SYNTARA LIMITED - Capital/Financing Update 2011

ABN 75 082 811 630

Retail Offer Booklet

Fully underwritten 1 for 3 non-renounceable Entitlement Offer at an Issue Price of $1.05 per New Share to raise approximately $80.2 million

Retail Entitlement Offer closes at 5.00pm (Sydney time) on 8 December 2011

If you are an Eligible Retail Shareholder, this is an important document which should be read in its entirety. It is accompanied by a personalised Entitlement and Acceptance Form which sets out your Entitlement for New Shares in Pharmaxis Ltd. If you do not understand these documents, or are in doubt as to how to act, you should consult your financial or other professional adviser before making an investment decision.

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS

Joint Lead Managers and Underwriters

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Important Information	1
Chairman’s Letter	2
Key Dates	4
What Should You Do?	5
1. Overview of the Entitlement Offer	6
2. How to Apply – Eligible Retail Shareholders	9
3. Capital Raising Presentation and ASX Announcements	13
4. Important Information for Shareholders	44
5. Glossary	49
6. Corporate Directory	51

Important Information

Retail Offer Booklet

This Retail Offer Booklet is issued by Pharmaxis Ltd ABN 75 082 811 630. This Retail Offer Booklet and the Entitlement and Acceptance Form are important and require your immediate attention. You should read these documents carefully and in their entirety before deciding whether or not to participate in the Entitlement Offer. In particular, you should consider the risk factors outlined in the Capital Raising Presentation as set out in section 3 of this Retail Offer Booklet.

No prospectus

Neither this Retail Offer Booklet nor the Entitlement and Acceptance Form is a prospectus for the purposes of the Corporations Act. Accordingly, these documents do not contain all of the information which a prospective investor may require to make an investment decision. They do not, and are not required to, contain all of the information which would otherwise be required to be disclosed in a prospectus. They are not required to be, and will not be, lodged with ASIC. This Retail Offer Booklet should be read in conjunction with Pharmaxis’ other periodic and continuous disclosure announcements to the ASX available at www.asx.com.au.

Other important information

Please see the other important information set out in section 4 of this Retail Offer Booklet.

Offering restrictions

This Retail Offer Booklet does not constitute an offer, invitation or recommendation to subscribe for or purchase New Shares in any jurisdiction in which it would be unlawful. New Shares may not be offered or sold to shareholders who have a registered address on Pharmaxis’ share register in any country outside Australia and New Zealand. In particular, this Retail Offer Booklet does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States or to, or for the account or benefit of, any ‘US person’ (as defined in Regulation S under the US Securities Act of 1933 (US Securities Act)) (US Person). None of this Retail Offer Booklet, the ASX announcements and Capital Raising Presentation reproduced in it nor the Entitlement and Acceptance Form may be distributed to or released in the United States or to any US Persons. The New Shares have not been, and will not be, registered under the US Securities Act or the securities laws of any other jurisdiction. Entitlements may not be taken up by persons in the United States or by persons who are, or are acting for the account or benefit of, a US Person.

Chairman’s Letter

Dear Shareholder,

On behalf of Pharmaxis Ltd (Pharmaxis), I am pleased to invite you to participate in a pro-rata accelerated non-renounceable entitlement offer to subscribe for 1 Share (New Share) for every 3 Pharmaxis Shares held as at 7.00pm (Sydney time) on the Record Date of 21 November 2011 (Entitlement Offer). The New Shares are being offered at an issue price of $1.05 per New Share (Issue Price), which represents a discount of approximately 15.2% to the theoretical ex-rights price (TERP)[1] .

On 16 November 2011 Pharmaxis announced its intention to raise approximately $80.2 million through the Entitlement Offer. Merrill Lynch International (Australia) Ltd and Wilson HTM Corporate Finance Ltd are Joint Lead Managers and Underwriters to the Entitlement Offer. The Entitlement Offer was initially underwritten to $40 million but as a result of strong support, is now fully underwritten.

Pharmaxis has already raised $49.7 million (before offer costs) from institutional investors as part of the Institutional Entitlement Offer. Settlement of these New Shares will occur in two tranches with $42.4 million to be completed on the first settlement date of 28 November 2011 and a further $7.3 million will be settled on the second settlement date of 15 December 2011.

This offer booklet (Retail Offer Booklet) relates to the retail component of the Entitlement Offer (Retail Entitlement Offer) which provides Eligible Retail Shareholders with the same opportunity offered to those investors who participated in the Institutional Entitlement Offer to acquire New Shares. The Retail Entitlement Offer will raise approximately $30.5 million before offer costs.

Pharmaxis is undertaking the equity capital raising to increase its cash reserves and strengthen its balance sheet in anticipation of the commercial launch of Bronchitol for cystic fibrosis in Europe, expected to occur in the first half of 2012.

This Retail Offer Booklet contains important information about the Retail Entitlement Offer, including:

Key Dates;
What should you do;
Overview of the Entitlement Offer;
How to Apply;
Capital Raising Presentation and ASX Announcements; and
Important Information for Shareholders.

Accompanying this Retail Offer Booklet is your personalised Entitlement and Acceptance Form which contains details of your Entitlement.

The Retail Entitlement Offer is now open to Eligible Retail Shareholders and closes at 5.00pm (Sydney time) on 8 December 2011. To participate, you need to ensure that your completed Entitlement and Acceptance Form and Application Monies are received by the Registry before this time and date pursuant to the instructions that are set out on the Entitlement and Acceptance Form OR that you have paid your Application Monies by BPAY[®] .

Eligible Retail Shareholders may also apply for New Shares in excess of their Entitlement (Additional Shares). The allocation and issue of Additional Shares will be determined by Pharmaxis at its sole discretion.

Entitlements are non-renounceable and will not be tradeable on the ASX or otherwise transferable. Shareholders who do not take up their Entitlement will not receive any value in respect of those Entitlements and their percentage interest in Pharmaxis will reduce.

1 TERP is the theoretical price at which Shares should trade immediately after the ex-date for the Entitlement Offer assuming 100% take-up of the Entitlement Offer. The theoretical ex-rights price is a theoretical calculation only and the actual price at which Shares trade immediately after the ex-date for the Entitlement Offer will depend on many factors and may not be equal to the theoretical ex-rights price. TERP is calculated by reference to the closing price of Pharmaxis’ shares on ASX of $1.30 on 15 November 2011.

Full details of the Retail Entitlement Offer and how to participate can be found in this Retail Offer Booklet. You should consult your stockbroker, accountant or other independent professional adviser to evaluate whether or not to participate in the Retail Entitlement Offer. You should also refer to the ‘Risk Factors’ section of the Capital Raising Presentation set out in section 3 of this Retail Offer Booklet which contains a summary of key risks associated with an investment in Pharmaxis.

On behalf of the Board of Pharmaxis, I invite you to consider this investment opportunity and thank you for your ongoing support of our company.

Yours sincerely,

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Denis Hanley Non-executive Chairman

Key Dates

Event	Date
Announcement of the Entitlement Offer	Wednesday, 16 November 2011
Record Date for the Entitlement Offer	7.00pm (Sydney time)
	Monday, 21 November 2011
Despatch of Retail Offer Booklet and Entitlement	Thursday, 24 November 2011
and Acceptance Forms
Retail Entitlement Offer opens	Thursday, 24 November 2011
First settlement of New Shares issued under the	Monday, 28 November 2011
Institutional Entitlement Offer
Retail Entitlement Offer closes (Closing Date)	5.00pm (Sydney time)
	Thursday, 8 December 2011
Second settlement of New Shares issued under	Thursday, 15 December 2011
the Entitlement Offer
Allotment of New Shares issued under the second settlement	Friday, 16 December 2011
(New Shares issued under the Retail Entitlement Offer will be
allotted at this time)
Commencement of trading of New Shares issued under	Monday, 19 December 2011
the second settlement (New Shares issued under the
Retail Entitlement Offer will commence trading at this time)
Despatch of holding statements for New Shares issued	Monday, 19 December 2011
under the second settlement

This timetable is indicative only and is subject to change. All dates and times refer to Sydney time. The commencement of quotation of New Shares is subject to confirmation from ASX.

Applicants are encouraged to submit their Entitlement and Acceptance Form and Application Monies as soon as possible after the Retail Entitlement Offer opens. The Directors may vary these dates, with the consent of the Joint Lead Managers and Underwriters, subject to the Corporations Act, ASX Listing Rules and other applicable laws. An extension of the Closing Date for the Retail Entitlement Offer will delay the anticipated date for allotment and issue of the New Shares. Pharmaxis also reserves the right to accept late Applications either generally or in particular cases. You cannot, in most circumstances, withdraw the application once it has been accepted. No cooling off rights apply to the Retail Entitlement Offer.

The Directors reserve the right not to proceed with the whole or part of the Retail Entitlement Offer at any time prior to allotment and issue of the New Shares. In that event, Application Monies (without interest) will be returned in full to Applicants.

Enquiries

If you are in any doubt as to whether you should participate in the Retail Entitlement Offer, you should consult your stockbroker, accountant, solicitor or other professional adviser.

If you have any questions, please call the Pharmaxis Offer Information Line on 1300 368 679 (within Australia) or +61 3 9415 4193 (outside Australia) at any time between 8.30am to 5.30pm (Sydney time) Monday to Friday before the Retail Entitlement Offer closes.

Website

www.pharmaxis.com.au

What Should You Do?

What should you do?

Decide what you want to do

Apply for New Shares

This Retail Offer Booklet and the accompanying personalised Entitlement and Acceptance Form contain important information about the Retail Entitlement Offer. You should read them carefully and in their entirety before deciding whether or not to participate in the Retail Entitlement Offer.

If you are in doubt as to the course you should follow, you should seek appropriate professional advice before making an investment decision.

If you are an Eligible Retail Shareholder, you may subscribe for all, some or none of your Entitlement or apply for Additional Shares in excess of your Entitlement (see section 2 for further details).

Eligible Retail Shareholders who do not participate in the Retail Entitlement Offer, or participate for an amount less than their Entitlement, will have their percentage holding in Pharmaxis reduced. Eligible Retail Shareholders who take up all their Entitlement will maintain their percentage shareholding. By applying for, and being allotted Additional Shares, Eligible Retail Shareholders will see their percentage holding in Pharmaxis increase to the extent of any Additional Shares issued to them.

To participate in the Retail Entitlement Offer and subscribe for New Shares, you must:

lodge a duly completed Entitlement and Acceptance Form and applicable Application Monies; or

® • apply and pay via BPAY , so that they are received before 5.00pm on 8 December 2011, otherwise your Entitlement under the Retail Entitlement Offer will lapse.

1. Overview of the Entitlement Offer

1.1 Entitlement Offer

The Entitlement Offer is a pro-rata accelerated non-renounceable entitlement offer to subscribe for 1 New Share for every 3 Pharmaxis Shares held as at 7.00pm (Sydney time) on the Record Date to raise approximately $80.2 million.

The Issue Price is $1.05 per New Share, which represents a discount of approximately 15.2% to TERP which is $1.24, and a discount of approximately 19.2% to the closing price of Pharmaxis’ Shares on ASX of $1.30 on 15 November 2011, the trading day prior to the announcement of the Entitlement Offer.

The Entitlement Offer comprises an institutional component (the Institutional Entitlement Offer) and a retail component (the Retail Entitlement Offer being made under the Retail Offer Booklet).

Please refer to the Capital Raising Presentation in section 3 of this Retail Offer Booklet for information regarding the purpose of the Entitlement Offer, Pharmaxis’ business and strategy and importantly, the risks associated with an investment in Pharmaxis. You should also consider publicly available information about Pharmaxis available at www.asx.com.au and www.pharmaxis.com.au.

The Entitlement Offer is fully underwritten.

1.2 Retail Entitlement Offer

The Retail Entitlement Offer constitutes an offer to Eligible Retail Shareholders only. See section 2.1 for the definition of an Eligible Retail Shareholder. The Retail Entitlement Offer will raise approximately $30.5 million.

Eligible Retail Shareholders are invited to subscribe for all or part of their Entitlement and are being sent this Retail Offer Booklet with a personalised Entitlement and Acceptance Form.

Your Entitlement is non-renounceable. This means it is personal to you and cannot be traded, transferred, assigned or otherwise dealt with. If you do not take-up your Entitlement it will lapse and you will not receive any New Shares under the Entitlement Offer.

Eligible Retail Shareholders may also apply for New Shares in excess of their Entitlement at the Issue Price. The ability for Pharmaxis to issue Additional Shares is dependent upon the extent of any Shortfall in the Retail Entitlement Offer. The allocation and issue of Additional Shares is at the sole discretion of Pharmaxis.

The Retail Entitlement Offer closes at 5.00pm (Sydney time) on Thursday, 8 December 2011.

Pharmaxis reserves the right to reject any Application that it believes comes from a person who is not an Eligible Retail Shareholder and to issue nil or a lesser number of Additional Shares than may be subscribed for.

1.3 Ranking of New Shares

The New Shares will upon issue be fully paid and rank equally with Existing Shares of Pharmaxis. The rights attaching to the New Shares will be the same as the rights attaching to Existing Shares of Pharmaxis which are derived through a combination of Pharmaxis’ constitution and the law.

1.4 Effect of the Entitlement Offer on Pharmaxis’ capital structure

The principal effect of the Entitlement Offer on Pharmaxis’ capital structure will be to increase the total number of issued Shares. The capital structure of Pharmaxis following the issue of New Shares in connection with the Entitlement Offer will be as follows:

Shares on issue on announcement of Entitlement Offer	229,116,309
Approximate number of New Shares to be issued at	40,409,020
first settlement
Approximate number of New Shares to be issued at second	35,963,083
settlement (which includes the Retail Entitlement Offer)
Approximate number of Shares on issue upon completion	305,488,412
of the Entitlement Offer

The final number of New Shares to be issued under the Entitlement Offer is subject to reconciliation, the rounding of the Entitlements and whether any employee options are exercised after the date of this Retail Offer Booklet but prior to the Record Date.

As at the date of this Retail Offer Booklet, Pharmaxis had 11,942,140 options on issue. The exercise price of all options will be adjusted in accordance with the ASX Listing Rules and Pharmaxis’ employee option plan following the Entitlement Offer. The options do not carry an entitlement to participate in the Entitlement Offer. Options exercised prior to the Record Date may participate in the Retail Entitlement Offer.

1.5 Allotment

Pharmaxis has applied for quotation of the New Shares on ASX. Subject to approval being granted, it is expected that:

normal trading of New Shares allotted in connection with the Entitlement Offer first settlement will commence on Tuesday, 29 November 2011; and
normal trading of New Shares allotted in connection with the Entitlement Offer second settlement will commence on Monday, 19 December 2011. New Shares allotted to Eligible Retail Shareholders will be issued on the second settlement date.

Application Monies will be held by Pharmaxis in trust for Applicants until the New Shares are allotted. No interest will be paid on Application Monies.

1.6 Holding Statements

Holding statements are expected to be dispatched to Eligible Retail Shareholders on Monday, 19 December 2011 in respect of New Shares allotted under the Retail Entitlement Offer.

It is the responsibility of each successful Applicant to confirm their holding before trading in New Shares. Successful Applicants who sell New Shares before receiving a holding statement, do so at their own risk, even if they have obtained details of their holding from the Pharmaxis Offer Information Line.

1.7 Withdrawal of the Entitlement Offer

Pharmaxis reserves the right to withdraw the Entitlement Offer at any time prior to the issue of New Shares, in which case, Pharmaxis will refund any Application Monies already received for New Shares which have not been issued in accordance with the Corporations Act and without interest.

1.8 Allocation Policy

All Eligible Retail Shareholders will be allocated New Shares applied for up to their Entitlement. All applications for Additional Shares in excess of their Entitlements will be allocated at the discretion of Pharmaxis. Applicants are not guaranteed to receive the Additional Shares they subscribe for. Pharmaxis reserves the right to allocate to any Applicant a lesser number of Additional Shares than the Applicant subscribed for, or to decline to issue any Additional Shares.

2. How to Apply – Eligible Retail Shareholders

2.1 Eligible Retail Shareholder

Eligible Retail Shareholders are persons who are registered as a holder of Existing Shares as at the Record Date (being 7.00pm (Sydney time) on 21 November 2011) and who:

have a registered address on Pharmaxis’ share register in Australia or New Zealand;
are not in the United States and is not a US Person and not acting for the account or benefit of any person in the United States or any US Person;
were not invited to participate under the Institutional Entitlement Offer; and
are eligible under all applicable securities laws to receive an offer under the Retail Entitlement Offer.

Eligible Retail Shareholders will receive a personalised Entitlement and Acceptance Form setting out their Entitlement which accompanies this Retail Offer Booklet.

2.2 Overseas Shareholders

The Retail Entitlement Offer will not be made to shareholders resident outside Australia and New Zealand. In particular, the offer is not being made to any person in the United States or to, or for the account or benefit of, a US Person. Pharmaxis has determined that it would be unreasonable to make the Retail Entitlement Offer to shareholders resident outside Australia or New Zealand, having regard to the number of Ineligible Retail Shareholders and the costs in complying with the legal and regulatory requirements in those jurisdictions. No action has been taken to register or qualify the New Shares or the Entitlement Offer or otherwise to permit an offering of the New Shares in any jurisdiction outside Australia and New Zealand.

