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Pharmos Issues Letter to Shareholders
Date:9/10/2007

in March 2007 after nearly 20 years of dedicated service to the Company. We wish him all the best in his retirement. Dr. Aviv remains a director of the Board of Pharmos.

As management, we are aware that at the time of this writing, our stock price is disappointingly low and not reflective of the underlying value in our assets. As fellow shareholders, we will do our utmost to unlock the value in the Pharmos pipeline by delivering meaningful clinical data, leveraging our R&D expertise and communicating this with the investment community.

With the changes put into place over the past year, we feel confidently that Pharmos has been fundamentally repositioned for growth and creating shareholder value, and we are excited to be with you on this journey. We thank our employees, partners and shareholders for your continued support and loyalty. We look forward to the year ahead, which we expect will be one of rebuilding through further developments and innovations in our clinical and preclinical programs.

Elkan R. Gamzu Alan L. Rubino

Chief Executive Officer President & Chief Operating Officer

--End of Letter to Shareholders --

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 program in Phase 2a involves a clinical trial of our NanoEmulsion cream drug delivery system to deliver the NSAID diclofenac topic
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