new key findings

Prana Biotechnology Presents New Key Findings on PBT2
PBT2 Alters Biomarkers and Rapidly Improves Cognition in two distinct models of Alzheimer’s Disease

MELBOURNE, Australia – June 7, 2007 – Prana Biotechnology Limited (NASDAQ: PRAN /
ASX: PBT), a biopharmaceutical company focused on the research and development of treatments
for neurodegenerative disorders, announced today that it will present new data on Prana’s lead Alzheimer’s disease (AD) drug PBT2 at the Alzheimer’s Association International Conference on Prevention of Dementia, in Washington D.C.

Professor Colin Masters MD, Executive Director and Laureate Professor Mental Health Research
Institute and The National Neuroscience Facility University of Melbourne and Director of the
Company will present the findings on June 9, in a lecture entitled "Alzheimer’s Disease: Abeta
amyloid as the principal molecular therapeutic and diagnostic target.” The presentation will include
data from manuscripts currently under preparation for publication by scientists from Prana, The
Mental Health Research Institute and The University of Melbourne.

While PBT2 is currently in Phase IIa development, the presentation will detail the results of the expansive mouse cognitive and biomarker studies recently completed on PBT2, including several key findings such as: PBT2 potently inhibits synthetic Abeta forming toxic soluble oligomers in vitro; PBT2 reduces Abeta oligomer levels detected in secretions from the brains of conscious, freely-moving AD transgenic mice within 4hrs of oral administration. This observation was
reproduced in two genetically distinct mouse models. PBT2 sharply improves cognitive performance in the Morris Water Maze for two genetically distinct mouse models of AD within 5 to 7 days of treatment; and The brains of the mice with improved cognition showed a substantial reduction in the biomarkers phosphorylated tau and Abeta, while simultaneously raising the level of the neuronal marker protein synaptophysin.

The amyloid plaques which are the main pathological feature of the brains of Alzheimer’s sufferers
are composed of aggregates of the Abeta protein. The Alzheimer’s research community largely supports the hypothesis that small, soluble, mobile aggregates (oligomers) of the Abeta protein are the cause of neurotoxicity in AD. PBT2’s ability to inhibit the generation and toxicity of these oligomers, as well as preventing the hyperphosphorylation of tau, while improving cognition, supports the disease modifying potential of PBT2 and other drugs in the Prana development pipeline.

Geoffrey Kempler, Chairman and Chief Executive Officer of Prana commented: “The results of these studies are encouraging and lend further support to the theories driving development of PBT2. We continue to improve our understanding of PBT2’s functionality and potential for disease modification as we move forward with formal clinical development. The ongoing PBT2 Phase IIa trial in early Alzheimer’s patients is on track to complete dosing by the end of this year and report early in 2008.”

The technique of in vivo brain microdialysis recently adopted as a research tool by Prana scientists
provides a unique insight into a dynamic metabolic process, allowing researchers to sample secretions from the brains of conscious, unrestrained test animals freely interacting with their environment. Sampling from the brains of genetically-engineered AD mouse models which have received single or sequential oral doses of PBT2, it was found that the drug exerts its inhibitory
effects upon the target molecule, Abeta, rapidly and reproducibly without causing "rebound" effects
observed with other drugs in development. Most particularly, a dramatic reduction was observed in
soluble oligomers of the size range identified in the literature as the most toxic form of Abeta amyloid
in AD.

The findings of these studies confirm and expand upon data presented by the Company at the International Conference of Alzheimer’s Disease in Madrid last July, describing potent effects of PBT2 on memory acquisition and retention in Alzheimer's mice.