CollaGenex Pharmaceuticals Announces Signing of Export Marketing Agreement for Middle East.

Business Editors

NEWTOWN, Pa.--(BUSINESS WIRE)--Jan. 30, 2001

CollaGenex Pharmaceuticals, Inc. (Nasdaq:CGPI) today announced that it had signed an exclusive Middle East Export Marketing Agreement for Periostat(R), its adjunctive treatment for adult periodontitis, with Pharma Med Inc.

Pharma Med Inc. is a privately owned company headquartered in Parsippany, New Jersey. The founder of Pharma Med, Rashmin Dave, has 20 years experience in marketing pharmaceutical products in the Middle East.

Pharma Med will appoint distributors and manage the introduction of Periostat in Bahrain, Cyprus, Egypt, Jordan, Kuwait, Lebanon, Malta, Oman, Qatar, Saudi Arabia, Sudan, Syria, Turkey, UAE, and Yemen. In return for these services, Pharma Med will be paid a fee contingent on Periostat sales to the Distributors.

"Utilizing the services of an Export Marketing company such as Pharma Med Inc. is a very efficient way for CollaGenex to leverage its existing regulatory and marketing materials to enable access to a number of markets with common characteristics," noted Brian M. Gallagher, PhD, chairman, CEO and president of CollaGenex.

"We are fortunate to have identified Pharma Med, which has the expertise and experience to maximize the value of Periostat throughout the Middle East."

The countries represented by Pharma Med have a combined population in excess of 200 million, and many have highly developed health care programs, including a high standard of dental care.

"We had already been approached by several potential distributors enquiring about the availability of Periostat," said Rashmin Dave, President of Pharma Med Inc., "and we immediately contacted CollaGenex to take advantage of the opportunity to market Periostat throughout the countries of the Middle East."

Periostat is marketed to the dental community in the United States by CollaGenex through a professional pharmaceutical sales force. Currently, the company's sales force is also marketing VIOXX(R), a Merck & Co. drug that the company promotes for the treatment and relief of acute dental pain, and Denavir(R), a Novartis Pharmaceuticals Corporation product for the treatment of cold sores.

Periostat is marketed directly to the periodontal profession in the U.K. by CollaGenex International Limited.

Research has shown that the enzyme suppressing technology underlying Periostat may also be applicable to other diseases involving destruction of the body's connective tissues, including cancer metastases (Metastat(R)) and a broad range of inflammatory diseases. CollaGenex is developing a series of novel, proprietary compounds known as IMPACS(R) (Inhibitors of Multiple Proteases and Cytokines) to address these applications.

The company intends to pursue further research and development of these technologies primarily through partnerships with third parties.

Pharma Med was established in 1999 by Rashmin Dave, who has in excess of twenty years experience living and working in the Middle East as a representative of various major pharmaceutical companies. Pharma Med is primarily involved in the provision of export marketing services for medical products and hospital supplies.

It has also recently entered the nutraceutical market and has developed and manufactures a line of OTC and nutraceutical products under the Pharma Med brand name for sale in the Middle East.

For additional information on CollaGenex or on Periostat, please visit the company's websites at www.collagenex.com and www.periostat.com, neither of which are part of this press release.

This news release contains forward-looking statements within the meaning of Section 231E of the Securities and Exchange Act of 1934, as amended. Investors are cautioned that forward-looking statements involve risks and uncertainties, which may affect the company's business and prospects.

The company's business of selling, marketing and developing pharmaceutical products is subject to a number of significant risks, including marketing plans; risks inherent in research and development activities; risks associated with conducting business in a highly regulated environment and uncertainty relating to clinical trials of products under development, all as discussed in the company's periodic filings with the US Securities and Exchange Commission.

Periostat(R), Metastat(R)and IMPACS(R)are trademarks of CollaGenex Pharmaceuticals, Inc. CollaGenex(R)and Periostat(R)are trademarks of CollaGenex International Limited VIOXX(R)is a trademark of Merck & Co., Inc. Denavir(R)is a trademark of Novartis Pharmaceuticals Corporation