AURIGA LABS REPORTS RECORD 2007 FIRST QTR RESULTS.

Auriga Laboratories, Inc., (OTCBB:ARGA), Los Angeles, a specialty pharmaceutical company with products for the treatment of Xerostomia, dermatological conditions, and acute respiratory diseases, has reported its financial results for the first quarter ended March 31, 2007.

Q1 2007 Highlights

Gross revenue increased 179% to a record $8.9 million; gross revenue exceeded guidance by $2.7 million and was up 422% sequentially from Q4 2006.

First quarter of positive income from operations. Sale force totaled 200 associates, up from 50 reported in previous quarter.

Successful launch of two new product lines: Zinx and Aquoral. Total monthly prescriptions exceeded 26,000 in January 2007, up 324% from January 2006.

Q1 2007 Financial Results

As compared to the previous quarter and same period a year ago: Gross Revenue totaled a record $8.9 million, an increase of 179% from $3.2 million in the year-earlier period. The increase was primarily due to a growing product line being sold by a rapidly expanding national sales force.

Net Revenue totaled a record $6.8 million, an increase of 673% from $875,000 in the previous quarter and up 124% from $3.0 million a year ago.

Income from operations was $110,000, as compared to a loss of $3.7 million in the previous quarter and a loss of $1.0 million a year ago. Net loss per common share totaled ($0.02), as compared to a loss of ($0.11) per share in the previous quarter and a loss of ($0.10) per share in the same period a year ago. The loss per common share includes $1.8 million of non-cash share-based compensation costs and $157,000 of non-cash depreciation and amortization expenses. Earnings before interest, taxes, depreciation, amortization, and share based-compensation ("EBITDAS") was a gain of $1.8 million, as compared to a loss of $1.8 million reported in the previous quarter, and up from a loss of $928,000 reported the same period a year ago. A reconciliation of EBITDAS is included at the end of this release.

Other Significant Events

During the first quarter, independently generated IMS data indicated Auriga's total dispensed prescriptions reached a record 26,004 in January 2007, which represented an increase of 324% from 6,141 in January 2006. By the end of the first quarter, the company sales force exceeded 200 associates nationwide, doubling from the number reported mid-January. The company also introduced two new product lines in the first quarter: The Zinx line of products for relief of cold and allergy symptoms, and Aquoral, a FDA-approved oral spray for the treatment of Xerostomia or "Dry Mouth." Aquoral targets a condition affecting 25 million Americans and a market opportunity estimated to exceed $1 billion.

"While we made great strides during this first quarter in both sales force recruitment and new product introductions, these results still far exceeded our expectations," said Philip S. Pesin, Auriga's founder, chairman and CEO. "The key to our success has been an innovative, commission-only sales force structure that allows us to retain a highly-motivated workforce at a minimal investment. These factors, combined with positive cash flow from operations and an improving balance sheet, have encouraged us to increase our growth objectives for 2007." Added Auriga's CFO, Charles Bearchell, "Subsequent to the end of the first quarter we completed a private equity offering that resulted in aggregate gross proceeds of $2 million. We believe that our cash and investment balances are now sufficient to fund working capital needs for the foreseeable future. In fact, based on our improving financial position and operating results, our auditors have concurred that we can remove the 'going concern' qualification on our financial statements, including this quarter's Form 10-QSB to be filed later today."

2007 Business Outlook

Based upon greater than anticipated first quarter results, the company has raised its forecast for gross revenue to exceed $29 million in 2007, up from the previously issued guidance of $26 million. This compares to gross revenue of $7.4 million for the company's first full year of operations in 2006.

The company plans to achieve this with a sales force that will exceed 275 by the end of 2007, as well as new product introductions. Before the end of 2007, the company expects to enter the $5 billion dermatology marketplace with the introduction of several newly-branded prescription dermatology products under the trade names Akurza and Xyralid.

About Auriga Laboratories

Auriga Laboratories is a specialty pharmaceutical company building an industry changing commission based-sales model. The company's high-growth business model combines driving revenues through a variable cost commission-based sales structure, acquisition of proven brand names, introduction of new brands, and a strategic development pipeline, all of which is designed to enhance its growing direct relationships with physicians nationwide. Auriga's exclusive prescription and over-the-counter product portfolio includes Aquoral for the treatment of Xerostomia, Akurza and Xyralid dermatology products, and the Zinx, Extendryl, and Levall families of products for relief of symptoms associated with a range of acute respiratory diseases.

For more information, visit http://www.aurigalabs.com or call 310/461-3606.