ACRUX LIMITED — AGM Information 2007

Oct 9, 2007

8 October 2007

Dear Shareholder,

We are very pleased to invite you to attend Acrux’s Annual General Meeting, for which the following documents are enclosed:

• Notice of the meeting, including notes and explanatory statement

• a personalised proxy form and return envelope

If you have elected to receive it in printed form, also enclosed is our Annual Report for the year ended 30 June 2007, which we trust you will find useful and informative. An electronic copy of the report can be viewed on our website (www.acrux.com.au).

The Annual General Meeting will be held at the offices of Pitcher Partners, Level 19, 15 William Street, Melbourne, on Wednesday 14 November 2007, commencing at 2.30 pm.

If you are unable to attend, but wish to appoint a proxy, please complete the proxy form and return it to our Registrar in the envelope provided.

If you are able to attend, we look forward to welcoming you and ask you please to bring the personalised proxy form with you to assist registration and admission to the meeting.

Yours sincerely,

==> picture [151 x 46] intentionally omitted <==

==> picture [145 x 71] intentionally omitted <==

Ross Dobinson Chairman

Richard Treagus Chief Executive Officer

==> picture [568 x 66] intentionally omitted <==

ABN 72 082 001 152

NOTICE OF ANNUAL GENERAL MEETING

NOTICE is hereby given that the Annual General Meeting of the members of the Company will be held at the offices of Pitcher Partners, Level 19, 15 William Street, Melbourne, Victoria, Australia on Wednesday 14 November 2007 at 2.30 pm.

AGENDA

Financial Statements and Reports

To receive and consider the financial report of the Company and the reports of the directors and auditor for the year ended 30 June 2007.

Remuneration Report

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

1. That the Company’s remuneration report for the year ended 30 June 2007 be adopted and approved.

Issue of shares subscribed for by Directors in July 2007 placement at $1.60 per share to fund Phase 3 development of Testosterone MD-Lotion[®]

To consider and, if thought fit, pass the following resolutions as ordinary resolutions:

• 2a. That 1,397,855 ordinary shares be issued and allotted to Ross Dobinson before 30 November 2007 on receipt of subscription proceeds of $2,236,568

• 2b. That 48,000 ordinary shares be issued and allotted to Ken Windle before 30 November 2007 on receipt of subscription proceeds of $76,800

• 2c. That 300,000 ordinary shares be issued and allotted to B&K Finnin Pty Ltd, of which Barrie Finnin is a director, before 30 November 2007 on receipt of subscription proceeds of $480,000

• 2d. That 150,000 ordinary shares be issued and allotted to Peter Gillooly before 30 November 2007 on receipt of subscription proceeds of $240,000

• 2e. That 10,000 ordinary shares be issued and allotted to Richard Treagus before 30 November 2007 on receipt of subscription proceeds of $16,000

In accordance with Listing Rule 14.11, the Company will disregard any votes cast on these resolutions by or on behalf of a Director of the Company or an associate of a Director of the Company. However, the Company need not disregard a vote if it is cast by:

(a) a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or

==> picture [114 x 66] intentionally omitted <==

==> picture [360 x 66] intentionally omitted <==

==> picture [92 x 66] intentionally omitted <==

2

(b) the Chairman of the meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides (and where required the acknowledgement box on the proxy form in relation to the resolution is marked).

Grant of options to Richard Treagus

To consider and, if thought fit, pass the following resolutions as ordinary resolutions:

3. That approval is given for the grant of options to subscribe for 1,300,000 ordinary shares to Richard Treagus, resolved by the Board to be granted on 30 August 2007 under the Company’s Employee Share Option Plan at an exercise price of $1.84 per share, and upon exercise of those options, the issue of the shares underlying the options.

In accordance with Listing Rule 14.11, the Company will disregard any votes cast on this resolution by or on behalf of a Director of the Company or an associate of a Director of the Company. However, the Company need not disregard a vote if it is cast by:

(a) a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or

(b) the Chairman of the meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides (and where required the acknowledgement box on the proxy form in relation to the resolution is marked).

