HAEMACURE REPORTS $1.06 MILLION NET CONSOLIDATED LOSS.

For the first quarter ended January 31, 2004, Haemacure Corporation (TSX:HAE), Montreal, recorded sales of $1.22 million, compared with $5.34 million for the first quarter of fiscal 2003. This significant decrease is attributable to the termination of the sale of the fibrin sealant Hemaseel APR in November 2003.

The gross margin for the first quarter was 49%, compared with 56% for the first quarter of 2003. This decrease was attributable to a declining sale price of Hemaseel APR and the absence of commission revenues from the sale of Gelfoam.

Operating expenses also decreased significantly in all categories, down to $1.64 million from $5.08 million for the first quarter of 2003. The decrease is mainly due to the major downsizing of Haemacure's US operations as a result of the termination of the sale of Hemaseel APR.

At the close of the first quarter, the net consolidated loss amounted to $1.06 million, or $0.04 per share, down from a loss of $2.13 million, or $0.08 per share, for the first quarter of fiscal 2003.

Financial Position

As at January 31, 2004, current assets amounted to $2.26 million, compared with $9.64 million at the close of fiscal 2003. This decrease is mainly due to the decrease in trade accounts receivable and inventories, as a result of the termination of the sale of Hemaseel APR, and to the decrease in other receivables resulting from the cashing in November 2003 and January 2004 of amounts to be received from Baxter Healthcare S.A. (Baxter) under the settlement agreement entered into on October 31, 2003. The decrease was partly off-set by the increase in cash and cash equivalents, which went from $618,759 at the close of fiscal 2003 to $1.39 million at the close of the first quarter.

As at January 31, 2004, current liabilities decreased to $824,046 from $6.99 million at the close of fiscal 2003. This decrease is mainly the result of the payment to Baxter in November 2003 of outstanding accounts payable amounting to US$1.6 million ($2.1 million), the full repayment of the line of credit and the payment of US$675,000 ($890,000) to Bio Products Laboratory (BPL) both in December 2003, pursuant to the settlement agreements reached with Baxter and BPL. Part of the decrease is also due to the payment of severance pay and salaries of $275,000 and commissions of $270,000, which were accrued at the close of fiscal 2003.

Fixed assets rose to $689,854, up from $565,424 at the close of fiscal 2003, as a result of the purchase of equipment under leasing contracts with UPS Capital.

The financial statements include a going concern assumption note as the corporation's ability to continue operating as a going concern is dependent on its raising additional financing and achieving a profit on its business.

Hemaseel HMN and Hemaseel Thrombin 

Haemacure is now focusing its efforts and resources on rapidly developing its proprietary fibrin sealant (Hemaseel HMN) and thrombin (Hemaseel Thrombin) products, which includes, in the short term, securing a manufacturing contract and completing Phase III clinical trials to support the filing of Biologics License Applications (BLAs) with regulatory authorities in the United States and Europe, in order to launch these products on the market by early 2007. The company is currently active in arranging for the manufacture of product for clinical trials and commercialization.

Phase III clinical trials for Hemaseel HMN were initiated in 1998 and remain to be completed; the related Investigative New Drug Applications with the U.S. FDA and certain European countries are still open. The product was tested on 150 patients, no adverse reaction were reported and the resulting data will be used in support for the BLAs to be filed. Haemacure plans on resuming the trials during the first of quarter of fiscal 2005 and on filing BLAs with regulatory authorities during the fourth quarter of the same year.

Haemacure will have available for this project the US$ 4.5 million to be received from ZLB Bioplasma AG (ZLB) under the 2002 settlement agreement, and the US$2 million to be received from Baxter in January 2005 and January 2006. Payment by ZLB is conditional upon achieving certain milestones related to the completion of the clinical trials and the manufacture of Hemaseel HMN. Additional financing will be required.

As announced on February 24, 2004 Haemacure has retained PowerOne Capital Markets Ltd. of Toronto, Ontario to act as agent for a private placement under which Haemacure would issue a maximum of 10 million units at a price of $0.50 per unit for total proceeds to the Corporation of $5 million. In addition, PowerOne will be granted an option to increase the offering by up to 2 million units. If exercised, the total proceeds would be $6 million. Each unit will consist of one common share and one half common share purchase warrant. Each whole warrant will permit its holder to subscribe for one additional common share for a period of two years following the closing of the offering, at a price of $0.60 during the first year and $0.75 during the second year. The net proceeds will be used to complete the Hemaseel HMN project and the balance, if any, will be used for working capital purposes.

Target Markets

Haemacure's main product offering consists of all-human fibrin sealant and thrombin products. The aggregate value of the worldwide market for these products was in excess of US$ 300 million in 2003 and is currently estimated to grow to nearly US$500 million in 2007, when Haemacure plans on launching its products.

The first commercial fibrin sealant approved by the U.S. FDA was approved in May 1998. Haemacure launched Hemaseel APR in June 1998. By 2003, the U.S. fibrin sealant market had reached approximately US$65 million and is now expected to grow to US$90 million in 2007. The worldwide fibrin sealant market, excluding the U.S., is currently expected to reach US$ 150 million in 2007. The U.S. thrombin market has seen a faster growth, increasing from US$ 15 million in 1998 to US$141.7 million in 2003. The U.S. thrombin market is supplied by one American manufacturer offering a bovine-derived thrombin. The U.S. and rest of the world thrombin markets are expected to grow to US$ 250 million in 2007. Bovine-derived thrombin is not approved in Europe.

"Haemacure developed and patented a technology used as a platform for product development, from which Hemaseel HMN and Hemaseel Thrombin are derived. Haemacure enjoys exclusive and full ownership of its technology and intends to exploit it in all major markets. In addition, we expect that the all-human nature of our fibrin sealant and thrombin products, as opposed to other products which contain bovine-derived components, will provide highly valuable clinical benefits, as growing concerns continue with bovine components." said Marc Paquin, president and CEO of Haemacure.

Haemacure Corporation is a Canadian company specializing in the development and commercialization of innovative biological adhesives, biomaterials and surgical devices for the acute surgical wound care market. It also operates offices in Sarasota, Florida through a wholly-owned subsidiary. The Corporation is traded under stock symbol HAE on the TSX.

All dollar amounts set forth in this press release are in Canadian dollars, except where otherwise stated.

For more information, call 941/364-3700 or visit http://www.haemacure.com.