QRxPharma raises A$25 million, announces A$10.4 million Rights Issue

Raise Also Strengthens Company Position For Partnering Negotiations

QRxPharma Limited (ASX: QRX and OTCQX: QRXPY) is pleased to announce the successful completion of a placement to institutions and professional investors raising A$25 million ("Placement") which was significantly oversubscribed. The Placement was very well supported by both existing and new investors including Australia, US and UK based fund managers. The Company has also launched a 1 for 20 non-renounceable rights issue to raise up to an additional A$10.4 million ("Rights Issue"). The combined Placement and Rights Issue (if fully subscribed) will raise gross proceeds of up to A$35.4 million.

The issue price under the Placement and Rights Issue is A$1.45 per share which represents a 10% discount to the last closing price of QRxPharma shares on 19 July 2011.

RBS Morgans Corporate Limited and Bell Potter Securities Limited were Joint Lead Managers to the Capital Raising.

QRxPharma intends to use the proceeds from the Placement and Rights Issue to progress MoxDuo® IR through FDA approval and commercialisation leading to product launch expected in 2012, to progress the development of MoxDuo controlled release (CR) and to provide additional working capital. The capital raising also puts the Company in a strong financial position as it negotiates with potential partners.

As announced to ASX on Monday 18 July 2011, the Company achieved another significant milestone as it commenced filing its New Drug Application (NDA) with the United States Food and Drug Administration (FDA) for MoxDuo IR for the treatment of moderate to severe acute pain, a $2.5 billion segment of the $8 billion spent annually on prescription opioids in the U.S. QRxPharma's product pipeline also includes intravenous (IV) and CR formulations which are in earlier stages of clinical development.

QRxPharma CEO and Managing Director, Dr. John Holaday commented, "We continue to make significant progress towards commercialising MoxDuo IR, having just initiated our NDA filing with the FDA.  With this capital raising, we are in an excellent position to further develop our portfolio of Dual Opioid ® pain products as we await FDA feedback on our NDA over the coming year.  These additional resources also place us in a solid position as we continue our partnering negotiations."

Dr. Peter Farrell, Chairman of QRxPharma, stated, "This capital raising will allow QRxPharma to further important milestones including the commercialisation of MoxDuo IR for acute pain management, as well as enabling significant progress with its MoxDuo CR formulation for chronic pain, which the Board believes will support partnering discussions and add significant shareholder value."

Rights Issue

The Rights Issue is non-renounceable giving all eligible QRxPharma shareholders the opportunity to subscribe for 1 new QRxPharma share for every 20 existing QRxPharma shares held on the Record Date (7.00 p.m., 2 August 2011) at the issue price of A$1.45 per New Share. This is the same price paid by investors in the Placement. Participants in the Placement will also be eligible to participate in the Rights Issue. The Rights Issue is not underwritten.

Eligible shareholders will be able to apply for additional new shares at the same issue price being A$1.45 per share.

New shares issued under the Rights Issue, and the Placement, will rank equally with existing ordinary shares on issue.

Post the Placement and Rights Issue (if fully subscribed), QRxPharma's net cash position (after expenses of the capital raising) will be A$41 million.

SOURCE QRxPharma Limited