Price up today on moderate (for MBP) vol.Given that some...

Price up today on moderate (for MBP) vol.

Given that some announcements are due in August, (see below) this either means that there is a whiff oc success or that buyers are punting on a possible positive outcome of the trials.

AnnaPMETABOLIC PHARMACEUTICALS LIMITED 2002-05-22 ASX-SIGNAL-G

HOMEX - Melbourne

+++++++++++++++++++++++++
As has been our practice since formation in 1998, Metabolic remains
committed to providing frequent and detailed updates for investors.
Following our February update and several subsequent announcements,
your board is pleased to provide this May update.

SUMMARY

* The Phase 2A oral administration clinical trial of AOD9604 obesity
drug has commenced on schedule and results should be available in
August;

* ADD9918 and ADD9922 diabetes compounds are proceeding through
animal efficacy tests

* MBP0250 and MBP0260 osteoporosis compound synthesis is nearly
complete and animal efficacy tests are ready to start;

* MBP0201 iron chelator compounds have been synthesized and animal
efficacy experiments are in progress;

* The company now has cash reserves of $12.6 million through the
recent placement, the share purchase plan and exercise of options.

AOD9604 for OBESITY

ADD9604 is a peptide analog of a fragment of human growth hormone,
with the potential to provide a safe and effective pharmaceutical
treatment for obesity.

The Phase 2A oral human clinical trial of A0D9604 commenced today on
schedule.

This is a double-blind single-dose trial of similar design to the
intravenous trial reported in February which showed very encouraging
positive results. The purpose of the oral trial is to assess safety
and activity of AOD9604 administered orally in capsules. Sixteen
patients will each receive a single oral dose of 0, 9, 36 or 54 mg of
AOD9604 in random order, on four occasions separated by two-weekly
intervals.

The results from this trial should be available in late August.

If the results show oral activity of AOD9604 in humans, as we expect
from observations in animals, a multiple dose oral clinical program
will commence as soon as possible thereafter. This program is planned
to involve an initial seven-day oral safety study followed by a
one-month oral weight reduction study. These studies will help
determine the expected rate of weight loss after daily dosing and the
optimal dose for pivotal longer term Phase 2/3 studies.

If the results of the current study show that AOD9604 is not active
orally in humans, we plan to commence a multi-dose safety study via
intravenous administration. This would be required to support the
subsequent human testing of a slow-release depot formulation
administered once per month by subcutaneous injection. A depot
formulation would be a feasible and marketable alternative to oral
delivery.

ADD9918/ADD9922 for TYPE II DIABETES

ADD9918 and ADD9922 are analogs of fragments of insulin that cause
potent insulin sensitization in animal models of type 2 diabetes.
They have the potential to provide a new treatment for type 2
diabetes.

As previously reported, our attentions have narrowed to two candidate
compounds, codenamed ADD9918 and ADD9922, which produced favourable
results from preliminary toxicity tests. After conducting comparative
animal efficacy experiments, the next stage is to select one of these
two compounds for a full preclinical program.

These efficacy experiments are underway and while we are obtaining
useful data, this part of the program is taking longer than expected.
We anticipate reporting substantial progress in the next quarter.

MBPO250 and MBF0260 for OSTEOPOROSIS

MBPO250 and MBPO260 are fragments of the hormones amylin and
adrenomedullin with potential for the treatment of osteoporosis.
These compounds were exclusively licensed from the University of
Auckland in March this year.

Synthesis of sufficient quantities for animal trials with both
compounds is nearly complete and contracts to start a pivotal animal
efficacy experiment are in place. This experiment should finish near
the end of this year. The objective is to prove bone building in a
rat model of osteoporosis similar to the bone building in mice
already reported in published work by the inventors. A positive
outcome would result in activation of a fall preclinical program on
the most promising of the in-licensed compounds commencing in early
2003.

MBPO201 for IRON OVERLOAD

MBPO201 is a new compound with potential to provide an effective oral
drug for iron overload diseases. This invention was exclusively
licensed from Sydney's Heart Research Institute in March this year.

Progress at the Heart Research Institute has been faster than
expected, where three candidate compounds have been synthesised and a
program of animal efficacy experiments has started. The experiments
should finish before the end of this year. The aim is to prove that
at least one of the three compounds produces enhanced iron excretion
after oral administration to iron-overloaded mice. If this is
established, we will select a lead compound and start a full
preclinical program in early 2003.

EXECUTIVE RESPONSIBILITIES

Dr Evert Vos, previously Executive Director of Medical and Regulatory
Affairs, has now retired from full-time responsibilities. Dr Vos
plans to settle in North America and will continue on the Board of
Metabolic. In addition he will continue to be available to the
company as part-time consultant and Medical Director. In this role he
will advise the company on medical issues which arise in the conduct
and design of clinical trials, and assist the company with increasing
our profile in the US.

The Board thanks Dr Vos for his tireless efforts since the formation
of Metabolic in steering the successful ongoing development of
AOD9604, and looks forward to his continuing association with the
company.

Caroline Herd, who was appointed in November last year as Associate
Director - Drug Development, has now taken over as Clinical Director,
responsible for design and conduct of the clinical trial program. Dr
Herd came to us from the Clinical Drug Development section at
AstraZeneca in the UK, and has a PhD in pharmacology from the
University of Adelaide.

CASH POSITION

As announced on Monday 20 May, the Shareholder Purchase plan raised
$547,445 from the issue of 720,322 shares at the price of $0,76. In
addition, $346,255 was raised from the early exercise by a
shareholder of 1,731,276 MBPO options. The company now has cash
reserves of approximately $12.6 million.

For scientific background to these projects, a copy of our corporate
presentation and other information, please visit our website
www.metabolic.com.au or phone:

Managing Director - Chris Belyea +61 3 9826 0949 Investor Relations -
David Kenley +61 3 9826 0949