VIRAX TO DEVELOP HEPATITIS B TREATMENT WITH
NEW YORK BLOOD CENTER

~ Virax expands development program into third product area
~ Prestigious US organisation seeks Virax collaboration
~ Visit www.virax.com.au for more information

Melbourne, Australia -- 19 August 2002 -- Virax Holdings Limited (ASX:VHL) announced today that it has signed a development agreement with the New York Blood Center to develop a novel treatment for hepatitis B (HBV) infection.

The new treatment is Virax's third product under development and is a significant addition to the company's portfolio of potential drugs in the development pipeline.

Dr. David Beames, CEO of Virax Holdings, commented, "The collaboration with Alfred Prince MD of the New York Blood Center will further broaden Virax's infectious disease treatment programs."

"The new development program will be based in part on Virax's Co-X-GeneTM technology," explained Dr Beames. "Virax is continuing its strategy of using the Co-X-GeneTM platform to add new products to its portfolio."

"It is gratifying that the Company's expertise in early development of immune therapies is being recognised around the world and that we have this opportunity to work with a scientist of the eminence of Dr Prince," said Dr Beames.

"Hepatitis B is an extremely serious and widespread problem for which there is currently no cure. Virax is pleased to have established this collaboration in an effort to meet this vital need."

"Preclinical work is expected to commence next year, with late 2003 as the goal for commencement of clinical trials."

Commercial terms of the development agreement have not been disclosed. Both parties will be involved in the development of novel candidate drugs. Virax will contribute its Co-X-Gene™ technology and viral vector expertise to commercialise the New York Blood Center hepatitis B research. In exchange, Virax will retain commercial rights to further develop the most promising leads.

New York Blood Center
New York Blood Center (NYBC) is the USA's largest independent blood distribution and services organisation, supplying blood and blood products to more than 200 hospitals and 20 million people in the greater New York area.

The NYBC is also the home of the prestigious Lindsley F Kimball Research Institute which has 18 laboratories dedicated to the study of blood and the prevention, treatment and cure of blood-borne and blood-related diseases. It has an impressive record of taking products from early stage development through to commercial products.

Internationally renowned hepatitis expert Alfred M Prince MD, heads the NYBC Virology Laboratory studying DNA-based HBV immunisation and immunotherapies. This laboratory was instrumental in developing a series of tests for the diagnosis of HBV in the 1960s and 1970s. It was also responsible for developing a plasma derived HBV preventative vaccine which is now in widespread use in Asia for mass immunisation

"Our collaboration with Virax is an important and promising step towards providing a much needed treatment for a devastating illness," said Dr Prince.

Hepatitis B
According to the World Health Organisation (WHO), hepatitis B is one of the most common infectious diseases in the world. The WHO estimates that over 2 billion people have been infected with hepatitis B virus worldwide, and more than 350 million are chronic carriers of the virus. These chronically infected persons are at high risk of death from cirrhosis of the liver and liver cancer, diseases that kill about one million persons each year.

While vaccines for preventing hepatitis B have been launched successfully in many instances, safe and effective treatments and cures have proven more difficult to develop. Existing hepatitis medications have shown an alarming tendency to become ineffective as the virus quickly develops resistance to the treatments. Therefore the need for a more effective product to treat hepatitis B has never been greater.

Virax Development Program Update
Virax is developing its Co-X-GeneTM platform to deliver a range of new therapies which harness the body's immune system to fight disease. The Company is currently involved in another two significant clinical development programs.

In the area of HIV/AIDS, the results of a Phase I/IIa human clinical trial of VIR201, an immune-based drug therapy are due at the end of this year. This is a major milestone for the company as it will provide preliminary safety and some immunogenicity data on the platform technology Co-X-GeneTM.

Virax has also just filed a patent application for a future prostate cancer treatment. Preclinical testing of this medication is due to commence at the beginning of 2003.

