ACRUX LIMITED — Management Reports 2007

Aug 5, 2007

ACRUX (ASX: ACR) - ASX ANNOUNCEMENT

6 AUGUST 2007

INVESTOR UPDATE FROM ACRUX CEO

Melbourne 6 August 2007: Following the approval of its first transdermal spray product Estradiol MDTS[®] (EvaMist™) by the Food And Drug Administration (FDA) last week in the US, Acrux today provides an update on prospects for the remainder of 2007 and beyond from Dr Richard Treagus, CEO and Managing Director.

What exactly does the FDA approval of EvaMist™ mean for Acrux?

This constitutes marketing approval for the first Acrux product, indeed the first estradiol transdermal spray product in the world. This now allows our sub-licensee, KV Pharmaceutical to proceed with their launch plans and we expect the product to be made available to patients in the US, anytime from October 2007 onwards.

The FDA approval provides regulatory validation for the Acrux transdermal technology in its broadest sense. We have always had the highest confidence in the technology platform, specifically in relation to safety and efficacy, and very importantly; the FDA approval goes a long way to independently confirm this.

Most notably, all of the other products in our pipeline utilise the same transdermal technology and by removing this final regulatory risk, the value of the Acrux technology and the prospects of the business as a whole have been greatly enhanced.

This translates directly into a strengthened ability to progress more of our own products through the development process, a greater ability to engage new global partners, and a greater value that can rightfully be placed on the individual products and the technology platform.

How much will Acrux earn from the sales of EvaMist™ in the US?

The licensing deal that was entered into with Vivus back in early 2004 was prior to the Acrux IPO and prior to the completion of any Phase 3 clinical programme. The Vivus deal may have been appropriate at that point in time, however the Acrux business and the technology is now very much more advanced and it is reasonable to expect that current and future licensing terms will be more favourable.

Acrux has already received US$2 million in milestone payments and will receive a further US$3 million milestone payment within the next month. More significant though is the value that accrues to Acrux from the royalty flow, calculated as a percentage of the net sales of EvaMist™ in the US market, from launch until expiry of the last remaining Acrux patent (currently 2022). The royalty percentage increases as

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the annual sales increase. Revenue will be modest in the period after launch as sales grow and the rate increases, but within a few years post-launch we anticipate that royalties will be US$15-20 million per annum.

What are Acrux’s plans for licensing Estradiol MDTS in the markets outside of the US?

Acrux has retained the rights to the Estradiol MDTS product for all territories outside the US. We are currently in discussions with potential licensing partners in a number of other countries, including Europe, and we are confident of being able to update investors on our progress before the end of the 2007 calendar year.

When will Estradiol MDTS be available in Australia?

The Estradiol MDTS marketing application will be filed with the TGA by October 2007, with approval and market launch anticipated early in 2009. We have already secured Aspen Pharmacare as our licensee in Australia and we believe that they will prove to be a very capable and committed local partner.

What are the likely partnering prospects for Acrux in the months ahead?

The FDA approval of EvaMist™ has further increased the awareness and interest in the Acrux products and the technology platform from a number of international pharmaceutical companies.

We are currently in active discussions with a range of partners in relation to both earlystage development collaborations, as well as the licensing of our more advanced products, most notably Estradiol MDTS, Testosterone MDTS and Testosterone MDLotion. We are confident of being able to conclude additional partnerships before the end of the 2007 calendar year.

How is the animal health partnership with Eli Lilly (Elanco) progressing?

The Elanco team is now working very closely with Acrux. We are pleased to report that they have made significant progress towards commencing a Phase III clinical trial of their lead compound in the US and Europe, which is now planned for the last quarter of calendar 2007.

How is the partnership with Organon progressing?

The Acrux incubation team is actively engaged in the formulation of one contraceptive compound and one Organon proprietary compound. We anticipate providing a more detailed updated of progress in the last quarter of calendar 2007.

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What new products are coming through the Acrux pipeline?

The incubation and research team is working extremely well and has made great progress in relation to developing additional transdermal products. We are actively investigating formulations that are applicable in the therapeutic areas of contraception, smoking-cessation, Parkinson’s disease, musculoskeletal disorders and hypertension. Some of these formulations have already progressed through into proof-of-concept pharmacokinetic clinical trials and we look forward to updating shareholders of our progress over the course of the next six months.

What is the strategy and outlook for Acrux now that the first product has been approved in the US?

With the first Acrux product scheduled for launch in the US in the upcoming months this has provided us with even greater certainty around our future cash flows. Combined with our strong cash position and a very capable and engaged management team, I am pleased to report that the business is in a particularly strong position to execute on the core elements of our growth strategy.

In the months ahead we look forward to announcing the inclusion of new candidates in our product pipeline, the conclusion of additional licensing partnerships, and finally, we anticipate making material progress with our key development programmes such as the Organon collaboration and our own Testosterone MD-Lotion.

With the upcoming launch in the US of our first approved product and plans well underway for the commencement of two phase III trials, the second half of 2007 and beyond is set to be another pivotal period in the growth of our company.

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Richard Treagus, Acrux CEO +61 417 520 509 richard.treagus@acrux.com.au

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About Acrux - www.acrux.com.au

• Acrux is an Australian drug delivery company, developing and commercialising a range of patient-preferred, patented pharmaceutical products for global markets, using its innovative technology to administer drugs through the skin.

• Fast-drying, invisible sprays or liquids provide a delivery platform with low or no skin irritation, superior cosmetic acceptability and simple, accurate and flexible dosing. The technology platform is covered by broad and well-differentiated, issued patents.

• Acrux’s lead product Estradiol MDTS[®] (EvaMist™ in the USA) to treat menopause symptoms has been approved for marketing by the US FDA. Other products in clinical development include:

  • Testosterone MDTS[®] to treat decreased libido in women

  • Testosterone MD-Lotion[®] to treat testosterone deficiency in men

  • Nestorone[®] MDTS[®] contraceptive spray for women

  • Fentanyl MDTS[®] to treat chronic pain

• Acrux has licensed worldwide rights to its technology for selected contraceptives and for an undisclosed proprietary drug to ORGANON, USA rights for Estradiol MDTS[®] to KV Pharmaceutical and for Testosterone MDTS[®] to VIVUS, and AUS/NZ distribution rights for Estradiol MDTS[®] to Aspen Pharmacare and for Testosterone MDTS[®] and Fentanyl MDTS[®] to CSL Limited. Acrux has also licensed its technology to Eli Lilly and Company for veterinary healthcare products.

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