AUSTCANCER TO ACQUIRE U.S. VACCINE DEVELOPER.

The Board of Australian Cancer Technology ("AustCancer") (ASX:ACU) has signed an agreement to acquire, through its wholly- owned U.S. subsidiary Adjuvantys Inc., the business of Galenica Pharmaceuticals Inc., a private U.S biopharmaceutical company, for US$5.0 million in a largely scrip offer.

Approximately US$12.0 million has been invested in the development of Galenica's proprietary technology which comprises three families of semi-synthetic immune enhancers, or adjuvants, used to stimulate the immune system. Employed as stand-alone therapeutics, or as an essential component in vaccines, these compounds have been or are currently being used in cancer vaccines in two Phase I and one Phase I/II clinical trials at leading cancer centres in the U.S.

Galenica also has a licensing agreement with Pfizer Animal Health for a series of animal vaccines in development which will use Galenica's adjuvant, and with Endocyte for a novel active immune therapy for kidney cancer. The first milestone payment pursuant to the Pfizer agreement is expected in 2005.

Pfizer Holdings Europe, an affiliate of Pfizer Inc., and SuperGen are both shareholders in Galenica.

AustCancer managing director Paul Hopper described this transaction as a "business making" deal for the company. "We have been working aggressively on expanding our portfolio of developmental drugs. Galenica brings us exclusive rights to a novel technology with considerable potential and two products candidates already in the clinic. Galenica's patent estate includes five granted patents and one pending" he said.

"Also, Galenica's technology platform is synergistic with what AustCancer is already doing - immune enhancers are critically important in vaccines and the development of vaccines is one of our core businesses," said Hopper.

Galenica's founder and internationally recognized vaccinologist Dr. Dante Marciani welcomed the proposed acquisition. "AustCancer and Galenica both have promising development programs in the area of cancer vaccines. The combined entity will commercially exploit this strong technology platform with current and new strategic partners, and continue the ongoing development of a number of novel vaccines in the U.S. and Europe," said Dr. Marciani.

As part of the acquisition, Dr. Marciani will join AustCancer and continue to run the business.

AustCancer sees its leading edge anti-idiotypic cancer vaccine Pentrys as an obvious candidate for evaluation with the Galenica adjuvants. Pentrys is in a Phase IIb clinical trial on prostate cancer patients at three leading Melbourne hospitals.

Under the terms of the acquisition, AustCancer will issue 1,955,758 ordinary shares of AustCancer stock at 48 cents per share and pay US$350,000 in cash upon closing; an additional US$3.0 million will be paid in 12 months time in AustCancer stock or cash at AustCancer's option; and a final US$1.0 million payment in AustCancer stock or cash at AustCancer's option will be made in 24 months time and will be subject to specific performance milestones. The acquisition is subject to final due diligence by both parties, approval by AustCancer shareholders and execution of definitive purchase agreements. A general meeting of AustCancer Shareholders will be held in mid July, to ratify the acquisition.

Galenica

Founded in 1996, and privately financed, Galenica recognized that multiple components are needed to develop effective vaccines. The company focuses on developing proprietary technology in immune enhancers, carriers and antigens - new therapeutic agents aimed at enabling physicians to modulate the body's immune system by providing protection and treatment against an array of diseases.

Galenica has assembled a strong technology base in medicinal chemistry and immunology for use in the expanding field of vaccines for cancer and infectious diseases.

For more information, call 205/969-5829 or visit http://www.galenicapharma.com.

GP1-0100, Galenica's lead immune enhancer, is currently being evaluated in two clinical trials. A Phase I trial at the University of Alabama at Birmingham (UAB) Comprehensive Cancer Center is evaluating a HER-2 vaccine containing GPI-0100 and a novel antigen for the treatment of breast cancer patients that have developed resistance against the drug Herceptin(tm). A Phase I trial, conducted by Endocyte, a Galenica licencee, at Baylor University Texas, is evaluating a GPI-0100 and folate antigen complex for renal cancer.

A Phase I/II trial at the prestigious Memorial Sloan-Kettering Cancer Center in New York was conducted in 2003 to evaluate a GP1-0100/antigen complex to prevent recurrence of prostate cancer in patients that have responded to the initial treatment.

Galenica also intends to commence a Phase I clinical trial using a CEA vaccine for colorectal cancer, at the UAB Comprehensive Cancer Center in 2005.

An immune enhancer or adjuvant is a critical vaccine component that is required to stimulate a protective or therapeutically effective immune response against cancer cells or infectious agents. Galenica's GPI-0100 series are safe semi-synthetic derivatives from certain natural saponins which have the capability of stimulating Th 1 immunity with production of antigen-specific cytotoxic T cells (CTL) that will seek out and destroy cells carrying abnormal markers such as viral or tumor antigens. Pre-clinical work has shown that the GPI-0100 derivatives can also be used as stand-alone drugs in cancer immunotherapy.

About Australian Cancer Technology

Australian Cancer Technology is a broadly based international oncology company developing a portfolio of high quality oncology-related projects that are at various stages of commercialisation. Cash generating businesses will provide the funds to exploit the potential of its leading products and to introduce promising pre-clinical and Phase I projects into the development pipeline. Its leading edge Pentrys anti-cancer vaccine successfully completed Phase I and Phase I/IIa trials at St. Vincent's Hospital Sydney and is undergoing a comprehensive Phase IIb trial with prostate cancer patients at three leading Melbourne institutions. Its US subsidiary, revisys, is launching a range of nutritional supplements designed by leading US scientists for people with special needs, including those undergoing cancer treatment. The company is also broadening its cancer therapeutic development pipeline, which currently includes a new oncology drug (CHK1 Kinase Inhibitor) to optimise the efficacy of chemotherapy and radiotherapy. AustCancer plans to complete a Level 1 ADR program on NASDAQ in the near future.

For more information, visit http://www.austcancer.com.au.