Carrington Laboratories Renegotiates, Expands Contract to Assure Ample Supply of Alcohol for Raw Materials Processing in Costa Rica

Extended 5-Year Contract Provides for Current Needs, Anticipated Growth

IRVING, Tex., Jan. 16 -- Carrington Laboratories, Inc. (Nasdaq: CARN) today announced that it has renegotiated and extended its contract for alcohol recovery and supply for its bulk pharmaceutical plant in Costa Rica. Alcohol is a critical component in the production of Carrington's raw materials and raw materials that it sells to other manufacturers. The company said the new five-year contract would result in efficiencies over the agreement it replaces. Terms of the old contract had a variable cost according to use, whereas the new contract has a fixed cost per liter.

Carrington, through its Costa Rica subsidiaries, has signed the new five-year contract with Servicios de Alcohol S.A. (SERCOHOL), a Costa Rican firm that has done business with Carrington for ten years. SERCOHOL will continue to operate onsite facilities to recover and purify alcohol used in processing products from the Aloe vera L. plant.

"This new contract is important to Carrington because it not only provides a critical material for our current production, it also assures us an ample additional supply as needed to account for growth in product demand," said Dr. Carlton E. Turner, president and chief executive officer. "Additionally, CR1013, the raw material for the GelSite(TM) technology used by DelSite Biotechnologies to deliver proteins and peptides, will be produced in this facility. Thus, a stable price per liter is critical to our goal of delivering products to our customers at a relatively stable price."

Dr. Turner continued, "We believe our recent strategic initiatives, including a marketing alliance and a business acquisition, will contribute to a growing demand for the materials we produce in Costa Rica. We also anticipate growth in our base business and in our SaliCept(TM) Oral Patch, which is intended for use in tooth extraction sites to manage alveolar osteitis, the often painful condition known as dry socket. We are just beginning production in Costa Rica of this product for domestic use and have an alliance with a partner for registration in Japan."

SaliCept, which has been available in other forms for general oral pain and wounds, contains Acemannan Hydrogel(TM), one of the products produced in Costa Rica. Most of Carrington's products contain Acemannan Hydrogel(TM), Manapol(R) or Hydrapol(TM). Other new raw materials in the development process will also use alcohol.

Acemannan Hydrogel(TM) is a highly processed, freeze-dried "product by process" from the inner leaf gel of Aloe vera L. Carrington's patented process ensures batch-to-batch consistency. The raw material is used in human monograph drugs, medical devices and prescription medical devices, primarily related to wound care. Manapol(R) Powder is protected by patents in more than 26 countries. Its DSHEA (Dietary Supplement Health and Education Act of 1994) claims include that it enhances the immune system. Manapol(R), when used in conjunction with a proper nutrition and exercise program, may also aid in digestion and help maintain healthy cholesterol levels. The product's major end markets include nutritional beverages, dietary supplements, nutraceuticals and cosmetics.

About Carrington

Carrington Laboratories, Inc., is an ISO 9001-certified, research-based biopharmaceutical and consumer products company currently utilizing naturally occurring complex carbohydrates to manufacture and market products for mucositis, radiation dermatitis, wound and oral care; manufacture and market the nutraceutical raw materials Manapol(R) and Hydrapol(TM). Carrington also manufactures and markets consumer products sold under its AloeCeuticals(R) brand and manufactures quality products for other companies. Manufacturing operations comply with cGMP standards. The company's DelSite subsidiary is developing its proprietary GelSite(TM) technology designed to provide controlled release of peptide- and protein-based drugs. Carrington's technology is protected by more than 120 patents in 26 countries. Select products are honored with the internationally coveted CE mark, recognized by more than 20 countries around the world.

Certain statements in this release concerning Carrington may be forward- looking. Actual events will be dependent upon a number of factors and risks including, but not limited to: subsequent changes in plans by the company's' management; changes in the regulatory process; changes in market trends; and a number of other factors and risks described from time to time in the Company's filings with the Securities & Exchange Commission, including the Form 10Q filed November 14, 2002.

For additional information about Carrington Laboratories,
Visit the company's home page at

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