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PHARMOS COMPLETES $65 MILLION MERGER OF PHARMATEC; TO FOCUS EXPANDED TECHNOLOGY BASE ON DEVELOPMENT/COMMERCIALIZATION OF DRUGS FOR EYES,BRAIN

PHARMOS COMPLETES $65 MILLION MERGER OF PHARMATEC; TO FOCUS EXPANDED TECHNOLOGY BASE ON DEVELOPMENT/COMMERCIALIZATION OF DRUGS FOR EYES,BRAIN
 NEW YORK, Oct. 29 /PRNewswire/ -- At its annual meeting today, Pharmos Corp. announced it has completed its $65 million merger of Pharmatec, Inc. (NASDAQ: PHTC), a Florida-based biotechnology company developing a unique carrier technology for the delivery of drugs to the brain
 Pharmatec's stock ceased trading at the end of the trading day today. Pharmos, the combined entity will begin trading tomorrow morning on NASDAQ under the ticker symbol PARS.
 "The two companies have synergies in technology, their management skill sets and their products. Pharmos' drug delivery system and Pharmatec's carrier system complement each other and combined will expedite bringing our drugs to the clinic," said Haim Aviv, chairman. "Additionally, our rich and focused product pipeline with one product commencing Phase III clinical trials will enables to establish a strong position with novel treatments for the eye and central nervous system."
 Under terms of the merger, Pharmatec will issue 13.4 million shares of a new class of convertible common stock (Class B) of Pharmatec to Pharmos shareholders, in exchange for all of the 17.5 million issued and outstanding shares of Pharmos common stock. The Class B common stock is subject to restrictions on public trading for a period of 15 months following the merger and afterward will automatically convert to shares of unrestricted (on a one-for-one basis) common stock.
 With the completion of the merger, Pharmos now will exercise its option to acquire Xenon Vision, Inc. Pharmos expects this acquisition to close tomorrow Oct. 30, 1992.
 Following these events, Pharmos will focus on the development and commercialization of ophthalmic and central nervous system (CNS) drugs. The company currently has approximately 10 compounds in various stages of development from preclinical to advanced clinical trials. Loteorednol Etabonate, the company's first product for ocular inflammation, is currently commencing the Phase III clinical testing. Additionally, the company has a proprietary drug delivery system, the Sub Micron Emulsion (SME) technology. SME is a broad-based drug delivery system whose initial application is for ophthalmic drugs, and is also being applied to several drugs in Phase I clinical trials. Pharmos' proprietary ophthalmic drugs address a worldwide market of nearly $1 billion.
 Likewise, in the CNS area, Pharmos has a patented Chemical Delivery System (CDS) which has been shown in animals and in limited human testing to enhance the delivery of drugs to the brain. Based on results of pre-clinical studies, Pharmos' AZT-CDS drug may prove advantageous in the treatment of AIDS-related dementia. Pharmos' Estradiol-CDS, expected to enter Phase I clinical trials in the U.S. in early 1993, has demonstrated superior concentrations of estrogen in the brain which may be advantageous in the treatment of post-menopausal syndromes.
 Pharmos' drugs, which specifically and selectively cross the Blood Brain Barrier use a novel approach exploiting the transit mechanisms of the Blood Brain Barrier without damaging the barrier, and address major therapeutic market in excess of $3 billion.
 Pharmos' research and development program in stroke and head trauma has shown encouraging results for the company's lead compound HU-211 in preclinical studies.
 "This merger and acquisition bring together a mix of technologies, products and people which places Pharmos at the forefront of innovative ophthalmic pharmaceuticals in late stage development, and in a unique position in CNS drugs using innovative approaches to address large unfulfilled therapeutic needs," said Stephen R. Streber, president.
 The merged company will be headquartered in New York with research facilities in Israel and Florida.
 Pharmos Corporation is a pharmaceutical company engaged in the development of innovative therapeutic products to treat disorders of the eye and central nervous system. The company utilizes a variety of unique and proprietary technologies to provide effective new modes of delivery and enhanced levels of specificity for existing pharmaceutical compounds.
 -0- 10/29/92
 /CONTACT: Stephen R. Streber, president of Pharmos Corp, 212-838-0087; Anthony J. Russo, Ph.D. of Noonan/Russo Communications, 212-979-9180, or Donald C. Weinberger of Strategic Growth International, 212-826-9622 both for Pharmos/
 (PHTC) CO: Pharmos Corp.; Pharmatec, Inc. ST: New York IN: MTC SU: TNM


SH-AH -- NY063 -- 6655 10/29/92 14:07 EST
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Date:Oct 29, 1992
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