IntelliPharmaCeutics Announces Agreement
for the Development of a Second Controlled Release Product for Distribution in Canada

TORONTO, CANADA, January 5, 2006 - IntelliPharmaCeutics Corp. of Toronto, Ontario is pleased to announce that it has entered into an agreement with ratiopharm inc. of Mississauga, Ontario, for the development of a generic, controlled release drug product for the Canadian market. IntelliPharmaCeutics Corp. is a Canadian specialty drug development company, and operating affiliate of IntelliPharmaCeutics Ltd., (Delaware). ratiopharm develops, manufactures, markets and distributes generic pharmaceutical products in Canada.

The agreement follows an earlier agreement between the same companies, announced December 18, 2005, for the development of another drug product for the Canadian market.

Financial terms of the agreement were not disclosed.
Under the agreement, IntelliPharmaCeutics will develop the product using its proprietary controlled release drug delivery technologies, and ratiopharm will file the Abbreviated New Drug Submission (ANDS) with Health Canada, and will manufacture and distribute the generic drug product for the Canadian market.

Dr. Isa Odidi, Chairman, CEO and Co-Chief Scientific Officer of IntelliPharmaCeutics, stated, "We are very enthusiastic about this opportunity to develop a second drug for ratiopharm using our proprietary drug delivery technologies. We believe that our expertise in developing controlled release products and ratiopharm’s considerable regulatory and marketing experience, and promotional reach, will ensure its commercial success in Canada.”

About IntelliPharmaCeutics

IntelliPharmaCeutics is a drug delivery innovator and developer, specializing in the controlled and targeted once-a-day delivery of oral, solid dose pharmaceutical products. It operates from a 25,000 sq ft research laboratory and manufacturing scale-up facility located adjacent to Toronto International Airport. The Company utilizes proprietary, patented and proven drug delivery technologies, to formulate both generic and new drug products with enhanced performance characteristics. In addition to its pre-clinical portfolio, IntelliPharmaCeutics has an extensive pipeline of development products in clinical trials, in therapeutic areas that include neurology, cardiovascular, GIT, pain and infection.

This news release contains forward-looking statements, including those related to the preliminary nature of the clinical program results and the potential for further product development, that involve known and unknown risks, delays, uncertainties and other factors not under the control of IntelliPharmaCeutics, which may cause actual results, performance or achievements of the Companies to be materially different from the results, performance or other expectations implied by these forward-looking statements. In particular, because substantial future clinical testing and regulatory review will be required prior to marketing approval, there can be no certainty that a successful commercial product will be developed. These risks and other factors, including the timing or results of pending and future clinical trials, regulatory reviews and approvals by the Food and Drug Administration, and intellectual property protections and defenses, are discussed in the Companies' filings with the Securities and Exchange Commission such as the 10K, 10Q and 8K reports. The Companies undertake no obligation to update any forward-looking statements.

For IntelliPharmaCeutics Corp.
John N. Allport, V.P. - Legal Affairs and Licensing
Tel: 416-798-3001; E-mail: jallport@intellipharmaceutics.net
Website: www.intellipharmaceutics.net

Sharon Will, Investor Relations
Phone: 518-398-7888 E-Mail: sharon@saggicapital.com