The distribution of this document outside Australia may be restricted by law. In particular, this document may not be distributed or released, in whole or part, in the United States or to any person that is, or is acting for the account or benefit of, a US Person. Persons who come into possession of this document should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

2.3 Choices available to Eligible Retail Shareholders

As an Eligible Retail Shareholder you may:

take up all or part of your Entitlement (refer to section 2.4);
take up all of your Entitlement and apply for Additional Shares in excess of your Entitlement (refer to section 2.4); or
take no action and allow all of your Entitlement to lapse (refer to section 2.5).

2.4 Take up all of, part of, or more than your Entitlement

If you wish to take up your Entitlement in part or in full, or if you wish to take up your Entitlement in full and apply for Additional Shares in excess of your Entitlement, there are two different ways you can submit your Application and Application Monies.

2.4.1 Submit your completed Entitlement and Acceptance Form together with cheque, bank draft or money order for all Application Monies

To apply and pay by cheque, bank draft or money order, you should:

complete the personalised Entitlement and Acceptance Form accompanying this Retail Offer Booklet in accordance with the instructions set out on that form, and indicate the number of New Shares of your Entitlement you wish to subscribe for and the number of Additional Shares you wish to subscribe for; and
return the form to the Registry (address details below) together with a cheque, bank draft or money order which must be:
in respect of the full Application Monies (being $1.05 multiplied by the number of New Shares of your Entitlement and Additional Shares you wish to subscribe for);
in Australian currency drawn on an Australian branch of a financial institution; and
made payable to ‘Pharmaxis Limited Trust A/C’ and crossed ‘Not Negotiable’.

You should ensure that sufficient funds are held in relevant account(s) to cover the full Application Monies.

You need to ensure that your completed Entitlement and Acceptance Form and cheque, bank draft or money order in respect of the full Application Monies reaches the Registry at the following postal address:

Mailing Address

Pharmaxis Ltd C/- Computershare Investor Services Limited GPO Box 505 Melbourne VIC 3001

Entitlement and Acceptance Forms (and payments for any Application Monies) will not be accepted at Pharmaxis’ registered or corporate offices.

For the convenience of Eligible Retail Shareholders, an Australian reply paid envelope addressed to the Registry has been enclosed with this Retail Offer Booklet for shareholders with a registered address in Australia.

Note that if you have more than one holding of Existing Shares, you will be sent more than one personalised Entitlement and Acceptance Form and you will have separate Entitlements for each separate holding. A separate Entitlement and Acceptance Form and payment of Application Monies must be completed for each separate Entitlement you hold.

2.4.2 Payment via BPAY[®]

To apply and pay via BPAY[®] , you should make your payment in respect of the full Application Monies via BPAY[®] for the number of New Shares you wish to subscribe for (being the issue price of $1.05 per New Share multiplied by the number of New Shares of your Entitlement and Additional Shares you are applying for). You can only make a payment via BPAY[®] if you are the holder of an account with an Australian

financial institution. You should check the processing cut off-time for BPAY[®] transactions with your bank, credit union or building society to ensure your payment will be received by the Registry in time.

If you choose to pay by BPAY[®] , you do not need to submit the personalised Entitlement and Acceptance Form but are taken to have made the declarations on that personalised Entitlement and Acceptance Form.

If you have multiple holdings of Shares you will have multiple BPAY® reference numbers. To ensure you receive your Entitlement in respect of each holding, you must use the reference number shown on each personalised Entitlement and Acceptance Form when paying for New Shares that you wish to apply for in respect of that holding.

2.4.3 Application Monies

If the amount of Application Monies is insufficient to pay in full for the number of New Shares you applied for, or is more than the number of New Shares you applied for, you will be taken to have applied for such whole number of New Shares which is covered in full by your Application Monies, up to your full Entitlement. Alternatively, your Application will be rejected.

If you apply for Additional Shares in excess of your Entitlement and you are not allocated all or some of the Additional Shares applied for, the relevant excess Application Monies will be refunded to you after the final allotment date in accordance with the Corporations Act, without interest.

2.5 If you do nothing

If you are an Eligible Retail Shareholder and you do nothing, then your Entitlement will lapse and the New Shares representing your Entitlement will be offered to Eligible Retail Shareholders who subscribe for Additional Shares in excess of their Entitlement or form part of any shortfall. To the extent you do not participate in the Retail Entitlement Offer for all of your Entitlement, your percentage holding in Pharmaxis will reduce.

2.6 Entitlement and Acceptance Form or payment by BPAY[®] is binding

A completed and lodged Entitlement and Acceptance Form, or a payment made through BPAY[®] , constitutes a binding offer to apply for New Shares on the terms and conditions set out in this Retail Offer Booklet and, once lodged or paid, cannot, in most circumstances, be withdrawn. Your Application will be considered to be for as many New Shares (and Additional Shares, as applicable) as your payment will cover. The Entitlement and Acceptance Form does not need to be signed to be binding. If the Entitlement and Acceptance Form is not completed correctly it may still be treated as a valid application. The Directors’ (or their delegates’) decision whether to treat an acceptance as valid and how to construe, amend or complete the Entitlement and Acceptance Form is final.

By completing and returning your personalised Entitlement and Acceptance Form with the requisite Application Monies or making a payment by BPAY[®] , you will also be deemed to have acknowledged, represented and warranted on behalf of each person on whose account you are acting that:

(a) you agree to be bound by the terms of the Retail Entitlement Offer;
(b) all details and statements in the Entitlement and Acceptance Form are complete and accurate;
(c) once Pharmaxis (or the Registry) receives the Entitlement and Acceptance Form or any payment of Application Moneys via BPAY[®] , you may not, in most circumstances, withdraw it;

(d) you irrevocably apply for the number of New Shares specified in the Entitlement and Acceptance Form, or for which you have submitted payment of any Application Monies via BPAY[®] , at the Issue Price per New Share (and any Additional Shares, as applicable);
(e) you agree to be issued the number of New Shares (and any Additional Shares, as applicable) that you apply for;
(f) you authorise Pharmaxis, the Joint Lead Managers and Underwriters, the Registry and their respective officers or agents, to do anything on your behalf necessary for the New Shares to be issued to you, including to act on the instructions of the Registry and to use the contact details set out in the Entitlement and Acceptance Form;
(g) you declare that you were the current registered holder of Existing Shares on the Record Date and are an Eligible Retail Shareholder;
(h) you acknowledge that the information contained in this Retail Offer Booklet and the Entitlement and Acceptance Form is not investment advice or a recommendation that New Shares are suitable for you given your investment objectives, financial situation or particular needs, and that the Retail Offer Booklet is not a prospectus, does not contain all of the information that you may require in order to assess an investment in Pharmaxis and is given in the context of Pharmaxis’ past and ongoing continuous disclosure announcements to ASX;
(i) you acknowledge you have read and understood the ‘Risk Factors’ section of the Capital Raising Presentation as set out in section 3 of this Retail Offer Booklet and that investments in Pharmaxis are subject to a high degree of investment risk;
(j) you are not in the United States nor a US Person, nor acting for the account or the benefit of a US Person, and are not otherwise a person to whom it would be illegal to make an offer or issue of New Shares under the Retail Entitlement Offer;
(k) the New Shares have not been, and will not be, registered under the US Securities Act or under the laws of any other jurisdiction outside Australia or New Zealand; and
(l) you have not and will not send any materials relating to the Retail Entitlement Offer to any person in the United States or any other country outside Australia and New Zealand, except Australian nominees and custodians may send this document to beneficial shareholders who are institutional investors in other countries listed in, and to the extent permitted under, the ‘Selling Restrictions’ in the Capital Raising Presentation set out in section 3.

2.7 Enquiries

If you are in any doubt as to whether you should participate in the Entitlement Offer, you should consult your stockbroker, accountant, solicitor or other professional adviser.

3. Capital Raising Presentation and ASX Announcements

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Capital Raising Presentation NOT FOR DISTRIBUTION OR RELEASE IN THE November 2011 UNITED STATES OR TO US PERSONS

Important Notices

This investor presentation ( Presentation ) has been prepared by Pharmaxis Ltd (ABN 75 082 811 630) ( PXS ). This Presentation has been prepared in relation to a pro-rata accelerated non-renounceable entitlement offer of new PXS ordinary shares ( New Shares ), to be made to:

eligible institutional shareholders of PXS ( Institutional Offer ); and
eligible retail shareholders of PXS ( Retail Offer ),

under section 708AA of the Corporations Act 2011 (Cth) ( Corporations Act ) as modified by ASIC Class Order relief (together, the Entitlement Offer ).

Summary information

This Presentation contains summary information about PXS and its activities current as at the date of this Presentation. The information in this Presentation is of a general nature and does not purport to be complete nor does it contain all the information which a prospective investor may require in evaluating a possible investment in PXS nor does it contain all the information which would be required to be included in a prospectus or product disclosure statement prepared in accordance with the requirements of the Corporations Act 2001 (Cth). This Presentation has not been and will not be lodged with ASIC or any other with ASIC or any other regulatory body. This Presentation should be read in body This Presentation should be read in conjunction with PXS’ with PXS s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange, which are available at www.asx.com.au. Not financial product advice This Presentation is for information purposes only and is not a financial product or investment advice or a recommendation to acquire PXS shares and has been prepared without taking into account the objectives, financial situation or needs of any person’s investment objectives, financial situation or particular needs. Before makinp g an investment decision, prospective investors should consider the appropriateness of the information havin, p p pp p g re g ard to their own objectives, financial situation and needs and seek legal, financial and taxation advice appropriate to their jurisdiction. PXS is not licensed to provide financial product advice in respect of PXS shares. Cooling off rights do not apply to the acquisition of PXS shares. Financial data All dollar values are in Australian dollars (A$) unless otherwise stated. Investors should note that past performance, including past share price performance, of PXS cannot be relied upon as an indicator of (and provides no guidance as to) future PXS performance including future share price per ormance. nves ors s f I t h ou ld no e t th a t thi s resen a P t ti on con a ns pro t i ‐ f orma nanc a fi i l i n orma f ti on. n par I ti cu ar, a pro- orma a ance s l f b l h ee t h as een b prepared by adjusting the unaudited balance sheet of PXS as at 30 September 2011 to reflect the impact of the Entitlement Offer.

US Restrictions

This Presentation may not be released or distributed in the United States. This Presentation does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. Any securities described in this Presentation have not been, and will not be, registered under the US Securities Act of 1933 and may not be offered or sold in the Un ited States except in transactions exempt from, or not ited States except in transactions exempt from or not subject to , registration under the under the US Securities Act and applicable US state securities laws.

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Important Notices (cont.)

Risk

An investment in PXS shares is subject to a number of investment and other known and unknown risks, some of which are beyond the control of PXS and which can affect the value of an investment in PXS. PXS does not guarantee any particular rate of return or the performance of PXS. Potential investors should have regard to the risk factors outlined in this Presentation.

Future performance

Thi s resen a P t ti on con a ns cer a n orwar t i t i “f d l oo ki ng s a emen s t t t ” . All s a emen s, o t t t th er th an s a emen s o t t t f hi s or ca t i l f ac s, are orwar t f d l oo ki ng s a emen s. t t t Forward looking statements can sometimes be identified by the use of forward looking words such as “expect”, “anticipate”, “likely”, “intend”, “should”, “could”, “may”, “predict”, “plan”, “will”, “believe”, “forecast”, “estimate”, “target” and other similar expressions within the meaning of the securities laws of applicable jurisdictions. The forward looking statements contained in this Presentation are not guarantees or predictions of future performance and involve known and unknown risks and uncertainties and other factors, many of which are beyond the control of PXS, and may involve significant elements of subjective judgment and assumptions as to future events which may or may not be correct. Refer to the “Risk Factors” section of this Presentation for a summary of certain general and PXS specific risk factors that may affect PXS. There can be no assurance that actual outcomes will not differ materially from these forward looking statements. A number of important factors could cause actual results or performance to differ materially from the forward looking statements, including the risk factors set out in this Presentation. Investors should consider the forward looking statements contained in this Presentation in light of the above and are cautioned not to place undue reliance on any forward looking statements having regard to the fact that the outcome may not be achieved. PXS makes no representation or warranty, express or implied, and to the fullest extent permitted by law, no responsibility or liability (whether for negligence, under statute or otherwise) is or will be accepted by PXS, as to or in relation to the accuracy or completeness of the information, statements, opinions or matters (express or implied) arising out of, contained in or derived from this Presentation or any omission from this Presentation or of any other written or oral information or opinions provided now or in the future to any recipient of this Presentation or their advisers. The forward looking statements are based on information available to PXS as at the date of this Presentation. Except as required by law or regulation, PXS undertakes no obligation to provide any additional or updated information whether as a result of new information, future events or results or otherwise.

Disclaimer

No party other than PXS has authorised or caused the issue, lodgement, submission, dispatch or provision of this Presentation, or makes or purports to make any statement in this Presentation. The underwriters and advisers take no responsibility for any information in this Presentation or any action taken by you on the basis of such information. To the maximum extent permitted by law, PXS, the underwriters and their respective affiliates, officers, employees, agents and advisers exclude and disclaim all liability, for any expenses, losses, damages or costs incurred by you as a result of your participation in the proposed offering and the information in this Presentation being inaccurate or incomplete in any way for any reason, whether by negligence or otherwise, and make no representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of information in this Presentation, with regards each underwriter, their advisers and affiliates, officers and employees, take no responsibility for any part of this Presentation. The underwriters and their respective advisers and affiliates make no recommendations as to whether you or your related parties should participate in the proposed offering nor do they make any representations or warranties to you concerning the proposed o ff ering, or any such in ormation and you represent, warrant and agree f that you have not relied on any statements made by any of the underwriters, the advisers or any of their affiliates in relation to the proposed offering generally. The information in this Presentation remains subject to change without notice. PXS reserves the right to withdraw the offering or vary the timetable without notice.

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 3

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Capital Raising
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NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
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Overview

Pharmaxis is undertaking a 1 for 3 accelerated pro-rata non-renounceable entitlement offer to raise up to approximately A$80m:
•Underwritten to $40 million by Merrill Lynch International (Australia) Ltd and Wilson HTM Corporate Finance Ltd
Pharmaxis is undertaking the capital raising to increase its cash reserves and strengthen the balance sheet in anticipation of the commercial launch of Bronchitol for cystic fibrosis in Europe, expected to occur in the first half of 2012

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Key Terms of the Offer

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• 1 for 3 accelerated pro-rata non-renounceable entitlement offer (“Entitlement Offer”) to
raise approximately $80 million, comprised of:
Entitlement Offer Structure – Institutional Entitlement Offer and Retail Entitlement Offer
and Size – Underwritten Underwritten to $40m by Merrill Merrill Lynch International (Australia) Ltd and Ltd and
Wilson HTM Corporate Finance Ltd
• Record date is 7pm (Sydney time) on 21 November 2011
• A$1.05 per new share
Offer Price • 19 . 2% discount to Pharmaxis ’ closing price of A$1 . 30 on 15 November 2011
• 15.2% discount to the theoretical ex-rights price (TERP) [(1)]
Institutional Entitlement Offer [(2)] • Institutional Entitlement Offer from 16 November 2011 to 17 November 2011
Retail Entitlement Offer [(2)] • Retail Entitlement Offer from 24 November 2011 to 8 December 2011
Ranking • Shares issued under the Entitlement Offer will rank equally with existing shares
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Notes:

The theoretical ex-rights price is the price at which Pharmaxis shares should trade immediately after the ex-date for the Entitlement Offer assuming 100% take-up of the Entitlement Offer. The theoretical ex-rights price is a theoretical calculation only and the actual price at which Pharmaxis shares trade immediately after the ex date for the Entitlement Offer will depend on many factors and may not be equal to the theoretical ex-rights price. The theoretical ex-rights price is calculated by reference to Pharmaxis’ closing price of $1.30 on 15 November 2011
Dates are indicative only and subject to change. All times refer to Sydney time
Refer to the selling restriction slides for information on restrictions on eligibility criteria to exercise entitlements

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Balance Sheet Impact

Pro-forma balance sheet

		Adjustment for Pro‐Forma Post Underwritten Adjustment Pro‐Forma Assuming Fully
	A$m	Audited Unaudited Underwritten Amount(1) Amount Assuming Fully Subscribed(1) Subscribed 30‐Jun‐11 30‐Sep‐11 30‐Sep‐11 30‐Sep‐11

	Cash and cash equivalents Property, plant & equipment Intangible assets Other assets Total assets Borrowings Other liabilities Total liabilities Equity	44.3 33.7 37.9 71.6 38.3 109.9 30.5 29.8 29.8 29.8 16.0 15.5 15.5 15.5 3.7 3.9 3.9 3.9 94.5 82.9 37.9 120.8 38.3 159.1 13.2 13.0 13.0 13.0 10 5 8 0 8 0 8 0 . . . . 23.7 21.0 ‐ 21.0 ‐ 21.0 70.8 61.9 37.9 99.8 38.3 138.1

Note: 1. The adjustments presented represent the Company’s estimate as at 15 November of the expected equity to be raised net of estimated transaction costs.

