SPENDA LIMITED — Capital/Financing Update 2004

Oct 24, 2004

Premier Bionics Subsidiary PulmoSonix receives AusIndustry R&D Start Grant

25 October 2004

PulmoSonix Pty Ltd today announced that the Company has been awarded a grant of approximately $500,000 under the R&D Start Grant scheme to support the Company's PulmoScreen project. The grant will enable the further development of a clinically important diagnostic device based on PulmoSonix's proprietary acoustic technology. This device is designed to detect the early stages of obstructive lung diseases, such as emphysema. before clinical symptoms are detectable. Diagnosis at this stage is currently not possible. It enables lifestyle changes, such as smoking cessation, to have a significant impact on reducing the morbidity and mortality currently associated with the disease.

Dr Trevor Williams, the Clinical Director of the Department of Allergy Immunology and Respiratory Medicine at the Alfred Hospital in Melbourne, described the PulmoScreen project as a significant step forward in the work to establish with precision the early diagnosis of obstructive lung diseases. "A device such as the PulmoScreen would greatly assist Doctors to identify the early stages of chronic obstructive lung diseases in which smoking plays such a substantial role. Currently, the diagnosis of obstructive lung diseases is usually at a late stage when patients are already presenting with clinically significant symptoms. By identifying early changes to the lung caused by obstructive lung diseases Doctors will be able to work with their patients, allowing earlier intervention and reducing the burden of long term chronic illness as well as reducing cost to the patient and the community."

The R&D Start grant provides 50% of the project funding required to develop a working prototype of the device and to perform tests on animal models. It will also fund preliminary human clinical trials.

Once proof of concept has been established, the Company has been invited to apply for additional assistance under Ausindustry's new Commercial Ready program (the successor to R&D Start) for Stage 2 of the project. This would co-fund development of the device to market readiness and full commercialisation stage.

Chronic Obstructive Pulmonary Disease (COPD) is a significant global public health issue. At a local level. COPD costs the Australian community some $800 million dollars annually and approximately 80-90% of these costs are attributable to smoking. Current methods of diagnosis are expensive, generally ineffective in differentiating emphysema from other forms of COPD such as chronic bronchitis and can only detect changes once the disease has progressed to an advanced stage. The PulmoScreen device is designed to offer a rapid, simple and low cost definitive diagnosis of emphysema at a stage before irreversible lung damage has occurred, i.e. to enable early intervention.

Premier Bionics' and PulmoSonix's Managing Director, Dr Martin Soust said, "We are very pleased that Auslndustry, by awarding this grant, has recognised the significant potential benefits that the PulmoScreen device can bring to Australia and beyond and Premier Bionics appreciates the financial assistance provided by AusIndustry. This will enable PulmoSonix to rapidly pursue its development and commercial plans for this product."

Background on Premier Bionics

Premier Blonics was formed in December 2001 to invest in advanced, Australian-based research in medical devices and diagnostics. The company listed on the Australian Stock Exchange (ASX: PBI) in May 2002.

The directors of Premier Bionics identified a confluence of three factors that represented a large commercial opportunity. These factors are: the global medical diagnostics and devices market is estimated to be worth US$170 billion annually; Australian researchers have a demonstrated capacity for creative contribution to innovation in medical devices and diagnostics; and later stage Australian R&D projects tend to be relatively under-funded.

Premier Bionics' first investment is PulmoSonix Pty Ltd, a company formed to develop technology developed at Monash University's Ritchie Centre for Baby Health Research. Premier Bionics was also granted a Zyear exclusive right of first review, evaluation and commercialisation of technology produced by researchers at the Ritchle Centre in the field of respiratory disorders, sleep apnea and other sleep disorders, and chronic lung disease.

Company information:

Dr Martin Soust		CEO Premier Bionics

Tel: 03 8508 8201