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Dated: 2 Nov:
PXS--PHARMAXIS Ltd.

Website: http://www.pharmaxis.com.au/

Chart: http://bigcharts.marketwatch.com/javachart/javachart.asp?symb=AU%3APXS&time=&freq=

Quarterly Report: Outflow: $2.04 mill. Cash: $22.9 mill

There is a trading halt in progress to raise more cash so as to fund completely Phase III of a trial. Current price: 83 cents
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Today's AFR- Street Talk:

Pharmaxis goes solo with Aridol

Respiratory disease drug developer Pharmaxis is achieving something few Australian biotechs can claim by taking its asthma diagnosis test Aridol through Phase III trials and funding the whole process itself.

Pharmaxis was in a trading halt yesterday while it raises $15million in a placement through the same broker it used when it floated last year, Wilson HTM. The biotech will not return to the screens until tomorrow, but is expected to pitch the issue at a 10per cent discount to its last close of 83¢, compared with its float issue price of 50¢.

The company's last cashflow statement shows it had $23million in cash at the end of the last quarter, so it is not in dire need of the money. Pharmaxis's strategy, unlike many biotechs, is to fund drug development through each stage, rather than bring in a big pharmaceutical company to pay for the privilege in return for the bulk of the returns.

Assuming the drug has some merit, the longer it can be funded internally, the more valuable the drug becomes to the big companies.

Aridol is but one part of the company's portfolio, and Pharmaxis also has high hopes for the Bronchitol product, a therapeutic treatment for cystic fibrosis and chronic obstructive pulmonary disease.

Aridol is a patented, inhaleable dry powder designed to identify patients with active asthma and provide information on the disease's severity and the effectiveness of treatment. The dose causes the airway to contract and the amount of air a patient can exhale in one second measures the severity of the illness. As it stands, doctors rely on older tests that can be inaccurate and cumbersome.

Asthma is obviously a significant burden on the health system, costing the United States some $US15billion ($20billion) last year and killing 4500 people there and 400 in Australia. Pharmaxis expects to start generating cashflow from Aridol within the next 12 months".
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Gerry
Holds PXS
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