SYNTARA LIMITED — Capital/Financing Update 2006

Sep 19, 2006

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003.

Name of entity

Pharmaxis Ltd

ABN

75 082 811 630

We (the entity) give ASX the following information.

conversion price and dates for

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

$\mathbf{1}$ +Class of +securities issued or to be Unlisted Employee Options over Pharmaxis Ltd issued ordinary shares $\mathfrak{D}$ Number of +securities issued or to 72.500 be issued (if known) or maximum number which may be issued Exercise Price: $1.8918 3 Principal terms of the "securities Expiry: $19th$ September 2016 (eg, if options, exercise price and expiry date; if partly paid Vesting: 30 June 2007: 18.125 *securities, the amount outstanding 30 June 2008: 18.125 and due dates for payment; if 30 June 2009: 18,125 *convertible securities. the

30 June 2010: 18.125 Issued to 9 Pharmaxis employees in accordance with the Pharmaxis Employee Option Plan. Vesting of options is subject to the annual achievement of certain individual performance milestones.

conversion)

+ See chapter 19 for defined terms.

4	Do the "securities rank equally in allrespects from the date of allotmentwith an existing *class of quoted*securities?If the additional securities do notrank equally, please state:the date from which they do٠extent to whichthetheyparticipate for the next dividend,of(in)thecasea.trust.distribution) or interest paymentthe extent to which they do notrank equally, other than inrelation to the next dividend,distribution or interest payment	equally with existing ordinary shares.	No. Shares issued upon exercise will rank
5	Issue price or consideration	Nil
6	Purpose of the issue(If issued as consideration for theacquisition of assets, clearly identifythose assets)	Issue ofOption Plan	options to nine recently hiredemployees under the Pharmaxis Employee
7	Dates of entering *securities intouncertificated holdings or despatchof certificates	$22nd$ September 2006
		Number	$^\circ\mathrm{Class}$
8	Number*elassofalland*securitiesquotedASXon(including the securities in clause2 if applicable)	176,971,092	fullyOrdinarypaidshares

$+$ See chapter 19 for defined terms.

		Number	* Class
9	telassNumberandοfаII	1,340,000	Options expiring on
	*securities not quoted on ASX		various dates with an
	(including the securities in clause		$_{\mathrm{of}}$exerciseprice
	2 if applicable)		$0.125 (ASX Code
			PXSAM)
		5,632,000	Options expiring on
			various dates with an
			οfexerciseprice
			$0.3125 (ASX Code
			PXSAO)
		500,000	Options expiring 30
			November 2013 with
			an exercise price of
			$0.376 (ASX Code
		22,500	PXSAQ)Options expiring24
			March 2014 with an
			οfexerciseprice
			$0.508 (ASX Code
			PXSAS)
		15,000	Options expiring3
			June 2014 withan
			οfexerciseprice
			$$0.426$ $(ASK$ $Code$
			PXSAU)
		255,000	Options expiring$\mathbf{l}$
			February 2015 with an
			exercisepriceοf
			$0.8340 (ASX Code
			PXSAY)
		330,000	Options expiring11May 2015 withan
			ofpriceexercise
			$1.147 (ASX Code
			PXSAW)
		947,000	Optionsexpiring4
			August 2015 with an
			exercise price of $1.79
			(ASX Code PXSAZ)
		105,000	Options expiring 17
			October 2015 with an
			оfexerciseprice
			$2.772 (ASX Code
			PXSAA)

$\overline{\text{+}$ See chapter 19 for defined terms.

270,000	Options expiring 12
	February 2016 with an
	exercise price of
	$2.194 (ASX Code
	PXSAB)
111,500	Options expiring 31
	May 2016 with an
	exercise price of
	$2.194 (ASX Code
	PXSAC)
646,500	Options expiring 14
	August 2016 with an
	exercise price of
	$1.917 (ASX Code
	PXSAD)
72,500	Options expiring 19
	September 2016 with
	an exercise price of
	$1.8918 (ASX Code
	$PXS_$

Dividend policy (in the case of a $\lceil$ trust, distribution policy) on the $\overline{10}$ $\rm n/a$ increased capital (interests)

Part 2 - Bonus issue or pro rata issue

П	holderapprovalsecurityls.required?
12 °	Is the issue renounceable or non-renounceable?
13	Ratio in which the "securities willbe offered
$\vert 4$	* Class of + securities to which theoffer relates
15.	determine*Recorddatetoentitlements
16.	Will holdings on different registers(or subregisters) be aggregated forcalculating entitlements?
17.	Policy for deciding entitlements inrelation to fractions

+ See chapter 19 for defined terms.

