Phosphagenics commences Phase I clinical trial for its transdermal insulin delivery platform TPM-02/Insulin

Melbourne, Australia, 24 July 2006
Phosphagenics Limited ("Phosphagenics") (ASX: POH) announced today that it has commenced a Phase I clinical trial of its transdermal insulin delivery product, TPM-02/Insulin. TPM-02/Insulin is being developed as a novel way of administering insulin to diabetics, and this trial follows on from the successful preclinical trials that were reported to the market on 25 May 2006.

The primary objective of this study is to assess the safety and tolerability of this unique delivery platform in delivering insulin through the skin. Blood glucose and insulin levels will also be measured as secondary outcomes. In the proposed study, 20 healthy male volunteers aged between 18 and 45 will be randomly assigned to receive either TPM-02/Insulin or a placebo gel, applied in a single dose directly to the skin. Patients will then be monitored for a period of 48 hours.

The trial, which is being conducted at The Alfred hospital (Melbourne, Australia) in accordance with ICH GCP standards, is expected to be completed by the end of July, with a full analysis anticipated by September 2006.

Dr Esra Ogru, Executive Director of Research and Development at Phosphagenics, said: "This Phase I trial will add further evidence to the safety and tolerability of Phosphagenics’ technology in delivering larger peptide or protein drugs through the skin."

The principal investigator to the clinical trial will be Professor Leon Bach, senior endocrinologist at The Alfred hospital and the co-investigator will be William Hsu MD, clinical investigator at the Joslin Diabetes Center of Harvard Medical School.

ENDS….

For further information please contact:

Phosphagenics Limited
Dr Esra Ogru, Executive Director Research & Development
Telephone: +61 3 9605 5900 or 0402 080 846

About Phosphagenics’ Transdermal Carrier
Phosphagenics’ patented transdermal technology (TPM) utilises existing dermal transport mechanisms to rapidly transport drugs across the skin without disrupting or damaging its surface. The company believes that the key advantages of this TPM delivery system include the fact that it possesses anti-inflammatory and antierythema properties, thus minimising skin irritation, and has the ability to provide a sustained systemic delivery of a wide range of drugs - ranging from relatively small molecules (e.g. morphine, fentanyl, oxycodone, atropine, estradiol, testosterone) to large molecules (e.g. insulin and PTH) – from a single application. Additionally, the TPM delivery system can be cost-effectively manufactured in a wide range of presentations (e.g. gel, paste, liquid and powder) adding value to existing pharmaceuticals.

About Diabetes

Diabetes is an illness that occurs when the body does not produce or properly use the hormone insulin. Insulin, which is produced in the pancreas, enables muscles and other tissues to absorb and utilise glucose (a form of sugar) as the body’s energy source. When an individual has diabetes, either their pancreas does not produce the insulin they need or their body cannot use its own insulin effectively. As a result, people with diabetes do not use enough of the glucose in the food they eat. This leads to the amount of glucose in the blood increasing, a condition referred to as "high blood sugar" or "hyperglycaemia". High levels of glucose in the blood can lead to medical complications.

The International Diabetes Foundation (IDF) estimates that direct and indirect healthcare costs associated with diabetes exceed US$153 billion globally. IDF believes that some costs are preventable through disease control and management that decreases the longer term costs of complications, such as blindness and vision impairment, cardiovascular disease and kidney failure. At present there is no cure for diabetes.

The world market for insulin is estimated to be worth more than US$7.0 billion per annum and growing.

About Phosphagenics Limited (“Phosphagenics”)
Phosphagenics is a Melbourne-based biotechnology company focused on discovering new and cost effective ways to enhance the bioavailability, activity and delivery of proven pharmaceutical and nutraceutical products.

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.