Eupraxia Pharmaceuticals Reports Fourth Quarter and 2023 Financial Results Victoria, B.C.

Eupraxia Pharmaceuticals Reports Fourth

Quarter and 2023 Financial Results

Victoria, B.C. - April 1, 2024 - Eupraxia

Pharmaceuticals Inc. ("Eupraxia" or the "Company") (TSX: EPRX), a clinical-stage biotechnology company leveraging

its proprietary Diffusphere technology to optimize drug delivery for applications with significant unmet need, today announced

its financial results (prepared in accordance with U.S. GAAP) and operational highlights for the fourth quarter ended December 31, 2023.

All amounts are expressed in U.S. dollars unless otherwise indicated.

"The interim results from our ongoing

Phase 1b/2a RESOLVE trial, which is evaluating the safety and efficacy of EP-104GI as a treatment for eosinophilic esophagitis, demonstrate

this product candidate's significant potential," said Dr. James Helliwell, CEO of Eupraxia. "In addition, we remain

confident about the results from our recent end-of-Phase 2 meeting with the U.S. FDA, which clarifies our development path moving forward

for EP-104IAR. The Company is continuing planning and preparation in support of the Phase 3 osteoarthritis program at this time.

Subsequent to quarter end, we further strengthened our balance sheet, supporting the ongoing advancement of our product candidates. Based

on the significant data generated for EP-104GI and EP-104IAR, the Company is continuing to evaluate the potential to further de-risk development

programs through partnering. In addition, Eupraxia is continuing to pursue a Nasdaq listing for its common shares."

Change to Reporting Currency and U.S.

Effective December 31, 2023, the Company changed

its reporting currency to the U.S. dollar ("USD") from the Canadian dollar ("CAD"). As such, all prior amounts

originally reported in CAD are now reported in USD. The Company has retained the Canadian dollar as its functional currency.

The Company's consolidated financial

statements have also been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP")

as issued by the Financial Accounting Standards Board ("FASB"). Previously, the Company prepared its financial statements

in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board ("IASB").

The changes in reporting currency and adoption

of GAAP were made to enhance the comparability of the Company's results with other publicly traded companies in the life sciences industry.

Selected Operational and Financial Highlights

for the Fourth Quarter

Fourth Quarter 2023 Financial Review

The Company incurred a net loss of $10.6 million

for the three months ended December 31, 2023, versus $7.8 million for the three months ended December 31, 2022. For the year ended December

31, 2023, the Company included a net loss of $29.0 million versus $19.0 million for the year ended December 31, 2022. The increase in

net loss was primarily driven by higher costs associated with the conduct of multiple clinical programs, and increased costs associated

with business development and financing activities.

The Company had cash and cash equivalents

of $19.3 million as of December 31, 2023, up from $18.3 million at December 31, 2022. On March 15, 2024, the Company announced it had

closed an overnight marketed public offering of common shares for gross proceeds, including the over-allotment, of $25,026,073 (CAD$33,867,784).

These funds are being used to fund clinical trials with EP-104GI and EP-104IAR. The remainder of the proceeds will be used for general

and administrative expenses, a milestone payment, working capital needs and other general corporate purposes. Assuming the Company is

able to refinance its existing debt facility with Silicon Valley Bank, management anticipates cash resources, including proceeds from

the recently closed offering, will be sufficient to fund the Company through to the third quarter of 2025.

Immediately following completion of the overnight

marketed public offering, the Company had 35,662,553 common shares issued and outstanding.

Financial Statements and Management

Discussion & Analysis

Please see the audited consolidated financial statements

and related MD&A for more details. The audited consolidated financial statements for the year ended December 31, 2023, and related

MD&A have been reviewed and approved by Eupraxia's Audit Committee and Board of Directors. For a more detailed explanation and analysis,

please refer to the MD&A that has been filed under the Company's profile on SEDAR+ at sedarplus.ca and will be available

on the Company's website at www.eupraxiapharma.com.

About Eupraxia Pharmaceuticals Inc.

