The Manager

Company Announcements Office

The Australian Stock Exchange Limited

Dear Sir

Re: Phosphagenics Announces A$11.25m Share Placement

Biotechnology company Phosphagenics Limited ("Phosphagenics") (ASX Code: POH; AIM Code: PSG) advises that it is to raise A$11.25 million (Stg.4.68 million) via a placement of approximately 46.875 million fully paid ordinary shares to leading overseas and domestic institutions, and other sophisticated investors, at 24 cents (10 pence) per share. The capital raising will provide funding for Phosphagenics’ core R&D program and general expenses.

It is expected that trading in the new shares on the Australian Stock Exchange and the London Stock Exchange’s Alternative Investment Market will commence on or around 17 November 2005.

Mr Harry Rosen, President & Executive Director said that the company was very pleased with the response from investors. "Support from international investors was particularly pleasing and we believe it reflects their confidence in our ability to meet our milestone targets and deliver on our strategic plan," he said.

The placement in Australia was arranged by BBY Limited, Lead Manager to the transaction, and in the UK by London-based Collins Stewart Limited.

Mr Rosen said: "The funds raised will be used to further develop our portfolio of pharmaceutical and nutraceutical drugs including Phosphagenics’ globally-competitive, transdermal technology which is uniquely safe and effective and has the potential to be applied to an extraordinarily broad range of drugs."

For further information, please contact Mr Harry Rosen, Phosphagenics Limited on +61 3 9605 5900.

Attached is an Appendix 3B Notice announcing and applying for quotation of the new 46,875,000 ordinary fully paid shares.

Yours faithfully
Phosphagenics Limited


per Mourice Garbutt
Company Secretary