British Biotech plc -"British Biotech"- BresaGen Ltd Commences Patient Recruitment Into Phase II Trial of E21R in Leukemia.

Business Editors

OXFORD, England--(BUSINESS WIRE)--March 6, 2001

British Biotech (NASDAQ: BBIOY) today announced that BresaGen Ltd, a listed Australian company and British Biotech's development partner for E21R, has commenced patient recruitment in a Phase II clinical study to investigate the effectiveness of BresaGen's lead compound, E21R, in chronic myelomonocytic leukemia (CMML).

The phase II clinical trial is being conducted by BresaGen in four sites in Australia and complements the phase II studies planned by British Biotech for the development of E21R in acute myeloid leukemia (AML).

Under the terms of the collaborative agreement signed in December 2000, British Biotech has been granted an exclusive world-wide license to commercialize E21R for all indications and will carry out the clinical studies necessary to obtain regulatory approval for AML. Equity, cash and conditional milestone payments of US$8 million are payable to BresaGen for the development of E21R for AML with further conditional milestone payments of up to US$6 million on the successful development of E21R for any non-leukemic indications. If successful, BresaGen will also derive significant royalty streams and manufacturing income from the eventual sale of the drug.

Welcoming BresaGen's announcement, British Biotech chief executive Elliot Goldstein said: "The start of the phase II program for E21R is an important milestone for both BresaGen and British Biotech. We are on track to begin our own phase II study to investigate E21R in acute myeloid leukemia in the third quarter of 2001 and are hopeful that E21R will provide a breakthrough therapy for these debilitating forms of cancer."

Dr John Smeaton, President and CEO of BresaGen Ltd, said: "Having worked with this novel compound for several years the Company is excited and optimistic about the potential for this drug to be effective in treating myeloid leukemia. This drug has been shown to act on leukemic cells in laboratory studies through two mechanisms, firstly by inhibiting growth of the leukemic cells and secondly by induction of cell death. This could provide a unique approach in the treatment of cancer."

CMML is a chronic proliferative disease of mature white blood cells, most common in middle-aged and elderly patients. Existing treatments for CMML are mainly chemotherapy drugs that are not very effective and usually produce toxic side effects. A phase I clinical study by BresaGen showed E21R to be well tolerated over a 10-day course of treatment and demonstrated none of the toxic side-effects associated with existing treatments for leukemia.

This news release contains forward-looking statements which reflect the Company's current expectation 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 strategy, the applicability of the discoveries made therein, the successful and timely completion of clinical studies and the uncertainties related to the regulatory process.

Background information:

Leukemia

In leukemia, there is a breakdown in the processes controlling blood cell production in bone marrow. The marrow starts to produce large numbers of abnormal blood-forming cells, disrupting production of normal blood and causing a variety of severe conditions.

The disease is classified as acute or chronic, depending on the speed at which it progresses, and as myeloid or lymphocytic, according to the type of blood cell affected. Leukemic diseases affect people of all ages. Around 5,000 new cases are diagnosed in the UK every year.

British Biotech

British Biotech is a research and development stage biopharmaceutical company. Its strategy is to build shareholder value by exploiting its proprietary programs in metalloenzyme inhibition; discovering and developing new classes of antibiotics; developing specialist drugs for the treatment of serious illness; and retaining commercialization rights for niche markets.

The Company comprises two distinct businesses: a Product Portfolio of six drugs with potential to treat up to 10 serious diseases; and an Antibiotic Program which is capable of yielding multiple product opportunities.

Product Portfolio

BB-10901 Collaboration with ImmunoGen Inc, USA; targeted at small cell lung cancer.

E21R Collaboration with BresaGen Ltd, Australia; targeted at acute myeloid leukemia; other leukemias; rheumatoid arthritis.

BB-2827 Collaboration with Serono SA, Switzerland; targeted at rheumatoid arthritis, periodontal disease.

BB-76163 Collaboration with Serono; targeted at multiple sclerosis; cancer.

BB-10153 Targeted at heart attack/stroke (thrombosis).

Batimastat BiodivYsio(TM) stent Collaboration with Biocompatibles International plc, UK; targeted at vascular restenosis.

Antibiotic Program

British Biotech's research into the use of metalloenzyme inhibitors in antibiotics is capable of yielding product opportunities in a number of fields. Polypeptide deformylase inhibitors are in development for common respiratory infections such as community-acquired pneumonia. LpxC inhibitors are in pre-development as potential treatments for gram negative bacteria such as those causing urinary tract infections. Also under way are research programs into treatments for severe hospital-based infections and broad-spectrum antibiotics.

BresaGen Limited

BresaGen Limited (ASX: BGN) is a listed Australian biotechnology company focused on the discovery, development and commercialization of products derived from gene technologies. BresaGen has two principal areas of focus: Protein Pharmaceuticals and Cell Therapy.

The Protein Pharmaceutical Division has established cost effective technology to express and purify recombinant proteins on a large scale using a proprietary bacterial expression system. The Division's aim is to develop and manufacture novel human and veterinary biotherapeutics for sale in the Asia-Pacific region and to sell in additional territories in collaboration with other biopharmaceutical companies.

The Cell Therapy activities incorporate some of the most exciting possibilities for the treatment of major degenerative diseases. Cell therapy involves the use of healthy cells to replace diseased cells and requires the ability to develop specific cell types such as blood, nerve and muscle.

The Cell Therapy program has been enhanced through the acquisition, in November 2000, of CytoGenesis Inc.