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 7

Offer Timetable

	Offer Timetable	Offer Timetable
	Event Date
	Trading halt commences	Wednesday, 16 November 2011
	Institutional Entitlement Offer opens	Wednesday, 16 November 2011
	Institutional shortfall bookbuild	Thursday, 17 November 2011
	Institutional Entitlement Offer closes	Thursday, 17 November 2011
	Trading halt lifted. Pharmaxis shares recommence trading on ASX	Friday, 18 November 2011
	Record date (7.00pm, Sydney time)	Monday, 21 November 2011
	Retail Entitlement Offer opens	Thursday, 24 November 2011
	Retail Offer Booklet despatch completed	Th rsda 24 No ember 2011 u y, v
	Entitlement Offer first settlement	Monday, 28 November 2011
	Allotment and trading of New Shares issued under the first settlement	Tuesday, 29 November 2011
	Retail Entitlement Offer closes	Thursday, 8 December 2011
	Entitlement Offer second settlement	Thursday, 15 December 2011
	Allotment of New Shares issued under the second settlement	Friday, 16 December 2011
	Trading of New Shares issued under the second settlement	Monday, 19 December 2011

Note: The above timetable is indicative only and subject to change. All times are references to Sydney time. Pharmaxis reserves the right to vary these dates or to withdraw the Entitlement Offer at any time. 8 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

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Business Overview

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Company Overview

		The development of products for respiratory diseases Aridol®: •assessment of asthma •approved & launched in major markets Bronchitol® for cystic fibrosis: •approved in Australia •recommended for approval in EU •US NDA in preparation Bronchitol for bronchiectasis: •Phase III trial in progress ASM8 for asthma: •Phase II trial in progress p PXS25(M6P receptor blocker); SSAO/VAP1 inhibitor ASX (Nov 2003): PXS Sydney Australia ●Philadelphia USA ●London UK , Australia , London, Manufacture of Aridol & Bronchitol 132(31/10/11)
	Objective
	Lead products
	Discovery
	Listing
	Locations
	Facility
	Employees

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Bronchitol - Cystic Fibrosis

• Background

Genetic disorder affectin g ~40,000 in Western Euro p e, ~30,000 in US and ~3,000 in Australia
Poorly hydrated, tenacious, thick mucus
Median predicted age of survival approximately 35 years (2009 – US and UK)

• Main Therapeutics

Mostly delivered by nebulizer (preparation, sterilization)
rhDNase (Pulmozyme[®] ): global sales ~CHF 513m (2010)
Tobramycin (Tobi[®] ): global sales ~US$ 279m (2010)

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Aztreonam (Cayston[®] ): approved EU: 09/09; US: 02/10

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Bronchitol - Progression of CF Lung Disease
Defective CF Gene
Defective/Deficient CFTR VX770
New
Therapies Reduced airway surface liquid Bronchitol
Impaired mucociliary
clearance
Pulmozyme
Infection Antibiotics
Current
Therapies
Inflammation
Inadequate Lung Function Transplantation
Poor Prognosis
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NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Bronchitol

Portable
No nebuliser
No refrigeration required
3-5 minute treatment
Minimal set-u p
Minimal cleaning
Minimal maintenance required
Hygienic

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Weekly disposable device, no sterilisation
Discreet
Convenient and unobtrusive
No power source

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Bronchitol - Clearance of Thick Mucus

Mechanism of Action

Before treatment

After Bronchitol administration

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representation representation
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Lung surface dehydrated Lung hydrated
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Airway surface fluid layer impaired Airway surface liquid restored

Lung defense and hygiene compromised Improved lung clearance

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Bronchitol - Cystic Fibrosis Clinical Program

Two Pivotal Phase III trials – same design

Multicentre, double blind, controlled
Approx 300 subjects 6 years and older per trial
6 month treatment, 400mg twice per day followed by 6 month open label
Primary endpoint:
Lung function (FEV1)
Secondary endpoints:
Other lung function measures
Mucus clearance
Exacerbations
Antibiotic use

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Quality of life, safety
CF301: 40 centres in UK, Ireland, Australia & New Zealand
CF302: 53 centres in US, Canada, Argentina, Germany, France, Belgium, & Netherlands
Subjects remain on existing best standard of care

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Bronchitol - Improvements in Lung Function

Change in lung function after 6 months Bronchitol treatment

	Results of Clinical Trials CF301 and CF302 - Combined	Results of Clinical Trials CF301 and CF302 - Combined	Results of Clinical Trials CF301 and CF302 - Combined	Results of Clinical Trials CF301 and CF302 - Combined	Results of Clinical Trials CF301 and CF302 - Combined

	Paediatric (6-11yrs)	Adolescents (12-17 yrs)	Adults (≥18 yrs)	Overall (n = 569)

	FEV1	FEV1	FEV1	FEV1	p value
% difference versus	4.16*	1.25*	4.88	3.80	<0.001
control (mL)
% change from baseline	1319	841	468	732	<0001
mannitol arm (mL)	.	.	.	.	.

Overall treatment response (FEV1) over 26-weeks – all age groups (Pooled Data) * not statistically significant

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

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CF-302 and CF-301 Mean Change (mL) in FEV1
CF-302 Primary endpoint: Overall Bronchitol vs. Control (6-26 Wks), 54.1 mL p=0.059
160
140 Mannitol (ITT-All) Control (ITT-All)
120
Δ 59.5mL Avg 8.2%
100 p=0.050 Δ 72.2mL (p<0 001).
80 Δ 30.7mL p=0.059
60 p=0.359
40
20
0
-20
0 2 4 6 8 10 12 14 16 18 20 22 24 26
CF-301 PrimOverall Bronchitol vs. Control (6-26 Wks), 84.65 mL p < 0.001ry endpoint: Overall Bronchitol vs. Control (6-26 Wks), 85.03 mL p<0.001
160
140 Mannitol Control
120 Avg 6.3%
100 Δ 77.7mL Δ 92.9 mL (p<0.001)
80 p<0 001. Δ 81.6 mL p<0 001.
60
p<0.001
40
20
0
-20
0 2 4 6 8 10 12 14 16 18 20 22 24 26
Treatment Week
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(ITT ) V1
ange in mL FE
Ch
(ITT)FEV1
Change in mL
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Bronchitol - Sustained Treatment Effect
Change in lung function after 12 months Bronchitol treatment
10 **
Percent 8
change in 6
FEV1
4 8.1 8.2
from
baseline 2
(ml)
0
(n = 82) (n = 144)
denotes p <0.001
CF301 CF302
Clinical Trial
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CF301 an d CF302 – D ou bl e Bli n d f or 6 mon th s f o ll owe d b y O pen L a b e l f or 6 mon th s

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Bronchitol - Exacerbation Incidence Reduced

Percentage reduction in exacerbation incidence after 6 months Bronchitol treatment


Percentage reduction in exacerbation incidence after 6 months Bronchitol treatment
CF301	35%	=0045
		p .
CF302	20%	p>0.05
CF301 + CF302 combined	29%	p=0.039

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Bronchitol - Commercialisation (Europe)

Orphan drug: expected 10 years market exclusivity from European Commission approval
Marketing approval status
Positive CHMP opinion received
Indicated for patients 18 years and older
Indicated as add on therapy to best standard of care
Anticipated European Commission approval – January 2012
Clinical trial to be conducted in children & adolescents
Design to be finalised after scientific advice from EMA
Further extension of 1 years marketing exclusivity for paediatric indication

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

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Bronchitol - Adult CF Population Represents Major Clinical Need

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CF P at ents n i i W estern
Median FEV1 Percent Predicted
Europe by Age 100
90
80
16% 70
60
50
49%
40
30
35% 20
10
0
6 ‐ 7 8 ‐ 11 12 ‐ 15 16 ‐ 19 20 ‐ 23 24 ‐ 27 28 ‐ 31 32 ‐ 35 36 ‐ 39 40+
Age
Source: UK CF Registry (2009)
Under 6 6 to 17 Over 18
Source: Based on UK CF Registry (2009)
% FEV1
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NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Bronchitol - Pricing and Reimbursement Plan Development

Market access strategy for Bronchitol based on multiple information sources:

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ILLNESS BURDEN EXPERT OPINION
4 Literature survey 4 Interviews with clinical
KOLs
4 Information from payer
Market access
HEALTH DATA from
ECONOMICS PHARMAXIS
strategy for
4 HE modelling Bronchitol 4 Study data
4 Comparator pricing 4 Advisor y boards
4 Marketing research
QUINTILES
EXPERIENCE
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Bronchitol - Pricing and Reimbursement Status

Europe
Germany
- No requirement for pricing approval prior to launch
UK
- No requirement for pricing approval prior to launch
- National Institute for Clinical Excellence to complete review and publish guidance
France, Italy & Spain
- Pricing submissions being prepared
- To be lodged after European Commission approval
Australia
- Pharmaceuticals Benefits Advisory Committee (PBAC) rejected resubmission at November meeting
- Di scuss ou s an t t di ng concerns w ith PBAC c h a r ear y Decem i l D b er
- PBAC minutes to be published mid December 2011

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Bronchitol - European Infrastructure

UK – Pharmaxis UK subsidiary and sales force in place (currently promoting Aridol)
Remainder of Western Europe (13 countries) – to be covered with Quintiles:
Quintiles – international p rovider of dedicated contract sales forces to the p harmaceutical industr y
Quintiles recruit and manage dedicated Pharmaxis sales force
Appoint sales force approximately 3 months before launch in each country
Leverage Quintiles local market knowledge to speed access
Quintiles provide full back office support
Satellite model leveraging Top 5 country management infrastructure to access other Western European countries
Flexible cost plus basis of engagement
European CF market support – Pharmaxis UK subsidiary
Marketing
Pricing
Medical information and pharmacovigilance
Build to ~40 people in Europe for CF
Logistics infrastructure to be provided by 3[rd] party
Central & Eastern Europe – specialist distributor to be appointed

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Bronchitol - Targeted Launch Sequence

	Country Reimbursement process Targeted launch date United Kingdom Automatic reimbursement but significant Q2 2012 National control of prices through NICE. Germany Reimbursement granted with Marketing Authorisation Q2 2012 France Centralised & robust Q4 2012 Italy Centralised with regional Q1 2013 implementation Spain Centralised with regional implementation Q1 2013 Rest of Western Europe Country dependent Q3 2012 – Q3 2013 Central & Eastern E Country dependent From Q3 2012 onwards urope NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 26	Country Reimbursement process Targeted launch date United Kingdom Automatic reimbursement but significant Q2 2012 National control of prices through NICE. Germany Reimbursement granted with Marketing Authorisation Q2 2012 France Centralised & robust Q4 2012 Italy Centralised with regional Q1 2013 implementation Spain Centralised with regional implementation Q1 2013 Rest of Western Europe Country dependent Q3 2012 – Q3 2013 Central & Eastern E Country dependent From Q3 2012 onwards urope NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 26	Country Reimbursement process Targeted launch date United Kingdom Automatic reimbursement but significant Q2 2012 National control of prices through NICE. Germany Reimbursement granted with Marketing Authorisation Q2 2012 France Centralised & robust Q4 2012 Italy Centralised with regional Q1 2013 implementation Spain Centralised with regional implementation Q1 2013 Rest of Western Europe Country dependent Q3 2012 – Q3 2013 Central & Eastern E Country dependent From Q3 2012 onwards urope NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 26
	Country	Reimbursement process	Targeted launch date
	United Kingdom	Automatic reimbursement but significant	Q2 2012
KETS		National control of prices through NICE.
	Germany	Reimbursement granted with Marketing Authorisation	Q2 2012
OP 5 MAR
	France	Centralised & robust	Q4 2012
	Italy	Centralised with regional	Q1 2013
T		implementation
	Spain	Centralised with regional implementation	Q1 2013

	Rest of Western Europe	Country dependent	Q3 2012 – Q3 2013
	Central & Eastern	Country dependent	From Q3 2012 onwards
	E urope

Bronchitol - US Cystic Fibrosis Opportunity

Regulatory

NDA scheduled submission H1 2012
Earliest FDA review completed H1 2013
Orphan drug provides 7 years market exclusivity from date of FDA approval

Marketing

~150 to 180 CF centres
Anticipated requirement for 20 - 25 person field force
~ 30 , 000 people in the US w ith CF
Pulmozyme price ~US$22,000 per patient per annum

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Bronchitol - Bronchiectasis

Abnormal, irreversible dilation of the lower airways
Daily mucus production, constant coughing, breathlessness, recurrent acute bronchitis with infective exacerbations, low quality of life
In over 50% of cases, the cause is unknown
Normal lung clearance impaired
Current treatments: anti inflammatory agents, antibiotics and physical intervention
No drugs proven effective to clear mucus

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Bronchitol - Bronchiectasis

Indication
Bronchiectasis (non Cystic Fibrosis)
Target Product Profile
‐ Effective clearance of mucus
‐ Reduction in exacerbation incidence
Market Size
Approximately 110,000 people in the US and 210,000 in the EU are
seekingtreatment
Competitors
Antibiotics & CF drugs; lack of targeted clinical development in this
disease state
Status
Phase III trial recruitment ongoing
Next Milestone
Close of recruitment in Phase III trial – Q4 2011
474 subjects targeted,83 sites in US,UK,Europe,South America,
Australia and New Zealand
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
29

Aridol[®]

Identifies airway hyperresponsiveness which helps physicians in the overall assessment of asthma
An easy-to-use test kit provides rapid results and doesn’t require sq p ecialized equiq p ment

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Aridol – Commercialisation Status

Financial years ending 30 June 2008 2009 2010 2011 Sales (A$’000) Australia Launched 2006 Direct 216 232 268 253 Europe Staggered launch from 2006 Individual country 137 267 398 398 distributors; UK – direct South Korea Launched 2009 Distributor - 32 162 205 Clinical trials Direct 174 64 - - US Launched Feb 2011 Direct - - - 54 527 595 828 910	Financial years ending 30 June 2008 2009 2010 2011 Sales (A$’000) Australia Launched 2006 Direct 216 232 268 253 Europe Staggered launch from 2006 Individual country 137 267 398 398 distributors; UK – direct South Korea Launched 2009 Distributor - 32 162 205 Clinical trials Direct 174 64 - - US Launched Feb 2011 Direct - - - 54 527 595 828 910	Financial years ending 30 June 2008 2009 2010 2011 Sales (A$’000) Australia Launched 2006 Direct 216 232 268 253 Europe Staggered launch from 2006 Individual country 137 267 398 398 distributors; UK – direct South Korea Launched 2009 Distributor - 32 162 205 Clinical trials Direct 174 64 - - US Launched Feb 2011 Direct - - - 54 527 595 828 910	Financial years ending 30 June 2008 2009 2010 2011 Sales (A$’000) Australia Launched 2006 Direct 216 232 268 253 Europe Staggered launch from 2006 Individual country 137 267 398 398 distributors; UK – direct South Korea Launched 2009 Distributor - 32 162 205 Clinical trials Direct 174 64 - - US Launched Feb 2011 Direct - - - 54 527 595 828 910	Financial years ending 30 June 2008 2009 2010 2011 Sales (A$’000) Australia Launched 2006 Direct 216 232 268 253 Europe Staggered launch from 2006 Individual country 137 267 398 398 distributors; UK – direct South Korea Launched 2009 Distributor - 32 162 205 Clinical trials Direct 174 64 - - US Launched Feb 2011 Direct - - - 54 527 595 828 910	Financial years ending 30 June 2008 2009 2010 2011 Sales (A$’000) Australia Launched 2006 Direct 216 232 268 253 Europe Staggered launch from 2006 Individual country 137 267 398 398 distributors; UK – direct South Korea Launched 2009 Distributor - 32 162 205 Clinical trials Direct 174 64 - - US Launched Feb 2011 Direct - - - 54 527 595 828 910	Financial years ending 30 June 2008 2009 2010 2011 Sales (A$’000) Australia Launched 2006 Direct 216 232 268 253 Europe Staggered launch from 2006 Individual country 137 267 398 398 distributors; UK – direct South Korea Launched 2009 Distributor - 32 162 205 Clinical trials Direct 174 64 - - US Launched Feb 2011 Direct - - - 54 527 595 828 910
Financial years ending 30 June			2008	2009	2010	2011
’
Sales (A$000)
Australia	Launched 2006	Direct	216	232	268	253
Europe	Staggered launch from 2006	Individual country	137	267	398	398
		distributors; UK – direct
South Korea	Launched 2009	Distributor	-	32	162	205
Cliil til		Direct	174	64
nca ras					-	-
US	Launched Feb 2011	Direct	-	-	-	54
			527	595	828	910

Potential growth

US and South Korea – full reimbursement for procedure and product
Asthma management – recent investigator initiated trial in UK
COPD – recent investigator initiated trial in Switzerland

