British Biotech and BresaGen Terminate E21R Development Agreement.

Business Editors & Health/Medical Writers

OXFORD, U.K. & SYDNEY, Australia--(BUSINESS WIRE)--July 23, 2002

British Biotech (LSE:BBG; NASDAQ:BBIOY) and BresaGen Ltd (ASX:BGN) today announced that they have terminated their collaborative agreement to develop the GM-CSF antagonist E21R.

The decision to end the collaboration follows further review of new pre-clinical study data that fail to confirm certain aspects of earlier published data on E21R-induced apoptosis in acute myeloid leukemia (AML) cells.

As already announced with the company's preliminary financial results on July 5, 2002, British Biotech has stopped a Phase II clinical study of E21R in AML patients. In addition, the Company has now been advised by external experts that, in view of the new pre-clinical data, a proposed Phase I clinical study in children with various myeloid leukemias could not proceed on ethical grounds. This proposed study was considered to be a pre-requisite for efficacy studies in the rare childhood disease, juvenile myelomonocytic leukemia.

BresaGen has placed patient accrual on hold in its two clinical studies in adult chronic myelomonocytic leukemia (CMML) and rheumatoid arthritis while it works with the Hanson Center for Cancer Research and the Institute of Medical and Veterinary Science to review other data and discuss further the possible repetition of some of the critical pre-clinical studies.

British Biotech has written off (pound)0.3 million in respect of the unamortized amount of milestone payments made to BresaGen. This charge, which was not included in the preliminary financial results for the year ended April 30, 2002, will be reflected in the published financial statements for the year ended April 30, 2002.

E21R was discovered by the Hanson Center for Cancer Research of the Institute of Medical and Veterinary Science in Adelaide. The drug was licensed and developed through manufacture and Phase I testing by BresaGen and subsequently licensed to British Biotech in a collaborative development program in which British Biotech had worldwide commercialization rights for all clinical indications. These rights now revert to BresaGen.

Enquiries:

British Biotech plc
Dr Elliot Goldstein, Chief Executive Officer       Tel: [phone]

Media contacts for British Biotech
John Olsen/James Longfield, Hogarth Partnership    Tel: [phone]

BresaGen Ltd
Dr John Smeaton                                    Tel: [phone]

Background Notes

British Biotech's Product Portfolio now comprises four products, three in clinical development and one in late-stage pre-clinical development:

BB-10901 - A Tumor-Activated Prodrug product, currently in Phase I/II trials in small cell lung cancer. British Biotech acquired exclusive European and Japanese development and commercialization rights to BB-10901 from ImmunoGen Inc. (Boston, USA) in May 2000.

MG98 - A 2nd generation antisense inhibitor of DNA methyltransferase, a nuclear enzyme implicated in uncontrolled tumor growth. British Biotech acquired exclusive European development and commercialization rights to MG98 from MethylGene Inc. (Montreal, Canada) in February 2002.

BB-10153 - A novel thrombolytic, in Phase II proof-of-principle studies in heart attack patients. The study is being conducted by the Thrombolysis in Myocardial Infarction Study Group, a US-based investigative team at the forefront of clinical research into acute coronary syndromes.

BB-83698 - Targeted at community-acquired pneumonia (hospitalized patients), BB-83698 is the lead peptide deformylase inhibitor from British Biotech's Antibiotic Program. In completed pre-clinical studies BB-83698 has shown high potency against a range of gram positive bacteria, including several drug-resistant strains. The toxicology studies necessary to allow human dosing have been carried out and final analysis of data is nearing completion. A Phase I clinical study in healthy volunteers, to determine the safety and pharmacokinetics of single doses of an intravenous formulation, is expected to begin in October 2002.

This news release contains forward-looking statements that reflect the Company's current expectations regarding future events. Forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein and depend on a number of factors including the success of the Company's research strategies, the applicability of the discoveries made therein, the successful and timely completion of clinical studies and the uncertainties related to the regulatory process.