October 19, 2004

PHASE III USHERCELL (CELLULOSE SULFATE) TRIAL
FOR HIV PREVENTION UNDER WAY

Toronto, Ontario, October 19, 2004 -- Polydex Pharmaceuticals Limited (NASDAQ:POLXF) (BSE:PXL) announced the commencement of a Phase III clinical trial of Ushercell (Cellulose Sulfate) a microbicidal gel which is being tested for its effectiveness in the prevention of HIV and other sexually transmitted infections. In ongoing contraceptive studies, Cellulose Sulfate, a high molecular weight polymer, may also prove to be a major advance in fertility regulation. Preclinical and clinical studies have already demonstrated its high level of safety. Laboratory tests revealed the potential of Cellulose Sulfate to act as an effective guard against both unwanted pregnancies and against sexually transmitted infections, including HIV/AIDS, gonorrhea, chlamydia and herpes 1 and 2.

"The initiation of this Phase III trial is an important milestone in celebrating our successful partnership with CONRAD, as Ushercell becomes the first of our products to reach this critical stage in product development," said George Usher, President and CEO of Polydex.

CONRAD, located in Arlington, VA, has played an instrumental role in developing Cellulose Sulfate with the support of USAID and private foundations, and in clinical collaboration with Family Health International, WHO and NIH. CONRAD, which was established and funded by USAID at the Eastern Virginia Medical School, has focused on developing safe, effective, acceptable and affordable methods of contraception and microbicides for the prevention HIV/AIDS and other sexually transmitted infections.

Jeff Spieler, Chief of USAID's Research Technology and Utilization Division of the Bureau for Global Health said: "USAID's highest priority in microbicide research and development is to undertake the trials to demonstrate that a safe product can reduce the risk of acquiring HIV. Microbicides represent the best chance we have over the next several years to provide a life-saving HIV prevention technology for women who cannot negotiate condom use, including women whose only risk factor is their husband's or partner's lack of faithfulness."

In the summer of 2004, the FDA gave permission for the first Phase III HIV prevention study of Cellulose Sulphate to be carried out by FHI in two sites in Nigeria. A second study's protocol has just been approved by the FDA and will be conducted by CONRAD in several countries with a high incidence of HIV infection.

The randomized placebo-controlled studies will assess the effect of 6% CS gel on HIV transmission among HIV negative women, who are at high risk of contracting HIV through intercourse. The primary objective of the trials is to determine the effectiveness of 6% CS gel (3.5mL) compared to a placebo, in preventing male-to-female vaginal transmission of HIV; the secondary objective is to determine the effectiveness of CS gel, compared to a placebo gel, in preventing male-to-female transmission of Neisseria gonorrhoeae and Chlamydia trachomatis.

Polydex Pharmaceuticals Limited, based in Toronto, Ontario, Canada, is engaged in the research, development, manufacture and marketing of biotechnology-based products for the human pharmaceutical market, and also manufactures bulk pharmaceutical intermediates for the worldwide veterinary pharmaceutical industry.

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.

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