Biodar Acquires the Activities Of Karma Pharm

Founders to receive US $2 million plus stock

Yavne, Israel, 22 of January 2004 ---Biodar Ltd, a subsidiary of Lycored Ltd. and Makhteshim Agan Industries Ltd (MAI), announced today the acquisition of the activities of Karma Pharm, a start-up activity based in Israel.

Karma Pharm develops generic controlled-release oral drug delivery products, in addition to added-value generic poorly soluble and fast dissolving drugs. Karma Pharm had several collaboration agreements in place with both Israeli and international pharmaceutical companies in addition to support by the Chief Scientist of Israel. Karma Pharm was also a participant at the Sixth European Program.

Biodar Ltd. develops and manufactures microencapsulation-based products for the food and nutraceuticals industries.

Under the terms of the agreement Biodar Ltd. will finance the continuation and expansion of the drug delivery research and development activities that originated at Karma Pharm. In addition, Karma Pharm founders are to receive US $2 million and an undisclosed amount of shares in Lycored.

“The combination of Karma Pharm activities and technologies, together with Biodar’s microencapsulation capabilities will create a synergistic effect, which we believe will lead to the creation of a world class drug delivery company,” said Morris Zelkha, CEO at Biodar.

Currently the oral drug delivery market is valued at an estimated.US $38$billion. The annual growth of the Drug Delivery Systems (DDS) market is 15% compared to 7% annual growth of the total drug market. Forecasts show that the oral drug delivery market may grow to an estimated US $52billion by 2007. It is estimated that in 2010 DDS will represent more than 50% of the market. Oral drug delivery represents nearly 55% of the total drug delivery market.

Karma Pharm was established in August 2000 by a group of private entrepreneurs: the Mittlelman family, Mr. Ehud Marom and Dr.Yoram Sela, both of whom served as senior executives in pharmaceutical companies . Rachel Sagi, LLB was Karma Pharm's General Manager and director.

Mr. Marom is the CEO and president of Gamida-Cell, developer of stem cell expansion products. Dr. Yoram Sela will continue a leadership position in Biodar by maintaining responsibility for Biodar's newly adopted pharmaceutical activities.

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