CollaGenex Pharmaceuticals and QuatRx Pharmaceuticals Announce Agreement for the Development and Commercialization of Becocalcidiol.

NEWTOWN, Pa. & ANN ARBOR, Mich. -- CollaGenex Pharmaceuticals, Inc. (NASDAQ:CGPI) and QuatRx Pharmaceuticals Company today announced a licensing agreement under which CollaGenex will develop and commercialize becocalcidiol, a patented Vitamin D analogue developed by QuatRx that is currently in Phase II clinical trials for the topical treatment of mild to moderate psoriasis. Unlike all other Vitamin D-based treatments for psoriasis, becocalcidiol does not appear to induce hypercalcemia, a significant dose-limiting toxicity. According to the National Institutes of Health, approximately 7.5 million Americans have psoriasis, a non-contagious, chronic skin disease characterized by itching and red, scaly patches of skin.

Colin Stewart, president and chief executive officer of CollaGenex, said, "We have been in discussions with QuatRx for a number of months and have been very impressed with the quality of their research and development efforts. This license is another important step in executing our strategy to become a leader in therapeutic dermatology by developing a broad portfolio of innovative, proprietary products. The market for non-biological treatments of psoriasis is currently $600 million. This compound has great potential as a unique treatment for psoriasis and is an excellent fit for CollaGenex."

Dr. Klaus Theobald, Chief Medical Officer of CollaGenex, commented, "Becocalcidiol has shown efficacy in the clinic and appears to be a non-irritating formulation for the treatment of psoriasis. It is unique among available Vitamin D analogues because it does not seem to promote hypercalcemia. If successfully developed, this product could provide significant advances in the topical treatment of psoriasis."

Robert Zerbe, M.D., president and chief executive officer of QuatRx, said, "QuatRx is extremely pleased to have CollaGenex continue the development of becocalcidiol. With its strong development team and expertise in dermatology, we believe CollaGenex is the ideal strategic partner to maximize the potential of this important new product candidate."

The license provides for the right to practice various patents, patent applications and related technology covering the compound and methods of using it topically to treat psoriasis and other skin diseases. Under the terms of the agreement, CollaGenex will pay an upfront licensing fee of $1.5 million to QuatRx and will be responsible for all further development costs. Additional fees are payable upon the achievement of various development and sales milestones. The agreement also provides for royalty payments linked to future product sales.

About QuatRx

QuatRx Pharmaceuticals Company is a privately-held biopharmaceutical company focused on the discovery, development and commercialization of compounds to treat endocrine, metabolic and cardiovascular disorders. In addition to becocalcidiol, QuatRx has three other product candidates in clinical development and two in preclinical development. Ophena(TM), being studied in a large Phase 3 trial, is a potential estrogen-free therapy for post-menopausal vaginal syndrome, a common problem that results from thinning of vaginal tissues associated with estrogen deficiency of menopause. Fispemifene is a new, selective estrogen receptor antagonist that is in Phase 2 studies as an oral treatment for testosterone deficiency and associated disorders in men. QRX-431, a novel, selective thyroid receptor beta antagonist, is in Phase 1 studies as a potential treatment for lipid disorders and obesity. QuatRx's two preclinical small molecule drug programs are designed to address common endocrine disorders in women.

About CollaGenex

CollaGenex Pharmaceuticals, Inc. is a specialty pharmaceutical company currently focused on developing and marketing proprietary, innovative medical therapies to the dermatology market. In July 2006, CollaGenex launched Oracea(R), the first FDA-approved systemic product for the treatment of rosacea. CollaGenex's professional dermatology sales force also markets Pandel, a prescription topical corticosteroid licensed from Altana, Inc., Alcortin(R) (1% iodoquinol and 2% hydrocortisone), a prescription topical antifungal steroid combination, and Novacort(R) (2% hydrocortisone acetate and 1% pramoxine HCl), a prescription topical steroid and anesthetic. Alcortin and Novacort are marketed by the Company under a Promotion and Cooperation agreement with Primus Pharmaceuticals, Inc. CollaGenex is conducting two Phase II dose-finding studies to evaluate its second dermatology candidate, incyclinide, for the treatment of acne and rosacea, respectively. CollaGenex is also conducting Phase II clinical trials to evaluate COL-118, a topical compound based on the SansRosa technology, for the treatment of redness associated with rosacea and other skin disorders.

Research has shown that compounds can be created by chemically modifying certain tetracyclines and that these new compounds have properties that may make them effective in treating diseases involving inflammation and/or destruction of the body's connective tissues. CollaGenex is evaluating various chemically modified tetracyclines (so called "IMPACS"(TM) compounds because they are Inhibitors of Multiple Proteases And CytokineS) to assess whether they are safe and effective in these applications. The Company has a pipeline of innovative product candidates with possible applications in dermatology and other disease states. In addition, CollaGenex has acquired the SansRosa(TM) technology, which consists of a class of compounds that have shown promise in reducing the redness associated with rosacea, and the Restoraderm(R) technology, a unique, proprietary dermal drug delivery system. CollaGenex plans to leverage these platforms to develop a range of topical dermatological products with enhanced pharmacologic and cosmetic properties.

To receive additional information on the Company, please visit our Website at www.collagenex.com, which does not form part of this press release.

Statements in this press release regarding management's future expectations, beliefs, intentions, goals, strategies, plans or prospects, including statements relating to the Company's plans to develop becocalcidiol and its future research and development efforts relating to Oracea, incyclinide and COL-118 and its dermatology franchise, product pipeline and intellectual, property, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by terminology such as "anticipate," "believe," "could," "could increase the likelihood," "estimate," "expect," "intend," "is planned," "may," "should," "will," "will enable," "would be expected," "look forward," "may provide," "would" or similar terms, variations of such terms or the negative of those terms. Such forward-looking statements involve known and unknown risks, uncertainties and other factors including those risks, uncertainties and factors referred to in the Company's Annual Report on Form 10-Q for the quarter ended March 31, 2007 filed with the Securities and Exchange Commission under the section "Risk Factors," as well as other documents that may be filed by CollaGenex from time to time with the Securities and Exchange Commission. As a result of such risks, uncertainties and factors, the Company's actual results may differ materially from any future results, performance or achievements discussed in or implied by the forward-looking statements contained herein. CollaGenex is providing the information in this press release as of this date and assumes no obligations to update the information included in this press release or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Periostat(R), Restoraderm(R) and Oracea(R) are registered trademarks and IMPACS(TM) and SansRosa(TM) are trademarks of CollaGenex Pharmaceuticals, Inc.

Novacort(R) and Alcortin(R) are trademarks of Primus Pharmaceuticals, Inc.

Pandel(R) is a trademark of Taisho Pharmaceuticals.

Atridox(R), Atrisorb(R) and Atrisorb-D(R) are registered trademarks of Tolmar, Inc.

Ophena(TM) is a trademark of QuatRx Pharmaceuticals Company.

All other trade names, trademarks or service marks are the property of their respective owners and are not the property of CollaGenex Pharmaceuticals, Inc. or any of our subsidiaries.