MONTREAL, QUEBEC — January 31, 2002 - Biophage Pharma Inc. (CDNX: BUG) (“Biophage”) and Biopolymer Engineering, Inc. (“Biopolymer”) announced today an agreement to research and commercialize pharmaceutical applications of Biopolymer's immune modulators in the prevention and treatment of a variety of biological agents, including anthrax, smallpox, plague and brucellosis. This partnership will seek to develop an alternative or adjunctive approach to antibiotics or vaccines through the enhancement of the innate immune defense system against infections.

The preclinical results of experiments performed by Biophage have demonstrated that Biopolymer's immune modulator products can prevent the fatal outcome of anthrax infection in a significant number of animals. This research will be made public following publication in peer-reviewed scientific journals and presentation at upcoming scientific conferences. Further animal testing in small and large animals is required to optimize the pharmaceutical applications of these immune modulators for the prevention and treatment of a larger number of biological weapons threats.

“The results of the research conducted by both companies to date are very promising,” said Mr. Richard G. Mueller, President and Chief Executive Officer of Biopolymer Engineering. “Together we have already made significant progress toward the development of a pharmaceutical product to prevent and treat certain biowarfare infections,” added Mr. Mueller.

“This joint program seeks a major breakthrough in the prevention and treatment of anthrax infections in humans,” said Dr. Rosemonde Mandeville, President and Chief Executive Officer of Biophage Pharma. “Biophage has been involved in this field since 1996, when it received its first contract from Defence Research Establishment Suffield, Alberta. Biophage has developed the tools and the expertise to assess novel approaches to the management of biowarfare agents. We are extremely pleased to partner with Biopolymer to accelerate the development and commercialization of these immune modulators,” concluded Dr. Mandeville.

Under the terms of the agreement, Biophage and Biopolymer will share the development costs, intellectual property and profits generated by the commercialization or licensing of the developed products. The two companies plan to accelerate their research program by securing additional funding through various U.S. and Canadian governments incentive programs.

Biophage Pharma Inc. is a Canadian biopharmaceutical company specializing in the development of novel alternative strategies for the treatment of antibiotic resistant infections in humans and livestock, and inflammatory diseases in humans. Founded in 1995, Biophage is located at the Biotechnology Research Institute in Montreal and now has 23 employees including a team of 19 scientists. Through an active R&D program and a disciplined growth strategy, Biophage is actively seeking in-licensing, collaboration agreements and joint ventures to strengthen its intellectual property portfolio currently consisting of 17 patents and patent applications. Website: www.biophage.com.

Biopolymer Engineering, Inc. is a privately held, international biotechnology company developing carbohydrate-based products for a wide range of therapeutic, consumer and industrial applications. Founded in 1997 and based in Eagan, Minnesota, the company has built a strong technology platform supported by more than 200 U.S. and international patents covering its carbohydrate-based products. Website: www.biopolymer.com.