MAYNE PHARMA GROUP LIMITED — M&A Activity 2009

Oct 29, 2009

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ANNOUNCEMENT

HALCYGEN COMPLETES ACQUISITION OF WHOLLY OWNED SUBSIDIARY OF HOSPIRA INC

Friday 30[th] September 2009, Melbourne Australia : HalcyGen Pharmaceuticals Limited (ASX: HGN) is pleased to announce it has completed the acquisition of Mayne Pharma International Pty Ltd (MPI) from Hospira Australia Pty Ltd, a wholly owned subsidiary of Hospira Inc. MPI was formerly known as FH Faulding & Co Ltd, and is a specialist pharmaceutical company with an intellectual property portfolio built around the optimisation and delivery of oral dosage form drugs. MPI has a long and successful history in developing and commercialising improved pharmaceuticals, and has launched and marketed numerous products through partnerships with global licensees. Although a wholly owned subsidiary of Hospira Inc., MPI has operated largely independently of Hospira’s global hospital products business.

MPI was acquired for US$15.0M and an “Earnings Sharing Arrangement”. The “Earnings Sharing Arrangement” allows Hospira to receive a percentage of gross sales dependent on the achievement of gross sales in excess of certain target threshold levels by MPI. The “Earn Out” is capped on an annual basis over a six-year period. In addition, an amount of $2M has been paid in respect of increased working capital acquired at completion, being greater than the working capital balance included in the initial purchase price.

The acquisition includes land (approximately 30 acres) situated in Salisbury, South Australia; associated buildings, inventory, working capital, plant and equipment, employees, customer contracts and relationships; as well as an intellectual property portfolio.

The acquisition is largely non-dilutive for HalcyGen, being implemented through a loan from National Australia Bank (NAB) of US$10.0M to be repaid within 2 years from profits and further supplemented by a $9.0M two-tranche placement of shares underwritten by Patersons Securities Limited and a Share Placement Plan (SPP) at $0.20 per share contributing a further $4.5M.

The SPP was greater than six times over subscribed and consequently applications under the SPP will be scaled back on a pro rata basis based on

the number of shares applied for. For example, in the event a shareholder applied for the maximum 75,000 shares available under the SPP per applicant, the application of the scale back will result in 11,621 shares being allocated.

HalcyGen’s CEO, Dr Roger Aston said, “We are very pleased to complete the acquisition of MPI, providing the Company with sales revenue, increased product pipeline providing attractive growth opportunities and securing our manufacture of SUBA-Itraconazole, which we are confident of filing for registration in 2010 following recent meetings with EU regulatory authorities.”

-ENDS-

Media Enquiries: HalcyGen: Dr Roger Aston or Craig Bottomley 03 8614 7777

Hospira: David Griss +61 3 8541 5215

HalcyGen Profile:

HalcyGen was founded to bridge the gap between main stream pharmaceutical companies and high volume generics companies through the development and licensing of new improved proprietary generic formulations known as "Super Generics" or "High Functionality Generics". HalcyGen's strategy is to capitalise on the value associated with the development and commercialisation of novel, improved variants of existing proprietary pharmaceuticals known as Super Generics.

The basis of the HalcyGen's strategy is a strategic licensing partnership with Hospira, Inc. The Company will initially develop and market two products in partnership with Hospira. Subject to performance and meeting certain other criteria, the Company has the opportunity to develop further products with Hospira.

Through the global exclusive license granted to HalcyGen by Hospira, Inc., for the commercialisation of SUBA[®] -Itraconazole , Hospira has a first right of refusal to manufacture SUBA[®] -Itraconazole to support sales.

Hospira Profile:

Hospira, Inc. is a global specialty pharmaceutical and medication delivery company dedicated to Advancing Wellness[™] . As the world leader in specialty generic injectable pharmaceuticals, Hospira offers one of the broadest portfolios of generic acute-care and oncology injectables, as well as integrated infusion therapy and medication management solutions. Through its products, Hospira helps improve the safety, cost and productivity of patient care. The company is headquartered in Lake Forest, Ill., and has approximately 14,000 employees. Learn more at www.hospira.com.