MEMPHASYS LIMITED. — Management Reports 2007

Jul 23, 2007

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FOR IMMEDIATE RELEASE

NuSep’s First Quarterly Newsletter

SYDNEY, AUSTRALIA – 24[th] June 2007 – NuSep Ltd (ASX: NSP). Attached is NuSep’s first quarterly newsletter.

About NuSep Limited

NuSep is an Australian BioSeparations company based in Frenchs Forest, Sydney. NuSep manufactures and markets a range of products to BioSeparations customers located worldwide through distribution and sales centres located in Australia, the USA and Europe. NuSep is listed on the Australian Stock Exchange where its shares trade under the code “NSP”.

NuSep currently operates across three product groups, each addressing BioSeparations customers, utilising patented technology and leveraging the company’s global distribution network. The three product groups are as follows:

1. Gels – NuSep offers two ranges of electrophoresis pre-cast gels: iGels, innovative gels including long-life gels and gels with solid well dividers; and NuBlu, high quality gels at an every day price together with associated consumables.

2. Gradiflow[®] Instruments – NuSep has developed two unique laboratory separation devices based on Gradiflow® technology. The first to be released in early 2008 is a proteomics instrument that can separate a biological sample into eight fractions. The second instrument will be applied to sperm separation required for fertility treatments such as IVF. Development of this product is supported by the Australian Government’s Commercial Ready program.

3. Biological Products – in May 2007, the company began manufacturing research grade reagents purified from human and animal plasma. The first product release is a human IgG product.

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

Enquiries/additional information:

Prakash Patel Company Secretary NuSep Limited (02) 8977 9000

-Ends-

22 Rodborough Road � Frenchs Forest NSW 2086 � Australia � 61.2.8977.9000 � 61.2.8977.9099 fax NuSep Ltd ABN: 33 120 047 556

www.nusep.com

NuSep News July 2007

Redefi ning BioSeparations

Welcome to the fi rst issue of NuSep News

I am delighted to welcome you to NuSep’s fi rst quarterly Shareholders Newsletter. It has been six months since we separated from Life Therapeutics and already we have achieved many important commercial milestones, including:

• The resolution of Gel production issues and

• establishment of global distribution.

• The appointment of the United States sales force.

• The launch of NuBlu gels.

• Listing on the Australian Stock Exchange on 14th May

• under the code NSP.

We continue to implement commercial strategies designed to make NuSep a leader in its fi eld. We are focused on acquiring the next generation of products by exploring opportunities in the monoclonal antibodies area. NuSep is also expanding its current product range with the launch of our IgG (Immunoglobulin) reagent. IgG is the fi rst Gradifl ow manufactured product and will be followed by additional biological products.

Another important milestone which I believe needs to be mentioned is NuSep’s clinical trial of the Sperm Sorter instrument. It is particularly pleasing when a new product brings both social and commercial benefi ts as the Sperm Sorter does.

NuSep is moving forward with a clear commercial focus, and I know our shareholders will work with us to make it happen. If you have any issues, concerns or ideas please contact me – I value and welcome your feedback. I’m sure you will fi nd this edition of NuSep News to be both interesting and informative, and we look forward to sharing with you all our exciting updates on a quarterly basis.

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Cav Nicholas Caré Chairman

Cav Nicholas Caré, Chairman and John Manusu, CEO at NuSep’s ASX Listing Ceremony

Goal: To be the leading supplier to the BioSeparations market

Distribution

NuSep’s distribution system gives it a competitive edge. Utilising the web, NuSep has established a global distribution system that allows for direct sales and delivery to its BioSeparation customers. Without the need to employ distributors, our system not only lowers costs but puts us in direct contact with our customers. This distribution is centrally controlled from Frenchs Forest and supported by local sales, customer service and logistic functions.

Technology

All NuSep products are based on patented technology. Our novel technology is more than a point of difference; it delivers superior results to our customers.

