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It is with great pride that I address many of you for the first time, to share my excitement with the opportunities that face Anadis over the coming months. With a well positioned intellectual property portfolio and a team of dedicated professionals we are transforming Anadis to become among the top biotechnology companies utilising antibodies in the field of human health, and the leading developer and provider of polyclonal antibodies worldwide.

The recent announcements made by Anadis illustrate our renewed vision – bringing the use of polyclonal antibodies into the forefront of clinical medicine. Anadis is unique in this field, with more than a decade of extensive research and proven scientific results, strong intellectual property and demonstrated manufacturing experience.

We are now ready to leverage our capabilities and become a significant player in the international healthcare industry. This success will be achieved through collaborations and association with corporate, government and academic partners. We plan to create significant value by synergistically combining royalty, product and custom antibody solution revenue, all based on our intellectual property portfolio.

Our recently announced agreement with SPC Ardmona, the food subsidiary of Coca-Cola Amatil Ltd (ASX: CCL), represents another milestone in the significant changes at Anadis in recent months. Alongside our main focus on utilising our unique polyclonal antibodies

to address major diseases globally, the agreement with SPC Ardmona for Anadis to become an 'Innovation Satellite' will allow us to have a broad impact via incorporating our know-how into high quality nutritional foods and assisting in preventing disease.

Our significant agreement with the Australian Defence authorities to develop a Biodefense diagnosis and containment gel, utilising our polyclonal antibody platform, was announced during May. The project, named "Project Ectoplasm", is already creating headway around the world and the company is in discussions with other international defence authorities to further broaden the research effort.

Project Ectoplasm is just another example of how diverse our platform is: from the prevention of disease, through their diagnosis and up to treatment. For each of the diseases our know-how can address, we are collaborating with the best partners. Recent announcements are just the beginning. In that context we are proud to revise our company description, and will revise our web site to reflect our renewed vision.

Thank you for your continued support in our worthy scientific and healthcare endeavour.

Wil Hart

Dr Zeil Rosenberg, CEO Anadi∯Ltd

Dr Zeil Rosenberg, CEO Anadis Ltd

The Anadis Antibody Technology Platform

Anadis Ltd. is a research-driven biotechnology company focused on antibody-based therapeutic and preventive products. Anadis' proprietary rapid manufacturing technology has enabled it to develop a product pipeline of polyclonal antibody-based solutions to a range of important infectious and immune-mediated diseases. The majority of global antibody research is in the area of monoclonal antibodies derived from tumour cells that are grown in mice or cell cultures, which all bind to one very specific part of their target. Polyclonal antibodies however are formed normally by the immune system in humans and animals in response to a target. They are actually a group of different antibodies that bind to many parts of the same target.

The all natural platform, and its regulatory classification as food rather than as a biological or drug, allows for a significantly shorter time frame from bench to market compared with typical biotechnology products. The platform also possesses dramatically lower manufacturing costs and higher scalability when compared with typical antibody-based solutions. The company is addressing existing market opportunities sized in excess of US \$30 billion.

The core manufacturing technology is highly scalable and allows for rapid and low cost development, commercialization and streamlined regulatory pathway for a broad range of preventive and therapeutic products. Current R&D pipeline targets address broad markets including influenza, nosocomial (hospital acquired) infections, enteric diseases, biodefence, and environmental biohazard containment, diagnostics and decontamination. A new initiative that targets oncology has special promise.

Anadis' dairy-derived products will be delivered primarily via the oral and topical routes to enable ease of use and leverage the technology itself. The streamlined regulatory pathway leverages product certification as GRAS (Generally Regarded as Safe) in the US, having all manufacturing completed under very strict and globally respected Australian dairy industry standards and by registering products according to national medical food, food supplement or plain food regulations rather than as drugs or biologics. All product claims are backed by a strong international scientific base and clinical studies program.

Accordingly, most products will be able to be launched in the US as a "medical food" upon self-certification by the company to the FDA regarding the product's GRAS status and by scientific evidence of its effectiveness, rather than by waiting for completion of full phase III clinical studies and their submission to, and approval by, the FDA.

