Life Therapeutics Reports More Than 7-Fold Increase in Sales For First Half of Fiscal Year Over Same Period Last Year.

SYDNEY, Australia & ATLANTA -- Major Turnaround Puts Company on Track to Achieve Forecast Goals

Life Therapeutics (ASX:LFE) today reported an increase of 746% in sales revenue for the first half of its Fiscal Year 2005, as compared to the first half of Fiscal Year 2004, based primarily on the strong performance of its Atlanta-based Life Sera business, acquired in January 2004. In addition, there was a 47% decrease in the company's net loss for this period over the same period last year.

"This confirms that the company's operations and financial performance have now experienced a complete turnaround," said Hari Nair, MD, Life Therapeutics Managing Director and CEO, "and it further validates the strategic re-positioning that the Board and management of the company have overseen in the last year. It also demonstrates that we are very much on track to achieve the financial objectives we stated for the 2005 financial year," Dr. Nair said.

Recently renamed Life Therapeutics, the company is now a global manufacturer of biologically-based niche therapeutics with four operating divisions, including Life Sera, Life Gels and Life Diagnostics in Atlanta as well as Life Bioprocess in Australia.

Financial Highlights: July 1 - December 31, 2004

--Sales revenues for the period of July 1, 2004 to December 31, 2004, were A$18.63 million (US.$14.51 million) representing an increase of 746% on sales achieved in the same period last year, due to the contribution of the new Life Sera business, as well as improved performance and growing contributions from the company's other three operating divisions.

--The vastly improved sales performance, combined with reductions and efficiencies gained from the recent restructuring initiatives, implemented during 2004, have resulted in a net loss for the period of A$2.82 million (U.S.$2.2 million), compared with the loss of A$5.3 million (US$4.13 million) for the same period last year. This represents a 47% decrease in the loss this period over the corresponding period last year.

--The Life Sera business unit made a profit of A$1.98 million (US$1.54 million) in the six months to December 2004 exceeding the A$2 million (US$1.56 million) profit forecast made at the time of acquisition for the full year by A$100,000 (US$77,900).

--Net Tangible Assets (NTA) have also increased by A$4.8 million (US$3.74 million) over the last six months, the first NTA improvement in 2 years. The NTA is now 31 cents per share, which represents an increase of 10 cents per share or 47% over the course of the first half of the year.

During the period, the company raised an additional A$3 million (US$2.34 million) through a private placement underwritten by ABN AMRO Morgans at A$0.60 per share and was able to reduce its debt by US$5.5 million through the re-negotiation of the Life Sera acquisition from Serologicals Corporation.

Under the terms of the original acquisition, Life Therapeutics issued US$13.3 million of notes to Serologicals in addition to the US$3.5 million initial cash payment. In December 2004, Serologicals agreed to reduce the amount owing to it by US$5.5 million (A$7.3 million) to US$6.7 million in return for a non-exclusive, non-commercial license to utilize the company's patented Gradiflow(R) technology.

As a result, the company's balance sheet position is strong with total debt of A$18.5 million (US$14.4 million) a reduction of A$9.5 million (US$7.4 million) in the six months to December 2004. Cash also increased during the six months to A$3.8 million (US$3.0 million) as of December 31, 2004, from A$0.4 million (US$0.3 million) as of June 30, 2004.

According to Life Therapeutics CFO John Manusu, "Continuing improvement in the performance of the Life Sera business was the foundation upon which these results were based; however, all of the company's operations have contributed with improved performances, with the Life Diagnostics division in particular achieving sales well in excess of budget forecasts. Overall, the sales revenues were unprecedented."

"The company was cash flow positive in three of the last six months and we are confident that our company will be cash flow positive on a consistent and ongoing basis for the remainder of the financial year," he said.

Operational Highlights: July 1 - December 31, 2004

--Joint venture agreement entered into with Italian blood fractionator Kedrion S.p.A for clinical development and manufacture of a new Hepatitis C hyperimmune Hepatitis C Immune Globulin.

--Licensing agreement with UK-based blood fractionator Bio Products Laboratory ("BPL") which will allow the company to license from BPL the patents, master cell banks and other intellectual property necessary for the development of rAnti-D as a recombinant replacement product for human plasma-derived Rh Hyperimmune. Anti-D Hyperimmune is used to treat Rh negative pregnant women to overcome incompatibility of blood types between the mother and child. If untreated this leads to termination of pregnancy.

--Establishing a new manufacturing division headed by Dr. Wolfgang Ruesseler (formerly President of Life Sera)

--Appointing Cyndi Tolman as President of Life Sera

--Sales revenue growth and reductions to operating costs at Life Sera resulting in profitable operations of the business in the period

--Significantly exceeding sales revenue budget forecasts for the Life Diagnostics division

--Substantial resolution of issues affecting the manufacturing process in the Life Gels division

--Successfully regaining major clients of the company, as follows:

--Bayer - customer of Life Sera

--Abbott - customer of Life Diagnostics

--Ortho Diagnostics (a subsidiary of Johnson & Johnson) - customer of Life Diagnostics

"A little more than a year ago, the newly installed Board and management of the company embarked upon a complete re-focus of the company's activities to become a niche therapeutics manufacturer," said Dr. Nair. "These results demonstrate the magnitude of what has been achieved over a relatively short period of time.

"This company is capable of operating on a consistently profitable and growing basis in the years ahead. We now look forward to reporting to shareholders and the market on further progress, as we continue to deliver on the goals we have set for our company and our people," he said.

NASDAQ Application

During the period, the company also announced that it had successfully established its US American Depositary Receipt (ADR) Level I program. This will enable trading in Life Therapeutics shares by US based investors and is an important initial step towards the company's ultimate objective of achieving a full listing of Life Therapeutics securities on NASDAQ.

About Life Therapeutics

Life Therapeutics is an international company with 180 employees, located in Australia and the United States with manufacturing operations in both countries and eight plasma donor centers in six American states. Life Therapeutics was formerly named Gradipore Ltd.

The company's four divisions include: Life Sera, the largest unit, Life Gels, and Life Diagnostics, in Atlanta, Georgia, and Life Bioprocess, in Frenchs Forest, New South Wales, Australia.

Life Sera collects specialty plasma, including Anti-D and Hepatitis B from a donor base of more than 5,000 in eight US collection centers. The plasma is then sold to blood fractionators who process it into hyperimmune therapeutic products.

Life Gels offers pre-cast gels for use in biological research and diagnostic testing, including a variety of electrophoresis systems. It also offers ultra-sensitive and rapid stains, molecular weight markers, and specially formulated buffers.

Life Diagnostics provides highly specific diagnostic tests for blood-clotting disorders and source plasma products for blood-borne diseases. Technologies include specialized blood coagulation tests to predict the risk of thrombosis and bleeding disorders. It also collects high-titer source plasma and serum used to make diagnostic kits.

Life Bioprocess directly markets the Gradiflow(TM) technology, a patented process that simultaneously purifies proteins and removes all viral pathogens, and infectious prion proteins.

For more information, visit our website at www.life-therapeutics.com.