Progen Research Receives Ph.D. Scholarship Funding.

Business Editors & Medical/Health Writers

BRISBANE, Australia--(BW HealthWire)--March 28, 2002

Progen Industries (ASX:PGL) (Nasdaq:PGLAF) and Griffith University have been awarded a Linkage Grant from the Australian Research Council (ARC) to support the research collaboration between Progen and Professor Mark von Itzstein at Griffith University's Centre for Biomolecular Science and Drug Discovery in Queensland (CBSDD).

Linkage Grants are designed to `foster opportunities for postdoctoral researchers to pursue internationally competitive research in collaboration with industry, targeting those who have demonstrated a clear commitment to high quality research.'

This grant will provide a scholarship for a Ph.D. student to work with Professor von Itzstein and Progen's chief scientist, Dr. Vito Ferro on Progen's heparanase program. Prof von Itzstein was awarded the Australia Prize for excellence in the field of Pharmaceutical Design in 1996 for his role in the development of influenza drug Relenza(TM).

"Heparanase is a naturally occurring enzyme that plays an important role in cancer, autoimmune and inflammatory diseases such as arthritis and multiple sclerosis," explained Prof von Itzstein. "This grant recognizes the importance of this area of research and will significantly speed up our ability to develop an assay to examine precisely how heparanase works and which potential drugs may inhibit its action.

"While inflammation is a normal immune response, in the case of diseases such as arthritis we believe that inhibiting heparanase and restricting the amount of white blood cells that travel to and invade the disease site may relieve painful inflammation. Preclinical tests show that inhibiting the action of heparanase may play a significant role in arresting the spread of cancer," he said.

Under the terms of the Linkage Grant, the ARC will provide a total of AUD67 635 over three years matched by AUD30 000 from Progen Industries.

About Progen Industries

Progen Industries Ltd (www.progen.com.au) is a biotechnology company committed to the discovery, development and commercialization of small molecule pharmaceuticals for the treatment of a variety of diseases. The company's lead drug candidate, PI-88, is under development as a potential treatment for cancer and other diseases. The company's drug discovery efforts are focused on the development of potent, selective inhibitors of carbohydrate-protein interactions, which are implicated in a range of different diseases. The company has a world-class facility that manufactures drug candidates under Good Manufacturing Practices (GMP) for clinical trials.

This press release contains forward-looking statements that are based on current management expectations. These statements may differ materially from actual future events or results due to certain risks and uncertainties, including without limitation, risks associated with drug development and manufacture, risks inherent in the extensive regulatory approval process mandated by the United States Food and Drug Administration and the Australian Therapeutic Goods Administration, delays in obtaining the necessary approvals for clinical testing and for marketing of PI-88, patient recruitment, delays in the conduct of clinical trials of PI-88, market acceptance of PI-88 and other drugs, future capitals needs, general economic conditions, and other risks and uncertainties detailed from time to time in the Company's filings with the Australian Stock Exchange and the United States Securities and Exchange Commission. Moreover, there can be no assurance that others will not independently develop similar products or processes or design around patents owned or licensed by the Company, or that patents owned or licensed by the Company will provide meaningful protection or competitive advantages.