MEMPHASYS LIMITED. — Capital/Financing Update 2009

Feb 19, 2009

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The NxGen Business – A Summary

SYDNEY, AUSTRALIA – 20[th] February, 2009 – NuSep (ASX: NSP) wishes to provide further information on the NxGen business it is acquiring.

Who are NxGen and what are their products?

NxGen is a dominant player in the Australian custom pharmaceutical market. NxGen develops and manufactures innovative products to meet the increasing demand in the sexual health and anti-addiction markets.

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NxGen’s products address large global markets.

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$10.0
$9.0
Global Erectile Dysfunction
$8.0
Market in US$B $2.0
$7.0
$6.0
Untapped
$5.0
$1.1 Existing
$4.0
$6.6
$3.0
$0.6
$2.0 $3.8
$1.0 $2.0
$-
US$B
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• In the Australian market the products developed by NxGen are the market leader competing directly with Pfizer’s Viagra, Eli Lilly’s Cialis and Bayer’s Levitra.

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• The premature ejaculation product developed by NxGen is the only medical product to currently address this medical need. Approximately 14% of the male population suffer from this disorder, relative to 10% of the male population who have erectile dysfunction.

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• NxGen has plans to enter the US$1 billion American erectile dysfunctional market.

NxGen 2008 & 2009 Financials

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• NxGen has developed an anti-addiction product to address alcoholism and opiate addition. Clinical testing of these products is due to commence shortly. NxGen is also aiming to address addiction to ICE (methamphetamine) with the development of a new product.

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• NxGen made a pre-tax profit of $1 million in the year to 30 June 2008 and is on target to make a pre-tax profit of $2.5 million in the year to 30 June 2009.

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7
6
7
5 07/08 $M
4 5.1 08/09 $M
3
2 3.5 2.5
1 2.8
08/09 $M
0 1
Sales 07/08 $M
Gross Margin
Profit
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Contact Details Email info@nusep.com
Telephone +61 2 8977 9000 Web www.nusep.com
Facsimile +61 2 8977 9099 ABN 33 120 047 556
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NuSep Ltd Postal Address 22 Rodborough Rd P.O. Box 6126 Frenchs Forest NSW 2086 Frenchs Forest NSW 2086

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NxGen’s Main Products

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Sexual Health Products

NxGen has developed a range of products that address erectile dysfunction, premature ejaculation and female sexual dysfunction.

Erectile Dysfunction (ED)

NxGen’s ED nasal spray is now a market leader in the Australian US$50 million market. This product is supplied by ACP directly to the patient and competes directly with Pfizer’s Viagra, Eli Lilly’s Cialis and Bayer’s Levitra. NxGen receives a product licensing fee on these sales from ACP. The Australian ED market is approximately 1/20th of the US market in terms of market size.

Premature Ejaculation (PE)

According to a global study of sexual attitudes and behaviours[1] , 14% of the male population suffers from PE compared with 10% who suffer from ED. This suggests that the market for PE treatment may be significantly larger than the US$3.8 billion ED market. Treatment options are limited and there is no licensed competitive product that addresses this market need.

Female Sexual Dysfunction (FSD)

Female sexual dysfunction affects as many as four in every 10 women at some point in their lives. NxGen has developed a gel formulation to address FSD in the Australian market. While it is too early to project future sales of this product the initial uptake has been encouraging.

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Compound Pharmacy Products

ACP, NxGen’s strategic pharmacy partner fills and ships on average over 1,400 products a day across Australia. These are all products developed by NxGen. Each of these is an individual prescription issued by an Australian based doctor. Based on this, NxGen has developed a unique ability to license and develop new pharmaceutical products.

Naltrexone – Addiction Implants

NxGen has developed a time release naltrexone implant that is effective against alcoholism, nicotine, gambling and opiate addictions. Clinical trials will shortly commence for NxGen’s alcohol, nicotine and opiate substance abuse products. Future projects include implants for methamphetamine (ice) and cocaine addiction.

1 Sexual behaviour and sexual dysfunctions after age 40: the global study of sexual attitudes and behaviours. Urology 2004 64: 991-997.

