ACRUX LIMITED — Capital/Financing Update 2007

Aug 2, 2007

ACRUX SHARE PURCHASE PLAN - CHAIRMAN’S LETTER

31 July 2007

Dear Shareholder,

Today we announced that Acrux’s first product has been approved by the US Food and Drug Administration for marketing in the USA. We look forward to the launch of EvaMist™ by our US partner KV Pharmaceutical. Our delivery technology platform has now been proven and we believe that the prospects for accelerating the commercialisation of our other products that use the same platform have been further enhanced.

On 15 July 2007 we announced positive results from the Phase 2 trial of Testosterone MD-Lotion[®] , our patient-preferred treatment for testosterone deficiency in men (full copy of the announcement enclosed). As noted in the announcement, these study results are strongly indicative of success in a Phase 3 trial. Acrux believes that value for its shareholders will be more than doubled by licensing Testosterone MD-Lotion[®] to a commercial partner for marketing and distribution after completing the remaining development, compared with licensing the product now. The remaining development is within Acrux’s capability and the estimated development costs are relatively low, at $20 million.

On 17 July 2007 we announced that we had successfully raised $22.5 million in a placement of new shares to institutions and sophisticated investors (primarily existing shareholders) in order to fund the remaining Testosterone MD-Lotion[®] development. We also announced that we would enable all shareholders to make an additional investment though a Share Purchase Plan at the same price at which the placement was made.

Share Purchase Plan (SPP) details

Details of the SPP are set out in the accompanying materials and you should read these in their entirety before deciding whether to participate. Key points of the SPP are as follows:

• Under the SPP you are able to apply for up to A$5,000 worth of shares in parcels of either 625 shares, 1,250 shares, 1,875 shares or 3,125 shares as set out in the enclosed Application Form.

• There are no transaction costs payable on the allotment of shares under the SPP.

• • Should you elect to participate in the SPP, all shares will be issued at $1.60 which has been set at the same price as the recent placement to institutions and sophisticated investors.

• Shares allotted under the SPP will rank equally with existing fully paid ordinary shares.

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To participate in the SPP you must complete and return you application by filling in your personalised Application Form and attaching either a cheque or bank draft and mailing it in the reply paid envelope so that it is received by our share registry, before 4.00pm AEST on 17 August 2007.

Alternatively you can apply to the SPP by paying through BPAY. Your Application Form includes the details of the Biller Code and your Customer Reference Number unique to your holding and this SPP. If you pay by BPAY your payment must be made through your bank or financial institution so as to be received by the Company no later than 4.00pm AEST on 17 August 2007 . If you use BPAY you are not required to return your Application Form, however you will still be bound by the SPP Terms and Conditions.

Transaction confirmation statements are expected to be despatched on or about 23 August 2007 to Issuer Sponsored and CHESS participants for shares allotted under the SPP.

Annual Report election

For those of you who have not previously made an election to receive Acrux’s Annual Report electronically, also enclosed for your attention is a form on which to record your preference. Based on environmental and cost considerations Acrux has decided to adopt the permitted option whereby shareholders must view the Annual Report electronically unless they positively elect to receive a printed copy . It is therefore important that you read and complete this form.

Thank you for your continuing support as a shareholder of Acrux.

Yours sincerely,

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Ross Dobinson Chairman

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ACRUX LIMITED SHARE PURCHASE PLAN – TERMS AND CONDITIONS

The following are the Terms and Conditions applicable to the Share Purchase Plan (SPP) approved by the Directors of Acrux Limited (ABN 72 082 001 152) ( Acrux ). By accepting the offer to acquire shares under this SPP, you agree to be bound by these Terms and Conditions and the Constitution of Acrux.

Eligibility

Each shareholder who is entered in the Company’s register of members as at 9:30am AEST on 18 July 2007 (Record Date) and who has a registered address in Australia or New Zealand (a Participant) is eligible to participate in the SPP. Each offer to all Participants is made on the same terms and conditions.

Participation optional

Participation in the SPP is optional and you should seek independent advice from a licensed adviser if you are unsure whether you should participate in the SPP.

