CollaGenex Pharmaceuticals Licenses Exclusive U.S. Marketing Rights for Pandel, a Mid-Potency Topical Corticosteroid Product.

Business Editors

First Prescription Dermatology Product Addresses Potential $125

Million Market for Mid-potency Topical Corticosteroids 

CollaGenex Pharmaceuticals, Inc. (Nasdaq:CGPI) today announced that it has licensed the exclusive rights to market Pandel(R) (hydrocortisone probutate cream, 0.1%) in the United States and Puerto Rico from Savage Laboratories(R), a division of Altana, Inc., the U.S. subsidiary of the German multi-national pharmaceutical company, Altana Pharma AG. Under the terms of the agreement, CollaGenex will pay an up-front licensing fee and future royalties on commercial sales to Savage Laboratories. Altana will continue to manufacture and supply the product and physician's samples.

Pandel is a mid-potency topical corticosteroid that is indicated for the relief of mild-to-moderate inflammatory disorders of the skin, such as atopic dermatitis and psoriasis. It is available in several sizes, including 15g, 45g and a unique 80g tube, which is particularly useful for frequent users. It is non-halogenated and is delivered in a cosmetically elegant formulation offering once-a-day convenience. The mid-potency corticosteroid market is valued at approximately $125 million in the United States. For full Pandel prescribing information, please call the Professional Affairs Department at CollaGenex at 888-339-5678.

CollaGenex intends to leverage its current sales and marketing infrastructure by allocating a portion of its existing pharmaceutical sales force to promote Pandel to the dermatology community in the United States. In the near-term, the company will also augment its marketing efforts for Pandel through the use of a modest-sized contract sales organization that has expertise in the dermatology community. Pandel has not been actively promoted for several years and the combined efforts of the two sales forces is expected to be instrumental in increasing product awareness and sales.

"The Pandel license is an important step in executing our strategy to acquire and license a portfolio of proprietary dermatology products, while continuing the development of the dermatological applications of Periostat(R) and the Restoraderm(TM) technology," noted Brian M. Gallagher, PhD, chairman, president and chief executive officer of CollaGenex. "Pandel is an under-promoted brand with differentiating advantages that participates in a large market, and it has several years of exclusivity remaining. The combined resources of our existing sales force and a modest-sized contract sales organization will provide an excellent entree into the dermatologist's office and should contribute immediately to our revenues."

CollaGenex Pharmaceuticals, Inc. is a specialty pharmaceutical company currently focused on providing innovative medical therapies to the dental and dermatology markets. Currently, the Company's 120-person professional dental pharmaceutical sales force markets Periostat(R), the first and only pharmaceutical to treat periodontal disease by inhibiting the enzymes that destroy periodontal support tissues, Vioxx(R), a Merck & Co. drug that CollaGenex co-promotes for the treatment of acute dental pain, and Atridox(R), Atrisorb(R) and Atrisorb-D(R), Atrix Laboratories Inc.'s products for the treatment of adult periodontitis. Research has shown that the enzyme suppression technology underlying Periostat may also be applicable to other diseases involving inflammation and/or destruction of the body's connective tissues, including acne, rosacea, meibomianitis and cancer metastasis, among others. CollaGenex is further developing Periostat, as well as a series of novel, proprietary compounds known as IMPACS (Inhibitors of Multiple Proteases and Cytokines), to address these applications. In addition CollaGenex has licensed the Restoraderm(TM) technology, a unique, proprietary dermal drug delivery system, in order to develop a range of topical dermatological products with enhanced pharmacologic and cosmetic properties.

To receive additional information on the Company, please visit our Web site at www.collagenex.com, which is not a part of this press release.

Savage Laboratories(R) is a division of Altana, Inc., the U.S. subsidiary of the German multi-national pharmaceutical company, Altana Pharma AG. Currently the strategic focus of Savage Laboratories is emergency/critical care and women's health care. More information is available at www.savagelabs.com, which is not a part of this press release.

This press release contains forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended. Investors are cautioned that forward-looking statements involve risks and uncertainties that 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 U.S. Securities and Exchange Commission.

Periostat(R), Metastat(R), IMPACS(TM) and Restoraderm(TM) are United States trademarks of CollaGenex Pharmaceuticals, Inc. Periostat(R) is a European Community trademark of CollaGenex Pharmaceuticals, Inc.

Periostat(R), IMPACS(R) and Restoraderm(R) are United Kingdom trademarks of the Company's wholly owned subsidiary, CollaGenex International Limited. CollaGenex(R) is a European Community and United Kingdom trademark of CollaGenex International Limited.

Pandel(R) is a trademark of Taisho Pharmaceuticals.

VIOXX(R) is a trademark of Merck & Co., Inc.

Atridox(R), Atrisorb(R) and Atrisorb-D(R) are trademarks of Atrix Laboratories, Inc.