The NxGen Group Financials

NxGen	30 June 2008 $M	30 June 2009 $M
Total Revenue	$3.5	$7.0
Gross Profit	$2.8	$5.1
EBITDA	$2.0	$2.7
Profit	$1.0	$2.5

This information has been extracted from the Investigating Accountant’s Report by Pinn Deavin contained in the 13 February 2009 Notice of Meeting

Revenue Split - 2008 Actual Revenue Split - 2009 Forecast

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10% 10%
20% 20%
Pharma Pharma
10% 10%
Cosmetics Cosmetics
10% Erectile Dysfunction 10% Erectile Dysfunction
Animals Animals
Other
Other
50%
50%
Total Revenue: A$ 3.5m
Total Revenue: A$7.0m
Value Comparables
Anti Addition Products Sexual Health Products
Alkermes Inc Acrux Ltd
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Acrux Ltd

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• (NASDAQ:ALKS) markets Vivitrol, an extended release injectable naltrexone.

• (ASX:ACR) is an Australian company developing pharmaceutical products

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• In 2005 Alkermes, Inc. entered into an agreement with Caphalon, Inc. (NASDAQ:CEPH) to develop a naltrexone injection .

• In 2004 Acrux signed an exclusive licensing agreement with VIVUS, Inc. (NASDAQ:VVUS) for development of a topical testosterone spray,

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• Vivus agreed to pay Acrux licensing fees of US$3 million, clinical milestone payments of US$4.3 million, product approval milestone payments of US$6 million, plus undisclosed royalties.[3]

• Cephalon agreed to pay US$160 million upfront, plus US$110 million on FDA approval and up to an additional US$220 million in milestone payments based on sales.[2] ….

Acrux’s current market capitalisation is AU$76 million.[4]

This information has been extracted from the Independent Expert’s Report by Innovation Dynamics contained in the 13 February 2009 Notice of Meeting

2 Alkermes, Inc. (2005). Press Release: Cephalon and Alkermes Announce Agreement for the Commercialization of Vivitrex for the Treatment of Alcohol Dependence; Companies to Share Profits from Future Sales of Vivitrex Equally, 24 June 2005

3 Vivus, Inc. (2004). Press Release: VIVUS Expands Sexual Health Product Pipeline Through Deal With Acrux, 12 February 2004

4 Commsec (2008). ASX:ACR Last updated 19 December 2008

This announcement should not be read to the exclusion of the Notice of Meeting and the Board strongly urges each shareholder of the Company to review the Notice of Meeting in detail and obtain professional advice if required .

About NuSep

NuSep (ASX: NSP) is a publicly listed life sciences company that sells products into the global bioseparations market. The company has offices in both Sydney, Australia and Atlanta, USA.

With a 30 year heritage in biological separations, NuSep has forged a world class reputation for its innovative yet simple biological separation techniques including the world’s first IVF sperm separation device. In short NuSep has redefined the BioSeparations market through innovation and simplification.

NuSep’s world renowned research team has developed an extensive portfolio of patented products. In all, NuSep currently manufactures, distributes and sells 55 products to customers in the USA, Europe, Asia and Australia.

NuSep Products:

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• Gels – NuSep manufactures and sells precast gels including the innovative iGels, with a 2 year shelf life.

• Separation Instruments – NuSep has developed two unique biological separation instruments. The first instrument released in February 2008 can separate biological samples into 8 fractions for use in the proteomic market. The second instrument separates sperm for fertility treatments such as IVF and is presently undergoing clinical trials.

• Biological Products – NuSep supplies research grade biological products manufactured using its unique separation technologies. These products include human IgG and Albumin.

For more information about NuSep please visit the company’s website www.NuSep.com

Contact: Prakash Patel Chief Financial Officer & Company Secretary +61 2 8977 9000 prakash.patel@nusep.com

Contact Details Email info@nusep.com Telephone +61 2 8977 9000 Web www.nusep.com Facsimile +61 2 8977 9099 ABN 33 120 047 556

NuSep Ltd 22 Rodborough Rd Frenchs Forest NSW 2086

Postal Address P.O. Box 6126 Frenchs Forest NSW 2086