Leveraging a technology platform that has been carefully developed over a ten-year period, the company expects to become the leading provider of proprietary polyclonal antibody-based solutions worldwide within five years.

Antibodies

Technology Advantage

The Anadis product line provides so-called "passive immunity", delivering intact dairy-derived polyclonal antibodies directly at the point of pathogen exposure and hence allows for immediate immune protection from disease. This approach compares favourably with the traditional "active immunity" (e.g. prophylactic vaccines) which may require multiple immunizations, months of time for immune responsiveness to develop, and has variable effectiveness.

Passive immunity is especially beneficial for those persons who have not mounted full protective immune responses to existing vaccines (e.g. high-risk, immuno-compromised and/or elderly), and for situations where traditional vaccines or drugs are relatively ineffective or have dangers of adverse reactions. Passive immunity requires periodic repeat dosing but its rapid protective effect, without the side effects or contraindications commonly seen with pharmaceuticals or vaccines, may provide enormous clinical benefit to both healthy and already exposed patients.

Key Advantages of the Anadis Approach:

Short Time to Product: May require as little as 3-6 months to obtain new antibody formulations for clinical testing and use
Rapid Scale up: With access to enormous numbers of dairy animals, large-scale rapid production is feasible and cost-effective
Cost Advantage: Dairy-derived immunoglobulins are a fraction of the cost of synthetic monoclonal antibodies and may provide a more robust immune response
Shorter Regulatory Pathway: Anadis' pipeline products have in general a much shorter and less costly expected path to commercialization than comparable synthetic pharmaceutical products
Efficient Clinical and Laboratory Facilities: Ongoing research collaborations with the University of Melbourne, Murdoch Childrens Research Institute and Monash University scientists, the Australian government, and other well-known hospitals and research institutions in Australia, the United States and Israel
Platform based: Proven ability to raise a variety of antibodies against bacteria, viruses and toxins for delivery to the GI tract, the upper respiratory tract and topically as required. Proven development model to successfully complete viral and bacterial toxin targeted product through registration

Against Disease

Technology Pipeline

Target markets exceed US\$30 billion and include both products and technologies the company plans to manufacture itself as well as out-license, respectively. The pipeline is expected to reach the market over the next five years:

Influenza Immediate-acting prevention and possible treatment of pandemic and seasonal influenza. The Anadis dairy-derived antibody platform allows for rapid modifications of the antibody profile in order to address new, emerging strains (e.g. avian influenza). Animal studies are being conducted, with clinical studies expected to begin in 2008. Access to a specialized government high containment research unit, including highly lethal H5N1 avian influenza strains, will aid rapid product development.
Bio-Defense Diagnosis, containment and environmental decontamination, Anadis is developing a health and emergency response worker (military and civilian) protection system against anthrax, plague and other bio-warfare agents with expansion potential to more routine bio-hazards including infectious agents, toxins and chemicals. The Australian Defense Department Science and Technology Office (DSTO) and Emergency Management Australia (EMA) awarded Anadis with a two-year grant for development of a proprietary antibody/polymer hydrogel system for rapid identification and containment of biohazards by first responders in 2007,
Nosocomial infections. Prevention and possible treatment for top priority hospital and community acquired nosocomial infections, in particular Clostridium difficile and Colden Staph/Staphylococcus aureus (methicillin resistant - MRSA and methicillin susceptible - MSSA strains). The company plans to initiate clinical studies for C diff in late 2007.

