May 3, 2005

CONRAD RECEIVES $24 MILLION FROM GATES FOUNDATION AND USAID FOR HIV MICROBICIDE TRIALS

MULTI-COUNTRY PHASE III CLINICAL TRIALS TO TEST MICROBICIDES TO PREVENT HIV INFECTION

Arlington, VA (May 3, 2005) The CONRAD program of the Eastern Virginia Medical School today announced that it has received a $12M grant from the Bill & Melinda Gates Foundation, with $12 million in matching funds committed by the US Agency for International Development (USAID), for a total of $24M. This grant plus the USAID award will allow two multi-country Phase III clinical trials of a product to prevent the transmission of HIV/AIDS.

The main goal of the project is to determine if a vaginal microbicide candidate is an effective and safe method for preventing HIV transmission. CONRAD plans to meet this goal by completing two Phase III HIV prevention trials with a gel consisting of 6% cellulose sulfate (CS), also known as Ushercell®, developed by CONRAD in collaboration with Polydex Pharmaceuticals Limited, a publicly quoted (POLXF, Nasdaq) Canadian company. One trial, implemented by CONRAD, will be conducted in India and four African countries. This trials will be funded equally by the Gates Foundation and USAID. The other trial, initiated in late 2004 in Nigeria in collaboration with Family Health International (FHI), is entirely supported by USAID.

Previous funding from the Gates Foundation and USAID provided support for studies that demonstrated an excellent safety profile for CS. Henry Gabelnick, Ph.D, Director of CONRAD said, "An urgent need exists to provide additional means of prevention of HIV/AIDS transmission as rapidly as possible. Although male and female condoms can provide protection, they are not used sufficiently and consistently. The availability of a microbicide that can be used by a woman to protect herself has a good probability of being this necessary alternative."

George Usher, President and CEO of Polydex Pharmaceuticals Limited, said "My thanks and gratitude at this announcement must go to the researchers and scientists at CONRAD for pursuing the development of Ushercell as a potential microbicide, and for garnering the considerable resources required over the years to advance this leading hope for women to protect themselves against sexually transmitted diseases and unwanted pregnancy."

The researchers hope that the completed trials will demonstrate a significant decrease -- at least 50% -- in HIV incidence among CS users compared to placebo users, and a measurable reduction in incidence of gonorrhea and chlamydia. A 50% decrease would be an enormous step towards reducing new infections and cost savings -- based on mathematical modeling of 73 countries with GDP of less than $1,200/year and all sub-Saharan countries, a microbicide of 50% efficacy and 20% service coverage would prevent 2.5 million new infections, leading to $3.7 billion in direct cost savings to health systems and indirect cost savings through increased productivity.

CONRAD and FHI, the primary organizations conducting these trials, have a long history of collaboration in microbicide development and have put together an excellent team of researchers to maximize the probability of a successful outcome.

The microbicide field has built an extraordinary amount of scientific momentum, with several first-generation candidates entering large-scale human trials around the world. At the same time, new products, based upon recent advances in HIV treatment, are already well into safety trials. Given current scientific advancements, and the identification of a number of potential microbicidal agents, an effective microbicide could be developed by the end of the decade, and once available, could well change the course of the AIDS epidemic.

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CONRAD is a cooperating agency of USAID committed to improving reproductive health by expanding the contraceptive choices of women and men and by helping to prevent the transmission of HIV/AIDS and other sexually transmitted diseases. CONRAD is administered through the Department of Obstetrics and Gynecology at Eastern Virginia Medical School (EVMS) in Norfolk, VA, with the main office located in Arlington, VA.

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 and Ushercell. Actual events or results may differ materially from expectations, which are subject to a number of known and unknown risks and uncertainties including but not limited to results of pending or future clinical trials.

CONTACT:

CONRAD Contact:
Henry Gabelnick
703-276-3904
hgabelnick@conrad.org

Polydex Contact:
Linda Hughes
877-945-1621
Linda@northarm.com