Phosphagenics Limited (ASX: POH; AIM: PSG; BNY/ADR: PPGNY) (“Phosphagenics”) today announced positive results from preclinical studies of its TPM-02 technology formulated with retinoic acid, a leading topical treatment for severe acne and also an active ingredient used in anti-aging cosmetics.

The proof of concept studies showed a three-fold increase in the amount of retinoic acid delivered into the skin when formulated with TPM-02 compared to a control formulation. Importantly there was no retinoic acid detected in the bloodstream.

This study builds upon Phosphagenics’ successes in delivering drugs such as insulin through the skin and into the bloodstream, without causing skin disruption or irritation, and demonstrates that the TPM-02 technology can be controlled to deliver and hold an active ingredient in the skin. This is the optimal characteristic for dermatological and cosmetic delivery systems.

Dr Esra Ogru, Executive Vice President R&D at Phosphagenics, said that this trial shows the adaptability and flexibility of the Company’s delivery technology, which together with the high absorption rates from the trial will see Phosphagenics expanding upon opportunities in the dermatological and cosmetic fields.

“The aim of most dermatological and cosmetic products is to deliver an active ingredient to the active layer of the skin – the dermis – without entering the bloodstream,” Dr Esra Ogru said.

“Our studies have shown that using our TMP-02 formulation, Phosphagenics can deliver three times more retinoic acid compared to a control retinoic acid formulation, which to the consumer, means a far more effective product.”

In addition to improving on the dermal delivery of retinoic acid, Phosphagenics sees broader applications for the TPM-02 technology with internal studies of actives such as co-enzyme Q10 (CoQ10) and omega-3 fatty acids also providing promising results.

Phosphagenics’ President and CEO, Harry Rosen, said: “As foreshadowed at our Annual General Meeting in May this year, we are very excited to be pursuing the dermatological and cosmetic applications of our technology.

“We consider retinoic acid to be a promising candidate for clinical development as in the US alone the sales for topical acne treatments in 2006 were US$1.3 billion of which topical retinoids, such as retinoic acid, contributed US$347 million.”

ENDS….

APPENDIX AND NOTES TO EDITORS

About Phosphagenics Limited

Phosphagenics is a Melbourne-based, globally driven biotechnology company focused on the discovery of new and cost effective ways to enhance the bioavailability, activity, safety and delivery of proven pharmaceutical and nutraceutical products.

Phosphagenics’ core technology is built around the science and application of phosphorylation, a process where the addition of a phosphate group has been found to enhance the bioavailability, activity and safety of existing pharmaceuticals and nutraceuticals, as well as to assist in the production of drug delivery platforms.

Phosphagenics’ shares are listed on the Australian Stock Exchange (POH) and the London Stock Exchange's Alternative Investment Market (PSG). An ADR – Level 1 program has been established in the US with the Bank of New York (PPGNY) for US investors to trade in Phosphagenics’ stock on the ‘over-the-counter’ market.

For more information, please visit Phosphagenics’ web site at www.phosphagenics.com

Company Contact Details:                            US Investor and Media Contacts:

Dr Esra Ogru                                                   Mr Brian Ritchie

Phosphagenics Limited                                      Financial Dynamics

Executive Vice President R&D                            +1 212 850 5683

+61 3 9605 5900

Ms Mary Bennett

Phosphagenics Limited                                       

Investor Relations Manager                                                                    

+61 3 9605 5907                                               

Safe Harbor Statement

This press release contains forward-looking statements based on current expectations of future events. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialise, actual results could vary materially from the Phosphagenics' expectations and projections. Risks and uncertainties include general industry conditions and competition; economic conditions, such as interest rate and currency exchange rate fluctuations; technological advances and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approvals; domestic and foreign health care reforms and governmental laws and regulations.