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ASM8 – Asthma

	Indication Moderate to severe asthma for patients who do not respond to inhaled steroids or cannot tolerate high doses Target Product Profile -Greater efficacy through multi-targeting -Better tolerability & convenience compared with current treatments -Once daily nebulisation Market Size Affects ~12 million people worldwide C tit Si l i (US$5 0B 2010) X l i (US$369M 2010) ompe ors ngu a r . , , o a r , Status Phase II trial fully recruited Next Milestone Phase II trial results–Q2 2012	Indication Moderate to severe asthma for patients who do not respond to inhaled steroids or cannot tolerate high doses Target Product Profile -Greater efficacy through multi-targeting -Better tolerability & convenience compared with current treatments -Once daily nebulisation Market Size Affects ~12 million people worldwide C tit Si l i (US$5 0B 2010) X l i (US$369M 2010) ompe ors ngu a r . , , o a r , Status Phase II trial fully recruited Next Milestone Phase II trial results–Q2 2012
	Iditi	Moderate to severe asthma for patients who do not d t ihld tid t tlt hih
	ncaon	respon o nae seros or canno oerae g doses

	Target Product Profile	-Greater efficacy through multi-targeting -Better tolerability & convenience compared with current treatments -Once dail nebulisation
		y
	Market Size	Affects ~12 million people worldwide

	C tit ompe ors	Si l i (US$5 0B 2010) X l i (US$369M 2010) ngu a r . , , o a r ,
	Status	Phase II trial fully recruited
	Next Milestone	Phase II trial results–Q2 2012

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

PXS25 - IPF

Indication
Idiopathic Pulmonary Fibrosis (IPF)
Target Product Profile
-Inhibition of fibrosis and inflammation to lung tissue
-Local administration to the lung
S f
&
ll t l
t d i
h
- a e we
o era e
n umans
Market Size
Affects ~200 000 people in the USA
,
Competitors
Pirfenidone (just launched in EU), immunosuppressives
& steroids
Status
Initial Phase I trial (intravenous) completed
Next Milestone
Confirmatory in-vivo data
Clinical plan in development
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
33

SSAO/VAP1 – Lung Inflammation

	SSAO/VAP1 – Lung Inflammation	SSAO/VAP1 – Lung Inflammation
	Indication Treatment of inflammatory disease, such as asthma Target Product Profile -Target neutrophilic asthma -Once daily oral dosing Market Size Affects ~23 million people worldwide Competitors Significant clinical activity amongst pharmaceutical companies Status Pre-clinical development Next Milestone Lead development candidate – Q4 2011
	Indication	Treatment of inflammatory disease, such as asthma
	Target Product Profile	-Target neutrophilic asthma -Once daily oral dosing

	Market Size	Affects ~23 million people worldwide
	Competitors	Significant clinical activity amongst pharmaceutical companies

	Status	Pre-clinical development

	Next Milestone	Lead development candidate – Q4 2011

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

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Summary
• Respiratory company with approved products and a strong pipeline
• Aridol Approved in Australia, South East Asia, Europe and USA
• Bronchitol  Approved in Australia for cystic fibrosis
- Going through pricing / reimbursement
 Recommended for approval in Europe
- First launch expected 1H 2012
 USA marketing application to be filed 1H 2012
 Cli n ca i l t r a s n progress o expan i l i t d oppor un t it y n o ronc i t B hi ec as s t i
• ASM8 for asthma  In Phase II
• Capital raising to increase Pharmaxis cash reserves and strengthen the balance sheet in
anticipation of the commercial launch of Bronchitol for cystic fibrosis in Europe, expected to
occur in the first half of 2012.
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 35
Risk Factors
Pharmaxis’ business is subject to a number of risk factors both specific to its business and of a general nature. Pharmaxis’ business, financial condition and results of
operations could be materially and adversely affected by the occurrence of any of the risks associated with its business. As a result, the trading price of Pharmaxis’
shares could decline and shareholders could lose all or part of their investment. The risks outlined should not be considered exhaustive of the risks faced by
Pharmaxis and its investors but these and other risks could have a material impact on the financial performance of Pharmaxis and the value of the Shares offered
under the Entitlement Offer.
Before making a decision, investors should consider each of the risks described in this section and Pharmaxis’ periodic and continuous disclosure announcements
lodged with the ASX. Investors should carefully consider these factors in light of their investment objectives and financial circumstances. If prospective investors are
in any doubt regarding the terms and conditions of the capital raising they should seek professional advice from their stockbroker, solicitor, accountant, or other
qualified professional advisor.
Early stage company with limited revenue
Ph armax s s a an ear y s age o i i t l t f it s eve opmen as a spec a d l t i li s p t h armaceu ti ca company. o a e, l T d t it h as opera e t d a a oss an t l d h as a m li it e d opera ti ng s ory on hi t
which to evaluate its business and prospects. Pharmaxis has launched Aridol in key markets and is planning on launching Bronchitol for the treatment of cystic
fibrosis in Europe in 2012. Pharmaxis’ ability to generate sufficient revenue in the future depends on a number of factors, including: (i) the success of Bronchitol,
Aridol and the company’s future products in the market; (ii) the ability to obtain all necessary regulatory marketing authorisations for its products in a timely manner as
well as other approvals concerning pricing and reimbursement; (iii) the ability to manufacture sufficient quantities of products to the required standard and at
acceptable cost levels; and (iv) the success of Pharmaxis’ clinical development activities and clinical trials. There is a risk that Pharmaxis will continue to incur losses
from its operations and may not achieve or maintain profitability. Pharmaxis expects its expenses to increase in the short term in connection with the
commercialisation of Bronchitol in Europe , regulatory approval processes in the US , along with the continuing conduct of research and development projects and
large scale clinical trials. Over the longer term, Pharmaxis costs will fluctuate, primarily dependant on commercialisation expenses and the extent of sales and
marketing operations, regulatory marketing authorizations being sought, the number, type and size of clinical trials, preclinical development and research projects
being undertaken.
Dependence on Bronchitol
Although Pharmaxis has a pipeline of product candidates , it ’ s success is currently substantially dependent on completion of development , regulatory approval and
successful commercialisation of Bronchitol for cystic fibrosis and other applications in all key markets in a timely manner.
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 36
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Risk Factors

Marketing and sales

There is a risk that Pharmaxis’ internal and third party sales and marketing efforts may not be successful or that Pharmaxis is otherwise unable to sell sufficient quantities of Bronchitol, Aridol and other product candidates, either directly or through third parties. Pharmaxis is in the process of significantly expanding its sales and marketing capabilities and it may experience difficulties in managing its third party service providers and growth.

Pharmaxis relies on third party contract sales organizations, such as Quintiles in Europe, distributors and third party logistic organisations to perform sales, marketing, distribution and supply activities. As a result, Pharmaxis may have a lower degree of control over these activities. Third party sales contractors may not be as effective as Pharmaxis’ own efforts. To date, Pharmaxis has been able to manage the use of these third parties in order to effectively carry commercialisation activities. However, if these third parties are not successful in their commercialisation activities, do not successfully carry out their contractual duties or regulatory obligations or meet expected deadlines, or if the third parties need to be replaced, Pharmaxis’ commercialisation efforts may be severely compromised. Although there are a range of suitable alternatives to these third party organisations, there is no guarantee that Pharmaxis would be able to enter into alternative arrangements if required, on acceptable terms, or at all.

The third parties that Pharmaxis engages may have economic or other business interests or goals that are inconsistent with the business interest or goals of Pharmaxis. There is also the risk that these third parties might become bankrupt or default on or fail to fulfil their obligations as expected.

Market acceptance of products and patient population

There is a risk that Bronchitol, Aridol and future approved products may not gain adequate market acceptance. The degree of market acceptance will depend on a variety of factors , including: (i) the ability to demonstrate safety and efficacy and the prevalence and severity of any side effects; (ii) the level of support from clinicians; (iii) the relative convenience and ease of administration; (iv) cost-effectiveness compared to other treatments; (v) the availability of reimbursement from national health authorities; (vi) the timing of market introduction and clinical profile of competitive products; and (vii) the success of marketing and sales efforts. Additionally, it is difficult to determine the portion of the patient population that might use Pharmaxis’ products and there is a risk that Pharmaxis’ estimates do not accurately reflect the number of patients in the target markets.

Regulatory approvals

The clinical development, testing, manufacturing, sales and marketing of Pharmaxis’ products are subject to extensive regulation by regulatory authorities in the U.S., the E.U., Australia and elsewhere. To receive regulatory authorisation for the commercial sale of any product, Pharmaxis must complete pre-clinical development and extensive clinical trials to demonstrate safety and efficacy in humans and then apply for approval to the relevant regulatory authorities. The process to obtain regulatory authorisation is expensive, complex, lengthy and the outcomes uncertain. Failure can occur at any stage of the clinical testing or approval process. For example, Pharmaxis announced in June 2010 that its second Phase III trial of Bronchitol for the treatment of cystic fibrosis failed to achieve the primary endpoint comparing the FEV1 mL improvement to control over 26 weeks, narrowly missing statistical significance (p=0.059). This may impact on Pharmaxis’ ability to obtain regulatory approval for Bronchitol for cystic fibrosis in the US . Pharmaxis may not be able to obtain marketing authorisations for all of its products in all key jurisdictions, including the approval of Bronchitol for the treatment of cystic fibrosis in the US (despite the regulatory approval of Bronchitol for cystic fibrosis in other jurisdictions), or those authorisations may be delayed or subject to significant limitations in the form of narrow indications, warnings, precautions or contra-indications with respect to conditions of use.

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 37

Risk Factors

Ongoing regulatory issues

Even after products receive regulatory authorisation, Pharmaxis may still face developmental and ongoing regulatory compliance difficulties. Regulatory agencies subject a marketed product, its manufacturer and the manufacturer’s facilities to continual review and periodic inspections. Potentially costly follow-ups or postmarketing clinical studies may be required and previously unknown problems may result in restrictions on the marketing of the product and could include product withdrawal. If Pharmaxis fails to comply with applicable regulatory requirements, a regulatory agency may: (i) issue warning letters; (ii) impose civil or criminal penalties; (iii) suspend Pharmaxis’ regulatory authorisation or restrict or change the approved indications for use or impose additional safety reporting requirements; (iv) suspend any of Pharmaxis’ ongoing clinical trials; (v) refuse to approve pending applications or supplements to approved applications filed; (vi) impose restrictions on Pharmaxis’ operations, including closing Pharmaxis’ or its contract manufacturers’ facilities or terminating its licenses to manufacture Good Manufacturing Practice grade material; or (vii) seize or detain products or require a product recall. In addition, the law or regulatory policies governing pharmaceuticals may change. New regulatory requirements or additional regulations may be enacted that could prevent or delay regulatory approval of Pharmaxis’ products or that may otherwise impact on Pharmaxis‘ ability to market, distribute and sell product. Pharmaxis canno pre t di c t th e lik e lih oo d , na ure or ex en o a t t t f d verse governmen regu a t l ti on th a may ar se. t i Clinical trials To receive regulatory approvals for the commercial sale of products, Pharmaxis must complete pre-clinical development and extensive clinical trials to demonstrate safety and efficacy in humans. Clinical trials are expensive, time consuming, subject to delay and their outcome uncertain. There are numerous factors that could affect the timing of the commencement, continuation and completion of clinical trials which may delay the clinical trials or prevent Pharmaxis from completing these trials successfully . Due to our reliance on contract research organizations , hospitals and investigators to conduct clinical trials , Pharmaxis is unable to directly control the timing, conduct and expense of our clinical trials. Ongoing and future clinical trials may not show sufficient safety or efficacy to obtain regulatory approval. Success in pre-clinical and early clinical trials is not a guarantee of future results nor does it ensure that later large scale trials will be successful. There is a risk that the results of Phase III clinical trials may not show sufficient safety or efficacy to obtain regulatory marketing authorisation in key jurisdictions. Pharmaxis will undertake a further clinical trial of Bronchitol for the treatment of cystic fibrosis in children and adolescents (aged between 6 and 17 years of age) with a view to expanding the marketing label in Europe. The scope, timing and cost of that trial has not yet been determined. Additional clinical trials of Bronchitol for the treatment of cystic fibrosis may also be required in order to obtain FDA approval. Pharmaxis’ Phase III clinical trials of Bronchitol for the treatment of bronchiectasis and Phase II clinical trial of ASM8 for the treatment of asthma are ongoing . The outcome of these trials are uncertain and there is a risk that they may not be successful and may not demonstrate sufficient safety or efficacy to obtain regulatory marketing authorisation.

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Risk Factors

Pricing and reimbursement

The commercial success of Pharmaxis’ approved products is substantially dependent on achieving acceptable pricing and whether acceptable third-party coverage and reimbursement is available from government bodies, private health insurers and other third-parties. This process of obtaining pricing for products is time consuming and the outcomes in certain jurisdictions may not be sufficient to warrant the marketing of products in that jurisdiction. Government bodies, national health authorities and other third-parties are increasingly seeking to contain healthcare costs by delaying reimbursement for, and limiting both the coverage and the level of reimbursement of new products and, as a result, they may not cover or provide adequate payment for Pharmaxis’ products. Pharmaxis’ second application to have Bronchitol included on the PBS register in Australia was not successful and PXS intends to re-apply in 2012. It is not uncommon in some jurisdictions for multiple applications to be required before pricing and reimbursement approvals are accepted. An inability to obtain or delays in obtaining satisfactory pricing and reimbursement in certain jurisdictions may impair Pharmaxis’ ability to effectively commercialize products in those jurisdictions. Even if products receive acceptable pricing and reimbursement, pricing and reimbursement levels are subject to change. As a result, Pharmaxis’ products may not be considered cost effective and reimbursement may not be available to consumers or may not be sufficient to allow Pharmaxis’ products to be marketed on a competitive basis. Manufactur ngi Pharmaxis, or its contract manufacturers and suppliers, may fail to achieve and maintain required production yields or manufacturing standards which could result in patient injury or death, product recalls or withdrawals, product shortages, delays or failures in product testing or delivery or other problems that could seriously harm Pharmaxis’ business. Pharmaxis may be impacted by industrial action or operating equipment and facilities may not operate as intended or be available as a result of unanticipated failures or other events outside of Pharmaxis ’ control such as fires or catastrophic breakdowns or deliberate acts of destruction which may restrict Pharmaxis ’ ability to supply product, profitability and ability to operate. Pharmaxis and its contract manufacturers may not be able to obtain and maintain all licenses and approvals required to maintain manufacturing operations. Any interruption to Pharmaxis’ manufacturing capability could result in the cancellation of shipments and loss of product, resulting in delays and additional costs. Both Aridol and Bronchitol are administered through a dry powder inhaler. If there are interruptions or delays in the supply of the necessary quantity or quality of inhalers , Pharmaxis would be subject to costly delays which may compromise the commercialization of Aridol and/or Bronchitol . Likewise , any delays in the supply of the necessary quantity or quality of mannitol for the manufacture of Aridol and Bronchitol could compromise commercialization efforts. Clinical development

Pharmaxis cannot be certain that the clinical development of any of its product candidates in pre-clinical testing or clinical development will be successful. Significant delays in clinical development could materially increase costs, delay receipt of revenue or allow competitors to bring products to market before Pharmaxis. Pharmaxis uses third parties to provide research and development services and may therefore be unable to directly control of the timing, conduct and expense of certain research programs. If development activities are unsuccessful, significant monies and time invested may be rendered unproductive and worthless. NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 39

Risk Factors

Competition

Pharmaxis conducts business in a highly competitive industry in which there are a number of well established competitors that have significantly greater financial resources, sales and marketing organisations, market penetration and development capabilities, as well as broader product offerings and greater market and brand presence. There can be no assurances given in respect of Pharmaxis’ ability to compete. Orphan drug status The FDA has granted Orphan Drug designation to Bronchitol for the treatment of both bronchiectasis and cystic fibrosis for patients at risk of developing bronchiectasis and the European Medicines Agency and the Australian TGA have likewise granted Orphan Drug designation for Bronchitol in the treatment of cystic fibrosis. There is a risk that orphan drug exclusivity may not ultimately provide Pharmaxis with a true competitive advantage. Product liability claims and insurance Pharmaxis faces product liability exposure with respect to its products and product candidates. This exposure is likely to increase significantly as Pharmaxis increases commercial sales. Regardless of merit or eventual outcome, liability claims may result in: (i) decreased demand for Pharmaxis’ products; (ii) injury to Pharmaxis’ reputation; (iii) withdrawal of clinical trial participants; (iv) costly litigation; (v) substantial monetary awards to patients and others; (vii) loss of revenues; and (viii) an inability to commercialise Pharmaxis’ products and product candidates. Pharmaxis may not be able to maintain insurance coverage at a reasonable cost nor obtain suitable or reasonable insurance coverage in respect of any liability that may arise and any claim for damages could be substantial. Patents and trade secrets Aridol and Bronchitol are based in part on intellectual property rights licensed to Pharmaxis. If the license to this technology was terminated, Pharmaxis would have no further rights to develop and commercialize Aridol and Bronchitol. Pharmaxis uses patents or trade secrets to protect its technologies from unauthorised use by third parties. The term of patents may expire or may be challenged, invalidated or circumvented. There can be no assurances that Pharmaxis’ patents will afford it significant commercial protection for its products. Enforcement and infringement of intellectual property Third parties may own or control patents or patent applications that Pharmaxis may be required to license to commercialise product candidates, that Pharmaxis may infringe, or, that could result in litigation that would be costly and time consuming. As a result of intellectual property infringement claims, or to avoid potential claims, Pharmaxis might be: (i) prohibited from selling or licensing a product; (ii) required to expend considerable amounts of money in defending the claim; (iii) required to pay substantial royalties or license fees; (iv) required to pay substantial monetary damages; or (v) required to redesign the formulation of a product so it does not infringe, which may not be possible or could require substantial funds and time. NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 40

Risk Factors

Litigation

There has been substantial litigation and other proceedings in the pharmaceutical and biotechnology industries. Defending against litigation and other third party claims would be costly and time consuming and would divert management’s attention from our business, which could lead to delays in our development or commercialization efforts. If third parties are successful in their claims, Pharmaxis might have to pay substantial damages or take other actions that are adverse to the Pharmaxis business.

