Advancing “ oral ” treatments for bone & joint diseases especially for osteoporosis and arthritis

1. Advancing “oral” treatments for bone & joint diseases especially for osteoporosis and arthritis Paul Hopper Executive Chairman February 2006

2. Safe Harbor Statement This presentation contains forward-looking statements that involve risks and uncertainties. These forward-looking statements are not guarantees of Bone Medical Limited’s future performance and involve a number of risks and uncertainties that may cause actual results to differ materially from the results discussed in these statements. Factors that might cause the Company’s results to differ materially from those expressed or implied by such forward-looking statements include but are not limited to, development and commercialisation of the Company’s product portfolio; development or acquisition of additional products; and other risks and uncertainties. Bone Medical Limited undertakes no duty to update any of these forward-looking statements to confirm them to actual results.  2006 Bone Medical Ltd. CONFIDENTIAL

3. Corporate Overview • Founded December 2002 • Novel, proprietary oral drug delivery technology for musculoskeletal disease • Phase I/IIa clinical trial for oral calcitonin- Capsitonin- completed • Phase I clinical study for oral parathyroid hormone- Perthoxal completed • Listed Public August 2004 • Ticker: (ASX:BNE) (ADR:BMEDY.PK) • Office: Bentley, WA, Australia 6102 • Shares Outstanding: 64,291,032 (Ordinary); 9,999,204 (Preferred C) • Market Cap (13-2-06): AU$19.3 million (US$15.2 million) • Over AU$5.1MM spent to date developing two core compounds • Approximately AU$1.4 million cash on-hand CONFIDENTIAL  2006 Bone Medical Ltd.

4. Investment Highlights • CapsitoninPhase I/IIa clinical trial for “osteoporosis” completed • Capsitonin Pre-IND meeting held with FDA in December 2005 • Rapid regulatory process / strategy for Capsitonin- bioequivalence & 505(b)(2) NDA submission • Perthoxal- oral parathyroid hormone for “osteoporosis” Phase I clinical study completed • New, unique oral formulation technology with robust IP and long patent life • “Multi-billion” dollar market opportunity(s) for both Capsitonin and Perthoxal • Balanced portfolio between lower-risk drug delivery programs and potential breakthrough future treatments • Experienced management with experience in science, management and capital markets CONFIDENTIAL  2006 Bone Medical Ltd.

5. Market Opportunity • Osteoporosis • Approximately 200 million women worldwide • Incidence is expected to “double” in the next 50 years • Estimated US$48.0 million spent to treat disease in North America and in Europe • Osteoarthritis • Over 20 million people in the U.S. alone • Most common form of arthritis, approximately 5-10% of population will develop • Treatments • Calcitonin (sCT): US$600 million • Injectable and Nasal forms only (no oral form available) • Parathyroid Hormone (PTH): US$450 million • Injectable form only (no oral from available) Sources:International Osteoporosis Foundation, CDC, Mayo Clinic, NIAMS, National Center for Chronic Disease Prevention and Health Promotion CONFIDENTIAL  2006 Bone Medical Ltd.

6. Market Need • Osteoporosis • Painful and debilitating • Worldwide cost burden to reach US$131.5 billion by 2050 • Only 1 in 2 vertebral fractures diagnosed by a physician • Less than 20% of Osteoporosis patients receive timely treatment • Osteoarthritis (and rheumatoid arthritis) • Painful, physically and emotionally debilitating • 25% of persons “cannot” perform major daily activities (e.g., lifting, climbing stairs) “There are no oral formulations available for calcitonin or parathyroid hormone limiting the number of treated patients” CONFIDENTIAL  2006 Bone Medical Ltd.

7. Studies (trials) designed to support bioequivalence and 505(b)(2) FDA submissions Product Pipeline Pre-clinical Phase I Phase II Phase III NDA R&D Products / Compounds Capsitonin(“oral” sCT) Therapeutic peptide 1° Osteoporosis, 2°Osteoarthritis Perthoxal(“oral” PTH) Therapeutic peptide Osteoporosis BN007 (collagen tolerance) Oral Immune therapy Rheumatoid Arthritis BN006 (TNF down-regulator) BN008 (Osteoclast down-reg) BN005 (Osteoblast up-reg) Novel therapeutic entities Rheumatoid Arthritis, Osteoarthritis CONFIDENTIAL  2006 Bone Medical Ltd.