Re-election of Director

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

4. That Professor Barrie Finnin, who in accordance with clause 58 of the Company’s constitution retires by rotation and being eligible offers himself for re-election as a Director, be re-elected as a Director of the Company.

By order of the Board

==> picture [129 x 60] intentionally omitted <==

Jon Pilcher CFO & Company Secretary Date: 8 October 2007

==> picture [125 x 66] intentionally omitted <==

==> picture [366 x 66] intentionally omitted <==

==> picture [104 x 66] intentionally omitted <==

3

NOTES

Entitlement to Vote and Proxies

Only registered holders of the Company’s shares as at 7pm on 12 November 2007 are eligible to attend and vote at the Annual General Meeting.

If you do not plan to attend the Annual General Meeting you are encouraged to complete and return the proxy form that accompanies this Notice. A member entitled to attend and vote at this Annual General Meeting is entitled to appoint not more than two proxies. A proxy need not be a member of the Company. The proxy may be an individual or a body corporate. Your proxy's authority to speak and vote for you at the meeting is suspended if you are present at the meeting.

If you appoint one proxy, that proxy may vote on a show of hands. Where two proxies are appointed, each proxy may be appointed to represent a specific proportion of your voting rights on a poll but neither proxy has a vote on a show of hands. If you appoint two proxies and the appointment does not specify the proportion or number of your votes each proxy may exercise, section 249X of the Corporations Act 2001 provides that each proxy may exercise half of the votes (ignoring fractions). If you appoint another member as your proxy, that person will have only one vote on a show of hands and does not have to vote on a show of hands in accordance with any direction by you.

You may direct your proxy how to vote by marking X in one of the three boxes opposite each item of business. All your votes will be cast in accordance with your direction, unless you indicate only a portion of votes are to be cast on any item by inserting the percentage of your voting rights applicable to the proxy appointed by the proxy form in the appropriate box. If you do not mark any of the boxes relating to the items of business, your proxy may vote as he or she chooses. If you mark more than one box relating to the same item of business any vote by your proxy on that item will be invalid.

The enclosed proxy form provides further details on appointing proxies and lodging proxy forms. Proxy forms and the original or a certified copy of the power of attorney (if the proxy form is signed by an attorney) must be received not later than 2.30 pm on Monday 12 November 2007 :

• by post in the reply paid envelope provided addressed to Link Market Services Limited;

• on-line at www.linkmarketservices.com.au showing your Security Reference Number (SRN) or Holder Identification Number (HIN);

• by facsimile to Link Market Services Limited on fax number (02) 9287 0309;

==> picture [125 x 66] intentionally omitted <==

==> picture [366 x 66] intentionally omitted <==

==> picture [104 x 66] intentionally omitted <==

4

• by hand delivery to Link Market Services Limited, Level 4, 333 Collins Street, Melbourne, Victoria, Australia;

• by hand delivery or facsimile to Acrux Limited, 103-113 Stanley Street, West Melbourne, Victoria, Australia, 3003 Fax (03) 8379 0101.

Documents received after that time will not be valid for the scheduled meeting.

Bodies Corporate

A body corporate may appoint an individual as its representative to exercise any of the powers the body may exercise at meetings of the Company's shareholders. The appointment may be a standing one. Unless the appointment states otherwise, the representative may exercise all of the powers that the appointing body could exercise at a meeting or in voting on a resolution. The representative should bring to the meeting evidence of his or her appointment, including any authority under which the appointment is signed, unless it has previously been given to the Company.

==> picture [125 x 66] intentionally omitted <==

==> picture [366 x 66] intentionally omitted <==

==> picture [104 x 66] intentionally omitted <==

5

EXPLANATORY STATEMENT

Receipt of Financial Statements and Reports

The Company’s financial report and the reports of the directors and auditor for the year ended 30 June 2007 are placed before the meeting giving shareholders the opportunity to discuss these documents and to ask questions. No resolution is required in respect of these documents.