Resources

The loss of services of one or more of our members of key personnel or the inability to recruit and retain high calibre staff could delay or compromise the successful commercialisation of products. Pharmaxis will need to increase the size of its organisation, and it may experience difficulties in managing growth.

Capital requirements

Pharmaxis may require substantial additional funds which may be dilutive or that may not be available to Pharmaxis on favourable terms or at all. If Pharmaxis is unable to obtain additional funds when required, Pharmaxis may be forced to delay, reduce the scope or eliminate one or more clinical trials or research and development programs or future commercialisation efforts.

General economic factors

Material adverse changes in the general domestic and international economic climate may have an adverse effect on Pharmaxis ’ performance . These factors may include fluctuations in foreign exchange rates, inflation, interest rates, rate of economic growth, taxation laws, consumer spending, unemployment rates, government fiscal, monetary and regulatory policies and consumer and business sentiment. Any of these factors have the potential to cause costs to increase or revenues to decline.

Dividends

Pharmaxis has never paid a dividend and Pharmaxis does not intend on paying dividends in the foreseeable future which means that holders of shares may not receive any return on their investment from dividends.

Change in laws

Pharmaxis’ business and the business or the third parties with which it operates are subject to the laws and regulations in a number of jurisdictions. Unforeseen changes in laws and government policy both in Australia, the EU, the US and elsewhere, including material and unforeseen changes to licensing and approval requirements or regulations relating to clinical trials, manufacturing, product approval and pricing could materially impact Pharmaxis ’ operations, assets, contracts and profitability.

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 41

Risk Factors

Share price

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The market price of Pharmaxis’ shares historically has been, and Pharmaxis expects will continue to be, subject to significant fluctuations over short periods of time.
These fluctuations may be due to factors specific to Pharmaxis, to changes in analysts’ recommendations and earnings estimates, to changes in exchange rates or to
factors affecting the biopharmaceutical industry or the securities markets in general. These factors include:
• adverse or inconclusive results or delays in clinical trial programs;
• unforeseen safety issues or adverse side effects resulting from clinical trials or the commercial use of any Pharmaxis products;
• regulatory actions in respect of any Pharmaxis products or the products of any of its competitors;
• failure or delay of any of Pharmaxis products obtaining regulatory authorisations in key markets or limitations on the indications or other conditions on any
regulatory authorisations given;
• failure to obtain and maintain satisfactory pricing and reimbursement approvals for Aridol, Bronchitol or other product candidates in key jurisdictions;
• failure of any Pharmaxis products to achieve commercial success;
• inability to manufacture sufficient products to the necessary standard and disruptions to supply arrangements;
• announcemen s o t f th e n ro i t d uc ti on o new pro f d uc s y t b Ph armax s or s compe i it tit ors;
• market conditions, including market conditions in the pharmaceutical and biotechnology sectors;
• increases in the Company’s costs or decreases in revenues due to unfavourable movements in foreign currency exchange rates;
• developments or litigation concerning patents, licenses and other intellectual property rights;
• litigation or public concern about the safety of potential products;
• changes in recommendations or earnings estimates by securities analysts;
• actual and anticipated fluctuations in Pharmaxis’ quarterly operating results;
• deviations in operating results from the estimates of securities analysts;
• rumours relating to Pharmaxis or its competitors;
• additions or departures of key personnel;
• changes in third-party reimbursement policies; and
• developments concerning current or future strategic alliances or acquisitions.
General factors which may affect the market price of shares include:
• general movements in Australian and international stock markets;
• investor sentiment;
• Australian and international economic conditions and outlook;
• changes in interest rates and the rate of inflation;
• changes to government regulation and policies;
• announcement of new technologies; and
• geo-political instability, including international hostilities and acts of terrorism.
Pharmaxis may experience a material decline in the market price of its shares, regardless of operating performance. No assurances can be given that the New
Shares will trade at or above the Offer Price. None of Pharmaxis, its Board or any other person guarantees the market performance of the New Shares.
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NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 42

Selling Restrictions

This Presentation does not constitute an offer of New Shares of PXS in any jurisdiction in which it would be unlawful. New Shares may not be offered or sold in any country outside Australia except to the extent permitted below.

Bermuda

PXS is not making any invitation to persons resident in Bermuda for exchange control purposes to subscribe for New Shares.

Canada (British Columbia, Ontario and Quebec provinces)

This Presentation constitutes an offering of New Shares only in the Provinces of British Columbia, Ontario and Quebec (the Provinces ) and to those persons to whom they may be lawfully distributed in the Provinces, and only by persons permitted to sell such New Shares. This Presentation is not, and under no circumstances is to be construed as, an advertisement or a public offering of securities in the Provinces. This Presentation may only be distributed in the Provinces to persons that are "accredited investors" within the meaning of NI 45-106 – Prospectus and Registration Exemptions , of the Canadian Securities Administrators.

No securities commission or similar authority in the Provinces has reviewed or in any way passed upon this Presentation, the merits of the New Shares or the offering of New Shares and any representation to the contrary is an offence. No prospectus has been, or will be, filed in the Provinces with respect to the offering of New Shares or the resale of such securities. Any person in the Provinces lawfully participating in the offer will not receive the information, legal rights or protections that would be afforded had a prospectus been filed and receipted by the securities regulator in the applicable Province. Furthermore, any resale of the New Shares in the Provinces must be made in accordance with applicable Canadian securities laws which may require resales to be made in accordance with exemptions from dealer registration and prospectus requirements . PXS, and the directors and officers of PXS, may be located outside Canada, and as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon PXS or its directors or officers. All or a substantial portion of the assets of PXS and such persons may be located outside Canada, and as a result, it may not be possible to satisfy a judgment against PXS or such persons in Canada or to enforce a judgment obtained in Canadian courts against PXS or such persons outside Canada.

Any financial information contained in this Presentation has been prepared in accordance with Australian Accounting Standards and also comply with International Financial Reporting Standards and interpretations issued by the International Accounting Standards Board. Unless stated otherwise, all dollar amounts contained in this Presentation are in Australian dollars.

Statutory rights of action for damages or rescission

Securities legislation in certain of the Provinces may provide purchasers with, in addition to any other rights they may have at law, rights of rescission or to damages, or both, when an offering memorandum that is delivered to purchasers contains a misrepresentation. These rights and remedies must be exercised within prescribed time limits and are subject to the defenses contained in applicable securities legislation. Prospective purchasers should refer to the applicable provisions of the securities legislation of their respective Province for the particulars of these rights or consult with a legal adviser.

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 43

Selling Restrictions

Canada (British Columbia, Ontario and Quebec provinces) cont...

The following is a summary of the statutory rights of rescission or to damages, or both, available to purchasers in Ontario.

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In Ontario, every purchaser of the New Shares purchased pursuant to this Presentation (other than (a) a "Canadian financial institution" or a "Schedule III bank" (each
as defined in NI 45-106), (b) the Business Development Bank of Canada or (c) a subsidiary of any person referred to in (a) or (b) above, if the person owns all the
voting securities of the subsidiary, except the voting securities required by law to be owned by the directors of that subsidiary) shall have a statutory right of action for
damages and/or rescission against PXS if this Presentation or any amendment thereto contains a misrepresentation. If a purchaser elects to exercise the right of
action for rescission, the purchaser will have no right of action for damages against PXS. This right of action for rescission or damages is in addition to and without
derogation from any other right the purchaser may have at law. In particular, Section 130.1 of the Securities Act (Ontario) provides that, if this Presentation contains a
misrepresentation, a purchaser who purchases the New Shares during the period of distribution shall be deemed to have relied on the misrepresentation if it was a
misrepresentation at the time of purchase and has a right of action for damages or, alternatively, may elect to exercise a right of rescission against PXS, provided
that: (a) PXS will not be liable if it proves that the purchaser purchased the New Shares with knowledge of the misrepresentation; (b) in an action for damages, PXS
i s no t li a bl e or a f ll or any por ti on o f th e amages d th a t PXS proves oes no represen d t t th e eprec a d i ti on n va ue o i l f th e ew N Sh ares as a resu lt o f th e m srepresen a i t ti on
relied upon; and (c) in no case shall the amount recoverable exceed the price at which the New Shares were offered.
Section 138 of the Securities Act (Ontario) provides that no action shall be commenced to enforce these rights more than: (a) in the case of any action for rescission,
180 days after the date of the transaction that gave rise to the cause of action; or (b) in the case of any action, other than an action for rescission, the earlier of (i)
180 days after the purchaser first had knowledge of the fact giving rise to the cause of action or (ii) three years after the date of the transaction that gave rise to the
cause of action.
These rights are in addition to and not in derogation from any other right the purchaser may have.
Certain Canadian income tax considerations
Prospective purchasers of the New Shares should consult their own tax adviser with respect to any taxes payable in connection with the acquisition, holding, or
disposition of the New Shares as any discussion of taxation related maters in this Presentation is not a comprehensive description and there are a number of
substantive Canadian tax compliance requirements for investors in the Provinces .
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Language of documents in Canada

Upon receipt of this Presentation, each investor in Canada hereby confirms that it has expressly requested that all documents evidencing or relating in any way to the sale of the New Shares (including for greater certainty any purchase confirmation or any notice) be drawn up in the English language only. Par la réception de ce manière document, chaque investisseur canadien confirme par les présentes qu’il a expressément exigé que tous les documents faisant foi ou se rapportant de quelque que ce soit à la vente des valeurs mobilières décrites aux présentes (incluant, pour plus de certitude, toute confirmation d ’ achat ou tout avis) soient rédigés en anglais seulement.

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Selling Restrictions

European Economic Area - Germany and Luxembourg

The information in this Presentation has been prepared on the basis that all offers of New Shares will be made pursuant to an exemption under the Directive 2003/71/EC ( Prospectus Directive ), as implemented in Member States of the European Economic Area (each, a Relevant Member State ), from the requirement to produce a prospectus for offers of securities. France

An offer to the public of New Shares has not been made, and may not be made, in a Relevant Member State except pursuant to one of the following exemptions under the Prospectus Directive as implemented in that Relevant Member State:

(a)to legal entities that are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities;

(b)to any legal entity that has two or more of (i) an average of at least 250 employees during its last fiscal year; (ii) a total balance sheet of more than €43,000,000 (as shown on its last annual unconsolidated or consolidated financial statements) and (iii) an annual net turnover of more than €50,000,000 (as shown on its last annua unconso l lid a e t d or conso lid a e t d fi nanc a i l s a emen s t t t ) ; (c)to fewer than 100 natural or legal persons (other than qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive) subject to obtaining the prior consent of PXS or any underwriter for any such offer; or

(d)in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of New Shares shall result in a requirement for the publication by PXS of a prospectus pursuant to Article 3 of the Prospectus Directive.

France

This Presentation is not being distributed in the context of a public offering of financial securities (offre au public de titres financiers) in France within the meaning of Article L.411-1 of the French Monetary and Financial Code (Code monétaire et financier) and Articles 211-1 et seq. of the General Regulation of the French Autorité des marchés financiers ( AMF ). The New Shares have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France.

This Presentation and any other offering material relating to the New Shares have not been, and will not be, submitted to the AMF for approval in France and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in France.

Such offers, sales and distributions have been and shall only be made in France to (i) qualified investors (investisseurs qualifiés) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-1 to D.411-3, D. 744-1, D.754-1 and D.764-1 of the French Monetary and Financial Code and any implementing regulation and/or (ii) a restricted number of non-qualified investors (cercle restreint d’investisseurs) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-4, D.744-1, D.754-1 and D.764-1 of the French Monetary and Financial Code and any implementing regulation.

Pursuant to Article 211-3 of the General Regulation of the AMF, investors in France are informed that the New Shares cannot be distributed (directly or indirectly) to the public by the investors otherwise than in accordance with Articles L . 411-1 , . L 411-2 , . L 412-1 and L . 621-8 to L . 621-8-3 of the French Monetary and Financial Code.

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 45

Selling Restrictions

Hong Kong

WARNING: This Presentation has not been, and will not be, registered as a prospectus under the Companies Ordinance (Cap. 32) of Hong Kong (the "Companies Ordinance"), nor has it been authorised by the Securities and Futures Commission in Hong Kong pursuant to the Securities and Futures Ordinance (Cap. 571) of the Laws of Hong Kong (the "SFO"). No action has been taken in Hong Kong to authorise or register this Presentation or to permit the distribution of this Presentation or any documents issued in connection with it. Accordingly, the New Shares have not been and will not be offered or sold in Hong Kong by means of any document, other than (i) to "professional investors" (as defined in the SFO) or (ii) in other circumstances that do not result in this Presentation being a "prospectus" (as defined in the Companies Ordinance) or that do not constitute an offer to the public within the meaning of that ordinance.

No advertisement, invitation or document relating to the New Shares has been or will be issued, or has been or will be in the possession of any person for the purpose of issue, in Hong Kong or elsewhere that is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to New Shares that are or are intended to be disposed of only to persons outside Hon g Kon g or onl y to p rofessional investors ( as defined in the SFO and an y rules made under that ordinance ) . No p erson allotted New Shares ma y sell , or offer to sell, such shares in circumstances that amount to an offer to the public in Hong Kong within six months following the date of issue of such shares.

The contents of this Presentation have not been reviewed by any Hong Kong regulatory authority. You are advised to exercise caution in relation to the Entitlement Offer. If you are in doubt about any contents of this Presentation, you should obtain independent professional advice.

New Zealand

This Presentation has not been registered, filed with or approved by any New Zealand regulatory authority under the Securities Act 1978 (New Zealand).

The New Shares in the entitlement offer are not being offered to the public in New Zealand other than to existing shareholders of PXS with registered addresses in New Zealand to whom the offer of New Shares is being made in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002 (New Zealand).

Other than in the entitlement offer, New Shares may be offered and sold in New Zealand only to:

( a ) p ersons whose p rinci p al business is the investment of mone y or who , in the course of and for the p ur p oses of their business , habituall y invest mone y; or

(b) persons who are each required to (i) pay a minimum subscription price of at least NZ$500,000 for the securities before allotment or (ii) have previously paid a minimum subscription price of at least NZ$500,000 for securities of PXS ("initial securities") in a single transaction before the allotment of such initial securities and such allotment was not more than 18 months prior to the date of this Presentation.

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Selling Restrictions

Norway

This Presentation has not been approved by, or registered with, any Norwegian securities regulator pursuant to the Norwegian Securities Trading Act of 29 June 2007. Accordingly, this Presentation shall not be deemed to constitute an offer to the public in Norway within the meaning of the Norwegian Securities Trading Act of 2007.