8. Mechanism of Action: Calcitonin aids in the “formation of new bone” by interfering with osteoclast activity. Use/Indication: Osteoporosis, Osteoarthritis Side Effects: Mild, some joint ache, headache CapsitoninOral Capsule (synthetic salmon calcitonin peptide) Synthetic peptide of salmon calcitonin Lead Compound “Calcitonin has been used Safely as a treatment for osteoporosis for over 30 years!” CONFIDENTIAL  2006 Bone Medical Ltd.

9. Enteric coating for easy swallowing Capsule Contents: Drug, stabilizers, solublizers, protease inhibitors, various GRAS pharmaceutical excipients Improved transcellular absorption Capsule contents ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Gastric (stomach) cellular surface Novel Oral Formulation New, proprietary oral drug delivery technology • Recombinant peptides (Capsitonin and Perthoxal) are protected from gastric degradation • Released in the upper intestine in an area with high peptide absorption • Utilizes existing approved substances and/or excipients • Opportunity for rapid 505(b)(2) FDA submission CONFIDENTIAL  2006 Bone Medical Ltd.

10. Novartis Study minutes hours Decrease in plasma calcium following oral (tablet) administration of Capsitonin in pigs compared to subcutaneous (injection) Increase in total plasma Capsitonin following oral (tablet) administration of to primates CapsitoninOral Capsule • Background • Existing injectable and nasal formulations of calcitonin are difficult to administer affecting patient compliance and limiting its use as a treatment option • To date, an “oral” formulation of calcitonin has been unable to be developed • Capsitonin • Pre-clinical / Proof-of-concept CONFIDENTIAL  2006 Bone Medical Ltd.

11. Capsitonin - Phase I/IIa • Study Objective • Phase I/IIa open label safety & tolerability and preliminary efficacy / activity • Study Design • 12 post-menopausal, female volunteers • Sequential, cross-over design • Positive control (Miacalcin Nasal) – active comparator • 1250iu Capsitonin • 2500iu Capsitonin • Measurement of key biomarkers: serum calcitonin, serum CTX, and blood calcium CONFIDENTIAL  2006 Bone Medical Ltd.

12. Capsitonin - Phase I/IIa • Study Results / Outcomes • The study showed that Capsitonincan be delivered orally and exert a statistically significant biological effect • Measurement of markers of bone breakdown in the blood showed that Capsitonin reduced bone destruction • Calcitonin (in a small number of patients) was measured in blood • Calcium levels in the blood were also reduced as expected • Safe and well tolerated CONFIDENTIAL  2006 Bone Medical Ltd.

13. PerthoxalOral Capsule (synthetic parathyroid hormone peptide) Synthetic peptide of the human hormone Lead Compound “The bone forming effects of parathyroid hormone have been known for 70 years!” • Mechanism of Action: • A controlling agent for maintaining normal calcium levels in the blood for strong bone formation of new bone. • Use/Indication: • Osteoporosis • Side Effects: • Some leg cramps, mild headache CONFIDENTIAL  2006 Bone Medical Ltd.

14. 10 12.0 500ug PTH orally 8 50ug PTH s.c. injection 6 8.0 Calcemia [% change] 4 4.0 2 0 0 1 2 3 4 5 6 0.0 Time [hours] 0 1 2 3 4 5 6 Increase in plasma calcium following oral (tablet) administration of PTH in primates compared to subcutaneous (injection) Increase in total plasma calcium following oral (tablet) administration of PTH to primates Perthoxal Oral Capsule • Background • Existing injectable and nasal formulations of parathyroid hormone (PTH) are difficult to administer affecting patient compliance and limiting its use as a treatment option • To date, an “oral” formulation of PTH has been unable to be developed • Perthoxal • Pre-clinical / Proof-of-concept: CONFIDENTIAL  2006 Bone Medical Ltd.

