Neptune Technologies & Bioressources Inc

Neptune Technologies & Bioressources Inc. (Neptune) shares, in our opinion, should

currently be valued in the $5.00 to $7.00 per share range based on its existing nutraceutical

operations and a single Phase I/II IND valuation of $200 to $300 million.

-Catalyst Equity Research

What is Nutraceutical?

A nutraceutical (also known as a Natural Health Product) is a product isolated or purified from

foods that is generally sold in medicinal forms not usually associated with food. A nutraceutical

is demonstrated to have a physiological benefit or provide protection against chronic disease.

The Nutraceutical market is currently a $70 Billion Dollar and over a year industry, with an ever

expanding consumer base as many turn away from traditional medicine. The Nutraceutical

market has strongly benefited from the realization that diet, eating habits and lifestyle are a key

component to healthy living. The Nutraceutical market is not one filled with charlatans but

rather has many accredited professionals and maintains a strict level of conduct, ethics and

monitors practitioners and advisors.

Neptune Technologies & Bioressources Inc.

Neptune Technologies & Bioressources Inc. researches, develops and commercializes proprietary

bioactive ingredients and products with superior added-value and clinically proven health

benefits. The Company extracts a range of bioactive ingredients such as novel proprietary

omega-3 phospholipids from abundant yet underexploited marine biomass including Krill, a

cold deep water zooplankton. Neptune’s first commercially available product is Neptune Krill

Oil (NKO®), which represents the only clinically proven and scientifically acknowledged

marine omega-3 phospholipids with cardiovascular, cognitive and anti-inflammatory benefits

for human applications and which exhibits unmet safety, purity and stability and consequently

denoting a new level of excellence in omega-3 standards.

Catalyst Equity Research Report

Neptune Technologies & Bioressources Inc.

(TSX.V : NTB $2.10 NASDAQ : NEPT $2.05 )

Q3/10 Revenue Meets Expectations EBITDA Was Double Our Expectations

For Nutraceutical Group Plant Nears Full Capacity With Strong Backlog

Neptune Technologies & Bioressources Inc. (Neptune) released Q3/10 (quarter-ended November

30, 2009) financial results. We have briefly assessed them in the update below.

• Overall revenue was in line but Adjusted EBITDA came in about double expectations.

• Revenue and EBITDA outlook for the nutraceutical business very positive.

• Neptune’s production & Adjusted EBITDA margins back on stream.

• New launches in calendar 2010 to drive revenue to the $5 to $6 million level per quarter.

• EBITDA to exceed $1.0 million per quarter going forward.

First Take of Q3/10 Financial Results - Sales, Production & EBITDA:

• Neptune reported Q3/10 sales (Nov. 30) of $3.8 million up 56% Y/Y. This is in line with

our forecast and reflects the ramp-up in production since the plant shut-down in May and

June last year.

• Adjusted EBITDA (excluding Acasti and NeuroBioPharm) was reported at $874,000

versus a negative $389,000 in the same period last year.

• Adjusted EBITDA was double what we expected.

• Net income for the nutraceutical business was $320,000 in Q3/10 (excludes dilution gain

– see below).

• Consolidated net income (including Acasti & NeuroBioPharm) was reported at a loss of

$119,000.

• We believe that sales were particularly strong in Europe and the U.S. We believe the

U.S. sales were in part driven by Bayer orders as a new Bayer product could be

launched over the near-term.

• Production is targeting 90,000kg annually. We expect production to be close to full

capacity throughout

Q4/10 (ended Feb-10).

• Additional production capacity expected. Management expects to increase production

to the 110,000 to 120,000 kg level annually without production interruption with the

marginal investment financed out of cash flow. The extra capacity is needed in order to

meet new product launches.

Outlook Remains Very Positive

• We project Q4/10 revenue to be $4.0 to $5.0 million range.

• North American sales are expected to be strong next year driven by 2 additional product

launches expected from Bayer.

• Sales over the next several quarters will be also driven by European sales (NOVEL

FOOD and PARNUTS notification in place for NKOTM in the European Union

(27 European countries)

• Stage set for a strong 2011 fiscal year with our revenue projection of $25 million plus.

• We expect Adjusted EBITDA (before research costs) approaching $4 to $5 million in

fiscal 2011.

Convertible Debenture

• Neptune realized a $2.1 million gain on dilution due to the conversion of convertible

debentures.

• Neptune previously announced that $2.25 million of the total of $2.75 million of

convertible debentures issued last year were converted. A minimal amount was

converted into Neptune, while about $2.2 million have converted into Acasti.

Conclusion:

Neptune Technologies & Bioressources Inc. (Neptune) shares, in our opinion, should

currently be valued in the $5.00 to $7.00 per share range based on its existing nutraceutical

operations and a single Phase I/II IND valuation of $200 to $300 million.