UNITED-GUARDIAN REPORTS
                                     STRONG THIRD-QUARTER START

HAUPPAUGE, NY, August 21, 2001 — United-Guardian, Inc. (AMEX:UG) reported today that sales in the first half of the third quarter 2001 are above expectations, and on a pace to easily exceed sales for the same period last year.  Although the third quarter is typically the company’s slowest due to the overall slowdown in business activity in Europe during the summer, third quarter sales so far have been unusually strong.

In addition, the Company issued clarifications on recent sales of United-Guardian stock by insiders, in particular its Chief Executive Officer, Dr. Alfred Globus , who sold stock in April and May of this year and September of last year.   Some of the sales by Dr. Globus were made to repay advances made by the company on his behalf in connection with a life insurance policy that had been terminated.  Those stock sales were made directly to the company and not carried out on the open market.  The remaining sales were to cover the exercise of stock option grants made previously by Dr. Globus .  In total, the sales by Dr. Globus reduced his equity position in the company from approximately 32% to 30%.

Dr. Globus made it clear that he has no intention of selling any of his stock on the open market, and that he only made these sales to fulfill his prior obligations. 

The Company also pointed out that all the other insider sales that have taken place over the past few months have been in connection with the exercise of stock options issued under the company's employee incentive stock option plan.  Those options had been held for many years, involved small amounts of stock, and the reasons for the sale were personal ones unrelated to company.  The aggregate of the sales by insiders constituted less than 0.2% of the total shares outstanding

United-Guardian is a manufacturer of cosmetic ingredients, personal and health care products, pharmaceuticals, and specialty industrial products.   

Contact:   Robert S. Rubinger
                Public Relations
               (631) 273-0900

NOTE:   This press release contains both historical and "forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements about the company’s expectations or beliefs concerning future events, such as financial performance, business prospects, and similar matters, are being made in reliance upon the “safe harbor” provisions of that Act. Such statements are subject to a variety of factors that could cause Registrant’s actual results or performance to differ materially from the anticipated results or performance expressed or implied by such forward-looking statements. For further information about the risks and uncertainties that may affect the company’s business please refer to the company's reports and filings with the Securities and Exchange Commission.