September 18, 2002

USHERCELL LEADS MICROBICIDE RESEARCH
WITH CONRAD

ADDITIONAL FUNDING WILL ACCELERATE RESULTS

Toronto, Ontario, September 18, 2002 -- Polydex Pharmaceuticals Ltd. (NASDAQ:POLXF) announces continued progress in the development of Ushercell, the patented lead development product for Polydex. Ushercell has completed three Phase I/II clinical trials and further Phase I/II clinical trials are ongoing. Ushercell is nearing late-stage, Phase III human clinical trials planned for fiscal 2004 under the direction of CONRAD (formerly known as Contraceptive Research and Development).

Ushercell is a high-molecular-weight cellulose sulphate compound developed initially as a contraceptive, which has also shown promise, in vitro, for prevention of the transmission of sexual diseases.

On August 28th, 2002, the Bill and Melinda Gates Foundation furthered their commitment to HIV prevention and contraception as it announced a series of grants, $11.9 million of which was awarded to CONRAD. The Gates Foundation cites recommendations included in Global Mobilization for HIV Prevention - A Blueprint for Action, a comprehensive plan of action to prevent 29 million HIV infections between now and 2010 through new technologies and by scaling up existing prevention tools and strategies.

"This grant will enable CONRAD's CICCR project to accelerate research, development and clinical testing of innovative new technologies. Microbicidal gels hold the promise of both disease prevention and contraception, each a vital need in developing countries", said Michael J.K. Harper, Ph.D., Sc.D., director of CICCR and the Global Microbicide Project (GMP).

Dr. Harper further added: "The new award from the Gates Foundation provides funding for clinical trials of hormonal contraception for men, and also for testing the contraceptive efficacy, when used vaginally, of several microbicides under development. The most advanced candidate for such a clinical trial is Ushercell, and it is anticipated that a contraceptive efficacy trial could commence in mid- to late- 2003".

"Just over a month ago, in July of this year, the US Agency for International Development gave a $60 million grant to the Eastern Virginia Medical School's program called CONRAD in order to develop contraceptives and products to fight AIDS. The federal agency gave CONRAD $30 million in 1998 for five years and now has increased that to $90 million through 2008. Nearly 60 percent of the money will go toward fighting HIV", said CONRAD Director, Dr. Henry Gabelnick.

CONRAD was established in 1986 with funding from the U.S. Agency for International Development, and supported by the public sector. It's mission is to develop new contraceptive and subsequently antimicrobial agents that specifically address the reproductive needs and issues of women and men in less developed countries. CONRAD directs and funds the extensive research, regulatory and clinical trial requirements as well as related product development activities for Ushercell. CONRAD's funding for Ushercell is provided through CONRAD's Consortium for Industrial Collaboration in Contraceptive Research (CICCR) which commenced operations on October 1, 1995 with initial funding from Rockefeller Foundation and subsequently the United Nations Population Fund, and the Mellon, Hewlett, Packard and Gates Foundations, as well as the Global Microbicide Project (GMP) established in 2000 and funded by the Gates Foundation.

The Topical Prevention of Conception and Disease (TOPCAD), of Rush University in Chicago, IL have assisted in the development of Polydex's Ushercell since conceptualization. TOPCAD, established in 1993 at Rush-Presbyterian-St. Luke's Medical Center and the University of Illinois at Chicago, IL, aims at developing vaginal antimicrobial contraceptive compounds and formulations. Scientists from various universities and health organizations in the USA, Canada, Brazil and India participate in the Program.

The strategic alliance which Polydex has with CONRAD, as well as the licensing partnership with TOPCAD and Rush University have enabled Polydex to make significant strides forward in the development of this important compound, bringing extensive intellectual and financial resources devoted to the development of microbicides to bear on this project. Through these alliances, Polydex has been able to engage the services of specialty contractors to assist in the GMP synthesis and scale-up of Ushercell as an active pharmaceutical ingredient. It is anticipated they will also assist in the development and supply of product required for large-scale human phase III clinical studies and ultimately commercial use. Polydex has also retained the services of several consultants with expertise in pharmaceutical product development and business development and licensing.

The terms of the strategic alliance Polydex has with CONRAD, call for CONRAD to fund and conduct all the required clinical research studies for the development of Ushercell as a pharmaceutical product, and secure FDA approvals for all necessary IND protocols. CONRAD provides critical project management expertise. CONRAD is also funding the pre-NDA toxicology studies, the GMP synthesis and scale-up of Ushercell as an active pharmaceutical ingredient and the GMP development and supply of product for the clinical studies. Polydex retains all rights to commercialization in the private sector for Ushercell, and plans to supply product on a reasonable cost-plus basis for the public sector requirements.

Polydex Pharmaceuticals Ltd., based in Toronto, Ontario, Canada, is engaged in the research, manufacture and marketing of biotechnology-based products for veterinary and human pharmaceutical industries worldwide. 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 an integral part of all of the potential human pharmaceutical products in the Polydex pipeline.

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.

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

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