GENETIC TECHNOLOGIES LIMITED — Capital/Financing Update 2002

Nov 7, 2002

8 November 2002

The Manager Company Announcements Office Australian Stock Exchange Limited Exchange Centre 20 Bridge Street Sydney NSW 2000

By Fax 1300 300 021 - 2 pages

Dear Sir.

Licensing the "Non-Coding" Patents - A Second Progress Report to the ASX

In September 2001, I provided a first progress report to the market, describing the strategy being developed by Genetic Technologies Limited ("GTG"), to generate significant short-term revenues for GTG from the non-coding patents which came under our control as a result of the merger with GeneType AG, in August 2000.

GTG had already informed the market it had successfully secured patent insurance for its patents with Dexta Corporation, part of the General Electric Reinsurance Group back in February 2001 and that it had also appointed the law firm of Blakely, Sokoloff, Taylor and Zafman, in Denver, Colorado, to help identify suitable U.S. licensees for these noncoding patents.

In February 2002, we announced the first GTG license to the non-coding patents had been awarded - symbolically, to an Australian genetics firm, Genetic Solutions, who paid GTG an up-front fee of \$75,000 for a non-exclusive license limited to applications in livestock. In April 2002, we announced the first US licenses – to San Diego-based micro-array company, Nanogen, who paid us US\$250,000, and to bio-instrument maker, Sequenom, who paid us US\$500,000. In September 2002, we announced a license to Perlegen Sciences of Mountain View, California, who paid us US\$860,000, and just last week, we announced we had signed a broad strategic alliance with Myriad Genetics of Salt Lake city, Utah. The Myriad deal is by far the largest to date. Myriad pays GTG an up-front fee of US\$1M (approx $(A$1.85M)$ , plus annual recurring fees, and also grants to GTG broad rights to access its powerful range of genetic susceptibility tests for breast cancer and for several other major inherited diseases, which testing GTG can now offer

in Australia and New Zealand on an exclusive basis. GTG has also secured options to acquire similar rights in South East Asia on an exclusive basis.

The GTG alliance with Myriad was announced to the market by coordinated joint releases by both companies – to ASX and to NASDAQ on 28 October 2002. In summary, the Myriad agreements provide GTG with its largest up-front fee so far, with its first significant recurring annual revenues, and with a substantial new business opportunity in the Asia-Pacific region. Further, GTG has assured Myriad that other future licensees to the non-coding patents will not pay a lesser up-front fee than Myriad paid, for similar applications.

We are pleased to now confirm that on 31 October 2002, GTG duly received the agreed US\$1M from Myriad - in cash, without deductions or offsets, and that GTG's Director of Science, Dr. George Rudy, has already visited Myriad to start the process of planning the expansion of GTG's genetic testing laboratory in Melbourne, so GTG may soon start to offer these new services, in Australia and New Zealand.

Meanwhile, the GTG licensing program continues to grow. Ian Christensen has been hired in Melbourne to manage the GTG licensing team, to coordinate our expanding information-gathering efforts to identify prospective licensees, and to build a central database of all prospective licensees - on a global basis. Meanwhile, the US law firm of Faegre and Benson has been retained by GTG to help manage the formal documentation and enforcement aspects of this expanding GTG licensing program.

The total number of licensing prospects already contacted by GTG is significant, with a number of new negotiations now under way. GTG will now focus not only on up-front fees, but also the creation of meaningful recurring revenues for GTG from this program. We will continue to keep the market informed, as appropriate.

Yours faithfully,

Dr Mervyn Jacobson Executive Chairman