The New Shares may not be offered or sold, directly or indirectly, in Norway except: (a) to "professional investors" (as defined in Norwegian Securities Regulation of 29 June 2007 no. 876); (b) any natural person who is registered as a professional investor with the Norwegian Financial Supervisory Authority (No. Finanstilsynet) and who fulfils two or more of the following: (i) any natural person with an average execution of at least ten transactions in securities of significant volume per quarter for the last four quarters; (ii) any natural person with a portfolio of securities with a market value of at least €500,000; and (iii) any natural person who works, or has worked for at least one year, within the financial markets in a position which presuppose knowledge of investing in securities; (c) to fewer than 100 natural or legal persons (other than "professional investors", as defined in clauses (a) and (b) above); or (d) in any other circumstances provided that no such offer of New Shares shall result in a requirement for the registration, or the publication by PXS or an underwriter, of a prospectus pursuant to the Norwegian Securities Trading Act of 29 June 2007. Singapore

This Presentation and an y other materials relatin g to the New Shares have not been , and will not be , lod g ed or re g istered as a p ros p ectus in Sin g a p ore with the Monetary Authority of Singapore. Accordingly, this Presentation and any other document or materials in connection with the offer or sale, or invitation for subscription or purchase, of New Shares, may not be issued, circulated or distributed, nor may the New Shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore except pursuant to and in accordance with exemptions in Subdivision (4) Division 1, Part XIII of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), or as otherwise pursuant to, and in accordance with the conditions of any other applicable provisions of the SFA. This Presentation has been given to you on the basis that you are (i) an existing holder of PXS’s shares, (ii) an "institutional investor" (as defined in the SFA) or (iii) a "relevant person" (as defined under section 275(2) of the SFA). In the event that you are not an investor falling within any of the categories set out above, please return this Presentation immediately. You may not forward or circulate this Presentation to any other person in Singapore. Any offer is not made to you with a view to the New Shares being subsequently offered for sale to any other party. There are on-sale restrictions in Singapore that may be applicable to investors who acquire New Shares. As such, investors are advised to acquaint themselves with the SFA provisions relating to resale restrictions in Singapore and comply accordingly. NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 47

Selling Restrictions

Switzerland The New Shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange ("SIX") or on any other stock exchange or regulated trading facility in Switzerland. This Presentation has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this Presentation nor any other offering or marketing material relating to the New Shares may be publicly distributed or otherwise made publicly available in Switzerland. Neither this Presentation nor any other offering or marketing material relating to the New Shares have been or will be filed with or approved by any Swiss regulatory authority. In particular, this Presentation will not be filed with, and the offer of New Shares will not be supervised by, the Swiss Financial Market Supervisory Authority (FINMA). This Presentation is personal to the recipient only and not for general circulation in Switzerland. United Kingdom Neither the information in this Presentation nor any other document relating to the offer has been delivered for approval to the Financial Services Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended ("FSMA")) has been published or is intended to be published in respect of the New Shares. This Presentation is issued on a confidential basis to "qualified investors" (within the meaning of section 86(7) of FSMA) in the United Kingdom, and the New Shares may not be offered or sold in the United Kingdom by means of this Presentation, any accompanying letter or any other document, except in circumstances which do not require the publication of a prospectus pursuant to section 86(1) FSMA. This Presentation should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by recipients to any other person in the United Kingdom. Any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) received in connection with the issue or sale of the New Shares has only been communicated or caused to be communicated and will only be communicated or caused to be communicated in the United Kingdom in circumstances in which section 21(1) of FSMA does not apply to PXS. In the United Kingdom, this Presentation is being distributed only to, and is directed at, persons (i) who have professional experience in matters relating to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 ("FPO"), (ii) who fall within the categories of persons referred to in Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the FPO or (iii) to whom it may otherwise be lawfully communicated (together "relevant persons"). The investments to which this Presentation relates are available only to, and any invitation, offer or agreement to purchase will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this Presentation or any of its contents. United States Thi s resen a P t ti on may no t b e re ease l d or s r di t ib u e t d i n th e n U it e d St a es. t Thi s resen a P t ti on oes no cons d t tit u e an o t ff er o se t ll , or a so li c it a ti on o an o f ff er o uy, t b securities in the United States. Any securities described in this Presentation have not been, and will not be, registered under the US Securities Act of 1933 and may not be offered or sold in the United States except in transactions exempt from, or not subject to, registration under the US Securities Act and applicable US state securities laws. NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 48

Media Release

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16 November 2011

Pharmaxis announces pro-rata entitlement offer to raise up to approximately A$80 million

Pharmaxis Ltd ( Pharmaxis or the Company ) (ASX: PXS) today announced a 1 for 3 pro-rata accelerated non-renounceable entitlement offer to eligible shareholders to raise up to approximately $80 million ( Entitlement Offer ).

The Entitlement Offer is underwritten to $40 million by Merrill Lynch International (Australia) Ltd and Wilson HTM Corporate Finance Ltd.

Use of proceeds of the offer

Pharmaxis is developing a portfolio of products to treat and manage respiratory diseases.

In October 2011, the Company received a positive opinion from the Committee for Medicinal Products for Human Use, recommending the granting of Marketing Authorisation in Europe of Bronchitol[®] for cystic fibrosis patients aged 18 and over. Bronchitol[®] was approved by Australia’s Therapeutic Goods Administration in February 2011 and the Company aims to submit a marketing application with the US FDA in the first half of 2012.

The Company currently sells Aridol[®] , a lung function test designed to help diagnose and manage asthma, which is approved in the USA, Europe, Australia, and parts of South East Asia. Pharmaxis also has a number of products in its development pipeline, including a Phase III clinical trial of Bronchitol for bronchiectasis which is expected to complete recruitment by the end of 2011.

The proceeds from the Entitlement Offer will be used to increase Pharmaxis’ cash reserves and strengthen the Company’s balance sheet in anticipation of the commercial launch of Bronchitol for cystic fibrosis in Europe, which is expected to occur in the first half of 2012.

“This capital raising will enable Pharmaxis to capitalise on the work to date in achieving product approvals and continue to build the company into a profitable, international, pharmaceutical business focussed on respiratory disease” said Pharmaxis Chief Executive Officer, Dr Alan Robertson.

Overview of the Entitlement Offer

Eligible shareholders will be invited to subscribe for 1 new ordinary share ( New Share ) for every 3 existing Pharmaxis ordinary shares held at 7:00pm (Sydney time) on 21 November 2011 ( Record Date ), at an issue price of $1.05 per New Share ( Entitlement ).

The issue price of $1.05 per New Share represents a 15.2% discount to the theoretical ex-rights price ( TERP )[1] and a 19.2% discount to the closing price of Pharmaxis shares of $1.30 on 15 November 2011. New Shares issued will rank equally with existing Pharmaxis shares. Eligible shareholders may also apply for New Shares in excess of their Entitlement ( Additional Shares ). The allocation and issue of Additional Shares will be determined by Pharmaxis at its sole discretion.

1 TERP is the theoretical price at which shares should trade immediately after the ex-date for the Entitlement Offer assuming 100% take-up of the Entitlement Offer. The theoretical ex-rights price is a theoretical calculation only and the actual price at which shares trade immediately after the ex-date for the Entitlement Offer will depend on many factors and may not be equal to the theoretical ex-rights price.

Pharmaxis Ltd 20 Rodborough Road T 02 9454 7200 ABN 75 082 811 630 Frenchs Forest NSW 2086 F 02 9451 3622 Australia www.pharmaxis.com.au 37

Pharmaxis will issue up to approximately 76,372,103 million New Shares in connection with the Entitlement Offer, resulting in Pharmaxis having up to approximately 305,488,412 million ordinary shares on issue following completion of the Entitlement Offer.

The Entitlement Offer comprises an institutional component ( Institutional Entitlement Offer ) and a retail component ( Retail Entitlement Offer ).

Institutional Entitlement Offer

Eligible institutional shareholders will be invited to participate in the Institutional Entitlement Offer. New Shares not taken up by Pharmaxis’ eligible institutional shareholders and those which would otherwise have been offered to ineligible institutional shareholders will be offered for subscription to eligible institutional shareholders and selected institutional investors through a volume bookbuild process at the issue price.

Pharmaxis' largest shareholder, being funds managed by Orbis Investment Management (Australia) Pty Ltd and their related bodies corporate, have indicated that, they intend to subscribe for such number of New Shares in the Institutional Entitlement Offer that will result in them collectively maintaining their current interest of approximately 19.3% of issued shares post completion of the Entitlement Offer.

Retail Entitlement Offer

Shareholders who are eligible to participate in the Retail Entitlement Offer ( Eligible Retail Shareholders ) are shareholders:

(a) who were a holder of Pharmaxis shares as at 7.00pm (Sydney time) on the Record Date; (b) who have a registered address on Pharmaxis' share register in Australia or New Zealand; (c) who are not in the United States and is not a “U.S. person”, as defined in Regulation S under the U.S. Securities Act of 1933 ( US Securities Act ) ( US Person ) and not acting for the account or benefit of any person in the United States or any US Person; (d) to the extent they were not invited to participate under the Institutional Entitlement Offer; and (e) who are eligible under all applicable securities laws to receive an offer under the Retail Entitlement Offer.

It is the responsibility of potential applicants to inform themselves of the eligibility criteria for participating in the Entitlement Offer. The Entitlements are non-renounceable and will not be tradeable on the ASX or otherwise transferable. Shareholders who do not take up their Entitlements will not receive any value in respect of those Entitlements that they do not take up. Shareholders who are not eligible to receive Entitlements will not receive any value in respect of Entitlements they would have received had they been eligible.

Full details of the Retail Entitlement Offer are set out in an offer booklet ( Retail Offer Booklet ), copies of which will be available on the ASX website www.asx.com.au and Pharmaxis’ website, www.pharmaxis.com.au from 24 November 2011. Eligible Retail Shareholders will be mailed a Retail Offer Booklet, together with a personalised Entitlement and Acceptance Form which contains details of your Entitlement on or around 24 November 2011. You should read all of the Retail Offer Booklet carefully before deciding whether to participate in the Retail Entitlement Offer.

Indicative Timetable

Indicative Timetable
Tradinghalt,Institutional Entitlement Offer opens	16 November 2011
Institutional Entitlement Offer closes	17 November 2011
Institutional shortfall bookbuild	17 November 2011
Tradinghalt lifted, existingshares recommence trading	18 November 2011
Record Date – 7:00pm(Sydneytime)	21 November 2011
Retail Entitlement Offer opens – 9:00am(Sydneytime)	24 November 2011
Retail Offer Booklet despatched to Eligible Retail Shareholders	24 November 2011

Entitlement Offer first settlement	28 November 2011
Allotment and trading of New Shares issued under the first	29 November 2011
settlement
Retail Entitlement Offer closes – 5:00pm(Sydneytime)	8 December 2011
Entitlement Offer second settlement	15 December 2011
Allotment of New Shares for the second settlement	16 December 2011
Tradingof New Shares issued under the second settlement	19 December 2011

The above timetable is indicative only and subject to change. All times are references to Sydney time. Pharmaxis with the consent of the underwriters reserves the right to withdraw the Entitlement Offer or vary the timetable for the Entitlement Offer without notice. Pharmaxis reserves the right to extend the closing date for the Retail Entitlement Offer, to accept late applications either generally or in particular cases or to withdraw the Retail Entitlement Offer without prior notice. The commencement of quotation of new securities is subject to confirmation from the ASX.

ENDS

For further information contact:

Alan Robertson - Chief Executive Officer Ph: +61 2 9454 7200 Email [email protected]

RELEASED THROUGH:

Australia:

Felicity Moffatt, phone +61 418 677 701 or email [email protected]

About Pharmaxis

Pharmaxis (ABN 75 082 811 630) is a specialist pharmaceutical company involved in the research, development and commercialization of therapeutic products for chronic respiratory disorders. Its product Aridol® for the assessment of asthma is launched in a number of key markets. Its development pipeline of products includes: Bronchitol for cystic fibrosis, bronchiectasis, ASM8 for asthma, PXS25 for idiopathic pulmonary fibrosis and a new oxidase inhibitor for lung disease. Pharmaxis is listed on the Australian Securities Exchange (symbol PXS). The company is headquartered in Sydney at its TGA-approved manufacturing facilities. For more information about Pharmaxis, go to www.pharmaxis.com.au or contact Investor Relations on phone +61 2 9454 7200.

About Bronchitol for Cystic Fibrosis

Bronchitol has been developed to help clear mucus (a major source of lung infections), improve lung function and reduce exacerbations in patients with cystic fibrosis. Bronchitol is a proprietary formulation of mannitol administered as a dry powder in a convenient hand-held inhaler. Bronchitol hydrates the lungs, helps restore normal lung clearance, and allows patients to clear mucus more effectively. Clinical studies have shown Bronchitol to be safe, effective, and well tolerated in treating patients cystic fibrosis.

About Cystic Fibrosis

In a healthy person, there is a constant flow of mucus over the surfaces of the air passages in the lungs, removing debris and bacteria. In CF, an inherited disease, a defective gene disrupts ion transport across the epithelial membrane within cells. In the lungs, this leads to a depletion of the airway surface liquid that normally bathes the cilia, and a resultant reduction in mucociliary clearance. The result is thick, sticky mucus that clogs the lungs, severely restricting the natural airway-clearing process. It also increases the potential for bacteria to become trapped and for inflammation, thus creating an unhealthy lung environment that leads to life-threatening lung infections.

Important Notice

This announcement is not an offer or an invitation to acquire securities. In particular, this release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States or to, or for the account or benefit of, any US Person. This announcement may not be released or distributed in the United States or to any US Person. Any securities described in this announcement have not been, and will not be registered under the US Securities Act or the securities laws of any other jurisdiction, and may not be offered or sold in the United States, or to, or for the account of benefit of, any US Person.

Forward-looking statements

This release contains forward-looking statements. The words “forecast”, “estimate”, “likely”, “anticipate”, “believe”, “expect”, “project”, “predict”, “outlook”, “guidance”, “intend”, “should”, “could”, “may”, “target”, “plan” and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, future

earnings and financial position and performance are also forward-looking statements. Forward-looking statements in this release include statements regarding our strategy, future operational and financial results, synergies from acquisitions, future projects, the results of the capital raising and the use of proceeds therefrom. You are cautioned not to place undue reliance on forward-looking statements. The forward-looking statements, opinions and estimates provided in this release are based on assumptions and contingencies that are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Forward-looking statements including projections, guidance on future earnings and estimates are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. Forward-looking statements are subject to known and unknown risks and uncertainties, there can be no assurance that actual outcomes will not differ materially from forward-looking statements and readers are accordingly cautioned not to place undue reliance on these forward-looking statements. Pharmaxis assumes no obligation to update or revise these forward-looking statements to reflect any change in expectations or assumptions.

Stock Lending and Other Transactions

Eligible shareholders will be entitled to apply under the Entitlement Offer for 1 New Share for every 3 existing Pharmaxis ordinary shares held as at 7.00pm (Sydney time) on the Record Date. Pharmaxis has been granted a waiver by ASX so that, in determining shareholder entitlements for the Entitlement Offer, it may ignore any changes in shareholdings that occurred after the announcement of the trading halt on 16 November 2011 (other than registrations of transactions that were effected through ITS before that announcement). Accordingly, a person who is a registered shareholder of Pharmaxis at 7.00pm (Sydney time) on the Record Date as a result of a dealing after the announcement of the trading halt (other than the registration of a transaction effected through ITS before that announcement) may not receive an entitlement under the Entitlement Offer. This means, for example, that in the event a Pharmaxis shareholder has existing Pharmaxis shares out on loan, the borrower will be regarded as the shareholder for the purposes of determining the entitlement (provided that those borrowed shares have not been on-sold or used to cover a short sale).

Media Release

18 November 2011

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INSTITUTIONAL COMPONENT OF ENTITLEMENT OFFER

Key points:

Strong demand in the Institutional Entitlement Offer from existing and new institutional shareholders
Underwritten amount increased from $40 million to the full Entitlement Offer size of approximately $80 million
Eligible retail shareholders to participate in the Retail Entitlement Offer, commencing 24 November 2011

Pharmaxis Ltd (ASX: PXS) ( Pharmaxis ) today announced that it has successfully raised approximately $50 million through the institutional component of its 1 for 3 pro‐rata accelerated non‐renounceable entitlement offer at $1.05 per share ( Institutional Entitlement Offer ) announced on 16 November 2011. Settlement of these new shares will occur in two tranches with approximately $43 million to be completed on the first settlement date of 28 November 2011. A further institutional amount of approximately $7 million will be settled on the second settlement date of 15 December 2011. This second settlement amount satisfies the commitment of Pharmaxis’ largest shareholder (funds managed by Orbis Investment Management (Australia) Pty Ltd) to maintain its pre capital raising interest of approximately 19.3% of issued shares post completion of the Entitlement Offer.

The Institutional Entitlement Offer was strongly supported by both existing and new institutional investors. Those entitlements not committed or eligible to be taken up by institutional shareholders have been subscribed through the institutional shortfall bookbuild.

Pharmaxis’ Chief Executive Officer, Dr Alan Robertson said "We are very pleased with the support for the capital raising from institutional investors. We look forward to welcoming participation from our retail shareholders when the retail entitlement offer opens on Thursday 24 November 2011."

The Institutional Entitlement Offer is fully underwritten by Merrill Lynch International (Australia) Ltd and Wilson HTM Corporate Finance Ltd.

Retail Entitlement Offer

The retail component of the entitlement offer ( Retail Entitlement Offer ) will raise approximately $30 million. The Retail Entitlement Offer will open on 24 November 2011 and close at 5.00pm (Sydney time) on 8 December 2011.

Eligible retail shareholders will be entitled to apply for 1 new ordinary share for every 3 existing Pharmaxis ordinary shares held at 7:00pm (Sydney time) on 21 November 2011 ( Entitlement ) (subject to the terms and conditions set out in the Retail Offer Booklet) at $1.05 per share, being the same offer price and the same offer ratio as the Institutional Entitlement Offer. Eligible retail shareholders may also apply for additional shares in excess of their Entitlement. The allocation of additional shares and any scale back will be at Pharmaxis’ absolute discretion.