Issue price

The issue price for each share under the SPP is $1.60. That price is the same as Acrux’s recent placement to institutions and sophisticated investors.

The market price of Acrux shares may change after the shares are offered under the SPP. However, this will not affect the price at which the Participant will be issued shares under the SPP. This means that the issue price for shares under the SPP may be the same as, higher, or lower than the market price of Acrux shares at the date of allotment.

If a Participant subscribes for more shares than provided for in the Application Form, the excess amount paid will be refunded to the Participant without interest after the completion of the SPP.

Number of shares that can be purchased

The Application Form specifies parcels of a particular number or cost of shares for which applications can be made. You may not apply for any other number or value of shares.

Trustees and Nominees

A trustee or nominee who is expressly noted on the Company share register as holding shares on account of a beneficiary may apply, on behalf of each such beneficiary, for shares up to the maximum amount.

To the extent that a trustee or nominee holds shares on account of a beneficiary resident outside Australia or New Zealand, it is the responsibility of the registered holder to ensure that any application complies with all applicable foreign laws.

Withdrawing your application

Applications may not be withdrawn, in whole or part, during the offer period. Any application to participate in this SPP is irrevocable.

Offer is non-renounceable

The offer of shares under the SPP is nonrenounceable which means that Participants cannot transfer their entitlement to purchase shares under the SPP to another person.

No transactions costs

No brokerage or other transaction costs are payable by Participants on an application through the SPP.

Open and Close of offer

The offer will open on 1 August 2007 and close at 4.00pm AEST on 17 August 2007 (subject to Acrux’s right to vary the closing date).

Application Form

Unless payment is made using BPAY[®] , applications to participate in the SPP must be made using the accompanying Application Form and must be received by the Company’s Share Registry (Link Market Services Limited) with the correct payment no later than 4:00pm AEST on 17 August 2007 . By returning the Application Form you agree to be bound by these Terms and Conditions.

Payments by BPAY

ASIC Class Order 02/831 requires that each shareholder may only purchase up to A$5,000 worth of shares under the SPP. This value is the same for all shareholders, irrespective of how many shares you hold on the Record Date. This limit also applies to you even if you receive more than one offer from Acrux (for example, if you are both a sole and joint shareholder, or if you are a shareholder with more than one holding under a separate account, you can only apply for shares under the SPP up to the maximum value of A$5,000).

If payment is made using BPAY there is no requirement for the Application Form to be returned. Payment must be received no later than 4:00pm AEST on 17 August 2007 . Applicants using the BPAY facility will be deemed to be bound by these Terms and Conditions and certify that the aggregate of the application price for the shares, the subject of the application, together with any other application under the SPP, or any similar arrangement in the 12 months prior to the date of issue, does not exceed A$5,000.

®Registered to BPAY Pty Ltd, ABN 69 079 137 518

Shares to be offered

Shares allotted under the SPP will rank equally in all respects with existing fully paid ordinary shares.

Promptly after allotment, application will be made by Acrux for shares allotted under the SPP to be listed for quotation on the official list of ASX Limited. This is expected to occur on or about 23 August 2007 . Transaction Confirmation Statements will be despatched to Issuer Sponsored and CHESS holders for shares allotted under the SPP.

Applications and notices

Applications and notices given to Acrux for the SPP must be in writing and in such form as Acrux may from time to time require. Such applications and notices will be effective on receipt by Acrux subject to:

• a. these Terms and Conditions; and

• b. in the case of applications, acceptance by Acrux before the closing date for payments.

Applications must be received by 4:00pm (AEST) on 17 August 2007 . Applications received after that time may not be accepted.

Change of Offer

Acrux may change, suspend or terminate the SPP or these Terms and Conditions at any time whether because of a change of law, the requirements or policy of the Australian Securities & Investments Commission (ASIC) or any other circumstance relevant to the SPP or Acrux. If Acrux does this, it will make the requisite disclosures to the market. Failure to notify shareholders of changes to, suspension or termination of, the SPP or these Terms and Conditions will not invalidate the change, suspension or termination.