15. Perthoxal - Phase I • Study Objective • Phase I open label safety & tolerability study and preliminary pharmacodynamic effects • Study Design • 18 post-menopausal, female volunteers • Sequential, cross-over design (12 of 18 patients only) of two different formulations of Perthoxal • Positive control (s.c. injected PTH) – active comparator • Formulation (1) 450ug Perthoxal • Formulation (2) 400ug Perthoxal • Measurement of key biomarker: serum calcium concentration CONFIDENTIAL  2006 Bone Medical Ltd.

16. Perthoxal - Phase I • Study Results / Outcomes • The study showed that Perthoxal was able to be delivered safely and that measurable amounts of calcium were able to be detected in serum • One Perthoxal formulation showed levels of measurable calcium • Both Perthoxal formulations were shown to be safe and well tolerated CONFIDENTIAL  2006 Bone Medical Ltd.

17. Competition • Calcitonin • Nasal Spray(commercially available) • Miacalcin® Nasal (Novartis), Fortical Nasal (Unigene Laboratories), Calcitonin-Salmon Nasal Spray (Nastech) • Injectable(commercially available) • Forcaltonin® (Unigene Laboratories) • Oral • Emisphere Technologies (w/Novartis), Unigene Laboratories Nasal Spray CONFIDENTIAL  2006 Bone Medical Ltd.

18. Competition • Parathyroid Hormone • Injectable(commercially available) • Forteo (Lilly) • Nasal Spray • Nastech Pharmaceuticals • Oral • Zelos Therapeutics, Emisphere Technologies (w/Novartis), Unigene Laboratories (w/GSK) Injectable pen device CONFIDENTIAL  2006 Bone Medical Ltd.

19. Intellectual Property • Bone Medical has been granted exclusive worldwide rights to oral drug delivery technology in the field of musculoskeletal disease under three patent pending applications for each product: • the use of aromatic alcohols to enhance the uptake of peptides across the small intestine; • pharmaceutical compositions containing certain proportions of aromatic alcohols; and • methods of solubilisation. CONFIDENTIAL  2006 Bone Medical Ltd.

20. Key Management Corporate SecretaryGabriel Chiappini Board of Directors Capitalization, governance, BD Innovate Oncology, Evolve Oncology, R&D, formulation, development Proxima R&D, development, regulatory Covance, Parke-Davis Operations, commercialization, BD, development Mitos Pharmaceuticals, Pfizer, Roche CONFIDENTIAL  2006 Bone Medical Ltd.

21. Outsource clinical development & manufacturing “Hybrid” distribution & promotion 1 2 Partner Capsitonin & Perthoxal (out-license and/or co-promotion) “Hybrid” distribution & promotion 2 2 Selectively develop analogs & acquire oncology compounds “Hybrid” distribution & promotion Selectively develop and out-license compounds in pipeline 3 2 Business Strategy • Minimal infrastructure cost and savings • Corporate / management focus • Rapidity to market and market up-take • Minimize infrastructure build & capital needs • Broaden drug pipeline and product offerings • Increase revenues and corporate growth CONFIDENTIAL  2006 Bone Medical Ltd.

22. Value Proposition • “Two” products in clinical trials: • Capsitonin- Oral calcitonin for “osteoporosis” and “osteoarthritis” • Perthoxal- Oral parathyroid hormone for “osteoporosis” • Rapid regulatory process: potential bioequivalence and/or 505(b)(2) FDA submissions • Multi-billion dollar market opportunity(s) • New, unique oral formulation technology with robust IP and long patent life • Balanced portfolio between lower-risk drug delivery programs and potential breakthrough future treatments • Experienced management CONFIDENTIAL  2006 Bone Medical Ltd.

23. Contact Paul Hopper Executive Chairman Tel: +1 858 200-5636 (San Diego, CA) Hopper@bone-ltd.com Patrick J. Mallon VP Commercial Operations Tel: +1 858 205-2501 (San Diego, CA) pmallon@bone-ltd.com CONFIDENTIAL  2006 Bone Medical Ltd.

24. Contact Leon Ivory Director Tel: +61 8 9355 5123 (Western Australia) leonivory@bone-ltd.com Ed Daquino Chief Financial Officer Tel: +61 8 9355 5123 (Western Australia) eddaquino@bone-ltd.com CONFIDENTIAL  2006 Bone Medical Ltd.