Pharmaxis Ltd 20 Rodborough Road T 02 9454 7200 ABN 75 082 811 630 Frenchs Forest NSW 2086 F 02 9451 3622 Australia www.pharmaxis.com.au

Entitlements are non‐renounceable and will not be tradeable on the ASX or otherwise transferable. Shareholders who do not take up their Entitlement will not receive any value in respect of those Entitlements.

The Retail Offer Booklet and a personalised Entitlement and Acceptance Form will be sent to eligible retail shareholders on 24 November 2011. Eligible retail shareholders should carefully read the Retail Offer Booklet and personalised Entitlement and Acceptance Form. Any eligible retail shareholders who wish to acquire new Pharmaxis shares under the Retail Entitlement Offer will need to complete, or otherwise apply in accordance with, the personalised Entitlement and Acceptance Form.

The Retail Entitlement Offer is fully underwritten by Merrill Lynch International (Australia) Ltd and Wilson HTM Corporate Finance Ltd.

Pharmaxis expects its trading halt to be lifted and Pharmaxis shares to recommence trading from market open today.

Indicative Timetable for the Retail Entitlement Offer

Indicative Timetable for the Retail Entitlement Offer
Record Date – 7:00pm(Sydneytime)	21 November 2011
Retail Entitlement Offer opens – 9:00am(SydneyTime)	24 November 2011
Retail Offer Booklet despatched to eligible retail shareholders	24 November 2011
Retail Entitlement Offer closes – 5:00pm(SydneyTime)	8 December 2011
Second settlement(includingRetail Entitlement Offer settlement)	15 December 2011
Allotment of new shares issued under the second settlement	16 December 2011
(which includes the allotment of new shares under the Retail
Entitlement Offer)
Trading of new shares issued under the second settlement (which	19 December 2011
includes the new shares issued under the Retail Entitlement
Offer)

The above timetable is indicative only and subject to change. All times are references to Sydney time. Pharmaxis, with the consent of the underwriters, reserves the right to withdraw the Retail Entitlement Offer or vary the timetable for the Retail Entitlement Offer without notice. Pharmaxis reserves the right to extend the closing date for the Retail Entitlement Offer, to accept late applications either generally or in particular cases or to withdraw the Retail Entitlement Offer without prior notice. The commencement of quotation of new securities is subject to confirmation from the ASX.

Shareholder Enquiries

Eligible retail shareholders who have questions relating to the Retail Entitlement Offer should call the Pharmaxis Offer Information Line on 1300 368 679 (within Australia) or +61 3 9415 4193 (outside Australia) between 8:30am and 5:30pm (Sydney time) Monday to Friday before 8 December 2011.

ENDS

SOURCE: Pharmaxis Ltd, Sydney, Australia CONTACT: Alan Robertson – Chief Executive Officer Ph: +61 2 9454 7200 or email [email protected]

RELEASED THROUGH: Australia:

Felicity Moffatt, phone +61 418 677 701 or email [email protected]

About Pharmaxis

Pharmaxis (ABN 75 082 811 630) is a specialist pharmaceutical company involved in the research, development and commercialization of therapeutic products for chronic respiratory disorders. Its product Aridol® for the assessment of asthma is launched in a number of key markets. Its development pipeline of products includes: Bronchitol for cystic fibrosis, bronchiectasis, ASM8 for asthma, PXS25 for idiopathic pulmonary fibrosis and a new oxidase inhibitor for lung disease. Pharmaxis is listed on the Australian Securities Exchange (symbol PXS). The company is headquartered in Sydney at its TGA‐approved manufacturing facilities. For more information about Pharmaxis, go to www.pharmaxis.com.au or contact Investor Relations on phone +61 2 9454 7200.

Important Notice

This announcement is not an offer or an invitation to acquire securities. In particular, this release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States or to, or for the account or benefit of, any “U.S. person”, as defined in Regulation S under the U.S. Securities Act of 1933 (“U.S. Securities Act”) (“U.S. Person) or in any other jurisdiction. This announcement may not be released or distributed in the United States or to any U.S. Person. Any securities described in this announcement have not been, and will not be registered under the U.S. Securities Act or the securities laws of any other jurisdiction, and may not be offered or sold in the United States, or to, or for the account of benefit of, any U.S. Person.

Stock Lending and Other Transactions

4. Important Information for Shareholders

4.1 No disclosure document or product disclosure statement

The Entitlement Offer complies with the requirements of section 708AA of the Corporations Act as notionally modified by ASIC Class Order CO 07/571 and ASIC Class Order CO 08/35. Accordingly, neither this Retail Offer Booklet nor the Entitlement and Acceptance Form are required to be lodged or registered with ASIC. As Pharmaxis is a listed disclosing entity which meets the requirements of section 708AA of the Corporations Act, as notionally modified by ASIC Class Order CO 07/571 and ASIC Class Order CO 08/35, no disclosure document or product disclosure statement for the Entitlement Offer will be prepared.

4.2 Notice to nominees and custodians

Nominees and custodians which hold Shares as nominees or custodians will have received, or will shortly receive, a letter from Pharmaxis. Nominees and custodians should consider carefully the contents of that letter and note in particular that the Retail Entitlement Offer is not available to Eligible Institutional Shareholders to the extent they were invited to participate in the Institutional Entitlement Offer (whether they accepted their Entitlement or not) and institutional shareholders that were ineligible to participate in the Institutional Entitlement Offer.

Pharmaxis is not required to determine whether or not any registered holder is acting as a nominee or the identity or residence of any beneficial owners of securities. Where any nominee or custodian is acting on behalf of a foreign person, that holder, in dealing with its beneficiary, will need to assess whether indirect participation by the beneficiary in the Retail Entitlement Offer is compatible with applicable foreign laws. Any person in the United States or any US Person with a holding through a nominee may not participate in the Retail Entitlement Offer. Nominees and custodians may not distribute any part of this Retail Offer Booklet in the United States or in any other country outside Australia and New Zealand except to beneficial shareholders who are institutional investors in other countries listed in, and to the extent permitted under, the ‘Selling Restrictions’ section of the Capital Raising Presentation.

4.3 Continuous disclosure

Pharmaxis is a ‘disclosing entity’ under the Corporations Act and is subject to regular reporting and disclosure obligations under the Corporations Act and the ASX Listing Rules, including the preparation of annual reports and half yearly reports.

Pharmaxis is required to notify the ASX of information about specific events and matters as they arise for the purposes of the ASX making that information available to the stock markets conducted by the ASX. In particular, Pharmaxis has an obligation under the ASX Listing Rules (subject to certain exceptions) to notify the ASX immediately of any information of which it is or becomes aware which a reasonable person would expect to have a material effect on the price value of its Shares. That information is available to the public from the ASX.

Some documents are required to be lodged with ASIC in relation to Pharmaxis. These documents may be obtained from, or inspected at, an ASIC office.

4.4 Not investment advice

The information provided in this Retail Offer Booklet is not intended to be relied on as advice to investors and has been prepared without taking into account the recipient’s investment objectives, financial circumstances or particular needs.

This Retail Offer Booklet does not purport to contain all of the information that you may require in evaluating a possible application for New Shares and you should undertake your own independent review, investigation and analysis of Pharmaxis and the Retail Entitlement Offer. You should obtain professional advice if required and carefully evaluate the risks of an investment in Pharmaxis before making any investment decision. The New Shares offered under this Retail Offer Booklet should be considered speculative.

4.5 Future performance

This document contains certain forward-looking statements with respect to the financial condition, results of operations, projects and business of Pharmaxis and certain plans and objectives of the management of Pharmaxis. These forward-looking statements involve known and unknown risks, uncertainties and other factors that are subject to change without notice. These risks include the matters described in the ‘Risk Factors’ section of the Capital Raising Presentation (included in section 3 of this Retail Offer Booklet). Pharmaxis gives no assurance that the anticipated results, performance or achievements expressed or implied in those forward-looking statements will be achieved.

Forward-looking statements are provided as a general guide only and there can be no assurance that actual outcomes will not differ materially from these statements. Neither Pharmaxis, nor any other person, gives any representation, warranty, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statement will actually occur. In particular, such forward-looking statements are subject to significant uncertainties and contingencies, many of which are outside the control of Pharmaxis.

4.6 Past performance

Investors should note that the past share price performance of Pharmaxis Shares provides no guarantee or guidance as to future share price performance. Past performance information given in this Retail Offer Booklet is provided for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance. The historical information in this Retail Offer Booklet is, or is based upon information that has been released to the market. For further information, please see past announcements released to the ASX.

4.7 Risks

There are a number of important factors and risks that could affect the financial and operating performance of Pharmaxis. In particular, please refer to the ‘Risk Factors’ section of the Capital Raising Presentation as set out in section 3 of this Retail Offer Booklet for a summary of key risks. You should consider these risk factors carefully in light of your personal circumstances, including financial and taxation issues, before making an investment decision in connection with the Retail Entitlement Offer.

4.8 No authorisation

No person is authorised to give any information or make any representation in connection with the Retail Entitlement Offer, which is not contained in this Retail Offer Booklet. Any information or representation not contained in this Retail Offer Booklet may not be relied on as having been authorised by Pharmaxis in connection with the Retail Entitlement Offer. Except as required by law, and only to the extent so required:

none of Pharmaxis, or any other person, warrants or guarantees the future performance of Pharmaxis or any return on any investment made pursuant to the information contained in this Retail Offer Booklet; and
Pharmaxis, its officers, employees and advisers disclaim all liability that may otherwise arise due to the Retail Offer Booklet being inaccurate or incomplete in any respect.

4.9 No Entitlement trading and no cooling-off rights

Entitlements are non-renounceable and will not be tradable on ASX or otherwise transferrable. Cooling-off rights do not apply to a subscription for New Shares under the Retail Entitlement Offer. Accordingly, you cannot, in most circumstances, withdraw your Application for New Shares once it has been accepted.

4.10 Foreign jurisdictions – restrictions and limitations

This Retail Offer Booklet is being sent to all Eligible Retail Shareholders on the register of Pharmaxis on the Record Date with an address on the share register in Australia or New Zealand. See the Selling Restrictions in the Capital Raising Presentation as set out in section 3 of this Retail Offer Booklet.

New Zealand

The New Shares are not being offered or sold to the public within New Zealand other than to existing shareholders of the Company with registered addresses in New Zealand to whom the offer of New Shares is being made in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002 (New Zealand).

This Retail Offer Booklet has not been registered, filed with or approved by any New Zealand regulatory authority under the Securities Act 1978 (New Zealand). This Retail Offer Booklet is not an investment statement or prospectus under New Zealand law and is not required to, and may not, contain all the information that an investment statement or prospectus under New Zealand law is required to contain.

United States

This Retail Offer Booklet does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States. Neither this Retail Offer Booklet nor the Entitlement and Acceptance Form may be distributed in the United States or to any US Person.

The New Shares have not been, and will not be, registered under the US Securities Act or the securities laws of any state or other jurisdiction of the United States. The Entitlements may not be taken up by persons in the United States or by persons who are, or are acting for the account or benefit of, a US Person. The New Shares may not be offered, sold or resold in the United States except in a transaction exempt from, or not subject to, the registration requirements of the US Securities Act and the applicable securities laws of any state or other jurisdiction in the United States.

Other jurisdictions

This Retail Offer Booklet does not constitute an offer in any jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer and no action has been taken to register the New Shares or otherwise permit a public offering of the New Shares in any jurisdiction other than Australia and New Zealand. Return of the Entitlement and Acceptance Form shall be taken by Pharmaxis to constitute a representation by you that there has been no breach of any such laws.

4.11 Taxation

There may be taxation implications associated with the Entitlement Offer. The taxation consequences of the Entitlement Offer and subscribing for New Shares under this document or the subsequent disposal of any such New Shares may vary depending on individual circumstances. Eligible Retail Shareholders should consult their own professional taxation advisors to obtain advice in relation to the taxation laws and regulations applicable to their personal circumstances.

4.12 Underwriting arrangements and fees

The Entitlement Offer is fully underwritten by Merrill Lynch International (Australia) Ltd and Wilson HTM Corporate Finance Ltd. Pharmaxis has provided the Joint Lead Managers and Underwriters with customary representations and undertakings in connection with the Entitlement. The Underwriting Agreement is subject to customary termination events. If terminated, the Entitlement Offer may not proceed in its entirety.

Pharmaxis must pay the Joint Lead Managers and Underwriters a management fee of 1.5% of the proceeds from the Entitlement Offer and an underwriting fee of 3% of the underwritten amount and must reimburse certain costs and expenses incurred by the Joint Lead Managers and Underwriters in connection with the Entitlement Offer.

The Joint Lead Managers and Underwriters may at their own cost appoint sub-underwriters, co-managers and brokers to the Entitlement Offer. Pharmaxis has agreed to pay a fixed lump sum of $35,000 (excluding GST) to BBY Limited, RBS Morgans Limited and Shaw Stockbroking Limited in connection with their participation as brokers to the Retail Entitlement Offer.

Subject to certain exceptions, Pharmaxis has agreed to indemnify the Joint Lead Managers and Underwriters, their affiliates, related bodies corporate, directors, officers, employees, partners, agents and advisers (each an Indemnified Party) from and against losses incurred by, or claims made against, an Indemnified Party in connection with the Entitlement Offer.

4.13 ASX waivers

In order to conduct the Entitlement Offer, Pharmaxis has sought certain waivers from the ASX Listing Rules. ASX has granted Pharmaxis waivers from ASX Listing Rules 3.20, 7.1, 7.40 and 10.11 subject to a number of conditions including that:

all shareholders are offered their pro-rata share of the Entitlement Offer unless ASX Listing Rule 7.7.1 would permit the shareholder to be excluded from the Entitlement Offer;
New Shares are offered under the Institutional Entitlement Offer and Retail Entitlement Offer at the same price and same ratio; and
related parties do not participate beyond their pro-rata share other than under bona fide underwriting arrangements that are disclosed in this Retail Offer Booklet.

The waivers also allow Pharmaxis to ignore, for the purposes of determining those entitled to receive Entitlements, transactions occurring after the announcement of the trading halt in Shares (other than registrations of ITS (Integrated Trading System) transactions which were effected before the announcement) (post ex-date transactions). Transactions ignored under this provision are to be ignored in determining holders and registered holders, and holdings and registered holdings, of Existing Shares as at the Record Date, and references to such holders, registered holders, holdings and registered holdings are to be read accordingly. Therefore, if you have acquired Shares in a post ex-date transaction you will not be entitled to receive an Entitlement in respect of those Shares.

4.14 Privacy

Pharmaxis collects information about each Applicant provided on an Entitlement and Acceptance Form for the purposes of processing the Application and, if the Application is successful, to administer the Applicant’s shareholding in Pharmaxis.

By submitting an Entitlement and Acceptance Form, you will be providing personal information to Pharmaxis (directly or through the share registry). Pharmaxis collects, holds and will use that information to assess your Application. Pharmaxis may disclose your personal information for purposes related to your shareholding in Pharmaxis, including to its Registry, agents, contractors and third party service providers, and to the ASX and regulatory bodies. To make a request for access to your personal information held by (or on behalf of) Pharmaxis, please contact Pharmaxis through its Registry.

4.15 Governing Law

The Entitlement Offer and contracts formed on acceptance of the Entitlement and Acceptance Forms are governed by the law of New South Wales, Australia. Each applicant submits to the exclusive jurisdiction of the courts of New South Wales, Australia.

5. Glossary

Additional Shares	New Shares applied for by Eligible Retail Shareholders in excess
	of their Entitlement.
Applicant	An Eligible Retail Shareholder who has applied to subscribe for
	New Shares by submitting an Entitlement and Acceptance Form
	or arranging for payment through BPAY® in accordance with the
	instructions on the Entitlement and Acceptance Form.
Application	An application by an Eligible Retail Shareholder to subscribe for
	New Shares by submitting an Entitlement and Acceptance Form
	or arranging for payment through BPAY® in accordance with the
	instructions on the Entitlement and Acceptance Form.
Application Monies	Monies paid by an Eligible Retail Shareholders pursuant to their
	Application in the Retail Entitlement Offer.
ASIC	Australian Securities and Investments Commission.
ASX	ASX Limited ACN 008 624 691 and the securities exchange
	operated by it.
Capital Raising Presentation	The presentation set out in section 3 of this Retail Offer Booklet.
Closing Date	5.00pm (Sydney time) on Thursday, 8 December 2011 or such
	other date as may be determined by the Directors.
Corporations Act	Corporations Act 2001 (Cth).
Director	A director of Pharmaxis.
Eligible Institutional Shareholder	An Institutional Shareholder:
	• to whom ASX Listing Rule 7.7.1(a) does not apply; and
	• who received an offer under the Institutional Entitlement Offer
	(as the Joint Lead Managers and Underwriters determine).
Eligible Retail Shareholder	Has the meaning given in section 2.1 of this Retail Offer Booklet.
Entitlement	The number of New Shares that an Eligible Retail Shareholder is
	entitled to under the Entitlement Offer.
Entitlement Offer	The fully underwritten Offer of approximately 76,372,103 New
	Shares comprising the Institutional Entitlement Offer and Retail
	Entitlement Offer.
Entitlement and Acceptance Form	The Entitlement and Acceptance Form accompanying this Retail
	Offer Booklet.

