Phosphagenics 2007 Financial Report
Appendix 4E

Phosphagenics Limited (“Phosphagenics”) (ASX: POH, AIM: PSG, OTCQX: PPGNY) today released its Financial Report for the year ended 31 December 2007 and Appendix 4E. The highlights from which are as follows:

Year in Review

In 2007 Phosphagenics earned $4.4 million in revenue, up 28% from $3.4 million in 2006. Royalties received amounted to $2.0 million, while $1.1 million was attributable to government grants provided to fund Research and Development (“R&D”) projects.  The Company also raised $7 million in January 2007.

During the year the Company was awarded an AusIndustry Commercial Ready grant for its insulin program and a Pharmaceuticals Partnerships Program (P3) grant, with a combined total of up to $5.3 million over three years.

Phosphagenics made a commitment for 2007 to drive its R&D programs forward and advance projects to clinical trials. The Company successfully delivered on this goal by increasing its R&D expenditure to $8.4 million, up 78% from $4.8 million in 2006. This increase was instrumental in supporting the achievement of a number of R&D milestones in 2007 and Phosphagenics now has five clinical stage products:

•           transdermal insulin

•           oral Phospha E^®

•           transdermal oxycodone

•           transdermal morphine

•           dermal retinoic acid 

The loss before income tax expense was, as reported under Australian International Financial Reporting Standards, $8.8 million in 2007, an increase of 44% from $6.1 million in 2006, which in view of the 78% increase in R&D expenditure in 2007 was a positive outcome for the Company, which concluded the year with $10.7 million in cash and cash equivalents.

Looking Forward

In addition to progressing insulin, Phospha E^®, oxycodone and retinoic acid clinical trials in 2008, Phosphagenics is developing a number of other product candidates utilising its targeted, localised delivery technology, including multiple anti-inflammatory and analgesic compounds.

The aim of these new product candidates is to use the precision and efficiency of Phosphagenics patented drug delivery technology, TPM, to enhance the safe delivery of approved topical drugs to a localised site of action, while minimising exposure of the active to the systemic circulation – applying the same technology as used in the recently announced retinoic acid clinical trial.

The Company will continue to work with world-leading collaborative partners, such as Assistant Professor William Hsu from the Joslin Diabetes Centre, Harvard Medical School, U.S., Professor Thomas Rades from the University of Otago, NZ, and Nestlé Nutrition, Vevey, Switzerland.

To view the financial report in full please click on the link below
 

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 was established in the U.S. with The Bank of New York Mellon (PPGNY) for U.S. investors to trade in Phosphagenics’ stock on the ‘over-the-counter’ market. In July 2007, this was upgraded to the International OTCQX, a new premium market tier in the U.S. for international exchange-listed companies, operated by Pink Sheets, LLC.

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

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.

Company Contact Details:                U.S. Investor and Media Contacts:

Mr Harry Rosen                                Brian Ritchie

Phosphagenics Limited                      Financial Dynamics

President & CEO                               Tel +1 212 850 5683

Tel +61 3 9605 5900

Mary McSwiggan (Bennett)

Phosphagenics Limited

Investor Relations Manager

Tel +61 3 9605 5907