Philom Bios Inc. announces its results for the year ended September 30, 2006.

Highlights:

• Financial

• Achieved second highest sales in Company history despite contraction of pulse market
• Grew sales in North American corn and soybean markets by 30%
• Launched TagTeam for soybean and JumpStart on corn in US markets
• Recorded ninth consecutive year of profitability
• Opened world-class production, lab, and office facility
• Launched Philom Bios (Australia) joint venture
• Named one of Canada’s 50 Best Managed Companies for 2005

Sales declined by 14% from the prior year mainly as a result of a 12% contraction in North American pulse acre market where about 70% of our products are sold. The Company attributes this market contraction to several macro economic factors including; weaker farm incomes in 2006 which stressed farmer choices on inputs, a late season shift in acres to other crop types, and adverse weather conditions in key geographic areas that led to lower seeded acres. The decline in operating earnings was further affected by a 5% increase in operating costs reflecting the Company’s commitment to long-term investments. Specifically, this comprises increased spending on research and development, mainly focused on the corn and soybean markets, and market expansion efforts across North America and in Australia, through our joint venture operations.

President/CEO Calvin Sonntag comments, “Despite growth in our North American corn and soybean business, our 2006 earnings were affected by the contraction in other major inoculant markets, which remain important to us. Although 2006 earnings did come in below last year, we were pleased with the growth in 4th quarter sales which reflect the use of our products on winter seeded crops. As a result annual earnings for 2006 were $0.16 per share - well above earlier estimates. We remain focused on our strategy of investing in expansion of markets and
innovation.”

Philom Bios is a world leading Inoculant Company with over 70 employees across North America in a wide range of research, manufacturing, marketing, and management positions and joint venture operations in Australia. Headquartered in Saskatoon, SK, Philom Bios is a Canadian public company serving the needs of farmers with high-value inoculants. Philom Bios has an over 25 year commitment to farmers through a dynamic partnership with distributors and leading retailers.

Philom Bios Inc. was a winner of Canada’s 50 Best Managed Companies program in 2005 and is delighted to announce that it has Requalified in 2006 to maintain their status as a Best Managed company.

“The 2006 Best Managed winners are an outstanding group of Canadian-owned and managed companies that have proven their remarkable ability and commitment to apply best practices to all areas of their business operations,” explained John Hughes, Partner, Private Company Services group with Deloitte, “These companies clearly demonstrate innovation, leadership and a laser focus on their customers and employees. Their example illustrates that focusing on business fundamentals while pursuing a clearly defined strategy is key to achieving exceptional results.”

Philom Bios reached several major milestones in 2006, which was a period of significant investment in facilities and market expansion:

• the launch of Next Generation TagTeam® inoculants for pea and lentil, a technology delivering Best Yields and Best Value for North America’s pea and lentil growers;

• the formation of Philom Bios (Australia) Pty, a 50/50 joint venture with the Grains Research and Development Corporation of Australia; and

• the delivery of 3 year average net sales and earnings that are respectively 39% and 42% higher (before extraordinary items) than the previous 3-year period.

"Requalifiying as a Best Managed company reinforces that our team’s unwavering commitment and focus on serving the needs of our customers is a winning strategy,” said Calvin Sonntag, President/CEO of Philom Bios. “We are truly humbled by the continued and growing confidence our customers place in our people and products.”

“Companies are always judged by profitability, as they should be,” says John Hughes, Partner, Private Company Services group with Deloitte, a national sponsor of the Best Managed program. “But Best Managed companies like Philom Bios have been singled out for qualities that promise long term growth. They’ve made rigorous investments in their own potential.”

2006 winners of the Canada’s 50 Best Managed Companies award, along with Requalified and Platinum Club members will be honoured at the annual Best Managed gala in Toronto on February 12, 2007. On the same date, the Best Managed symposium will address leading-edge business issues that are key to the success of today’s
business leaders.