EXHIBIT 99.2

[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 Sells $16.75 Million in Common Stock

Iselin, NJ, August 23, 2004 - Pharmos Corporation (Nasdaq: PARS) announced today
that it has raised $16.75 million gross proceeds in an issuance of common stock
with several institutional investors. The proceeds will be used for general
corporate purposes. Rodman & Renshaw, Inc. and Harris Nesbitt acted as co-lead
placement agents on this transaction.

Haim Aviv, Chairman and Chief Executive Officer said, "This financing will allow
us to more aggressively pursue our promising CB2 platform while maintaining
focus on our top investment priority, Dexanabinol for Traumatic Brain Injury. We
see this opportunity in the market as a means to solidify our cash reserves for
growth and success."

An aggregate of approximately 5.58 million shares of common stock were issued
utilizing a shelf registration declared effective by the Securities and Exchange
Commission in November 2003 and later amended in December 2003, and the offering
was priced at $3.00 per share. Investors in the offering do not have any
repricing or other adjustment rights for their common stock. This transaction
completes the balance of this shelf registration.

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 severe traumatic brain injury (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 expected use of the proceeds from
this offering, 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.