Existing Shares	Ordinary shares on issue in the capital of Pharmaxis prior to the
	Entitlement Offer.
Ineligible Retail Shareholder	A Pharmaxis shareholder who is not an Eligible Retail
	Shareholder.
Institutional Entitlement Offer	The offer of New Shares to Eligible Institutional Shareholders as
	part of the Entitlement Offer.
Issue Price	$1.05 per New Share.
Joint Lead Managers and Underwriters	Merrill Lynch International (Australia) Ltd and Wilson HTM
	Corporate Finance Ltd.
New Shares	Fully paid ordinary shares in the capital of Pharmaxis offered to
	eligible shareholders under the Entitlement Offer.
Pharmaxis	Means Pharmaxis Ltd ABN 75 082 811 630.
Record Date	7.00pm (Sydney time) on Monday, 21 November 2011.
Registry	Computershare Investor Services Pty Limited
	ABN 48 078 279 277.
Retail Entitlement Offer	The offer of New Shares to Eligible Retail Shareholders
	as part of the Entitlement Offer.
Retail Offer Booklet	This offer booklet, which relates to the Retail Entitlement Offer.
Share	A fully paid ordinary share in the capital of Pharmaxis.
Shortfall	The amount of Entitlements for New Shares under the Retail
	Entitlement Offer for which Pharmaxis does not receive valid
	Applications on the Closing Date.
TERP	Means the theoretical ex-rights price. This is a price at which
	Pharmaxis’ Shares should theoretically trade immediately
	after the ex-date for the entitlement offer assuming 100%
	take-up of the offer. The theoretical ex-rights price is a
	theoretical calculation only and the actual price at which
	Pharmaxis’ shares trade immediately after the ex entitlement
	date will depend on many factors and may not be equal to the
	theoretical ex rights price. TERP is calculated by reference to
	the closing price of Pharmaxis’ shares on ASX of $1.30 on 15
	November 2011.
US Person	Has the meaning given to ‘US person’ in Rule 902(k) under
	Regulation S in the US Securities Act.
US Securities Act	US Securities Act of 1933, as amended.

6. Corporate Directory

Directors

Chairman

Denis Hanley Chairman Alan Robertson Chief Executive Officer Malcolm McComas Non Executive Director Richard van den Broek Non Executive Director John Villiger Non Executive Director William Delaat Non Executive Director

Company Secretary

David McGarvey

Registered office and principal place of business

20 Rodborough Road Frenchs Forest NSW 2086

Phone: +61 2 9454 7200 Fax: +61 2 9451 3622 Website: www.pharmaxis.com.au ASX Code: PXS

Brokers to the Retail Entitlement Offer

BBY Limited

Level 17, 60 Margaret Street Sydney NSW 2000

Phone: +61 2 9226 0000 Fax: +61 2 9226 0066

RBS Morgans Limited Level 29, Riverside Centre 123 Eagle Street Brisbane Qld 4000 Phone: +61 7 3334 4888 Fax: +61 7 3831 9946

Shaw Stockbroking Limited Level 15, 60 Castlereagh Street Sydney NSW 2000

Phone: +61 2 9238 1238 Fax: +61 2 9232 1296

Joint Lead Managers and Underwriters

Merrill Lynch International (Australia) Ltd Level 38, Governor Phillip Tower 1 Farrer Place Sydney NSW 2000 Phone: +61 2 9225 6500 Fax: +61 2 9225 6644

Solicitors

PFM Legal Pty Ltd Level 12, 117 York Street Sydney NSW 2000

Phone: +61 2 8115 9805 Fax: +61 2 9261 0088

Registry

Wilson HTM Corporate Finance Ltd Level 38, Riparian Plaza 71 Eagle Street Brisbane QLD 4000 Phone: +61 7 3212 1333 Fax: +61 7 3212 1399

Computershare Investor Services Pty Limited Level 4, 60 Carrington Street Sydney NSW 2000

Phone: 1300 855 080 Fax: +61 3 9473 2500 www.computershare.com

Pharmaxis Offer Information Line

1300 368 679 (within Australia) +61 3 9415 4193 (outside Australia) at any time between 8.30am to 5.30pm (Sydney time) Monday to Friday before the Closing Date.

This page has been left blank intentionally.

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Pharmaxis Ltd

ABN 75 082 811 630

Please return completed form to: Computershare Investor Services Pty Limited GPO Box 505 Melbourne Victoria 3001 Australia Enquiries (within Australia) 1300 368 679 (outside Australia) 61 3 9415 4193

000001 000 1301011221012102012221332120133322113 SAM MR JOHN SMITH 1 FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

Securityholder Reference Number (SRN)

I1234567890

i 1234567890 I N D

Use a black pen. Print in CAPITAL letters A B C 1 2 3 inside the grey areas.

A For your security keep your SRN/HIN confidential.

Entitlement and Acceptance Form (including Additional Shares)

This personalised form can only be used in relation to the shareholding represented by the SRN or HIN printed above. This is an important document and requires your immediate attention. If you are in doubt about how to deal with this document, please consult your financial or other professional adviser.

A	Shareholder Entitlement details Entitlement Number Amount payable on full acceptance at $1.05 per New Share. Entitlement to New Shares on a 1 for 3 basis Existing Pharmaxis Shares entitled to participate at Record Date on 7:00pm (Sydney Time), Monday 21 November 2011 Subregister A$ 123456789012 X,XXX,XXX.XX XXX,XXX,XXX XXX,XXX,XXX Issuer

Non-renounceable Entitlement Offer closing 5:00pm (Sydney Time) on Thursday 8 December 2011

Non-renounceable Entitlement Offer on the basis of 1 New Share for every 3 existing Pharmaxis Shares registered and entitled to participate at the Record Date at an Issue Price of A$1.05 per New Share.

This Entitlement and Acceptance Form should not be relied upon as evidence of the current entitlement of the person named in this Entitlement and Acceptance Form.

Receipt of the slip below by 5:00pm (Sydney time) on Thursday, 8 December 2011 with your payment, utilising the payment options detailed overleaf, will constitute acceptance in accordance with the terms and conditions of the Retail Offer Booklet dated 24 November 2011.

The Retail Entitlement Offer to which this Entitlement and Acceptance Form relates is not being made to investors located or resident outside of Australia and New Zealand.

The offer documents including this Entitlement and Acceptance Form do not constitute an offer or invitation to acquire securities in any place which, or to any person to whom, it would be unlawful to make such an offer or invitation.

I/We enclose my/our payment for the amount shown below being payment of A$1.05 per New Share. I/We hereby authorise you to register me/us as the holder(s) of the New Shares allotted to me/us, and I/we agree to be bound by the constitution of Pharmaxis Ltd.

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See back of form for completion guidelines
PLEASE DETACH HERE
Paperclip Please see overleaf for Payment Options Biller Code: 123456
cheque(s)
Do not here. Pharmaxis Ltd Ent: X,XXX Pay: X,XXX Ref No: 123412341234123412
staple. ABN 75 082 811 630
Total amount enclosed (the number of New Shares applied
B Number of New Shares applied for C Number of Additional Shares applied for D for in box B and Additional Shares in box C x A$1.05)
.
A$
Payment Details – Please note that funds are unable to be directly debited from your bank account
E
Drawer Cheque number BSB number Account number Cheque amount
A$
Make your cheque or bank draft payable to “Pharmaxis Ltd Trust A/C” and crossed “Not Negotiable”
Contact Details
F
Please provide your contact details in case we need to speak to you about this slip
Name of contact person Contact person’s daytime telephone number
( )
----- End of picture text -----

1234567890123456+1234567890-1234+12

How to complete the Entitlement and Acceptance Form

Please note that photocopies of this form will not be accepted. These instructions are cross-referenced to each section of the Entitlement and Acceptance Form

Payment Details

A Details of your Entitlement based on your holding of Pharmaxis Shares at 7:00pm (Sydney Time) on Monday, 21 November 2011 are shown in box A on the front of this Entitlement and Acceptance Form.

You can apply for New Shares by utilising the payment options detailed below. Please note that funds are unable to be directly debited from your bank account.

New Shares Accepted

By making your payment using either electronic means or by cheque, bank draft or money order, you confirm that you agree to all of the terms and conditions as detailed in the Retail Offer Booklet dated 24 November 2011.

You can apply to accept either all or part of your Pharmaxis Entitlements. Enter in box B the number of New Shares you wish to accept from your Pharmaxis Entitlements.

Your cheque, money order or bank draft must be made in Australian currency and drawn on an Australian branch of a financial institution. Such payment must be made payable to “Pharmaxis Ltd Trust A/C” and crossed “Not Negotiable”. Payments not properly drawn may be rejected. Cheques will be processed on the day of receipt and as such, sufficient cleared funds must be held in your account as cheques returned unpaid may not be re-presented and may result in your acceptance form being rejected. Paperclip (do not staple) your cheque(s) to the form where indicated. Cash will not be accepted. Receipt of payment will not be forwarded. If you elect to make payment via Bpay[©] before 8 December 2011, you do NOT need to return the acceptance slip. By paying by Bpay[®] , you will be deemed to have completed an Entitlement and Acceptance Form for the number of New Shares and Additional Shares which is fully covered by your application monies. If you elect to pay by Bpay[®] , you are deemed to apply for your Entitlement to New Shares up to the amount your application monies will allow you to apply for. Where your application monies exceed the amount payable for your Entitlement to New Shares, you will be deemed to be applying for Additional Shares up to the amount your application monies will allow. For more information on paying by Bpay[©] , visit www.bpay.com.au

Please ensure you complete Section B on the bottom of the form.

Additional Shares Applied for

C

Enter the number of Additional Shares you wish to apply for (if any).

No Eligible Retail Shareholder is assured of receiving any New Shares applied for in excess of their Pharmaxis Entitlements and any amounts by which applications from Eligible Retail Shareholders exceed their Pharmaxis Entitlements may be scaled back at Pharmaxis’ discretion.

If you wish to apply for Additional Shares, please ensure you complete Section C on the bottom of the form.

Acceptance Monies

D

Enter the total amount of acceptance monies payable. To calculate this amount, multiply the total number of New Shares applied for in box B, and if applicable F Contact Details box C by A$1.05.

Enter the name of a contact person and telephone number. These details will only be used in the event that the registry has a query regarding the slip below.

The directors reserve the right to make amendments to this form where appropriate.

Lodgement of Acceptance

If you are applying for New Shares or New Shares and Additional New Shares, and your payment is being made by Bpay[©] , you do not need to return the slip below . Your payment must be received by no later than 5:00pm (Sydney Time) on Thursday 8 December 2011. Applicants should be aware that their own financial institution may implement earlier cut off times with regards to electronic payment, and should therefore take this into consideration when making payment.

If you are paying by cheque, bank draft or money order, the slip below must be received by Computershare Investor Services Pty Limited (CIS) Sydney by no later than 5:00pm (Sydney Time) on Thursday 8 December 2011. You should allow sufficient time for this to occur. A reply paid envelope is enclosed for Shareholders in Australia. New Zealand holders will need to affix the appropriate postage. Return the slip below with cheque attached.

Neither CIS nor Pharmaxis Ltd accepts any responsibility if you lodge the slip below at any other address or by any other means.

If you have any enquiries concerning this form or your entitlement please contact CIS on 1300 368 679.

This form may not be used to notify your change of address. For information please contact CIS on 1300 855 080, or visit www.computershare.com. (Issuer Sponsored Holders only)

CHESS holders must contact their Controlling Participant to notify a change of address.

Declarations

By completing and submitting this Acceptance Form or by using the Bpay[®] facility, you will be accepting the Retail Entitlement Offer and be deemed to have represented, warranted, acknowledged and agreed for the benefit of Pharmaxis, the Underwriters and each of their respective affiliates that you are entitled to exercise such Entitlements and subscribe for New Shares (including any Additional Shares) in accordance with all applicable laws, and that:

(i) you make and agree to be subject to all the representations, declarations, warranties and agreements in the Retail Offer Booklet (including in section 2.6) and you comply with the foreign selling restrictions set out in section 3 of the Retail Offer Booklet;
(ii) the New Shares will be issued under the terms of the Retail Offer Booklet and holders of New Shares are bound by the terms of the constitution of Pharmaxis as amended from time to time;
(iii) you acknowledge that the Entitlement Offer does not constitute an offer, invitation or recommendation to subscribe for or purchase New Shares in any jurisdiction in which it would be unlawful;
(iv) you will not send the Retail Offer Booklet, the Entitlement and Acceptance Form or any other material relating to the Retail Entitlement Offer to any person in the United States; and
(v) if you are acting as a nominee for other persons you must not send any documents related to the Retail Entitlement Offer to, any person in the United States, or any person in respect of whom it would be unlawful in the circumstances under applicable laws (including foreign laws) to acquire New Shares for the account or benefit of.

® Registered to Bpay Pty Ltd ABN 69 079 137 518

Payment Options:

Biller Code: 123456 Ref No: 1234 5678 9012 3456 78

Telephone & Internet Banking – Bpay

Call your bank, credit union or building society to make this payment from your cheque or savings account. More info: www.bpay.com.au

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----- Start of picture text -----

I1234567890
----- End of picture text -----

By Mail Pharmaxis Ltd Computershare Investor Services Pty Limited Entitlement Number: GPO Box 505 Melbourne, Victoria 2001 AUSTRALIA

SAMPLE CUSTOMER SAMPLE STREET SAMPLE STREET SAMPLE STREET SAMPLE STREET SAMPLETOWN TAS 7000

Privacy Statement

Personal information is collected on this form by CIS, as registrar for securities issuers (“the issuer”), for the purpose of maintaining registers of securityholders, facilitating distribution payments and other corporate actions and communications. Your personal information may be disclosed to our related bodies corporate, to external service companies such as print or mail service providers, or as otherwise required or permitted by law. If you would like details of your personal information held by CIS, or you would like to correct information that is inaccurate, incorrect or out of date, please contact CIS. In accordance with the Corporations Act 2001, you may be sent material (including marketing material) approved by the issuer in addition to general corporate communications. You may elect not to receive marketing material by contacting CIS. You can contact CIS using the details provided on the front of this form or by emailing [email protected] If you have any enquiries concerning this form or your entitlement, please contact CIS on 1300 016 250.

AI assistant

SYNTARA LIMITED — Capital/Financing Update 2011

65830_rns_2011-11-23_249e3f43-2778-4f76-9dd4-23280ac21829.pdf

Retail Offer Booklet

Retail Entitlement Offer closes at 5.00pm (Sydney time) on 8 December 2011

Table of Contents

Important Information

Retail Offer Booklet

No prospectus

Other important information

Offering restrictions

Chairman’s Letter

Dear Shareholder,

Key Dates

Enquiries

Website

What Should You Do?

What should you do?

Decide what you want to do

Apply for New Shares

1. Overview of the Entitlement Offer

1.1 Entitlement Offer

1.2 Retail Entitlement Offer

1.3 Ranking of New Shares

1.4 Effect of the Entitlement Offer on Pharmaxis’ capital structure

1.5 Allotment

1.6 Holding Statements

1.7 Withdrawal of the Entitlement Offer

1.8 Allocation Policy

2. How to Apply – Eligible Retail Shareholders

2.1 Eligible Retail Shareholder

2.2 Overseas Shareholders

2.3 Choices available to Eligible Retail Shareholders

2.4 Take up all of, part of, or more than your Entitlement

2.4.1 Submit your completed Entitlement and Acceptance Form together with cheque, bank draft or money order for all Application Monies

Mailing Address

2.4.2 Payment via BPAY[®]

2.4.3 Application Monies

2.5 If you do nothing

2.6 Entitlement and Acceptance Form or payment by BPAY[®] is binding

2.7 Enquiries

3. Capital Raising Presentation and ASX Announcements

Important Notices

Summary information

US Restrictions

Important Notices (cont.)

Risk

Disclaimer

Overview

Key Terms of the Offer

Notes:

Balance Sheet Impact

Pro-forma balance sheet

Offer Timetable

Business Overview

Company Overview

Bronchitol - Cystic Fibrosis

• Background

• Main Therapeutics

Bronchitol

Bronchitol - Clearance of Thick Mucus

Mechanism of Action

Bronchitol - Cystic Fibrosis Clinical Program

Two Pivotal Phase III trials – same design

Bronchitol - Improvements in Lung Function

Change in lung function after 6 months Bronchitol treatment

Bronchitol - Exacerbation Incidence Reduced

Percentage reduction in exacerbation incidence after 6 months Bronchitol treatment

Bronchitol - Commercialisation (Europe)

Bronchitol - Adult CF Population Represents Major Clinical Need

Bronchitol - Pricing and Reimbursement Plan Development

Bronchitol - Pricing and Reimbursement Status

Bronchitol - European Infrastructure

Bronchitol - Targeted Launch Sequence

Bronchitol - US Cystic Fibrosis Opportunity

Regulatory

Marketing

Bronchitol - Bronchiectasis

Bronchitol - Bronchiectasis

Aridol[®]

SYNTARA LIMITED Capital/Financing Update 2011