Bausch & Lomb Acquires Pharmos Corporation's Loteprednol Etabonate Ophthalmic Business.

Business Editors

ROCHESTER, N.Y.--(BUSINESS WIRE)--Oct. 10, 2001

Includes Rights to Lotemax(R), Alrex(R)

and New Compound in Development

Bausch & Lomb (NYSE: BOL) announces the acquisition of all rights to the loteprednol etabonate ophthalmic business of Pharmos Corporation (Nasdaq: PARS and Nasdaq Europe: PHRM) for cash and assumption of certain ongoing obligations.

The acquisition has two parts, one for products already on the market, the second for a medication now in clinical trials. Based on meeting certain new product milestones, the price of the total acquisition may reach $49 million.

Bausch & Lomb paid approximately $25 million in cash for Pharmos' rights to Lotemax(R) and Alrex(R), prescription products that are made and marketed by Bausch & Lomb under a 1995 marketing agreement with Pharmos.

Bausch & Lomb also is acquiring future extensions of loteprednol etabonate formulations, including a product currently in Phase III clinical trials, for approximately $14 million with the actual payment price based on the date of market introduction of this new combination therapy. An additional milestone payment of up to $10 million could be paid to Pharmos to the extent sales of the new product exceed an agreed-upon forecast in the first two years.

Lotemax(R) (loteprednol etabonate ophthalmic suspension 0.5%) is now the No. 1 dispensed ophthalmic steroid brand in America, and Alrex(R) (loteprednol etabonate ophthalmic suspension 0.2%) is the treatment of choice among many eye-care professionals in the United States for severe seasonal allergic conjunctivitis. Since U.S. market introduction at the end of 1998, more than 500,000 prescriptions have been written for Alrex and more than 900,000 prescriptions have been written for Lotemax. Lotemax has the broadest range of FDA-approved indications of any ophthalmic steroid including post-operative inflammation and other steroid-responsive inflammatory eye conditions.

The acquisition provides Bausch & Lomb with added flexibility in the development and marketing of loteprednol etabonate-based products and signals the company's commitment to the development and introduction of significant novel ophthalmic pharmaceuticals.

Bausch & Lomb Incorporated is the preeminent global technology-based healthcare company for the eye, dedicated to helping consumers see, look and feel better through innovative technology and design. Its core businesses include soft and rigid gas permeable contact lenses, lens care products, ophthalmic surgical and pharmaceutical products. The company is advantaged with some of the most respected brands in the world starting with its name, Bausch & Lomb(R), and including SofLens(TM), PureVision(TM), Boston(R), ReNu(R), Storz(R) and Technolas(TM). Founded in 1853 in Rochester, N.Y., where it continues to have its headquarters, the company has annual revenues of approximately $1.8 billion and employs approximately 12,000 people in more than 50 countries. Bausch & Lomb products are available in more than 100 countries around the world. Additional information about the company can be found on Bausch & Lomb's Worldwide Web site at http://www.bausch.com.