• Rights Issue Minimum Subscription Achieved
  
• Board Changes
  
• Despatch of Rights Issue Prospectus
  

Rights Issue Minimum Subscription
Virax wishes to advise shareholders that it has concluded a further Shortfall Placement Agreement with a current shareholder, who will subscribe for Convertible Notes up to the value of $250,000. This, added to the existing Shortfall Placement Agreements as referred to in the Convertible Notes Issue Prospectus date 19 December 2007, brings subscriptions up to the Minimum Subscription of $1.25 million.

The terms and conditions of the Shortfall Placement Agreement are substantially the same as the two previous Agreements described in the Prospectus.

Virax’s CEO, Dr Larry Ward said “This is a very encouraging development as the success of this raising will ensure the Company has sufficient working capital to continue its operations, on a sound footing and to implement the strategy outlined in the Prospectus. This includes:

• allowing the Company to benefit from the achievement of milestones and royalty payments under the Transgene Sub-licence;
  
• facilitate the South African clinical trial program of our HIV treatment vaccine VIR201; and
  
• permit the Company to participate in a corporate transaction to realise value for shareholders should an
  appropriate opportunity arise”.
  

We continue to work on financial and strategic matters to develop potential partnering arrangements and financing options.”

The context and further detail of the strategy is contained in the attached Chairman’s Letter from the Prospectus.


Board Changes
As proposed in the Prospectus, to pursue the new strategy and particularly to undertake a corporate transaction will require additional skills and experience, and once the Minimum Subscription was achieved it was agreed that the three current non-executive directors would resign after the appointment of the following incoming non-executive directors:

• Mr Michael Humphris, Chairman,
  
• Mr Ian Pyman, and
  
• Dr Albert Ting
  

This changeover is now being processed and will be announced to the market when completed.


Despatch of Rights Issue Prospectus
Shareholders are advised that copies of the Non–renounceable Rights Issue Prospectus date 19 December 2007 are being despatched today - 7 January 2008. Prospectus are being despatched only to eligible shareholders with residential addresses in Australia and New Zealand. A copy of that Prospectus is attached hereto or a copy may be found on the Company’s website www.virax.com.au.


About Virax
Virax, based in Melbourne, Australia, is a biopharmaceutical company engaged in the discovery and development of novel immunotherapeutic products for the treatment of cancer and chronic infectious diseases. The Company’s lead product, VIR201, an HIV/AIDS immunotherapeutic (therapeutic vaccine), recently cleared by the U.S. FDA to begin Phase II trials, has completed two successful clinical trials in Australia with additional international studies planned. The Company has also submitted an application to the South African regulatory authority (MCC) to conduct a Phase I/IIa trial of VIR201. Funding for the African trial has been contributed by a consortium of global and South African resource companies led by BHP Billiton.

Virax’s second product in development, VIR501, is an immunotherapeutic for the treatment of late stage hormone refractory prostate cancer. The Company has completed GMP production and is ready to commence clinical trials upon receipt of appropriate funding.

In March 2007 Transgene (Eurolist Paris: FR0005175080) executed a Licence Agreement with the Company for access to Co-X-Gene™ technology for use in two of Transgene’s immunotherapeutic products TG4001 – treatment for pathologies relating to human papilloma virus (HPV) infection that can lead to cervical cancer - and TG4010 – a treatment for non small cell lung cancer. This was reported to the ASX in the Company’s announcement of 13 March 2007 and is referred to as the “Transgene Sub-licence”. Both TG4001 and TG4010 are in advanced development with Phase III trials of TG4001 planned for 2008 and Phase IIb studies of TG4010 currently underway. Transgene has licensed TG4001 to the pharmaceutical company Roche for treatment of HPV related pathologies.

In March 2007 Transgene (Eurolist Paris: FR0005175080) executed a Licence Agreement with the Company for access to Co-X-Gene™ technology for use in two of Transgene’s immunotherapeutic products TG4001 – treatment for cervical cancer and TG4010 – a treatment for non small cell lung cancer. This was reported to the ASX in the Company’s announcement of 13 March 2007 and is referred to as the “Transgene Sub-licence”.

For further information contact:
Dr Larry Ward
CEO, Virax Holdings Limited
Melbourne, Australia
(03) 9854 6230

John Morrison
CFO, Virax Holdings Limited
Melbourne, Australia
(03) 9854 6230