Phosphagenics Initiates U.S. Clinical Trials For Its Topical Retinoic Acid

Phosphagenics
Limited ("Phosphagenics") (ASX: POH; AIM: PSG; OTCQX: PPGNY)
announced the initiation of a human clinical trial for its lead
dermatological product, retinoic acid, a form of vitamin A. This trial
represents the Company's first clinical trial to take place in the U.S. and
denotes the commencement of the Company's planned expansion into targeted,
non-systemic delivery of drugs.



This trial follows a number of pre-clinical studies that demonstrated
both an increase in dermal absorption of retinoic acid when formulated with
Phosphagenics' proprietary drug delivery platform (TPM), and a significant
reduction in irritation scores. The clinical trial is a double blinded
study that will involve 90 subjects and is being conducted at Broomall,
PA-based cyberDERM Inc., a contract research organization focused on
developing and refining innovative bio-instrumental and computerized
methods for non-invasive analysis of skin structure, its functions and
effects of topical treatments. This trial is expected to be completed by
the end of the second quarter, 2008.



According to the American Journal of Dermatology, retinoic acid is
prescribed most often as the topical treatment of choice for acne. However,
it is poorly soluble, is associated with irritation and dryness of the skin
and, in some cases, can cause liver damage when substantial amounts enter
the systemic circulation. Irritation, though, is the most common adverse
effect and is observed in approximately 90% of users. Additionally,
according to The American Dermatological Association Inc., half of the
patients who end their retinoic acid treatment cycle prematurely do so
because of irritation. Consequently, practitioners are often reluctant to
prescribe retinoic acid in large quantities and, typically, marketed
formulations contain between only 0.025% and 0.1% of the active, which
often serves to dilute the effectiveness of retinoic acid. Despite this,
the U.S. market for topical prescription retinoids, such as retinoic acid,
for acne treatment exceeds US$300 million annually.



"A new formulation with the ability to deliver greater absorption of
retinoic acid, reduce irritation and dryness and limit systemic circulation
would significantly increase practitioners' flexibility in prescribing the
product," said Harry Rosen, President & CEO of Phosphagenics. "It would
enable physicians to prescribe greater doses of retinoic acid and/or
maintain current dosing while achieving improved efficacy and substantially
limiting adverse effects. Such a product would have the potential to expand
the current market, and would likely capture a significant proportion of
the existing market.



"In our previously completed pre-clinical studies, we were able to
consistently demonstrate an increase in retinoic acid delivered, a
reduction in irritation scores, as well as limit the delivery of retinoic
acid into the systemic circulation, which is important because of its side
effects. Our objective is to replicate these results in our human trial and
deliver a safer, more effective acne treatment to consumers as quickly as
possible."
















In addition to retinoic acid, Phosphagenics is developing a number of
other product candidates utilizing its targeted, non-systemic delivery
technology, including multiple anti-inflammatory and analgesic compounds.



About Phosphagenics Limited



Phosphagenics is a Melbourne-based, globally driven biotechnology
company focused on the discovery of new and cost effective ways to enhance
the bioavailability, activity, safety and delivery of proven pharmaceutical
and nutraceutical products.



Phosphagenics' core technology is built around the science and
application of phosphorylation, a process where the addition of a phosphate
group has been found to enhance the bioavailability, activity and safety of
existing pharmaceuticals and nutraceuticals, as well as to assist in the
production of drug delivery platforms.



Phosphagenics' shares are listed on the Australian Stock Exchange (POH)
and the London Stock Exchange's Alternative Investment Market (PSG). An ADR
- Level 1 program was established in the U.S. with The Bank of New York
Mellon (PPGNY) for U.S. investors to trade in Phosphagenics' stock on the
'over-the-counter' market. In July 2007, this was upgraded to the
International OTCQX, a new premium market tier in the U.S. for
international exchange-listed companies, operated by Pink Sheets, LLC.



For more information, please visit Phosphagenics' web site at
phosphagenics



Safe Harbor Statement



This press release contains forward-looking statements based on current
expectations of future events. If underlying assumptions prove inaccurate
or unknown risks or uncertainties materialise, actual results could vary
materially from the Phosphagenics' expectations and projections. Risks and
uncertainties include general industry conditions and competition; economic
conditions, such as interest rate and currency exchange rate fluctuations;
technological advances and patents attained by competitors; challenges
inherent in new product development, including obtaining regulatory
approvals; domestic and foreign health care reforms and governmental laws
and regulations.


Phosphagenics Limited

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