Eupraxia is a clinical-stage biotechnology company

focused on the development of locally delivered, extended-release products that have the potential to address therapeutic areas with high

unmet medical need. The Company strives to provide improved patient benefit and has developed technology designed to deliver targeted,

long-lasting activity with fewer side effects. Diffusphere , a proprietary, polymer-based micro-sphere technology, is designed to

facilitate targeted drug delivery, with extended duration of effect, and offers multiple, highly tuneable PK profiles. This investigational

technology can be engineered for use with multiple active pharmaceutical ingredients and delivery methods.

Eupraxia recently completed a Phase 2b clinical

trial (SPRINGBOARD) for its lead product candidate, EP-104IAR, for the treatment of pain due to OA of the knee. The trial met its primary

endpoint and three of the four secondary endpoints. Eupraxia has expanded the EP-104 platform into gastrointestinal disease with the Phase

1b/2a RESOLVE trial for treating EoE. Eupraxia is also developing a pipeline of later- and earlier-stage long-acting formulations. Potential

pipeline indications include candidates for other inflammatory joint indications and oncology, each designed to improve on the activity

and tolerability of currently approved drugs. For further details about Eupraxia, please visit the Company's website at: www.eupraxiapharma.com.

Notice Regarding Forward-looking Statements

This news release includes forward-looking

statements and forward-looking information within the meaning of applicable securities laws. Often, but not always, forward-looking information

can be identified by the use of words such as "plans", "is expected", "expects", "scheduled",

"intends", "contemplates", "anticipates", "believes", "proposes" or variations (including

negative and grammatical variations) of such words and phrases, or state that certain actions, events or results "may", "could",

"would", "might" or "will" be taken, occur or be achieved. Forward looking statements in this news release

include statements regarding the Company's business strategies and objectives, including current and future plans and opportunities, expectations

and intentions; statements regarding the Company's clinical trials, including the Company's planning and preparation for the

Phase 3 osteoarthritis program; the ability of the Company to execute on its business strategy; the potential of partnerships to de-risk

the Company's development programs; the Company's pursuit of a Nasdaq listing for its common shares; the Company having

sufficient resources, including anticipated funding from its current cash and expected refinancing of its existing debt facility with

Silicon Valley Bank; the advancement of opportunities stemming from the Company's delivery technology and expansion of pipeline

designs; the results gathered from the Company's end-of-phase 2 meeting with the FDA; the potential of Eupraxia's product candidates;

the Company's expectations regarding its product designs, including with respect to patient benefit, duration, safety, effectiveness

and tolerability; the results gathered from studies of Eupraxia's product candidates; the potential for the Company's technology

to impact the drug delivery process; the competitive advantages of the Company's technology; the benefits to patients from the Company's

drug platforms; the translation of the Company's technologies and expansion of its offerings into clinical applications; and the

use of the terms "EP-104IAR", "EP-104GI", and "EP-104" in future disclosure.

Such statements and information are based

on the current expectations of Eupraxia's management, and are based on assumptions, including but not limited to: future research and

development plans for the Company proceeding substantially as currently envisioned; industry growth trends, including with respect to

projected and actual industry sales; the Company's ability to obtain positive results from the Company's research and development

activities, including clinical trials; and the Company's ability to protect patents and proprietary rights. Although Eupraxia's

management believes that the assumptions underlying these statements and information are reasonable, they may prove to be incorrect.

The forward-looking events and circumstances

discussed in this news release may not occur by certain dates or at all and could differ materially as a result of known and unknown risk

factors and uncertainties affecting Eupraxia, including, but not limited to: risks and uncertainties related to the Company's limited

operating history; the Company's novel technology with uncertain market acceptance; if the Company breaches any of the agreements

under which it licenses rights to its product candidates or technology from third parties, the Company could lose license rights that

are important to its business; the Company's current license agreement may not provide an adequate remedy for its breach by the

licensor; the Company's technology may not be successful for its intended use; the Company's future technology will require

regulatory approval, which is costly and the Company may not be able to obtain it; the Company may fail to obtain regulatory approvals

or only obtain approvals for limited uses or indications; the Company's clinical trials may fail to demonstrate adequately the safety

and efficacy of our product candidates at any stage of clinical development; the Company may be required to suspend or discontinue clinical

trials due to side effects or other safety risks; the Company completely relies on third parties to provide supplies and inputs required

for its products and services; the Company relies on external contract research organizations to provide clinical and non-clinical research

services; the Company may not be able to successfully execute its business strategy; the Company will require additional financing, which