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Pharmos Corporation Reports 2007 Third Quarter Results
Date:10/30/2007

imately 480 female patients with diarrhea-predominant or alternating IBS at up to 55 participating U.S. centers over an 18-month period. Enrollment of patients in the study is currently on schedule.

Additional but relatively minimal research and development expenses were incurred during the quarter in connection with the Company's commencement in June 2007 of a Phase 2a clinical study of its topical NanoEmulsion drug delivery technology formulated with 3% diclofenac as a treatment for osteoarthritis. Up to eight centers in Israel will enroll a total of approximately 126 subjects over a nine-month period. Gross expenses for other research and development projects in early stages of development for the third quarter 2007 and 2006 were relatively unchanged at $0.9 million.

The decrease in general and administrative expenses is due primarily to lower professional fees and investor relations costs in connection with the Company's acquisition of Vela Pharmaceuticals, which was ongoing in the third quarter 2006 and completed by the fourth quarter 2006.

For the year-to-date period ended September 30, 2007, Pharmos recorded a net loss of $12.9 million, or $0.51 per share compared to a net loss of $11.3 million, or $0.60 per share in the same period in 2006. The increase in net loss is due to increased operating expenses and a decrease in net other income. Total operating expenses increased 7% to $13.7 million in the current year-to-date period from $12.8 million in the same period in 2006, primarily due to increased research and development expenses and lower grant receivables. Gross research and development expenses increased 41% to $9.3 million from $6.6 million, reflecting increased clinical trial-related activities. Grant receivables decreased to $0.8 million from $1.1 million in the same period in 2006. Higher research and development expenses were partially offset by a 29% decrease in general and administrative expenses to $5.0 million from $7.0 milli
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