Ann: Appendix 4C - Quarterly Report & Company Update, page-2

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"During the quarter, the Company continued to make progress with the development of its key anti-cancer product, PPL-1. Following the announcement of further key results, PharmAust can confirm that PPL-1 has significant activity in suppressing a cancer marker associated with numerous cancers. Executive Chairman of PharmAust, Dr Roger Aston stated that the Phase I/II human trial conducted at Royal Adelaide Hospital and Lyell McEwin Hospital in South Australia has shown these effects in “Advanced Patients” which is particularly exciting as this group has failed all “Standard of Care” meaning they have few if any treatment alternatives available.

Trial results to date show that there is a significant drop in a key cancer marker (p70S6K) in immune white blood cells, even at low doses of the drug. Inhibition of this marker is extensively correlated in peer review publications with a reduction in malignancy and the aggressive nature of cancer cells. The trials also confirm that PPL-1 has no adverse side effects, even at high doses. The next stage is for clinical trials with PPL-1 and chemotherapy. The Company has shown that PPL-1 can significantly enhance chemotherapy in model systems without associated enhancement of toxicity commonly seen with chemotherapy drugs. Today, if one includes palliative therapies, the chemotherapy market has topped US$100 billion1 ( 1Reuters).

If successful, this will be a defining trial for PharmAust as their drug will need to be initially used on the backdrop of the chemotherapy “Standard of Care”. The company is also undertaking trials on canines in a Sydney-based veterinary surgery specializing in the treatment dogs with cancer. The surgery, in association with Dr Angela Frimberger, a dog cancer specialist, is evaluating a combination treatment of PPL-1 and chemotherapy drugs. They have shown no adverse side effects"