January 23, 2005

Ushercell Enters International Phase II Trial For Bacterial Vaginosis Treatment and Prevention
Phase III HIV Prevention trials continuing in Africa and India

Toronto, Ontario, January 23, 2006 -- Polydex Pharmaceuticals Limited ( NASDAQ:POLXF ) is pleased to announce the commencement of a randomized, blinded Phase II clinical trial of Cellulose Sulphate ( Ushercell ), a microbicidal gel which is being tested for its effectiveness in the treatment of Bacterial Vaginosis (BV), the most common vaginal disorder among reproductive-age women, present in 15-25% of gynecologic patients and up to 60% of women seen at sexually transmitted diseases clinics. BV is also associated with increased risk of HIV acquisition and transmission.

BV is defined as a clinical syndrome in which the normal lactobacilli-predominant vaginal flora is replaced by an overgrowth of Gardnerella vaginalis and anaerobic microorganisms . In an earlier published study, Ushercell demonstrated a growth-inhibition effect on BV-associated bacteria in vitro, and the study report concluded with recommendations to further study the effects of Ushercell as a treatment for BV.

In a subsequently published report delivered at the 12 th Conference on Retroviruses and Opportunistic Infections in Boston , the results of a clinical trial conducted by the HIV Prevention Trials Network (HPTN049) wherein 59 HIV+ women enrolled to assess Changes in Vaginal Flora Associated with Vaginal Microbicides , 43% of these participants had Bacterial Vaginosis at the time of enrollment. By day 14 of that trial, 89% of the patients with BV that were assigned the use of Ushercell no longer had BV. Not only is BV a common problem that requires treatment, Bacterial Vaginosis may also act as a co-factor in the heterosexual transmission of HIV. Therefore, the impact of Ushercell as a BV treatment warrants further study.

“We are delighted that Ushercell continues to show a high safety profile and broad spectrum antimicrobial activity, securing recommendations from Dr. Jose Simoes and Dr. Lourens Zaneveld to assess its potential as a treatment for BV,” said George Usher, President and CEO of Polydex. “The second study with equally encouraging indications of BV clearance confirms the potential we envision for Ushercell. A BV treatment may represent our fastest route to the market for Ushercell”, he continued.

Polydex has committed the necessary funding to complete this trial, and CONRAD continues its support in the development of Ushercell by providing the clinical trial supplies necessary to carry out this trial.

The study will be carried out under the direction of Dr. Jose Simoes, at the University of Campinas , Sao Paulo , Brazil , and will involve 60 women having a clinical diagnosis of BV, and no other sexually transmitted diseases or reproductive tract infections. All participants will be counseled to use an effective non-barrier method of contraception throughout the trial.

It is estimated that this randomized, blinded Phase II clinical study will last approximately six months, after which the data will be unblinded and analyzed. A report could be available as early as late 2006. The protocol for this study has been designed to conform to FDA guidelines.

Ushercell is a high molecular weight cellulose sulphate polymer derived from natural cotton, and has successfully completed numerous Phase I safety and tolerability trials. A Phase II clinical trial for fertility regulation has recently been completed in the United States and two Phase III trials to determine efficacy in the prevention of HIV/AIDS, gonorrhea, chlamydia and herpes 1 and 2 are ongoing in Africa and India .

CONRAD and Family Health International are conducting the Phase III HIV Prevention trials in Africa and India , with funding from USAID and the Bill and Melinda Gates Foundation. The two HIV prevention trials are expected to last approximately three years, with a further year required to evaluate the data.

CONRAD, located in Arlington , VA , has played an instrumental role in developing cellulose sulphate 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.

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.

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