EXHIBIT 99.1

[PHARMOS CORPORATION LOGO]                                 FOR IMMEDIATE RELEASE
99 Wood Avenue South, Suite 311                   Contact - U.S.:  Gale T. Smith
Iselin, NJ 08830                                                   732-452-9556
www.pharmoscorp.com                             Contact - Israel:  Irit Kopelov
                                                                   08-940-9679

          Pharmos Receives FDA Orphan Drug Designation for Dexanabinol
      Prospect of Marketing Exclusivity Benefits Commercialization Strategy

Iselin, NJ, August 12, 2004 - Pharmos Corporation (Nasdaq: PARS) today announced
the U.S. Food and Drug Administration (FDA) granted orphan drug designation to
the Company's lead product candidate, dexanabinol, a neuroprotective agent that
the Company is developing to treat severe traumatic brain injury (TBI).
Dexanabinol is currently being tested in a pivotal Phase III trial for this
indication. Results of the trial, which completed enrollment (861 patients) in
March 2004, are expected to be announced around the end of this year.

The FDA Office of Orphan Products Development (OOPD) administers provisions of
the Orphan Drug Act (http://www.fda.gov/orphan/oda.htm) that provide incentives
for companies and individuals to develop drug products that treat conditions
affecting 200,000 or fewer patients annually in the U.S. and that provide a
significant therapeutic advantage over existing treatments. A major benefit of
orphan drug designation is the provision of seven years of market exclusivity in
the U.S. to the first sponsor that obtains marketing approval in the designated
indication. The designation also provides for tax credits relating to research
conducted to generate data required for marketing approval, reduced filing fees
and preferential pre-filing regulatory guidance.

"We are pleased to be awarded orphan designation for dexanabinol to treat this
serious condition for which there is no FDA-approved product," said Haim Aviv,
Ph.D., Chairman and CEO. "In addition to benefiting the regulatory submission
process, orphan designation provides market exclusivity that adds one more layer
of protection beyond our robust intellectual property position for dexanabinol
in the treatment of severe TBI."

About TBI

TBI is a leading cause of death and disability in the young adult population,
due primarily to automobile accidents, and in the elderly due to falls.
According to the CDC, annually within the U.S. there are about 1.5 million head
injuries which lead to roughly a quarter million hospital admissions, a number
20 times greater than hospitalizations due to spinal cord injury. TBI is the
cause of nearly 52,000 deaths and approximately 80,000 cases of severe long-term
disability each year. About 2% of the U.S. population is living with
disabilities resulting from TBI which leads to an annual societal burden of over
$50 billion (http://www.cdc.gov/node.do/id/0900f3ec8000dbdc). If dexanabinol
achieves marketing approval, the Company believes that it will be a high-value
product because amelioration of the high morbidity associated with this
condition would have major benefit both to patients' quality of life and to
society's financial burden.

About Pharmos

Pharmos discovers, develops, and commercializes novel therapeutics to treat a
range of indications, in particular neurological and inflammation-based
disorders. The Company's first neuroprotective product is dexanabinol, a
tricyclic dextrocannabinoid, currently undergoing clinical testing as a
treatment for TBI and as a preventive agent against post-surgical cognitive
impairment. Other dextrocannabinoid compounds and CB2-selective receptor agonist
compounds from Pharmos' proprietary synthetic




cannabinoid library are being studied in pre-clinical programs targeting stroke,
pain, multiple sclerosis and other disorders.

Statements made in this press release related to the business outlook and future
financial performance of the Company, to the prospective market penetration of
its drug products, to the development and commercialization of the Company's
pipeline products and to the Company's expectations in connection with any
future event, condition, performance or other matter, are forward-looking and
are made pursuant to the safe harbor provisions of the Securities Litigation
Reform Act of 1995. Such statements involve risks and uncertainties which may
cause results to differ materially from those set forth in these statements.
Additional economic, competitive, governmental, technological, marketing and
other factors identified in Pharmos' filings with the Securities and Exchange
Commission could affect such results.