Expert panel finds tagatose sweetener 'GRAS'

Arla Foods of Denmark and Spherix (Biospherics Incorporated) (Nasdaq: BINC - news) of Beltsville, Maryland, jointly announced that an Expert Panel has found tagatose, the low- calorie sweetener, to be Generally Recognized As Safe (``GRAS''), thereby permitting its sale in the US. Arla Foods has already introduced tagatose to many major food products companies and found them receptive to the product. Well known products were successfully made by substituting tagatose for presently used sweeteners. Among these products are diet health bars, hard candies, diet soft candies, cereals, icings and diet-milk-based frozen desserts, sugarless chewing gum, and diet soft drinks. Arla Foods has also developed tagatose-sweetened nutritional bars for the healthy food market, and is investigating use of tagatose in the dietary supplement market.

``Our extensive marketing efforts show an attractive market for tagatose. With GRAS, we are now able to increase our effort vis-a-vis potential customers. Tagatose fits nicely into our product line and our distribution system,'' said Peter Lauritzen, Managing Director, Arla Foods Ingredients. ``GRAS is an important milestone that will enable us to engage customers in a closer dialogue,'' said Henrik Andersen, Executive Director, Arla Foods Ingredients.

Tagatose is a naturally occurring, multi-purpose, low-calorie, full-bulk sweetener derived from lactose. It is non-cariogenic and has prebiotic properties that promote healthy digestion. Tagatose is suitable for use in both food and functional food applications. It also enhances the taste of diet soft drinks. The new sweetener is safe for use by people with diabetes.

Establishing GRAS status for tagatose culminates a four-year effort. Spherix licensed its patent rights for the manufacture and sale of tagatose in foods and beverages to MD Foods in 1997, which, in 2000, was merged with a Swedish dairy to form Arla Foods, the world's second largest volume milk producer with annual revenues exceeding $4 billion. Whey is the raw material for the process and Arla Foods is one of the world's largest producers of whey. Arla Foods will now pursue regulatory approvals in Europe, Japan and Asia including Australia and New Zealand. Spherix will receive royalties on all sales of tagatose.

Arla Foods announced that it is proceeding to notify the FDA of the findings of the Expert Panel. Arla's plan for the commercialization of tagatose can now proceed. This plan includes plant development with participation of one or more major investment and/or production partners. With GRAS status established, it is hoped negotiations can be completed and implementation of the plan be undertaken this year.

Dr. Gilbert V. Levin, CEO of Spherix said, ``I am delighted at the GRAS Panel's finding. Our invention is now a food product. I want to recognize the strong development work of Arla Foods. In addition to pursuing safety approvals, Arla Foods made important discoveries that increase the potential market for our product. They found that tagatose synergistically improves the taste of diet soft drinks, that it can be used to enhance the flavor of health foods, and that it has prebiotic properties, promoting gut health. However, I am most impressed that taste panels have found that tagatose provides great tasting low-calorie products. Everyone agrees that taste matters most.''

Dr. Levin concluded, ``I hope that future royalties from tagatose will amply reward the patience and loyalty of our shareholders, and make it possible for the Company to expand operations in both of its lines of business, biotechnology and information technology.''

Certain statements contained herein are ``forward looking'' statements as defined in the Private Securities Litigation Reform Act of 1995. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied. Factors that could cause actual results to differ materially from those expressed or implied include, but are not limited to, those discussed in filings by the Company with the Securities and Exchange Commission, including the filing on Form 8-K made on March 3, 1999.

Under its motto, ``A World of Solutions,'' Spherix's mission is to create value and increase shareholder wealth through innovations that benefit our clients and the human condition. Spherix offers innovations in information technology, knowledge management, and biotechnology.

The Spherix Internet address is http://www.spherixinc.com .

Source: Spherix (Biospherics Incorporated)