Enteric disease conditions including

Travellers' Diarrhoea (TD) (enterotoxigenic E.coli). Anadis product, Travelan, is already being sold in Australia and has a global market. A specific opportunity is under review to add antibody against additional Gastro-Intestinal (GI) pathogens and potential reformulation for inclusion in military rations for use in the field.
Inflammatory bowel disease and irritable bowel syndrome (IBD and IBS). A clinical study for use as an adjunct therapy in patients with Inflammatory Bowel Disease (IBD) started in late 2006 and is being expanded to a multicentre study.
Chemotherapy-associated mucositis and Radiotherapy-induced enteritis diarrhoea and other conditions which involve damage to the GI system. A clinical study is planned to begin in late 2007.
BioShielding Proprietary drug delivery technology. This approach protects orally administered and fragile drugs, antibodies and vaccines from degradation during passage through the harsh acid conditions found in the stomach, facilitating absorption or immunization in the gut. The technology platform will also permit freeze-drying of proteins and vaccines onto dry food, enabling use of dairy-derived antibodies as cereal-based Nutraceuticals, and providing an alternative to the current use of unpleasant bicarbonate drinks in oral drug administration. Anadis has initiated commercialization discussions with partners around this and other Nutraceuticals concepts.
Oncology Several major cancer research groups at major academic medical centres have indicated their interest to co-develop with Anadis the use of polyclonal antibodies in conjunction with their own proprietary oncology treatment approaches. Anadis intends to fully explore these opportunities and expects to initiate animal and clinical studies during 2007-08. We anticipate that such activities will be structured with dedicated investments and grants,

www.anadis.com

Travelan Update

After initial complications with distribution arrangements in Australia, sales of Travelan, for the prevention of travellers' diarrhoea, are gaining momentum. Anadis continues to explore methods of expanding Travelan sales worldwide without allocating significant marketing resources in the near future, as the company looks to shift its focus towards the high-value projects listed above.

Travelan sales are set to expand internationally. Within weeks our first international shipments of Travelan are set to be delivered to Canada and South Africa. Anadis has declined to

pursue a previously noted US distribution agreement due to changes in strategic requirements. Anadis continues to explore arrangements that can bring this product profitably to this important market.

Anadis is expecting the sales of Travelan in Australia, and more notably the far larger export markets, to continue growing steadily - with our international arrangements through better externally funded distribution agreements.

Travelan stands as a powerful demonstration for the capabilities of the Anadis antibody technology platform, having been taken from development stage through product registration and then to both to commercial quantity production of antibodies and sales.

Antibody formulation against Enterovirus 71 update – EVProtec

Anadis has been developing EVProtec with the active ingredient being antibodies against Enterovirus 71, a virus described in recent medical journals as potentially another polio-like epidemic. Anadis has formulated EVProtec into a powder form to be packaged in sachets, intended to be taken daily.

Initially the key target market will be Taiwan, followed by other Asian countries, as they have the greatest seasonal disease burden. Early R&D was completed under an initiative between Anadis and the Taiwan Government Development Centre for Biotechnology (DCB).

We are working with the DCB and are anticipating support for an initial product launch following the collection and a positive review of required efficacy data. Although commercial benefit is initially limited in size, bringing the first product to market for this viral infectious disease would further demonstrate the robustness of the Anadis platform.

Investment and Company Development

Anadis will endeavour to expand the company in the near term through the use of new investment, collaborations and partnerships. New resources will be employed specifically for R&D enhancement (including expanding clinical trials and disease targets), and business development (specifically in the area of international investment, partnering and awareness).

In order to most efficiently undertake these high-value activities significant organisational, commercial and R&D portfolio restructuring of the company has been necessary, and this process is ongoing.

Significantly, Zeil Rosenberg MD, a New York-based executive formerly at Becton Dickenson and Company (BDX)

and USAID, has been appointed CEO. A new US subsidiary to facilitate business development and global capital market access will be directed by Oren Fuerst, PhD (formerly on the at Yale and Columbia business school faculty specializing in international technology valuation). For more information about Dr Rosenberg and Dr Fuerst see ASX announcement "Anadis to Establish US subsidiary", 17 January 2007.

Anadis Limited ACN 063 114 045 4 Capital Link Drive Campbellfield Victoria Australia 3061/ Tel: +61 3 9358 6388 Fax: +61 3 9358 6399 www.anadis.com

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