August 1, 2001

POLYDEX REPORTS ADVANCEMENT IN DEVELOPMENT OF TECHNOLOGY FOR LUNG DISORDERS

TORONTO, Ontario, August 1, 2001 -- Polydex Pharmaceuticals Ltd. (NASDAQ:POLXF) (BSE:PXL) is pleased to take this opportunity to report on progress being made in the development of Usherdex, a carbohydrate technology expected to be useful in alleviating breathing difficulties experienced by patients with such diseases as Cystic Fibrosis (CF), Chronic Obstructive Pulmonary Disease (COPD) and other lung disorders.

Usherdex, the first of our patented human pharmaceuticals to be sublicensed out to a strategic partner for development, has continued to show promise in the laboratory. In fact, BCY LifeSciences Inc. has reported raising over $4 million (CDN) toward the development of this promising compound, which could ultimately alleviate breathing difficulties experienced by patients with cystic fibrosis, chronic bronchitis, Chronic Obstructive Pulmonary Disease (COPD), and other lung ailments.

A number of accomplishments have been achieved in preparation for Phase I human clinical testing. BCY has announced the successful fractionation of a low molecular weight dextran and the completion of the bio-assay of these fractions. This enabled BCY to complete a critical step in its preparation for the filing of an IND (Investigational New Drug) application.

Since then, BCY LifeSciences has announced favorable results of toxicology testing, wherein an aerosol mist form of Usherdex was administered to rats and dogs, in dose levels well above the anticipated human dose and for dosing periods of up to 28 days. No signs of toxicity or other side effects were observed in either species.

BCY LifeSciences Inc. reported, on July 16, 2001, having filed an IND (Investigative New Drug) application in Canada to seek approval to conduct a Phase I clinical trial using Usherdex, under development with BCY by the name DCF 987. "This is a significant step for BCY LifeSciences" remarked Lorne Meikle, BCY's President & CEO. "We have only had the technology under license for fifteen months. During this short period, we have identified a lead compound, completed toxicology studies and with the filing of the IND, we now will complete our preparations for our Phase I clinical trial." In anticipation of successful Phase I human clinical testing, BCY is already planning to commence Phase II clinical trials in the first half of 2002.

It is Polydex's mandate to research, develop and market veterinary pharmaceutical products in a hands-on (concept to consumer) fashion. However, the business approach differs with development of their human pharmaceutical pipeline. Here, the mandate is to research and license out potential products to valued partners for development, thereby minimizing R&D expenditures while retaining a royalty revenue stream from successful products. This is the reason that the search for development partners is so important, and is ongoing relative to all of the potential human pharmaceutical products in the Polydex pipeline.

Polydex will share in a royalty stream on revenues generated from sales of a successful product. New products entering the market for cystic fibrosis patients have been shown to generate up to $120 million (US) in annual sales. Therefore Usherdex could ultimately produce a significant revenue stream. This is an excellent example of the successful implementation of the partnering mandate, wherein the Company could benefit greatly, with a minimal outlay of capital for this drug's development.

BCY LifeSciences Inc. is a Canadian development stage biopharmaceutical company dedicated to acquiring and developing innovative pharmaceutical products or technologies that serve unmet medical needs and that offer near term licensing opportunities with reduced scientific/clinical risk. BCY Lifesciences is a publicly trading company on the CDNX exchange under the symbol BCY.

Polydex Pharmaceuticals Ltd., based in Toronto, Ontario, Canada, is engaged in the research, manufacturing and marketing of biotechnology-based products for human and veterinary pharmaceutical industries worldwide. Polydex is traded on the Nasdaq SmallCap Market under the symbol POLXF and on the Boston Stock Exchange under PXL.

Note: This press release may contain forward-looking statements, within the meaning of the United States Securities Act of 1933, as amended, and the United States Securities Exchange Act of 1934, as amended, regarding Polydex Pharmaceuticals Limited. Actual events or results may differ materially from the Company's expectations, which are subject to a number of known and unknown risks and uncertainties including but not limited to changing market conditions, future actions by the U.S. Food and Drug Administration or equivalent foreign regulatory authorities as well as results of pending or future clinical trials. Other risk factors discussed in the Company's filings with the United States Securities and Exchange Commission may also affect the actual results achieved by the Company.

Please visit : www.Polydex.com and www.BCYLifesciences.com

CONTACT: Polydex Pharmaceuticals Limited
George G. Usher, President
(416) 755-2231
or e-mail: gu-dextran@rogers.com

Investor Relations:
North Arm Capital Services
Linda Hughes, Toll-free 1-877-945-1621
or e-mail: Linda@northarm.com