Melbourne, Australia, 01 May 2007: Phosphagenics Limited (ASX: POH) (AIM: PSG) (ADR/OTC: PPGNY) announced today that ethics approval has been obtained for a Phase Ib clinical trial of its transdermal insulin product, TPM-02/Insulin, which contains long-acting insulin.  The trial is planned to commence in May 2007.

TPM-02/Insulin gel is being developed as a novel “needle-free” way of administering insulin to patients with diabetes.  Following the successful completion of the Phase Ia study using short acting insulin and the recent advancements in the patented TPM-02 delivery system, this trial will assess Phosphagenics’ optimised formulation of a long-acting insulin, which is significantly cheaper, provides basal levels of insulin in humans and is commercially very attractive.

Dr Esra Ogru, Executive Director at Phosphagenics, said: “In August last year, our Phase Ia study demonstrated that a single application of TPM-02/Insulin gel applied to human skin rapidly delivered insulin across the skin and into the bloodstream without any adverse reactions.  Additionally, it significantly lowered blood glucose, insulin and c-peptide levels.

“Since then, we have been working diligently with our medical advisers, Assistant Professor William Hsu from the Joslin Diabetes Center, Harvard Medical School, US, and Professor Thomas Rades from the University Of Otago, New Zealand, to develop our optimised insulin formulation.

“This Phase Ib clinical trial is designed to assess, in up to 45 volunteers, the efficacy and safety of Phosphagenics’ improved formulation containing long-acting insulin, which aims to provide a non-invasive, needle-free treatment for many of the world’s 194 million diabetics.

“This trial will provide supporting data for an Investigational New Drug application to the U.S. Food and Drug Administration,” she said.

The proposed study, to be conducted by CMAX at the Royal Adelaide Hospital, South Australia, will lead directly into the start of a large Phase II trial that is likely to include up to several hundred patients.  It will be a multi-phased, multi-sited program, planned to commence in Q3, 2007.

Mr Harry Rosen, President and CEO of Phosphagenics, said: “This is an important step for the development and commercialisation of TPM-02/Insulin, especially with long-acting insulin, which is cost-effective and commercially attractive to our potential partners.

“This technology has the potential to eventually transform and expand the global $US 7 billion insulin market by providing a non-invasive and effective treatment for many of the world’s 194 million diabetic people, a figure which is predicted to rise to 350 million by 2025.” 

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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.