Class Action Lawsuit Filed on Behalf of Pharmos Corp. Investors


NEW YORK, March 18, 2005 (PRIMEZONE) -- The law firm of Kirby McInerney & Squire, LLP announces that a class action lawsuit has been commenced in the United States District Court for the District of New Jersey on behalf of all purchasers of Pharmos Corp. securities ("Pharmos" or the "Company") (Nasdaq:PARS) during the newly-expanded period from February 10, 2000 through December 17, 2004, inclusive (the "Class Period").

Please visit our website, which offers summary and detailed information concerning the suit at http://www.kmslaw.com/newcases/6.html or contact us by phone at (888) 529-4787 or by email at vlee@kmslaw.com for more information.

The action charges Pharmos and certain of its senior officers with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The alleged violations stem from the dissemination of false and misleading statements, which had the effect -- during the Class Period -- of artificially inflating the price of Pharmos's shares.

During the Class Period, defendants concealed the fact that Dexanabinol, the company's flagship drug product for Traumatic Brain Injury (TBI) trial was not exhibiting materially favorable reaction. Prior to disclosing this information to the public, Pharmos sold millions worth of stock in private placements. Furthermore, the Company's CEO sold 20% of his holdings and its President sold almost 50% of his holdings. Such sales occurred after the close of Phase III enrollment and after the six month post-enrollment period concluded. On December 20, 2004, just weeks after insiders sold 400,000 shares of stock, Pharmos announced that Dexanabinol was not found to be materially effective in Phase III testing. Furthermore, after years of touting the effectiveness of Dexanabinol, the Company abruptly ceased its effort to gain approval for Dexanabinol for TBI.

Kirby McInerney & Squire, LLP has specialized in complex litigation, including securities class actions, for several decades. The firm has repeatedly demonstrated its expertise in this field, and has been recognized by various courts which have appointed the firm to major positions in consolidated and multi-district litigation. The firm's efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling hundreds of millions of dollars, and its achievements and quality of service have been chronicled in numerous published decisions. More information about the firm, class actions in general, or about the role of the lead plaintiff in a securities class action can be obtained through Kirby McInerney & Squire's website at http://www.kmslaw.com.

If you are a member of the class described above, you may, no later than March 25, 2005, move the Court to serve as lead plaintiff of the class, if you so choose, pursuant to the Private Securities Litigation Reform Act of 1995 (the "PSLRA"), 15 U.S.C. section 78u-4(a). A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. Under certain circumstances, one or more class members may together serve as lead plaintiff. Your ability to share in any recovery is not, however, affected by the decision whether or not to seek appointment as a lead plaintiff. For more information about the case, its claims, and your rights, you can contact:

More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca



            

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