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

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. CONFIDENTIAL  2006 Bone Medical Ltd.

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.

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.

Market Opportunity Osteoporosis Osteoarthritis Treatments 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.

Market Need Osteoporosis Osteoarthritis (and rheumatoid arthritis) 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.

Product Pipeline Capsitonin (“oral” sCT) Perthoxal (“oral” PTH) Products / Compounds R&D Pre-clinical Phase I Phase II Phase III NDA Capsitonin (“oral” sCT) Therapeutic peptide 1° Osteoporosis, 2°Osteoarthritis Studies (trials) designed to support bioequivalence and 505(b)(2) FDA submissions 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.

“Calcitonin has been used Lead Compound “Calcitonin has been used Safely as a treatment for osteoporosis for over 30 years!” Capsitonin Oral Capsule (synthetic salmon calcitonin peptide) Synthetic peptide of salmon calcitonin 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 CONFIDENTIAL  2006 Bone Medical Ltd.

Enteric coating for easy swallowing Novel Oral Formulation New, proprietary oral drug delivery technology Enteric coating for easy swallowing Capsule Contents: Drug, stabilizers, solublizers, protease inhibitors, various GRAS pharmaceutical excipients Gastric (stomach) cellular surface ● Capsule contents Improved transcellular absorption 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.

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 Decrease in plasma calcium following oral (tablet) administration of Capsitonin in pigs compared to subcutaneous (injection) minutes Increase in total plasma Capsitonin following oral (tablet) administration of to primates Novartis Study hours CONFIDENTIAL  2006 Bone Medical Ltd.

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.

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.

effects of parathyroid Lead Compound “The bone forming effects of parathyroid hormone have been known for 70 years!” Perthoxal Oral Capsule (synthetic parathyroid hormone peptide) Synthetic peptide of the human hormone 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.

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: Time [hours] 2 4 6 8 10 1 3 5 Calcemia [% change] 0.0 4.0 8.0 12.0 500ug PTH orally 50ug PTH s.c. injection Increase in total plasma calcium following oral (tablet) administration of PTH to primates Increase in plasma calcium following oral (tablet) administration of PTH in primates compared to subcutaneous (injection) CONFIDENTIAL  2006 Bone Medical Ltd.

Perthoxal - Phase I Study Objective Study Design 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.

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.

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.

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.

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. Paul To have mnths on these is very difficult to manage – quarters gives better flexibilty CONFIDENTIAL  2006 Bone Medical Ltd.

Corporate Secretary Gabriel Chiappini Key Management Board of Directors Corporate Secretary Gabriel Chiappini 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.

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

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.

VP Commercial Operations 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.

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