SYNTARA LIMITED — Capital/Financing Update 2006

Aug 14, 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.

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 649.500 be issued (if known) or maximum number which may be issued Exercise Price: $1.917 3 Principal terms of the "securities Expiry: 14th August 2016 (eg, if options, exercise price and expiry date; if partly paid Vesting: 30 June 2007: 162,375 *securities, the amount outstanding 30 June 2008: 162,375 and due dates for payment; if 30 June 2009: 162,375 *convertible securities. the 30 June 2010: 162,375 conversion price and dates for Issued to 41 Pharmaxis employees in conversion) accordance with the Pharmaxis Employee Option Plan. Vesting of options is subject to the

annual achievement of certain individual

performance milestones.

+ 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 do٠theextent to whichtheyparticipate for the next dividend,thecaseοf΄(in$\mathbf{a}$trust.distribution) or interest paymentthe extent to which they do not$\bullet$rank equally, other than inrelation to the next dividend,distribution or interest payment	No. Shares issued upon exercise will rankequally with existing ordinary shares.
5.	Issue price or consideration	Nil
6	Purpose of the issue(If issued as consideration for theacquisition of assets, clearly identifythose assets)	Issue of options to 41 employees under thePharmaxis Employee Option Plan, subsequentto a review of employee performance for the2006 financial year
7	Dates of entering *securities intouncertificated holdings or despatchof certificates	$17th$ August 2006
8	Numberand*elassofallquoted*securitiesASXon(including the securities in clause2 if applicable)	- ClassNumber176,961,092Ordinaryfullypaidshares

$+$ See chapter 19 for defined terms.

		Number	+ Class
9.	andclass*allNumberof	1,340,000	Options expiringon
	*securities not quoted on ASX		various dates with an
	(including the securities in clause		οfexerciseprice
	2 if applicable)		$0.125 (ASX Code
			PXSAM)
		5,642,000	Options expiring on
			various dates with an
			exercise price$_{\mathrm{of}}$
			$0.3125 (ASX Code
			PXSAO)
		500,000	Options expiring 30
			November 2013 with
			an exercise price of
			$0.376 (ASX Code
			PXSAQ)
		22,500	Options expiring 24
			March 2014 with an
			$_{\mathrm{of}}$exerciseprice
			$0.508 (ASX Code
			PXSAS)
		15,000	Optionsexpiring3
			June 2014 withan
			ofexerciseprice
			$0.426 (ASX Code
			PXSAU)
		255,000	Options expiring$\mathbf{l}$
			February 2015 with an
			exercisepriceοf
			$0.8340 (ASX Code
			PXSAY)
		330,000	Options expiring11
			May 2015 withan
			οfpriceexercise
			$1.147 (ASX Code
			PXSAW)
		953,000	Optionsexpiring4
			August 2015 with an
			exercise price of $1.79
		105,000	(ASX Code PXSAZ)
			Options expiring 17October 2015 with an
			exercisepriceоf
			$2.772 (ASX Code
			PXSAA)

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

300.000	Options expiring 12February 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)
649.500	Options expiring 14
	August 2016 with an
	exercise price of
	$1.917 (ASX Code
	$PXS$ )

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

Part 2 - Bonus issue or pro rata issue

$\mathsf{H}$	holderapprovalsecuritylsrequired?
$12^{\circ}$	Is the issue renounceable or non-renounceable?
$\overline{13}$	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 the entity has "security holders who will not be sent new issue documents

Note: Security holders must be told how theirentitlements are to be dealt with.

Cross reference: rule 7.7.

19 Closing date for receipt of acceptances or renunciations

+ See chapter 19 for defined terms.

Appendix 3B New issue announcement

20.	Names of any underwriters
21	Amount of any underwriting fee or
	commission
22	Names of any brokers to the issue
23	Fee or commission payable to thebroker to the issue
24	any handlingAmount offee
	brokers who lodgepayable to
	acceptances or renunciations onbehalf of "security holders
25.	If the issue is contingenton"security holders"approval,the
	date of the meeting
26	Date entitlement and acceptanceform and prospectus or Product
	Disclosure Statement will be sent to
	persons entitled
27	If the entity has issued options, and
	the terms entitle option holders to
	participate on exercise, the date onwhich notices will be sent to option
	holders
28	Date rights trading will begin (ifapplicable)
29	Date rights trading will end (ifapplicable)
30	How do "security holders sell their
	entitlements in full througha
	broker?
31	How do "security holders sell part
	of their entitlements through a
	broker and accept for the balance?

$+$ See chapter 19 for defined terms.

32 How do "security holders dispose of their entitlements (except by sale through a broker)?

33 *Despatch date

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of securities $(iick one)$
  • Securities described in Part 1
• $(b)$

$\left( a\right)$

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

٠

If the +securities are +equity securities, the names of the 20 largest holders of the additional "securities, and the number and percentage of additional "securities held by those holders

36	If th
	*secu

e "securities are "equity securities, a distribution schedule of the additional urities 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
• 39 Class of "securities for which 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 of restriction 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.

Quotation agreement

• $\mathbf{I}$ *Quotation 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 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 $\bullet$ 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 *securities to be quoted under section 1019B of the Corporations Act at the time that we request that the "securities be quoted.

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

• $\mathfrak{Z}$ 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.
• We give ASX the information and documents required by this form. If any $\overline{4}$ 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.

......................................

15 August 2006

Print name: ......David McGarvey............

(Company secretary)

Sign here:

www.www.www.www.www.

+ See chapter 19 for defined terms.