September 14, 2005

Polydex Pharmaceuticals Reports Second Quarter Results

Toronto, Ontario, September 14, 2005 -- Polydex Pharmaceuticals Limited ( NASDAQ:POLXF ) reports financial results for its second fiscal quarter, the three-month period ending July 31, 2005.

POLYDEX PHARMACEUTICALS LIMITED AND SUBSIDIARIES
SECOND QUARTER RESULTS, FISCAL 2006
QUARTER ENDED: July 31, 2005
(Unaudited figures, stated in U.S. dollars)

A number of factors have affected the net income of the Company this quarter. Fluctuating currency exchange rates continue to have an affect on margins and profitability, and more recently, rising energy costs and subsequent effect on the price of raw materials has contributed to the decline in net income. Management has been examining ways to increase production and decrease costs of operation to meet the challenges of the changing operating environment.

George Usher, President and CEO says “We have opportunities for growth with our current customer base, as well as forging into new markets, and are working to increase overall quality and production to meet sales objectives.”

Planning for anticipated growth in demand for the Company's core product line, we are investing part of the capital gained from the sale of the Kansas facility to implement a series of refurbishments to the Toronto facility, and acquiring new equipment. Conversion of some internal procedures for compliance with GMP standards has been completed. A Good Manufacturing Practices certification will be required to meet production goals by 2006. To accomplish the necessary upgrades, we can expect that increased capital expenditures will continue through fiscal year end of January 2006.

Management also continues to seek strategic bio-pharmaceutical alliances for the future commercial development of Ushercell, while maintaining production with outsourced GMP facilities that have successfully produced and shipped hundred of thousands of individual dose units of Ushercell to clinical trial sites in the U.S. , Brazil , India and Africa . This has contributed to keeping the cost of production of Ushercell to a minimum, while maintaining consistent production of units for the various clinical trial sites.

In this past quarter, Ushercell became the recipient of $24 million in additional funding to CONRAD from the United States Agency for International Development (USAID) and the Bill and Melinda Gates Foundation. This grant funding enabled CONRAD to commence the second of two Phase III clinical trials to determine Ushercell's effectiveness for the prevention of HIV and other sexually transmitted diseases. CONRAD, in collaboration with Family Health International, has also recently completed a Phase II clinical trial assessing the efficacy of Ushercell as a contraceptive, for which a report is expected in mid-2006.

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.

Ushercell is among the leading candidates in the development of an HIV prevention microbicide, and as such has been featured in a number of television news stories across Canada and the US, as well as a variety of international print articles from India, Africa, the UK and in Canada's national newspaper, The Globe and Mail, featuring a story written by award-winning journalist, Stephanie Nolen (Globe, May 24, 2005, AIDS: A devastating setback in Africa but a drug from Canada offers hope )

George Usher says “We're obviously very pleased with the development achievements of Ushercell, and as this important research continues to gain broader exposure and international support, I'm looking forward to attending presentations and scientific findings at the Microbicides 2006 conference”, a biennial event to be next held in Cape Town, South Africa in April 2006.

Also during this quarter, preparations for a clinical trial to evaluate Ushercell's effectiveness at treating a common disorder among reproductive-age women, Bacterial Vaginosis (BV) remained in progress. As Bacterial Vaginosis may act as a co-factor in the heterosexual transmission of HIV, the impact of vaginal microbicides on Bacterial Vaginosis warrants further study.

With the contraceptive trial now completed, and the BV trial preparing to commence, Management anticipates that either of these indications could present an opportunity to bring Ushercell to market ahead of results from the HIV prevention trials which are anticipated to last several years. Currently, the global contraception market alone is valued at US$4.4 billion per year.

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 United States 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 for CONRAD: Annette Larkin, 202-429-4929, AnnetteLarkin@rationalpr.com

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