Research report in December states that they should be valued at...

Research report in December states that they should be valued at $64million. Current market cap is $9million!

http://www.virax.com.au/contact/downloads/IndpAnalyistRep_051221.pdf




27 March 2006
Announcement (222)

* Partly paid share payment due 3 April 2006
* Sale of Virax Shares
* Review of the Board and Management
* VIR201 Vaccine for Phase II HIV Trial released for testing
* Phase II HIV Trial Funding


Dear Shareholder

I would like to bring you up to date on a number of important matters, which are of interest to all of us.

Partly Paid Shares
The second and final payment of 7.5 cents per share is due on 3 April 2006 and is payable by shareholders who subscribed for partly paid shares earlier this year. A reminder notice was sent to those shareholders on 28 February 2006. If you hold partly paid shares and did not receive the notice please immediately contact Computershare Registry Services on 1300 669 814.

Sale of Virax Shares
The LUCRF Fund (formerly Labour Union Co-operative Retirement Fund) recently placed its holding of 3.8 million Virax shares on the market as part of a decision to restructure its portfolio as reported in the Herald Sun (Melbourne) on 18 March 2006. We have been advised that the sale of this parcel has been completed with 2.2 million shares having been bought by an existing Virax shareholder, who now holds approximately 10% of the company’s stock.

Review of the Board and Management
At the Annual General Meeting in November 2005 I referred to a review of the composition of the board and management in early 2006 to ensure we have the right structure, skills and network for the tasks ahead. After seeking advice, the Board has decided that it is not appropriate to make changes at this time. We propose to re-visit this matter later in the year.

Progress in Manufacture of VIR201 HIV Vaccine
Manufacture of the vaccine required for the proposed Phase II HIV trial has been completed in Germany, including the successful transfer of the manufacturing technology from our Australian facilities. The vaccine is now undergoing rigorous quality control checks and, imminently, will be subject to toxicology testing prior to its use in clinical trials.

Trial Funding
On previous occasions I have referred to the need to raise overseas funding for the Phase II trial of the HIV treatment vaccine. A team led by the CEO, Dr David Beames, and Mr John Chambers, a non-executive director, has had extensive discussions in London and on the continent to establish various viable options.

While funding has not yet been secured, progress is encouraging and it is being vigorously pursued.


Yours sincerely,

Dr Thomas W Quirk
Chairman

24 March 2006