Prana Announces $7 million Placement to Fund Research Programs -Additional Investment from Existing Shareholders

Announces $7 million Placement to Fund Research Programs

Investment from Existing Shareholders -

Australia - May 21, 2008 - Prana Biotechnology Limited (NASDAQ: PRAN / ASX:

biopharmaceutical company focused on the research and development of treatments

for neurodegenerative disorders, today announced it has raised in a private

transaction over 7 million (Australian) dollars from existing investors at

price of $0.40 (AUS) a share. Investors include both US and Australian

Kempler, Chairman and CEO of Prana Biotechnology, stated, "The funds will allow

us to boost our R&D activities. We are particularly gratified by the

increased confidence shown by these investors, who previously invested only

months ago at a value almost 50 percent below today's level. Since then we have

achieved key milestones, including a successful Phase 2a clinical trial of

and commencement of commercial discussions, as well as the widening of our

pipeline opportunities into different indications."

will be used for the development of the Company's pipeline in treatments for

Alzheimer's and other neurodegenerative diseases, such as Parkinson's and

Huntington's disease.

progressing discussions with potential pharmaceutical partners and are confident

that PBT2, our lead drug for Alzheimer's disease, offers a very attractive

opportunity. A strategic partnership is one way that we can achieve our central

goal of advancing the commercialization of PBT2," Mr. Kempler

Prana Biotechnology Limited

Biotechnology was established to commercialise research into Alzheimer's disease

and other major age-related neurodegenerative disorders. The

Company was incorporated in 1997 and listed on the Australian Stock Exchange

March 2000 and listed on NASDAQ in September 2002. Researchers at prominent

international institutions including The University of Melbourne, The Mental

Health Research Institute (Melbourne) and Massachusetts General Hospital, a

teaching hospital of Harvard Medical School, contributed to the discovery of

press release contains "forward-looking statements" within the meaning of

section 27A of the Securities Act of 1933 and section 21E of the Securities

Exchange Act of 1934. The Company has tried to identify such forward-looking

statements by use of such words as "expects," "intends," "hopes," "anticipates,"

"believes," "could," "may," "evidences" and "estimates," and other similar

expressions, but these words are not the exclusive means of identifying such

statements. Such statements include, but are not limited to any statements

relating to the Company's drug development program, including, but not limited

to the initiation, progress and outcomes of clinical trials of the Company's

drug development program, including, but not limited to, PBT2, and any other

statements that are not historical facts. Such statements involve risks and

uncertainties, including, but not limited to, those risks and uncertainties

relating to the difficulties or delays in financing, development, testing,

regulatory approval, production and marketing of the Company's drug components,

including, but not limited to, PBT2, the ability of the Company to procure

additional future sources of financing, unexpected adverse side effects or

inadequate therapeutic efficacy of the Company's drug compounds, including,

not limited to, PBT2, that could slow or prevent products coming to market,

uncertainty of patent protection for the Company's intellectual property or

trade secrets, including, but not limited to, the intellectual property relating

to PBT2, and other risks detailed from time to time in the filings the Company

makes with Securities and Exchange Commission including its annual reports

From 20-F and its reports on Form 6-K. Such statements are based on management's

current expectations, but actual results may differ materially due to various

factions including those risks and uncertainties mentioned or referred to in

this press release. Accordingly, you should not rely on those forward-looking

statements as a prediction of actual future results.