SCOLR's First CDT Product to Be Carried by Two National Retail Chains; Second Quarter Introduction of CDT Glucosamine & Chondroitin in More Than 2,000 Stores Planned

REDMOND, Wash.--(BUSINESS WIRE)--Feb. 10, 2003--SCOLR, Inc. (OTCBB:SCLL) announced today that the first two national chains to carry a CDT(TM) product will offer a 12-hour formulation of 500mg. glucosamine with 400mg. chondroitin tablets in more than 2,000 locations in the second quarter under their respective store brand labels.

Glucosamine is used in the treatment of osteoarthritis. According to Frost & Sullivan, national sales of glucosamine increased from estimates of $630 million in 1999 to an estimated projection of $1.58 billion in 2001. SCOLR's CDT(TM) glucosamine & chondroitin provides the consumer with the convenience of a once-daily dosage, by extending the release of glucosamine in the gastro-intestinal tract.

David Howard, President and CEO of SCOLR, stated, "We are very pleased that two national retailers have listed our CDT Glucosamine products and will be the first stores to receive deliveries under our recently initiated manufacturing arrangements. We will use this initial market availability as a stepping stone to introduce this product through other retail pharmacy chains and mass merchandisers in the U.S. We can expect to begin to see a royalty stream from these two chains late in the second quarter of this year.

"This distribution arrangement is the latest step in our business strategy to advance our drug delivery business and brings us one step closer to achieving our goal of becoming a specialty drug delivery company. As planned, the first commercializations of our patented CDT(TM) technology will generate early revenue streams from dietary supplement products -- which will partially support the longer term investments necessary to bring a prescription drug utilizing our CDT(TM) technology to market after 2005. We believe that the important manufacturing advantages provided by our CDT(TM) technologies and platforms will result in additional partnerships to develop unique products utilizing these platforms. These early royalty streams and the contemplated divestiture of probiotic assets are expected to provide some relief for our growing capital needs as we execute our business plan," stated Howard.

As previously announced, the Company has been exploring the sale of its probiotics business to provide liquidity to allow the Company to pursue its drug delivery business. While the Company has been actively engaged in negotiations to sell this business, no agreement has been reached. The Company intends to continue to pursue identified opportunities to sell its probiotics business or enter other strategic transactions in an effort to provide cash for the Company.

According to Stephen J. Turner, SCOLR Director of Product Development, "One advantage of offering a daily formulation for glucosamine & chondroitin means that consumer compliance should improve. It is widely accepted in the pharmaceutical and health supplement industries that products requiring multiple servings often lead to missed dosages, in turn reducing the effectiveness of any treatment regimen. As a result, we believe that a once-daily product will translate into increased customer satisfaction and increased sales. We expect that this product's patented formulation and proven technology will provide substantial marketing benefit to our partners."

The National Institutes of Health (NIH) is currently undertaking a $6.6 million glucosamine trial scheduled for completion in 2005. The trial calls for a three times a day dosing regimen for the subjects. Glucosamine is a Biopharmaceutical Classification System (BCS) Class1 compound, having highly permeable and soluble characteristics, and has been shown to have rapid clearance from the bloodstream. BCS Class1 drugs and compounds have been shown to benefit from the addition of a method of controlled release to help decrease the amount of the ingredient lost through the body's waste elimination processes.

Based in Redmond, Washington, SCOLR, Inc. (formerly Nutraceutix, Inc.) is a biopharmaceutical company leveraging specialized knowledge, proprietary and patented products and technologies, such as the patented CDT(TM) Controlled Delivery Technology platform, to introduce distinctive and novel OTC products, prescription drugs and dietary supplements. SCOLR currently operates in two business segments -- drug delivery and nutraceuticals. Its CDT(TM) drug delivery platform provides distinctive products with tangible benefits for the consumer and competitive commercial advantages for licensees. Established partnerships with pharmaceutical, OTC and natural products industry companies enable SCOLR to co-develop new products and to add value and protection to existing product franchises. For more information on SCOLR, please call 1.800.548.3222 or visit

Except for any historical information, the matters discussed in this press release contain forward-looking statements within the meaning of Section 37A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve risks and uncertainties, including activities, events or developments that the company expects, believes or anticipates will or may occur in the future. A number of factors could cause actual results to differ from those indicated in the forward-looking statements, including the Company's ability to continue to successfully market and provide its products and services and maintain their effectiveness, the continuation of the arrangements with the Company's product development partners, the ability of the Company to meet its financial projections, and general economic conditions. Such statements are subject to a number of assumptions, risks and uncertainties. Readers are cautioned that such statements are not guarantees of future performance and that actual results or developments may differ materially from those set forth in the forward-looking statements. The Company undertakes no obligation to publicly update or revise forward-looking statements whether as a result of new information or otherwise.

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