BioSeparation Customers

NuSep is singularly focused on providing products and services to the BioSeparations market. By focusing on this discrete market segment NuSep has been able to build up a wealth of knowledge about its customers. This allows NuSep to develop products which exceed our BioSeparation customer expectations.

Achieving NuSep’s Goal

Having established its global distribution system NuSep is now actively looking for additional products to sell to its BioSeparation customers. Some of these products will be developed internally, but the majority will be externally sourced.

NuSep is actively looking at a number of acquisitions of companies and products to expand its current product range.

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Distribution
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Instruments

Global distribution with central control and local delivery

BioSeparation Customers Our products share a common customer base

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Technology

All products are based on patented technology Biological

Developing our Core Competencies

NuSep provides BioSeparation customers with products and services which lead the industry in terms of customer defi ned benefi ts. NuSep achieves this by focusing on the BioSeparations market using the Company’s novel technology and distribution system. In essence NuSep . “Redefi nes Biological Separations”

NuSep Ltd | www.NuSep.com | 22 Rodborough Rd Frenchs Forest NSW 2086 | Ph: 02 8977 9000

Our products exceed customer expectations

US Distribution: Operates Locally, Controlled Centrally

1. Gradifl ow® Instruments

NuSep has two laboratory-based, separation devices in its development pipeline. Both are based on Gradifl ow technology.

Sperm Sorter - The ‘Sperm Sorter’ is a device that separates sperm, an essential pre-requisite to IVF, Intra-Uterine Insemination (IUI) and Intra Cytoplasmic Sperm Injection (ICSI) markets. The Sperm Sorter is supported by a A$2.2 million Australian Federal Government Commercial Ready grant. The Sperm Sorter is now in clinical trials which should be completed by December 2008. The market for this product is estimated to be A$19 million[1] .

MF10 - The MF10 instrument will be sold to the growing proteomics market which is estimated to be worth more than US$2 billion in 2006[2] . Proteomics is the study of protein structures and functions and is frequently used to identify proteins that can predict disease states or be applied to new drugs. The MF10 should be launched for sale in early 2008.

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2. Gels

NuSep manufactures a range of gels under the iGels brand to address the existing US$55 million[3] market. The Company has just launched NuBlu gels to open up the untapped ‘homemade’ gel market which is estimated to be worth a further US$45 million[4] . We have just completed recruitment of our sales force with four new reps in the US and one in Australia. US trade advertising

has begun (see ad this page) and plans for a more aggressive promotional campaign are underway. Manufacturing is expanding and the web based distribution model is now fully operational. NuSep’s ASX listing was delayed by four months which in turn means we will not achieve breakeven by 30 June. While this delay was unavoidable the Company will achieve monthly profi tability this fi nancial year as the gel promotions start to have effect.

3. Biological Products

The Biological Products area offers NuSep the greatest potential return as it enables the Company to open up new BioSeparation markets by leveraging off the Gradifl ow technology. Our fi rst Gradifl ow manufactured product is human IgG which was launched in June. Additional plasma products will be released later this year.

NuSep is now expanding into the manufacture and purifi cation of monoclonal antibodies. Monoclonals are a logical product extension from biological products as they fi t with our production capabilities, distribution system and customer base. Furthermore, this is a signifi cant market as approximately one fourth of all biotechnology products in development are based on monoclonal antibodies. NuSep is actively exploring licensing/acquisition opportunities in this area.

NuSep’s US distribution presence is now completely operational.

Establishing our US distribution has taken considerable time and resources. While physical distribution occurs in the US at Atlanta, most back offi ce functions are carried out in Sydney. This enables NuSep to:

• Reduce the costs associated with supplying our

• Customers;

• Creates a direct link to the Customer; and

• Gives the Company the ability to operate locally

• while controlling the distribution/sales process centrally in Sydney.

Both customer service and sales functions operate locally in the US. Orders are taken by phone, fax, email and via the web. It takes less than 3 hours for an order to be processed and dispatched, which means US customers generally receive their shipment in less than 24 hours.