Questions

If you have any questions about the SPP or your entitlement, please contact Link Market Services Limited on 1300 554 474.

Acrux reserves the right to issue no shares under the SPP or fewer shares than an eligible shareholder applies for under the SPP if Acrux believes the issue of those SPP shares would contravene ASIC requirements or policy, any law or any ASX Listing Rule. No interest will be paid on application money refunded. Acrux’s rights to change, suspend or terminate the SPP may be exercised by the Board of Acrux or any delegate of the Board.

Variations, waivers and resolution of disputes

Acrux reserves the right to:

• a. vary the closing date and share issue date for the SPP;

• b. waive compliance with any of these Terms and Conditions;

• c. refuse to allot shares where it believes there has been a breach of these Terms and Conditions; and

• d. settle in any manner it thinks fit any disputes or anomalies which may arise in connection with the SPP.

Dispute Resolution

Acrux may settle any dispute in relation to the SPP or these Terms and Conditions in any manner it thinks fit, whether generally or in relation to any shareholder, applications or shares. Acrux’s decision will be conclusive and binding.

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Your SPP questions answered…

Am I eligible to participate in the SPP?

You are eligible to participate in the SPP only if you were a holder of fully paid ordinary shares in Acrux Limited ( Acrux ) at 9:30am on 18 July 2007 (Record Date) with a registered address in either New Zealand or Australia. Acrux will not accept applications from holders registered at a later date or from holders with a registered address in other countries.

Can I buy less or more shares than is included in the specified share parcels in the Application Form?

No. You can only purchase one of the share parcels set out in the Application Form.

If you pay for more shares than as provided in the Application Form, the excess amount paid will be refunded to you. No interest is payable on any application moneys refunded.

If I decide not to participate in the SPP but my spouse (who is also a shareholder) wants to buy $10,000 worth, can I transfer my right to purchase shares to him/her?

No. The offer is non-renounceable. This means that you cannot transfer you right to purchase shares under the SPP to anyone else.

I own some shares in my name and some with my spouse. Does this mean I can buy up to $10,000 worth of shares?

No. You may only purchase up to A$5,000 worth of shares under the SPP or a similar plan with Acrux in any 12 month period.

The total of your application must not exceed A$5,000 – whether applied for with one or several application forms.

Will the shares I buy be the same as the other shares I currently own?

Yes. The shares purchased through the SPP will rank equally with existing fully paid ordinary securities in Acrux and will carry the same voting rights, distribution rights and other entitlements.

Do I have to participate in the offer? No. Participation in the SPP is entirely at your option.

Should I get financial advice as to whether or not to participate in the SPP?

Yes - if you are unsure as to whether you should participate in the SPP.

How much will it cost me?

You will only pay for the shares that you agree to acquire under the SPP. You will not be charged brokerage or other transaction fees to apply.

When does the offer close?

The offer closes at 4:00pm AEST on 17 August 2007 .

What happens if my Application Form arrives after 4:00pm on the closing date?

If your Application Form is received after the offer closes, your application may be rejected and you may not be able to participate in the SPP.

Is the offer underwritten?

No, the offer is not underwritten.

How do I apply?

Unless you are paying using BPAY[®] , applications to participate in the SPP must be made using the accompanying Application Form and must be received by Acrux’s Share Registry (Link Market Services Limited) with the correct payment no later than 4:00pm AEST of 17 August 2007 .

If payment is made using BPAY there is no requirement for the Application Form to be returned. Payment must be received no later than 4:00pm AEST on 17 August 2007 . Applicants using the BPAY facility will be deemed to be bound by these Terms and Conditions and certify that the aggregate of the application price for the shares, the subject of the application, together with any other application under the SPP, or any similar arrangement in the 12 months prior to the date of issue, does not exceed A$5,000.

What if I have lost my Application Form and want to participate?

If you have lost your Application Form and would like to participate you should contact Acrux’s Share Registry by telephone on 1300 554 474.

®Registered to BPAY Pty Ltd, ABN 69 079 137 518