British Biotech and Serono Renew Anti-Inflammatory Research Agreement.

Business Editors

OXFORD, UK--(BUSINESS WIRE)--Oct. 28, 2002

British Biotech plc (LSE: BBG, NASDAQ: BBIOY) today announced that its research collaboration with the Swiss biotechnology company Serono SA (Virt-X: SEO, NYSE: SRA) has been extended for a further year.

The aim of the collaboration is to discover new treatments for inflammatory diseases.

Formed in October 2000, the collaboration has made good progress screening British Biotech's library of patented metalloenzyme inhibitors against pathologically relevant targets. From this effort, a medicinal chemistry program has enabled selective inhibitors to be identified that show activity against three enzyme targets involved in inflammation, and which are active in disease models. The aim in the third year of the collaboration will be to optimise the pharmacokinetic profile of these inhibitors in order to produce orally bioavailable compounds for clinical development.

The two companies will continue to share research costs equally, with costs of clinical development to be borne by Serono. Under the agreement, British Biotech will receive undisclosed milestone payments and royalties on any commercialised products. British Biotech also retains the right to co-fund product development and commercialisation for an improved return on sales.

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.

Background Notes

1. Metalloenzymes

Metalloenzymes perform a wide range of biological functions in the intra- and extra-cellular environments. The overexpression of some members of this large family of enzymes is also a feature of the pathogenesis of inflammatory diseases. For example, in multiple sclerosis (MS) a metalloenzyme known as gelatinase B is believed to play a role in causing damage to the myelin sheath that protects neurons in the central nervous system. Certain other metalloenzymes become overexpressed in the inflamed joints of rheumatoid arthritis sufferers. The therapeutic aim of selectively inhibiting these enzymes is to stop or reverse the progression of such diseases.

2. British Biotech

British Biotech is a research and development stage pharmaceuticals company aiming to develop and commercialise specialist drugs for serious illnesses, principally cancer. It currently has four products in patient trials, supplemented by focused, collaborative drug discovery research programmes.

Product Portfolio

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

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

BB-10153 - A novel thrombolytic in Phase II in heart attack patients. The proof-of-principle Phase II 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 -A peptide deformylase inhibitor in Phase I development as a novel antibiotic targeted at community-acquired pneumonia in hospitalised patients.

Research

Antibiotic Programme - Now working in collaboration with Genesoft Inc., this research programme is focused on the development of bacterial metalloenzyme inhibitors as novel anti-infective drugs.

Anti-Inflammatory Programme - Working in collaboration with Serono SA, this research programme is investigating the use of metalloenzyme inhibitors as new treatments for inflammatory diseases, particularly multiple sclerosis.

Cancer Programme - As part of the collaboration with MethylGene on MG98 (see above) British Biotech has an exclusive option to European development and commercialisation rights for compounds from MethylGene's research into small molecule inhibitors of DNMT.

Biodefence Research - As part of the UK Government's biodefence initiative, the Defence, Science and Technology Laboratory (DSTL) of Porton Down is investigating the utility of selected British Biotech metalloenzyme inhibitors against anthrax lethal toxin and botulin toxin.