Ethics Committee Approval to conduct a Phase I study in Breast, Prostate and Melanoma Cancer patients using CAVATAKTM administered intravenously

Viralytics is pleased to announce that it has received written Ethics Committee approval from a major Australian hospital for a 26 patient intravenous administration, Phase I, dose escalation trial, using CAVATAKTM in late stage Breast, Prostate and

Melanoma

cancer patients.

The Company announced the lodgement of an Ethics Committee submission for this trial on 21 November 2006.

This is the second human trial that the Company has received approval for in the last 8 weeks.

This intravenous trial will be the third human trial to be carried out by the Company. Viralytics announced on 20 November 2006, Ethics Committee approval for a 9 patient, Phase I intratumoural administration study in Melanoma patients and the Company has previously announced the completion a safety study in late stage Melanoma patients using a single dose administered intratumourally in 5 patients.

This 26 patient intravenous trial is designed to assess the safety of CAVATAKTM given intravenously, with secondary objectives being signs of efficacy. The trial is designed as a 26 patient dose escalation study in Stage IV breast, melanoma and prostate cancer patients bearing ICAM-1 and/or DAF expressing tumours that have failed or refused conventional anti-cancer treatments.

In animal models growing human, breast, prostate and melanoma tumours, CAVATAKTM has demonstrated significant efficacy when administered intravenously, and is the basis for this intravenous trial.

Whilst early stage melanoma, breast and prostate cancers can be successfully treated by various modalities, few effective treatments exist for cancers which have progressed to stage IV. No current therapies are curative. There is currently an unmet need for effective treatments for stage IV patients with these types of solid tumours.

Breast cancer is the most frequent cancer diagnosed in females with new diagnoses of over 200,000 patients per year in the USA. Prostate cancer is the most frequent cancer type diagnosed in males, with new diagnoses of over 200,000 patients per year in the USA. Melanoma is one of the fastest growing cancers based on frequency, with new cases of over 50,000 patients per year in the USA (statistics from American Cancer Society, "Cancer Facts and Figures, 2005")

Bryan Dulhunty
Executive Chairman

About Viralytics

Viralytics is listed on the Australian Stock Exchange (ASX code: VLA), Viralytics ADR trades under VRACY on the OTC market in the USA. Viralytics' principal asset is the intellectual property relating to CAVATAK™, an Oncolytic Virus technology. CAVATAK™ is the trade name for Viralytics' proprietary formulation of the Coxsackievirus Type A21 (CVA21). CVA21 is a human virus that occurs naturally in the community, and was first isolated over 50 years ago. Infection by CVA21 most often causes non-specific fever or upper respiratory infection ( "cold" like symptoms) and is self limiting, requiring no specific treatment for those infected to completely recover. In order to infect a cell, CVA21 must first attach to the outside of a cell, using a specific 'receptor' on the cell's surface (like a key fitting a lock). CVA21 uses two receptors to infect cells, intercellular adhesion molecule-1 (ICAM-1) and/or decay accelerating factor (DAF). Both of these receptor proteins have been extensively studied and are significant molecules of interest in cancer research, they have been demonstrated to be highly expressed on multiple cancer types, including: melanoma, prostate cancer, breast cancer, multiple myeloma and others. Animal models have demonstrated significant efficacy when CAVATAK™ is administered to animals growing a range of human cancer types