psx - up 50% to 17.5c today

Strong recovery after long time in the doldrums!!

PSIRON LTD 2002-12-17 ASX-SIGNAL-G

HOMEX - Brisbane

+++++++++++++++++++++++++
As foreshadowed in the Company's recent releases to the market the
Company is pleased to announce the signing of a major biotech deal
with Canon Inc of Japan.

Psiron Ltd announces today that it signed a Memorandum of
Understanding (MOU) on the 16th of December 2002 with Canon Inc of
Japan.

The MOU provides that Canon Inc will be granted an exclusive
worldwide licence over the Vapotronics Intellectual Property relating
to inhaled drug delivery. Psiron recently acquired a majority holding
in Vapotronics.

The market for drug inhalation is forecasted to grow to US$22 billion
by 2005 and feedback received from the pharmaceutical industry
indicates that a marketshare of up to 25%, or US$ 5 billion, would be
achievable for this technology. Canon using the Vapotronics
Intellectual Property is expected to monopolise if not dominate this
new pharmaceutical business.

The commercial terms of the MOU include a US$ 1 million upfront fee
and royalties of 0.5% on all device sales and 10% of the royalties
received by Canon from pharmaceutical companies. Royalties in the
drug delivery systems industry are typically between 5 and 15% of
sales of the pharmaceutical company. The royalty stream payable by
Canon to Vapotronics is expected to be very substantial.

"A landmark agreement for the Australian biotechnology industry",
said Ron van der Pluijm, Psiron's Chief Executive. "The commercial
upside for our company based on the terms negotiated is enormous, and
with a company like Canon involved it dramatically increases the
potential".

"Very few agreements have been reached between Australian biotech
companies and respected major top 500 multinational such as Canon. It
shows that a strong IP position is key to achieving this".

Additionally the two parties have agreed to a collaborative venture
on the further pharmaceutical development of this drug delivery
system on terms yet to be agreed.

"Initial interest in the technology from the pharmaceutical companies
has been very promising and a contact from a major pharmaceutical
company has already been received by Psiron", said Ron van der
Pluijm.

Canon and Psiron expect to have the final agreements executed before
the end of March 2003.

For further enquiries, please contact:

R van der Pluijm
MANAGING DIRECTOR
Psiron Ltd
(02) 9659 8650