Converting Note Placement to Raise $1.6 Million

PERTH, AUSTRALIA: October 16, 2012 – Phylogica Ltd (ASX:PYC, XETRA:PH7), an Australian peptide drug discovery company, announced today that it has agreed to raise $1.6 million of new capital through a placement of 16,000 unlisted converting notes each with an issue price of $100 (“Converting Notes”). The key highlights of the offering are:

• New capital of $1.6 million provides Phylogica with the balance sheet security to finalise anticipated R&D collaborations from a strong negotiating position.
• New shares to be issued at up to 5.3 cents1 per share, being a 104% premium to the recent market price2, thus seeking to minimise dilution of existing shareholders at the current market price
• Participation in the Converting Note transaction by the Company’s largest shareholder, the Hockings Family, demonstrates confidence in both the management team and the Company’s value proposition.

The issue of the Converting Notes is subject to shareholder approval, which will be sought at the Company’s annual general meeting on 22 November 2012. The proposed Converting Note holders comprise Phylogica’s largest shareholder, the Hockings Family; other long-term shareholders; Directors, including Dr Wilson, Dr Watt and Mr Woolf; the Chief Operating Officer, Dr Hopkins, and some new investors.
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