PBT2 for Alzheimer's Disease

Chairman and CEO, Geoffrey Kempler, discussed the success of Prana's PhaseIIa clinical trial of PBT2 in early Alzheimer's Disease and affirmed thatthe Company plans to enter larger clinical trials and advance towardscommercialization.

Earlier this year the Company announced preliminary trial results and thatthe primary endpoints of safety and tolerability were met. In addition,PBT2 showed improvement in executive function, an important aspect ofcognitive performance, and reduced the levels of abeta in the spinal fluidof patients. Abeta is a key protein associated with Alzheimer's Disease."

In July, the trial results were published in The Lancet Neurology journaland presented at this year's International Conference on Alzheimer'sDisease. The publication of the results has attracted a great deal ofattention from industry.

Mr. Kempler confirmed that the Company has entered into confidentialityarrangements with several large pharmaceutical companies and is in variousstages of discussion in respect of the licensing of its lead compound PBT2;noting that the positive outcomes from the trial were viewed as apre-requisite for advancing negotiations with a number of existing partiesas well as attracting the interest of new parties.

Second Indication for PBT2 - Huntington Disease

Prana has received a commissioned report from independent US based clinicalresearchers entitled, "The suitability and recommendations for the clinicaldevelopment of PBT2 in Huntington Disease." In the report, the researchersconcluded that PBT2 was a suitable candidate for investigation inHuntington Disease clinical trials.

Huntington Disease is a genetically inherited degenerative brain diseasecausing uncontrolled movements, loss of intellectual faculties andemotional disturbance.

Professor Jeffrey Cummings, Chairman of Prana's R&D Advisory Board,commenting on the report, said that "the recommendation of this report is areal plus for PBT2. There are currently no drugs available to patientswhich prevent or delay Huntington Disease. PBT2 has the potential toaffect the disease process and therefore to treat the disease."

Both Huntington and Alzheimer's Disease involve the toxic interaction ofmetals and specific protein aggregates in the brain (huntingtin protein inHuntington Disease and abeta protein in Alzheimer's Disease) that lead tonerve damage. PBT2, a Metal Protein Attenuating Compound (MPAC), exerts itsactivity by reducing this metal protein association thereby reducing thedamage to nerve tissue. Very importantly, PBT2 has a neuroprotectiveeffect.

The authors of the report concluded that "On the basis of a relevantmechanism of action, supportive non-clinical proof-of-concept studies inHuntington Disease models, preliminary evidence of clinical safety andtolerability, and promising clinical and biomarker outcomes in Alzheimer'spatients, PBT2 is recommended to proceed to clinical trials in HuntingtonDisease research participants."

Ultimately PBT2 may be used to treat both Huntington and Alzheimer'spatients.

Candidates for Use in Parkinson's Disease

Mr. Kempler discussed the Company's novel therapeutic drug candidates fromits Parkinson's disease program. Prana's drug design is based on theunderstanding of the relationship between metals, particularly iron, andthe metal induced oxidation of dopamine, believed to be involved in damageto the substantia nigra, the area of the brain affected in Parkinson'sDisease.

"Already, a lead candidate drug, PBT427, has demonstrated positive effectsin pre-clinical in vivo studies, protecting against damage to thesubstantia nigra."

These results have been presented and very well received at the prestigiousSociety for Neuroscience Conference, held last week in Washington D.C. Inaddition, a recent cover story of Science-Business eXchange, a weeklypublication distributed by the publishers of BioCentury and nature wasdedicated to a description of Prana's work on Parkinson's Disease.

About Prana Biotechnology Limited

Prana Biotechnology was established to commercialise research intoAlzheimer's disease and other major age-related neurodegenerativedisorders. The company was incorporated in 1997 and listed on theAustralian Stock Exchange in March 2000 and listed on NASDAQ in September2002. Researchers at prominent international institutions including theUniversity of Melbourne, the Mental Health Research Institute (Melbourne)and Massachusetts General Hospital, a teaching hospital of Harvard MedicalSchool, discovered Prana's technology.

For further information, please visit our web site at www.pranabio.com.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaningof section 27A of the Securities Act of 1933 and section 21E of theSecurities Exchange Act of 1934. The Company has tried to identify suchforward-looking statements by use of such words as "expects," "intends,""hopes," "anticipates," "believes," "could," "may," "evidences" and"estimates," and other similar expressions, but these words are not theexclusive means of identifying such statements. Such statements include,but are not limited to any statements relating to the Company's drugdevelopment program, including, but not limited to the initiation, progressand outcomes of clinical trials of the Company's drug development program,including, but not limited to, PBT2, and any other statements that are nothistorical facts. Such statements involve risks and uncertainties,including, but not limited to, those risks and uncertainties relating tothe difficulties or delays in financing, development, testing, regulatoryapproval, production and marketing of the Company's drug components,including, but not limited to, PBT2, the ability of the Company to procureadditional future sources of financing, unexpected adverse side effects orinadequate therapeutic efficacy of the Company's drug compounds, including,but not limited to, PBT2, that could slow or prevent products coming tomarket, the uncertainty of patent protection for the Company's intellectualproperty or trade secrets, including, but not limited to, the intellectualproperty relating to PBT2, and other risks detailed from time to time inthe filings the Company makes with Securities and Exchange Commissionincluding its annual reports on From 20-F and its reports on Form 6-K.Such statements are based on management's current expectations, but actualresults may differ materially due to various factions including those risksand uncertainties mentioned or referred to in this press release.Accordingly, you should not rely on those forward-looking statements as aprediction of actual future results.

Contacts:Prana Biotechnology LimitedT: +61 3 9349 4906