Melbourne-based Virax Holdings Limited is a publicly listed (ASX:VHL) development stage biotechnology company engaged in the commercial development of immune-based therapies for HIV/AIDS, cancer, other infectious diseases, and auto-immune diseases.

Virax's business strategy is to identify, in-license and take promising early stage biotechnologies through the early stages of clinical development towards the pharmaceutical market.
For further information, please contact:

Dr David Beames                           Ms Tracy Hocking
Chief Executive Officer                   Investor Relations Manager
Virax Holdings Limited                   Virax Holdings Limited
Phone: (03) 9854 6230                  Mobile: 0421 061166
E-mail: virax@virax.com.au           E-mail: trhocking@virax.com.au

VIRAX & NEW YORK BLOOD CENTRE HEPATITIS B COLLABORATION
QUESTIONS & ANSWERS

What is the significance of this announcement?
By expanding into a third product area Virax is opening a new avenue for future revenue. Such diversification, while based on the same platform technology, spreads the development risk and protects against major competition in a particular disease area.

What is the market for a drug of this kind?
It is difficult to assess at this point in time what the cost of this medication would be. However in 1997 it was estimated that hepatitis B management cost the US economy alone more than $US600million annually. Others suggest that the US market could be greater than $US1 billion.

Why did Virax choose to collaborate with the NYBC?
Virax's expertise in commercialisation of immune based medicines is recognised around the world. It is delighted to be working with an organisation with an international reputation for its expertise in Hepatitis B.

Is Virax working exclusively with the NYBC in the area of Hepatitis B?
Virax has dedicated all its resources in the area of HBV towards this collaboration with the NYBC.

What is the nature of the treatment under development? How will it work?
The proposed drug will be an immune based therapy. Like the other products in Virax's range it will stimulate the patients' own immune systems to fight the disease. Fred Prince and his colleagues at the NYBC have identified genes which will be incorporated into the Co-X-GeneTM platform to specifically target hepatitis B.

When is preclinical work likely to start?
Fred Prince has dedicated much of his life to this area of research. Preclinical work can start promptly, early next year.

Is the development taking place only in the United States?
Vector construction and GMP manufacture for drug trialling will be undertaken in Australia. Preclinical and clinical trials will be conducted in the US. This will leverage the funding and the expertise of the NYBC and it is also cost effective for most of the testing to take place in the US under an IND (FDA counterpart of CTX!).

When are the clinical trials due to start?
Once the preclinical data is available applications for clinical trials will be submitted. Thus the clinical trial will probably commence in late 2003/early 2004.

Where will the clinical trials take place?
We anticipate that the clinical trial will be conducted in the US however the possibility of a complementary Australian trial has not been excluded at this point in time.

Which market will this product be launched at first - US or Australian?
At the appropriate time Virax will be seeking a large pharmaceutical partner to take this drug through to market. Such decisions will be made in conjunction with a development partner and regulatory agencies.

Who are your competitors in this field? What stage are they at?
Several organisations around the world are working on cures for hepatitis B. Some of these are already in clinical trial, however, as the hepatitis virus continues to mutate at an alarmingly rapid rate some likely treatments may not be particularly effective in the long term. Many respected health authorities believe that immune based therapies have the best chance of defeating this disease. Virax and the NYBC are amongst the first to focus on producing a treatment using immune based medicine.

How much funds are being invested in this new product development program by Virax?
The commercial terms of the agreement cannot be disclosed at this point in time however program investment by both Virax and the NYBC is tied to achievement of milestones.

How does Virax justify this expansion and expenditure in the current market?
Virax has a long term business strategy of identifying and developing promising immune based therapies. The current focus is on development of products based on its Co-X-Gene™ technology platform. The company is conscious of the implications of the current falling market and is imposing restraints on expenditure where appropriate. However it is committed to strengthening its portfolio of products under development to enhance shareholder return in the future.

This page last modified:
November 7, 2003

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