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

on due to the aforementioned lower professional fees and investor relations costs in connection with the Company's acquisition of Vela Pharmaceuticals in 2006, as well as to a reduction in insurance costs during the first half 2007. These reductions are offset in part by a $0.3 million consulting fee paid in 2007 to a former officer in accordance with the officer's employment agreement. Net other income decreased to $0.8 million in the current year-to-date period from $1.4 million in the same period in 2006, due primarily to a decrease in interest income.

Net Operating Loss Shareholder Notice

Under Internal Revenue Code Section 382 rules, a change in ownership can occur whenever there is a shift in ownership by more than 50 percentage points by one or more five-percent shareholders within a three-year period. When a change of ownership is triggered, the Company's net operating losses (NOL) asset may be impaired. The Company believes that substantially all of its Federal NOL generated since 1995 are not impaired, and requests that all investors contact the Company prior to allowing their ownership interest to reach a five-percent level.

About Pharmos Corporation

Pharmos Corporation is a biopharmaceutical company that discovers and develops novel therapeutics to treat a range of diseases of the nervous system, including disorders of the brain-gut axis, with a focus on pain/inflammation and autoimmune disorders. The Company's lead product, dextofisopam, is being studied in a Phase 2b clinical trial in patients with irritable bowel syndrome (IBS). Dextofisopam has completed a Phase 2a IBS study in which it demonstrated a statistically significant effect compared to placebo on the primary efficacy endpoint of adequate relief (n=141, p=0.033) and was very well tolerated. A second clinical program currently in Phase 2a testing is Pharmos' proprietary NanoEmulsion cream drug delivery system formulated with the NSAID diclofenac, which is being studied
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