NZP NEWS

Orphan Drug Designation

New Zealand Pharmaceuticals Ltd receives Orphan Drug Designation from the U.S. Food and Drug Administration for DEX-M74, a Treatment for Hereditary Inclusion Body Myopathy (HIBM)

Palmerston North, New Zealand, December 15, 2011 — New Zealand Pharmaceuticals Ltd (NZP), a leader in carbohydrate and bile acid manufacturing, has been granted orphan drug designation for its drug candidate, DEX-M74 by the U.S. Food and Drug Administration (FDA), for the treatment of Hereditary Inclusion Body Myopathy (HIBM).

“We are delighted to have received the Orphan Drug Designation,” said Andy Lewis, NZP’s Chief Executive Officer. “DEX-M74 represents an attractive development opportunity and the Orphan Drug Designation provides additional incentive for our Company to develop this much needed therapeutic product for this unmet medical need”. Mr Lewis added, "Orphan drug designation for DEX-M74 will provide us with market exclusivity, as well as financial and regulatory benefits, provided that the trials are completed successfully and the treatment receives FDA approval."

NZP and the Therapeutics for Rare and Neglected Diseases (TRND) program overseen by the National Institutes of Health’s Center for Translational Therapeutics (NCTT) are currently collaborating to complete all pre-clinical development activities needed for the Food and Drug Administration (FDA) to review an investigational new drug (IND) application for DEX-M74. Once the IND goes into effect, a phase I/II clinical is scheduled to begin in HIBM patients in mid-2012. It will be conducted at the NIH Clinical Center by Dr. William Gahl, M.D., Ph.D., clinical director and senior investigator in the intramural research program at the National Human Genome Research Institute (NHGRI).

About DEX-M74

DEX-M74 is intended to reduce or halt the progression of HIBM. In order to rapidly bring DEX-M74 to the people suffering from this disorder NZP exclusively licensed related intellectual property from the NHGRI. DEX-M74 is believed to be the leading clinical-stage therapeutic that directly targets HIBM. It is expected that the Orphan Drug Designation will contribute to the successful commercial development of this drug.

About HIBM

HIBM, also known as Distal Myopathy with Rimmed Vacuoles (DMRV), Quadriceps Sparing Myopathy (QSM) and GNE related muscle disease, is an ultra-rare disorder of the distal (limb) muscle tissue afflicting thousands of people clustered around the world but currently it is most commonly diagnosed in the USA, Japan and Israel. HIBM causes progressive muscle wasting that may begin in the teen years and often leads to very severe disability within 10 - 20 years of onset of symptoms.

Scientific papers on HIBM and a description of the disease can be found at: http://www.ncbi.nlm.nih.gov/omim/600737.

Additional information about HIBM and patient information is available at:

1. http://hibm.org/arm/index.php

2. http://www.neuromuscdisease.org/

About TRND and the NIH

DEX-M74 was one of the first molecules to enter development in the TRND program and the NZP-NHGRI joint research project was selected in 2010 to be one of only five TRND Pilot Projects (http://trnd.nih.gov/?page_id=59). TRND provides drug development expertise and resources required to produce compounds that can be tested in people.

Note: References to the National Human Genome Research Institute and the National Institutes of Health, its programs or its staff, should not be viewed as an endorsement or implied endorsement of NZP, its products or services.

About Orphan Drug Designations

The FDA's orphan drug designation is intended to encourage research and development of new therapies for diseases that affect fewer than 200,000 U.S. residents; www.fda.gov/ForIndustry/DevelopingProductsforRareDiseasesConditions/default.htm. As a designated orphan drug, DEX-M74 is eligible for tax credits based on its clinical development costs, as well as assistance from the FDA in guiding the drug through the regulatory approval process. The designation provides the opportunity for NZP to obtain U.S. market exclusivity for DEX-M74 for seven years from the drug's marketing approval date.

About New Zealand Pharmaceuticals Limited

New Zealand Pharmaceuticals Ltd (NZP; www.nzp.co.nz) is a manufacturing company, located in Palmerston North, New Zealand, dedicated to the supply of essential pharmaceutical intermediates and ingredients for therapeutic use. It is wholly owned by NZP Holdings Ltd, a company that also owns Dextra Laboratories Ltd, located at Reading, UK, (www.DextraUK.com) which provides a comprehensive service in the custom synthesis, analysis and manufacture of carbohydrates from bench to cGMP API manufacture. The Company’s drug development program for DEX-M74 is targeted to the treatment of HIBM. NZP is working with TRND to facilitate the rapid completion of the pre-clinical development program for DEX-M74 and will support Dr Gahl’s human clinical trial early in 2012.

NZP received the Orphan Drug Designation in a transfer of Designation ownership from the HIBM Research Group (HRG). NZP thanks Dr Daniel Darvish of the HRG for his co-operation and strong support for the development of DEX-M74.

The US Permanent Resident Agent for NZP is Aceto Corporation, Port Washington, New York.

This press release contains certain statements that may be forward-looking within the meaning of Section 27a of the Securities Act of 1933, as amended, including statements relating to the product portfolio, pipeline and clinical programs (collectively the “Products”) of New Zealand Pharmaceuticals Ltd (the “Company”), the market opportunities for the Products, the potential effectiveness of the Products based on the interpretation of past and/or planned pre-clinical or clinical data and the Company’s goals and objectives. Planned clinical trials are subject to FDA and other regulatory reviews prior to commencement. These statements are subject to numerous risks and uncertainties.

Contact:

Selwyn Yorke PhD, Business Development Manager