Over the last 3 months NuSep has appointed 4 sales people to cover continental USA. Brian Ayling leads this team and is based in New Jersey. Brian has over 15 years experience working most recently with GE Healthcare. Tom covers the Mid West to Washington, Linda covers the East Coast and Tiffany covers the West Coast.

Now that the US distribution system is in full swing Brian is implementing a number of promotional campaigns to signifi cantly increase sales.

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Gel Customers
Distribution
Sales Force www Cust. Service
NuSep.com
NuSep
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Gradifl ow is a registered trade mark of Life Therapeutics 1: IVF Monitoring Statistics for Australia, US and Europe

• 3: Phortech International, The 2004/05 US MSPPSA Electrophoretic Equipment & Media Market, page 92

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2: Front Line Strategic Management Consulting Inc

4: Phortech International, The 2004/05 US MSPPSA Electrophoretic Equipment & Media Market, page 87

The Sperm Sorter brings social and commercial benefi ts

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Sperm Sorter proceeds to clinical trials

Initial clinical trials for the Sperm Sorter have commenced at Westmead Hospital in Sydney. The purpose of the trial is to determine the effi cacy and safety of the Sperm Sorter as a sperm preparation technique for IVF treatment. Patient recruitment is currently underway and Westmead Fertility Centre has already performed a number of fertilisation procedures. The sperm samples, together with resulting fertilisation rates, will be analysed against specifi c criteria. It is anticipated that this initial trial will be completed by December 2007.

“We would have given up all hope of conceiving a child if it wasn’t for the Sperm Sorter” Nancy, mother of IVF baby Ashleigh

The Sperm Sorter is the result of successful collaboration with Professor John Aitken from the Faculty of Science and Information Technology at the University of Newcastle. Professor Aitken saw the potential of Gradifl ow in sperm separation and went on to confi rm that this technique was indeed able to isolate high-quality sperm from a sample of semen. In conjunction with experts at Sydney IVF, an early version of the Sperm Sorter received ethics approval for treating a couple who were unable to conceive using other methods. Following application of the Sperm Sorter, the couple successfully conceived and gave birth to a healthy baby girl. This successful result and commercial interest from fertility specialists prompted NuSep to undertake commercial development of the Sperm Sorter. NuSep’s research and development and early commercialisation activities are being supported by a A$2.2 million grant awarded under the Australian Government’s Commercial Ready program.

After many years of unsuccessful IVF treatment Nancy was about to give up hope of conceiving a sibling for their fi rst child. Even her doctors suggested she abandon her efforts until she was approached to trial the Sperm Sorter. Nancy agreed and successfully conceived a beautiful daughter, Ashleigh. Nancy is convinced that the Sperm Sorter made a signifi cant difference to her chance of conceiving. NuSep is pleased to be associated with this success story and wish Nancy and her family all the best for the future.

ART Trivia

The fi rst successful assisted reproductive treatment occurred in 1767 when Dr John Hunter the renowned English Surgeon artifi cially inseminated a lady with her husbands semen using a warmed syringe. The husband suffered from a congenital abnormality called hyposadias in which the urethral opening is on the under surface of the penis, rather than the tip. As a result he was unable to impregnate this wife naturally.

Italian knighthood awarded to NuSep Chairman

Chairman of NuSep Nicholas Caré was conferred the title of Cavaliere in the Order of Merit of the Italian Republic ceremony held last month at the Art Gallery of NSW. Mr Caré was honoured for his personal involvement in fostering the economic, social and cultural links between Australia and Italy in his role of Chief Executive Offi cer of the Italian Chamber of Commerce.

The reference for this trivia is The Knife Man, Wendy Moore, Broadway Books, New York 2005 page 142-143.

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Tax Time

Australian shareholders seeking information on the income tax implications of the shares received in the demerger process from Life Therapeutics should refer to the ATO class ruling posted on the NuSep website in the Company Announcements section.

Images Nicholas Caré receives John Manusu rings the bell his knighthood as NuSep lists on the ASX