Pharmos Initiates Phase I Trial of CB2-Selective Drug Candidate Cannabinor

Iselin NJ, Septemer 6, 2005 – Pharmos Corporation (Nasdaq: PARS) announced today that it has initiated a Phase I trial with cannabinor, a CB2-selective synthetic cannabinoid drug candidate. The study will assess the safety, tolerability and pharmacokinetics of cannabinor in healthy volunteers.

The trial will enroll up to 48 healthy male subjects in a randomized, double blind, placebo controlled, intravenous, escalating single dose study. The trial is being conducted at the Harrison Clinical Research Unit in Munich, Germany with clinical trial material manufactured in the Company’s GMP pilot facility.

It is expected that the Phase I cannabinor trial will be completed and the results analyzed by year-end 2005. If the trial results demonstrate that an adequate dose is safe and well-tolerated, Phase II trials in pain indications are planned for early 2006. Contingent clinical protocols are being developed for several potential Phase II trials including neuropathic pain, post-surgical pain and other indications. The final decisions regarding indications to be examined in the Phase II program will await analysis of the Phase I data.

“Initiating clinical development of compounds that work preferentially on the CB2 receptor is an important milestone for the Company. We hope that cannabinor will become an anti-pain drug that addresses significant unmet patient needs,” said Haim Aviv, Ph.D., Chairman and CEO. He continued, “Pharmos continues to build and leverage its unique expertise with synthetic cannabinoid compounds. We believe this class of compounds has great promise for a variety of applications in human health as CB1 and CB2 cannabinoid receptors in the brain and immune system play an integral role in nociception, inflammation and autoimmunity.”

Howard Grossberg, M.D., Vice President of Drug Development, added, “The scientific community has suggested for years that substances similar to or derived from marijuana, known as cannabinoids, could treat pain. Now, careful studies show that cannabinoids directly interfere with pain signaling in the nervous system. Compounds that display high affinity for the CB2 receptor may offer avenues for harnessing the analgesic effect of CB-receptor agonists while avoiding the psychotropic and other adverse events seen with cannabinoid structures.”

In preclinical studies, cannabinor has been shown to be effective in numerous experiments involving more than a dozen different animal models of various types of pain and autoimmune diseases. In models of noxious, neuropathic, inflammatory, visceral, and post-surgical pain, the analgesic activity of cannabinor was comparable or superior to reference agents tested including morphine and a variety of NSAIDs. Involvement of CB2 receptors in the drug candidate’s mechanism of action is supported by observations that specific CB2 antagonists modulate cannabinor’s analgesic and anti-inflammatory activities.

Cannabinor and other compounds from Pharmos’ proprietary CB2-selective platform have demonstrated significant efficacy in animal models of immunologic dysfunction, including multiple sclerosis, rheumatoid arthritis, and inflammatory bowel disease. There is increasing evidence that cannabinoids have a number of useful functions in autoimmune disease including altering the balance between TH1 and TH2 lymphocytes in a favorable fashion as well as modulation of macrophage function and activation of MAP kinase. After anticipated Phase II studies in pain are underway, a decision will be made whether to expand testing of cannabinor or to advance another candidate from the Company’s pipeline into clinical development for the treatment of autoimmune disease.

Pharmos discovers and develops novel therapeutics to treat a range of indications, in particular neurological and inflammatory disorders. The Company’s core proprietary technology platform focuses on discovery and development of synthetic cannabinoid compounds. Cannabinor, the lead CB2-selective receptor agonist candidate is undergoing Phase I safety studies and, if successful, will enter Phase II testing in pain indications around year-end or early 2006. From the dextrocannabinoid family, the neuroprotective drug candidate dexanabinol completed a Phase IIa trial as a preventive agent against post-surgical cognitive impairment. Other compounds from Pharmos’ proprietary synthetic cannabinoid library are in pre-clinical studies targeting pain, multiple sclerosis, rheumatoid arthritis and other disorders. The Company’s NanoEmulsion drug delivery system is in clinical-stage development for topical application of analgesic and anti-inflammatory agents.

Statements made in this press release related to the business outlook and future financial performance of the Company, to the prospective market penetration of its drug products, to the development and commercialization of the Company’s pipeline products and to the Company’s expectations in connection with any future event, condition, performance or other matter, are forward-looking and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties which may cause results to differ materially from those set forth in these statements. Additional economic, competitive, governmental, technological, marketing and other factors identified in Pharmos’ filings with the Securities and Exchange Commission could affect such results.

Pharmos U.S.:
Gale Smith
(732) 452-9556

Pharmos Israel:
Irit Kopelov

The Ruth Group, Inc.
John Quirk (investors)
(646) 536-7029

Janine McCargo (media)
(646) 536 7033