Remuneration Report

The Corporations Act requires the directors’ report to include certain information relating to director and executive remuneration in a “Remuneration Report”. The Corporations Act further requires that each Australian listed public company put to a vote at its annual general meeting a resolution that the Remuneration Report be adopted. The vote is advisory only and does not bind the directors of the Company. The Remuneration Report can be found at pages 37 to 43 of the Company’s 2007 Annual Report.

Issue of shares subscribed for by Directors in July 2007 placement

In July 2007, following positive results in the Phase 2 trial of Testosterone MD-Lotion[®] , Acrux raised $22.5 million in new capital through a placement of new shares at $1.60 per share to institutions and sophisticated investors. The majority of the shares were taken up by existing shareholders, including an allocation to each Director subject to shareholder approval under ASX Listing Rule 10.11. Each Director gave an irrevocable commitment to take up a defined number of shares at $1.60 per share once shareholder approval is obtained. Interest on the subscription amount of 6.5% per annum from 23 July 2007 to the settlement date shall be paid to the Company by each Director.

Grant of options to Richard Treagus

On 25 July 2007, following the positive results in the Phase 2 trial of Testosterone MDLotion[®] and the successful completion of the $22.5 million placement to fund Phase 3 development over the next two years, the Board announced that it would further incentivise the Acrux management team through the grant of new share options. Approximately 3.2 million options were to be granted at an exercise price of $1.84 per share, representing a 15% premium to the price of the placement. The options were not to be exercisable until two years after the grant date.

The Board resolved to grant 3,150,000 options on 30 August 2007 under Acrux’s Employee Share Option Plan (“ESOP”), at an exercise price of $1.84 per share, with a

==> picture [125 x 66] intentionally omitted <==

==> picture [366 x 66] intentionally omitted <==

==> picture [104 x 66] intentionally omitted <==

6

vesting date of 30 August 2009 and an expiry date of 30 August 2012. The exercise price represented a premium of approximately 30% compared with the market price of the shares on the grant date. Following the issue of these options, total options outstanding will be equivalent to approximately 5.2% of the Company’s issued share capital.

Included in the 3,150,000 options resolved to be granted were 1,300,000 options to CEO and Managing Director Richard Treagus, subject to obtaining shareholder approval as required by Listing Rule 10.14. The Company will issue these options to Richard within one week after obtaining shareholder approval. Following the issue of these options, Richard will hold options equivalent to approximately 2.5% of the Company’s issued share capital. The Board believes that this is an appropriate level of incentive, taking into account the material progress made in the business since Richard’s arrival in May 2006 and the critical commercial milestones expected over the next two years.

All Directors are entitled to participate under the terms of the ESOP, however during the period since Acrux listed on the ASX, the Board has determined that non-executive Directors will not be remunerated in the form of options. An initial grant of options was issued to Richard Treagus prior to the last Annual General Meeting, however this did not require shareholder approval since Richard was not a member of the Board until 3 April 2007.

Re-election of Barrie Finnin as a Director

Professor Barrie Finnin holds a degree in pharmacy and is both a doctor of philosophy and a doctor of chemistry. He has been a Director of the Company since 1999. He is a member of the Human Capital Committee and Chair of the Scientific Advisory Board.

Barrie is currently chair of Formulation Science at the Victorian College of Pharmacy, Monash University, Australia. He has more than 15 years experience in the management of commercially funded research in an academic setting. A co-inventor of the Acrux technology, he has conducted projects at various phases of drug development and manufacture for major pharmaceutical companies, and has experience in the design and commissioning of GMP manufacturing. He also has experience as an external evaluator of new drug applications for the Australian Therapeutic Goods Administration (TGA).

==> picture [125 x 66] intentionally omitted <==

==> picture [366 x 66] intentionally omitted <==

==> picture [104 x 66] intentionally omitted <==