Annual Financial Report 2007

RNS Number:8275O
Phosphagenics Limited
27 February 2008

27 February 2008



Company Announcement


                      Phosphagenics 2007 Financial Report
                                  Appendix 4E


Phosphagenics Limited ("Phosphagenics") (ASX: POH, AIM: PSG, OTCQX: PPGNY) today
released its Financial Report for the year ended 31 December 2007 and Appendix
4E. The highlights from which are as follows:


Year in Review

In 2007 Phosphagenics earned $4.4 million in revenue, up 28% from $3.4 million
in 2006. Royalties received amounted to $2.0 million, while $1.1 million was
attributable to government grants provided to fund Research and Development 
("R&D") projects.  The Company also raised $7 million in January 2007.

During the year the Company was awarded an AusIndustry Commercial Ready grant
for its insulin program and a Pharmaceuticals Partnerships Program (P3) grant,
with a combined total of up to $5.3 million over three years.

Phosphagenics made a commitment for 2007 to drive its R&D programs forward and
advance projects to clinical trials. The Company successfully delivered on this
goal by increasing its R&D expenditure to $8.4 million, up 78% from $4.8 million
in 2006. This increase was instrumental in supporting the achievement of a
number of R&D milestones in 2007 and Phosphagenics now has five clinical stage
products:

*           transdermal insulin
*           oral Phospha E(R)
*           transdermal oxycodone
*           transdermal morphine
*           dermal retinoic acid

The loss before income tax expense was, as reported under Australian
International Financial Reporting Standards, $8.8 million in 2007, an increase
of 44% from $6.1 million in 2006, which in view of the 78% increase in R&D
expenditure in 2007 was a positive outcome for the Company, which concluded the
year with $10.7 million in cash and cash equivalents.

The full Financial Report can be viewed on the Company's website using the
following link:

http://www.phosphagenics.com.au/documents/27_02_2008_Appendix_4E_Financial_Report.pdf


Looking Forward

In addition to progressing insulin, Phospha E(R), oxycodone and retinoic acid
clinical trials in 2008, Phosphagenics is developing a number of other product
candidates utilising its targeted, localised delivery technology, including
multiple anti-inflammatory and analgesic compounds.

The aim of these new product candidates is to use the precision and efficiency
of Phosphagenics patented drug delivery technology, TPM, to enhance the safe
delivery of approved topical drugs to a localised site of action, while
minimising exposure of the active to the systemic circulation - applying the
same technology as used in the recently announced retinoic acid clinical trial.

The Company will continue to work with world-leading collaborative partners,
such as Assistant Professor William Hsu from the Joslin Diabetes Centre, Harvard
Medical School, U.S., Professor Thomas Rades from the University of Otago, NZ,
and Nestle Nutrition, Vevey, Switzerland.



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
www.phosphagenics.com



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.



Company Contact Details:                    U.S. Investor and Media Contacts:
Mr Harry Rosen                              Brian Ritchie
Phosphagenics Limited                       Financial Dynamics
President & CEO                             Tel [phone]
Tel [phone]


Mary McSwiggan (Bennett)
Phosphagenics Limited
Investor Relations Manager
Tel [phone]




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            The company news service from the London Stock Exchange
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