18	Names of countries in which theentity has "security holders whowill not besent newissuedocumentsNote: Security holders must be told how theirentitiements are to be dealt with.
	Cross reference: rule 7.7.
19.	forofClosingdatereceiptacceptances or renunciations
20.	Names of any underwriters
21	Amount of any underwriting fee orcommission
22.	Names of any brokers to the issue
23	Fee or commission payable to thebroker to the issue
24	Amount of any handlingfeepayable to brokers who lodgeacceptances or renunciations onbehalf of *security holders
25.	If the issue iscontingenton"security holders'approval,thedate of the meeting
26	Date entitlement and acceptanceform and prospectus or ProductDisclosure Statement will be sent topersons entitled
27	If the entity has issued options, andthe terms entitle option holders toparticipate on exercise, the date onwhich notices will be sent to optionholders
28	Date rights trading will begin (ifapplicable)
29.	Date rights trading will end (if
	applicable)
30	How do "security holders sell theirentitlements in full through a

$\overline{\text{ }*$ See chapter 19 for defined terms.

	broker?
31	How do "security holders sell partof their entitlements through abroker and accept for the balance?
32	How do *security holders disposeof their entitlements (except by salethrough a broker)?
33	+ Despatch date

Part 3 - Quotation of securitiesYou need only complete this section if you are applying for quotation of securities

34 Type of securities $(iick one)$

$(b)$ All other securities Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35	If the "securities are "equity securities, the names of the 20 largest holders of theadditional *securities, and the number and percentage of additional *securities held bythose holders
36	If the *securities are *equity securities, a distribution schedule of the additional*securities setting out the number of holders in the categories$1 - 1,000$$1,001 - 5,000$$5,001 - 10,000$$10,001 - 100,000$100,001 and over
37	A copy of any trust deed for the additional "securities"

+ See chapter 19 for defined terms.

Entities that have ticked box 34(b)

• 38 Number of securities for which +quotation is sought
• Class of *securities for which 39 quotation is sought
• Do the *securities rank equally in all 40 respects from the date of allotment with an existing "class of quoted *securities?

If the additional securities do not rank equally, please state:

• the date from which they do
• the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment
• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment
• 41 Reason for request for quotation now

Example: In the case of restricted securities, end ofrestriction period

(if issued upon conversion of another security, clearly identify that other security)

Number and +class of all +securities 42 quoted on ASX (including the securities in clause 38)

Number	* Class

+ See chapter 19 for defined terms.

Ouotation agreement

• $\mathbf{I}$ "Ouotation of our additional 'securities is in ASX's absolute discretion. ASX may quote the "securities on any conditions it decides.
• $\overline{2}$ We warrant the following to ASX.
  • The issue of the *securities to be quoted complies with the law and is not for $\bullet$ an illegal purpose.
  • There is no reason why those "securities should not be granted "quotation.
  • An offer of the "securities for sale within 12 months after their issue will not require disclosure under section $707(3)$ or section $1012C(6)$ of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any *securities to be quoted and that no-one has any right to return any *securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the *securities be quoted.
• We warrant that if confirmation is required under section 1017F of the Ă Corporations Act in relation to the "securities to be quoted, it has been provided at the time that we request that the *securities be quoted.
• If we are a trust, we warrant that no person has the right to return the $\bullet$ *securities to be quoted under section 1019B of the Corporations Act at the time that we request that the *securities be quoted.

+ See chapter 19 for defined terms.

• $\overline{3}$ We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• $\overline{4}$ We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before *quotation of the "securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

......David McGarvey............

Sign here:

...................................... (Company secretary)

20 September 2006

Print name:

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+ See chapter 19 for defined terms.