+ + data and comment + +, page-37

re: + + investor update + + Investor Update
For Release: 4 June 2004

We are pleased to provide this update on the company’s activities:
• Recruitment completed on AOD9604 Phase 2b clinical trial
• Development of ACV1 analgesic on track
• Early stage projects update
• Representation at Bio2004 in San Francisco
• Cash position enhanced by $4.9 million private placement
• Board Changes

AOD9604 Obesity Drug
Clinical Trial
As advised in an announcement on 2 June 2004, recruitment is now complete in Metabolic’s 300-patient
Phase 2b clinical trial on obesity drug AOD9604. The last patient is expected to finish treatment in September 2004 with reportable results available in late
November 2004.

A copy of the detailed announcement of this important milestone will be posted to shareholders with this update.

Manufacturing Development
As reported in the March 2004 update, preparations for supply of clinical trial material for Phase 3 trials and for market scale are proceeding well. Cost projections for market scale are very
favourable.

Fundamental Science of AOD9604
The availability of additional funds raised in May 2004 has enabled us to accelerate our research effort on the
basic biochemical mechanism of AOD9604. Further elucidation of the basic mechanism will add substantial
value to the data package as we approach the time for entering a partnering agreement at the end of 2004.

To this end we have contracted the assistance of Neuren Ltd. Neuren is a biotechnology company associated with the Liggins Institute, New Zealand’s
premier medical research institute.

Scientists in Neuren have particularly relevant experience in the biochemistry of growth hormone, the hormone from which AOD9604 has been modelled.
Neuren will conduct key in vitro experiments for Metabolic over a 6 month period to complement the
company’s own considerable in-house
effort in this area.

ACV1 analgesic
In late September 2003 we announced the in-licensing of an exciting new analgesic compound called ACV1,
which was discovered by Associate Professor Bruce Livett and fellow scientists associated with the University Metabolic Investor Update June 2004 Page 2
of Melbourne.

ACV1 has been entered into formal preclinical development.
The preclinical developments with ACV1 continue to proceed at an excellent pace, with very favourable
outcomes so far. The full preclinical safety package is on track to be completed as planned in Q3 2004, in
preparation for a filing for ethics approval in Q4 2004 to conduct the Phase I human clinical trial

Sufficient clinical-grade material for has been manufactured on time and development of an injectable
subcutaneous formulation for the human clinical trial is also well under way.

Early stage projects
Metabolic also has early stage projects under evaluation, occupying a minor component of our annual expenditure, but are an important part our strategy of
building a robust pipeline of compounds in clinical development to eventually join with AOD9604 and ACV1. Current activities have been focusing on
compounds for treating bone disorders and type 2 diabetes.

Bone disorders project – existing compounds not to proceed further, and seeking new opportunities in this field.
Metabolic has been assessing MBP0250 and MBP0260, compounds in-licensed from the University of Auckland in 2002. Based on unsatisfactory results of a
contracted bone fracture experiment in rats we have decided not to elevate these compounds into a full development program.

The company remains interested in the bone metabolism area, having accumulated substantial experience, and will be seeking new opportunities for
evaluation.

New in-licensing opportunity
The company is currently making a detailed assessment of a new inlicensing opportunity. The project involves a class of peptides showing novel effects in the nervous system. A decision is expected to be made by the
end of Q3.

Representation at Bio2004
Metabolic will be represented at Bio 2004 next week in San Fransisco by Chairman Arthur Emmett, Chris Belyea,
CEO, David Kenley VP Corporate Development and Andrea McCracken, Research Manager. This is the world’s premier biotechnology event and is a
valuable opportunity to progress partnering and contracting opportunities.

Chris Belyea will also give an oral presentation on Metabolic in the Business Forum.

Cash Reserves
We announced on 4 May 2004 a private placement of shares to two major existing shareholders, Queensland
Investment Corporation and Acorn Capital, raising $4.86m. This additional cash has enabled us to
activate several value-adding expenditures in the AOD9604 development plan, including additional
manufacturing studies with a European supplier and the abovementioned contract with Neuren Ltd on AOD9604
science.

Board Changes
Since the March Investor Update we have announced the retirement of Dr Frank Ng, the AOD9604 inventor, from the Board and on 7 May 2004 the appointment of Mr Patrick Sutch. Patrick is based in London and very
recently retired from a senior position at NASDAQ. His unique skills and contacts in international banking and
finance will be of great assistance to the company during the very important period in the company’s growth anticipated in the next year.

Next Update
The next update is scheduled to be provided in September 2004.

About Metabolic
Metabolic Pharmaceuticals Limited is a biotechnology company based in Melbourne, Australia, and listed on the Australian Stock Exchange (ASX: MBP).
The Company’s mission is to develop a pipeline of new pharmaceuticals for world markets, and currently has active programs aimed at treating obesity, pain
and type 2 diabetes.
AOD9604 for obesity is the company’s most advanced project, currently in Phase 2b human clinical trials. The
AOD9604 molecule is a small orally active peptide modelled on one part of the human growth hormone molecule.

Growth hormone naturally occurs in the
body and has profound stimulatory effects on fat metabolism, with levels of the hormone typically becoming suppressed in the obese state. Daily
dosing with AOD9604 restores suppressed fat metabolism by mimicking the fat metabolic effects of growth hormone.

Metabolic believes that AOD9604 has the potential to provide a safer and more effective pharmaceutical treatment for obesity than existing drugs.
Previous short-term clinical trials conducted on AOD9604, with single doses and multiple doses up to 1 week’s duration, have indicated that drug is orally active, well tolerated and shows the expected trends in weight loss.

Contact Information:
Chris Belyea
CEO
[email protected]
David Kenley
VP Corporate Development
[email protected]
Website www.metabolic.com.au
Phone +61 3 9860 5700