MARKHAM, ON -- (Market Wire - Sep 20, 2005) --  AlphaRx Inc. ( OTC BB: ALRX ) today announced that it has completed the formulation development of a novel antibiotic formulation using its patent pending solid lipid nanoparticle delivery platform. The new product is under the trade name Vansolin(TM); the active ingredient is Vancomycin, a very powerful antibiotic being used mainly in hospitals around the world to treat life-threatening infectious disease such as hospital acquired pneumonia, ventilator associated pneumonia and severe sepsis. Vansolin(TM) is the Company's 4th product employing proprietary nanotechnology intended to increase the efficacy of existing drug compound while reducing its side effects.

Vancomycin was introduced into hospitals more than forty years ago in response to new strains of Staphylococci that were growing resistant to penicillin. Vancomycin is now seen as the last-resort drug because it is often the last opportunity that a physician may have to eliminate a bacterial infection, since bacteria have become resistant to so many other drugs.

The Company believes that encapsulating Vancomycin into nanoparticles may increase its efficacy. According to published research papers, in vitro the uptake of Vancomycin nanoparticles by white blood cells is 20 times more than free drug. The Company hopes that these white blood cells will absorb Vansolin(TM) nanoparticles after IV infusion and carry them to the site of inflammation, thereby increasing the local concentration of Vancomycin and ultimately increasing its bactericidal activity.

The Company announced earlier that it has completed formulation development of Zysolin(TM), a novel antibiotic nanoparticles intended to treat hospital acquired pneumonia and outlined its clinical development strategy. Vansolin(TM) will be developed using the same strategy. The Company expects to advance Vansolin(TM) into clinical phase by end of 2006.

About AlphaRx Inc. ( www.AlphaRx.com )

AlphaRx is an emerging biopharmaceutical company utilizing proprietary drug delivery technology to develop novel formulations of drugs that are insoluble or poorly soluble in water or have yet to be administrable to the human body with an acceptable delivery method. The Company's product candidates address various pharmaceutical markets, including arthritis, tuberculosis, ocular infection, ocular inflammation and hospital acquired pneumonia.

Forward-Looking Statements:

This release contains forward-looking statements within the meaning and pursuant to the Safe Harbor provisions of the Securities Litigation Reform Act of 1995 and involve risks and uncertainties that may individually or mutually impact the matters herein described, including but not limited to product development and acceptance, manufacturing, competition, regulatory and/or other factors, which are outside the control of the Company.

This press release is available on the company's official on-line investor relations site for investor commentary, feedback and questions. Investors are asked to visit http://www.agoracom.com and view the "AlphaRx" Investor Discussion and Contact Forum. In addition, investors are asked to e-mail all questions and correspondence to ALRX@Agoracom.com .

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