PGN Pgnx Capital Corporation

Paragon Pharmacies Limited (TSX VENTURE:PGN)("Paragon" or "the Company") today
reported its financial results for the second quarter ended February 28, 2011.


R. Gordon Gooding, Chief Executive Officer, said "The second quarter saw a
continued improvement in store operating income and increased gross margin
rates. To improve future sales trends, the Company has strengthened its senior
leadership team, and is initiating a restructuring of front store strategy and
execution. Improving performance combined with initiatives such as construction
of a new 5,500 sq. ft. medical clinic in Alberta, and the ongoing discussions
with potential acquisition targets provides the foundation for future growth."


Operating income, as defined, was $2.229 million in the second quarter compared
to $2.008 million in the same period last year, an increase of 11.0%. This
increase is a result of improved gross margin and cost containment initiatives.


Revenue for the three-month period was $20.034million compared to
$20.865millionin the same period last year. This4.0% decrease was the result of
a decline in comparable front store and pharmacy revenue. Pharmacy revenue was
impacted by reductions in generic prescription reimbursement rates, primarily
due to regulatory reform implemented in British Columbia in the first quarter of
2011, combined with increased generic prescription utilization rates.


EBITDA, as defined, was $0.813 million in the second quarter compared to $0.976
million in the same period last year, a decrease of $0.163 million or 16.7%. The
decrease inEBITDAwas due to increased corporate overheadincurred as the Company
assembles the resources required to position the Company for future growth. 


The net loss for the second quarter was $0.640 million compared to a netloss of
$0.464 million in the same period last year, an increase in net loss of $0.176
million or 37.9%. This change is primarily due to the reasons noted in EBITDA
above along with an increase in amortization. 


The Company's unaudited consolidated financial statements and Management's
Discussion and Analysis for the three and six month periods ended February 28,
2011 are available at the Investor Relations section of Paragon's website at
www.helloparagon.com or under the Company's profile on SEDAR at www.sedar.com.


Paragon Pharmacies Limited is building a pharmacy with our customers in mind.
Headquartered in Kelowna, BC and employing over 400 staff, Paragon currently
owns and operates 19 retail pharmacies and three central fill pharmacies
throughout British Columbia, Alberta and Manitoba. Paragon is a leading
mid-market pharmacy, providing premier pharmacy services in a friendly,
community-focused environment.


FORWARD LOOKING STATEMENTS

This press release contains forward-looking statements regarding, among other
things, the Company's beliefs, plans, objectives, strategies, estimates,
intentions and expectations, including as they relate to its operating and
financial results, capital expenditures and the ability to execute on its
operating, investing and financing strategies. Consequently, actual results and
events may differ materially from those included in, contemplated or implied by
such forward looking statements for a variety of reasons. Forward-looking
statements are subject to inherent risks and uncertainties including, but not
limited to, market and general economic conditions, certain property and
casualty risks, the ability to attract and retain pharmacists, the availability
and terms of financing, changes in the Company's relationship with its key
suppliers, competitive factors, changes in regulatory environments affecting the
Company's business, and the accuracy in management's assumptions (see "RISKS AND
RISK MANAGEMENT" as noted in the Company's Management's Discussion & Analysis
posted on SEDAR at www.sedar.com). This list is not exhaustive of the factors
that may affect any of the Company's forward-looking statements. Investors and
others should carefully consider these and other factors and not place undue
reliance on these forward-looking statements. In addition, these forward-looking
statements relate to the date on which they were made and the Company disclaims
and has no intention or obligation to update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise.

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