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Phosphagenics Announces Positive Proof of Concept Results from,Studies Utilizing Company's Dermal Drug Delivery Technology

MELBOURNE, Australia, June 25, 2007 /PRNewswire-FirstCall/ -- Phosphagenics Limited (AIM: PSG) announced today positive results from pre-clinical studies of its TPM-02 dermal drug delivery technology formulated with retinoic acid, a leading topical treatment for severe acne and an active ingredient used in anti-aging cosmetics.

The proof of concept studies showed a three-fold increase in the amount of retinoic acid delivered into the skin when formulated with TPM-02 compared to a control formulation. Importantly, there was no retinoic acid detected in the bloodstream. TPM-02's ability to deliver an active ingredient to the dermis, the active layer of the skin, highlights the system's potential use in dermatologic and cosmetic products.

This study builds upon Phosphagenics' successes in delivering drugs, including insulin, through the skin without causing skin irritation, and further demonstrates that the TPM-02 technology can be utilized to deliver and hold an active ingredient in the skin, which is optimal in achieving maximum effectiveness from dermatological and cosmetic products.

"These proof of concept studies demonstrate the adaptability and flexibility of Phosphagenics' delivery technology, and we intend to leverage these results in pursuing opportunities in the dermatological and cosmetic fields," said Dr. Esra Ogru, Executive Vice President R&D at Phosphagenics. "The ability to deliver greater amounts of retinoic acid to the skin will produce more effective products for consumers, which is our objective in the areas of dermatology and cosmetics."

In addition to improving the dermal delivery of retinoic acid, Phosphagenics sees broader applications for its TPM-02 technology with additional pre-clinical studies showing potential in the dermal delivery of other compounds, such as coenzyme Q10 (CoQ10) and omega-3 fatty acids.

About Phosphagenics Limited

Phospha genics 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. The Company's 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 has been established in the US with the Bank of New York (PPGNY) for US investors to trade in Phosphagenics' stock on the "over-the-counter" market.

For more information, please visit Phosphagenics' web site at http://www.phosphagenics.com

CONTACT: Company, Dr. Esra Ogru, Executive Vice President Research &Development, +1-646-706-2155, or Harry Rosen, President and CEO,+1-646-715-3581, both of Phosphagenics Limited; or U.S. Investors andMedia, Brian Ritchie or Evan Smith, of FD, +1-212-850-5600, forPhosphagenics Limited

Web site: http://www.phosphagenics.com/

Ticker Symbol: (NASDAQ-OTCBB:PPGNY)

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