BIOXYNE LIMITED 
By Suite 1001, 4 Bridge St
Sydney NSW 2000
P: +61 2 9247 0070
E: pscomans@bigpond.com
W: www.bioxyne.com
Australian Securities Exchange Companies Announcements Office, Exchange Centre,
Level 6, 20 Bridge Street, Sydney, NSW 2000
18 February 2013
• Acquisition of sales and distribution business VITALITY, a marketing distributor of high value medical devices in Australia and other key South East Asia regions.
• Initial products focus on Chronic Heart Failure and Type 2 Diabetes.
• Initial products are already CE marked and have received reimbursement approvals in key markets including Germany and the USA. In addition, the "DIAMOND" diabetes device has received Australia's TGA approval.
• A scalable business model with the opportunity to expand into key markets.
• Key management with a demonstrated track record of success in the Australian biotech sector, to manage the Company and join the Bioxyne board.
• Capital injection and support from major shareholder, Phillip Asset Management
Limited, of up to $2.5 million.
The Directors of Bioxyne Limited (BXN or the Company) are pleased to announce that BXN has entered into a non-binding term sheet for the proposed acquisition of 100% of the shares and convertible notes in VITALITY Pty Limited (VITALITY). BXN's major shareholder, Phillip Asset Management Limited acting as trustee for IB Australian Bioscience Fund I (PAM), is proposing to invest up to $2.5 million in BXN, by means of subscription for equity in BXN, at various stages of the proposed transaction.
As demonstrated below, the proposed acquisition is considered to be a material milestone for BXN. BXN Chairman, Tony Ho, commented:
"We look forward to the merger of VITALITY and BXN and in particular, the high value medical device business model, as supported by a management team that has a proven history in delivering value to shareholders. The proposed transaction and the support of our major shareholder will provide funding and the opportunity to bring together the BXN and VITALTY businesses into one strong unit."
About VITALITYBackground and overview
VITALITY was established in January 2012 as a sales and distribution business, initially focusing on high value medical devices in Australia and other key South East Asia markets. The founders of VITALITY - Greg Collier and James Campbell, both of whom had transitioned out of ChemGenex Pharmaceuticals after its sale to Cephalon for $230 million - began working towards the business vision of establishing a medical devices company with expertise in regulatory affairs, marketing and sales in the Asia-Pacific Region.
A key platform to the success of the business will be the expertise of its management team, the identification of high value medical devices that are available to the business on satisfactory terms and the ability to deliver a scalable business model.
A key focus of VITALITY is the Chronic Heart Failure and Diabetes markets in Australia and core markets in Asia - namely Singapore, South Korea and Taiwan - with plans to expand both the portfolio of products and the distribution footprint across the Asia-Pacific region.
Initial products
VITALITY currently has distribution agreements in place in relation to two high value medical devices, both based on breakthrough technologies - "Optimizer® III" and "DIAMOND". The technology of both devices is the subject of patents.
"Optimizer® III"
Optimizer® III was developed by Impulse Dynamics N.V. (Impulse) for the treatment of patients with Chronic Heart Failure (CHF). Approximately 26 million people globally suffer from CHF, of which approximately 2 million are located in Australia and the core markets, namely, Singapore, South Korea and Taiwan.
Early stages (I and II) of CHF can usually be treated through lifestyle intervention or pharmaceuticals, but later stages (III and IV) are treated with cardiac defibrillators, biventricular pacemakers, left ventricular assist devices and heart transplants. Optimizer® III provides a paradigm shift for later stage patients, working to remodel the heart and improve cardiac performance.
The basis of Optimizer® III was the discovery that Cardiac Contractility Modulation could be used to treat chronic, medically refractory CHF. Three independent randomised trials with Optimizer® III have shown significant impact on a patient's exercise tolerance and quality of life.
Optimizer III®:
• received regulatory approval in Europe (CE mark) in 2007 for patients with normal "coordinated" cardiac contraction, having a normal QRS duration (70% of the Type III & IV patient population). Reimbursement has been approved in key markets, including Germany and the USA;
2
• will soon be submitted for review by the Therapeutic Goods Administration (TGA) in Australia.
VITALITY management believes that the TGA is receptive to CE mark approved medical devices, as shown by procuring TGA approval of the DIAMOND device in a timely manner; and
• was launched commercially in 2010 in Germany. Commercial launch will occur in Australia after TGA approval is received. Significant sales in Australia are likely to be generated only after commercial launch.
"DIAMOND"
The Diabetes Improvement And Metabolic Normalization Device - or the "DIAMOND" device - was developed by Metacure Limited (Metacure) for the treatment of patients with Type 2 Diabetes.
The DIAMOND device was granted the CE mark in 2007, approved by TGA in April 2012 and is ready to be launched commercially in Australia.
DIAMOND is a patented implantable gastric stimulator that detects food intake into the stomach and electrically stimulates the antral stomach muscles to increase stomach contractility. This stimulation is believed to result in the activation of neuro-hormonal activity regulating glucose, insulin, glucagon, satiety and blood pressure similar to those activated by GLP-1 and other gastrointestinal hormones.
Clinical studies of the DIAMOND device found that HbA1c, a key indicator of Type 2 Diabetes, was reduced in 92% of the tested patients, with 43% of the patient group experiencing a reduction in HbA1c of >1.0% (the maximum HbA1c reduction was 3.0%). Significantly, the HbA1c level in 40% of patients reduced to
