BDSI Granted NASDAQ Exception for Continued Listing on the SmallCap Market.

NEWARK, N.J. -- BioDelivery Sciences International, Inc. (NASDAQ:BDSI) (NASDAQ:BDSIW) announced today that its common stock will continue to be listed on the NASDAQ SmallCap Market after being granted an exception from the stockholders' equity/market value of listed securities/net income listing requirement. BDSI further announced that certain other listing deficiencies cited by the Nasdaq Staff during BDSI's review process have been found to have been remedied.

On October 13, 2004, BDSI was notified that it has been granted an exception to the requirement that the company maintain a minimum of $2.5 million in stockholders equity as of June 30, 2004, subject to BDSI demonstrating compliance with this requirement for the quarter ended September 30, 2004. In light of its publicly announced transactions, BDSI believes that it will be able to readily exceed such requirement for the quarter ended September 30, 2004, although no assurances can be given that it will be able to do so.

This exception was issued by a Nasdaq hearing panel (the "Hearing Panel") which, at BDSI's request, held a formal hearing regarding BDSI's continued listing on September 9, 2004. BDSI had not met the minimum stockholders' equity requirement as of June 30, 2004. The exception extends through the filing of BDSI's Quarterly Report on Form 10-QSB for the third quarter ended September 30, 2004 and thereafter while the Hearing Panel further deliberates on whether continued monitoring of BDSI with respect to the stockholders' equity requirement is necessary. If BDSI is deemed to have met the terms of the exception, it will continue to be listed on the NASDAQ SmallCap Market. BDSI expects to file its September 30th Form 10-QSB on or before November 15, 2004.

BDSI also announced that, in its decision, the Hearing Panel addressed certain other alleged listing criteria deficiencies relating to BDSI which, as previously announced by BDSI, were cited by the Nasdaq Staff. BDSI announced that the Hearing Panel found that BDSI had remedied these deficiencies and specifically found that BDSI did not attempt to circumvent Nasdaq's rules and that BDSI had conducted itself in a proper manner before the Nasdaq Staff.

To indicate that BDSI is presently being listed on Nasdaq subject to an exception, beginning on Friday, October 15, 2004, and for the duration of the exception, BDSI's NASDAQ symbol will change from "BDSI" to "BDSIC."

Dr. Frank O'Donnell, Chairman, CEO and President of BDSI, stated: "We are very pleased with the hearing panel's findings and are grateful to have been granted the exception. We believe that the exception was well earned due to BDSI's ability to affect transactions which have strengthened our stockholders' equity position. We look forward to continuing our progress and our good working relationship with Nasdaq."

BioDelivery Sciences International, Inc. is a biotechnology company that is developing and seeking to commercialize patented and licensed delivery technologies for pharmaceuticals, vaccines, over-the-counter drugs, nutraceuticals and micronutrients. The company's technologies include: (i) the patented Bioral(TM) nanocochleate technology, designed for a potentially broad base of applications, and (ii) the patented BEMA(TM) (buccal or mouth) drug delivery technology being developed by the company's Arius Pharmaceuticals subsidiary with a focus on "acute" treatment opportunities for surgical and oncology patients.

Note: Except for the historical information contained herein, this press release contains, among other things, certain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Such statement may include, without limitation, statements with respect to the Company's plans, objectives, expectations and intentions and other statements identified by words such as "may", "could", "would", "should", "believes", "expects", "anticipates", "estimates", "intends", "plans" or similar expressions. These statements are based upon the current beliefs and expectations of the Company's management and are subject to significant risks and uncertainties, including those detailed in the Company's filings with the Securities and Exchange Commission. Actual results may differ from those set forth in the forward-looking statements. These forward-looking statements involve certain risks and uncertainties that are subject to change based on various factors (many of which are beyond the Company's control).

L.G. Zangani, LLC provides financial public relations service to the Company. As such L.G. Zangani, LLC and/or its officers, agents and employees, receives remuneration for public relations and or other services in the form of monies, capital stock in the Company, warrants or options to purchase capital in the Company.