Cortecs International Announces Solid Progress for the Half-Year Ending December 31, 1996.

LONDON--(BUSINESS WIRE)--March 12, 1997--Cortecs International ("Cortecs") (NASDAQ:DLVRY / LSE:COR / ASX:CRI) the U.K. based pharmaceutical company, today announced its interim results for the half-year ended December 31, 1996. Cortecs specializes in the development of innovative oral pharmaceutical delivery systems, new oral mucosal immunostimulants and rapid point-of-care diagnostics which either singly or in combination are designed to assist healthcare providers to manage serious diseases cost effectively and to obtain better patient outcomes.

In announcing the interim results, Executive Chairman Mr. Glen Travers, said: "Solid progress in our key programs has resulted from increased R & D spending. The increased pace of R & D has allowed us to exploit the adaptability of our technology platforms and to progress them towards product opportunities. We now have four lead projects in human trials and have launched our One Step format for rapid diagnosis which ties into our disease management strategy. Our progress is summarized as follows:

Highlights for the Half-Year

-The Phase II/III trial data of our oral calcitonin product Macritonin is now in analysis and subject to positive results in April, a European registration application is planned.

-Capsules now made for a Phase II trial with a second peptide, oral insulin in Type II diabetics.

-Pseudostat(TM) Phase II studies in cystic fibrosis and chronic bronchitis are underway.

-We have launched our new rapid point-of-care One Step diagnostic for Helicobacter. This is attracting new partners and analytes addressing important diseases including cancer and tuberculosis.

-Cash reserves at 51.6 million pounds.

-Turnover slightly down at 4 million pounds due to greater 'up-front' payments in prior period.

-Despite flat Helisal sales, net loss for half-year to December 31, 1996 on target at 4.3 million pounds in line with Chairman's May, 1996 forecast.

-Australian government announced it will be offering a A$2.2 million grant for otitis media mucosal immunostimulant (Otostat).

-Cortecs and the Defense Evaluation Research Agency (DERA) at Porton Down, England, announced an agreement today to develop an adaptation of our oral delivery system called Macromune which has demonstrated in animal trials that it can deliver Yersinia pestis antigens against the Bubonic and Pneumonic varieties of the Plague to obtain a systemic and mucosal immune response.

Cortecs fundamentals are very sound and the Company is poised at the beginning of an important and exciting period. Cortecs has achieved important progress in addressing diseases such as osteoporosis, diabetes, Helicobacter infection and influenza from which the Company has the potential to continue growth of shareholder value over the next several years."

ACHIEVEMENTS FOR THE HALF-YEAR

DEVELOPMENTS IN OSTEOPOROSIS

TRIAL FOR EUROPEAN REGISTRATION FOR ORAL CALCITONIN (MACRITONIN ) IN STATISTICAL ANALYSIS.

FERRER INTERNACIONAL OF SPAIN APPOINTED FIRST MARKETING PARTNER IN EUROPE FOR MACRITONIN .

STRATEGY DEVELOPED FOR U.S. CLINICAL TRIAL PROGRAM.

OSTEOSAL(TM) RAPID DIAGNOSTIC IN TESTING WITH HUMAN SAMPLES.

DEVELOPMENTS IN DIABETES

PHASE I INTUBATED ORAL INSULIN TRIALS ENCOURAGE COMPANY TO PREPARE FOR PHASE II TRIALS IN EARLY 1997.

ENCAPSULATED ORAL INSULIN STUDY COMMENCING SHORTLY.

AGREEMENT TO DEVELOP A FURTHER GLYCATED PROTEIN RAPID POINT-OF-CARE TEST TO ASSIST WITH THE MONITORING AND DETECTION OF DIABETES.

"NEURULIN" FOR THE TREATMENT OF DIABETIC NEUROPATHY COMMENCES PHASE II TRIALS.

DEVELOPMENTS IN RESPIRATORY DISEASES

COMMENCED PHASE II ORAL IMMUNOSTIMULANT PSEUDOSTAT TRIAL IN CHRONIC BRONCHITIS PATIENTS INFECTED WITH PSEUDOMONAS. INTERIM ANALYSIS PROVES ENCOURAGING.

COMMENCED SECOND PHASE II PSEUDOSTAT TRIAL IN CHRONIC BRONCHITIS PATIENTS WHO HAVE NO HISTORY OF PSEUDOMONAS INFECTION.

COMMENCED PHASE II ORAL PSEUDOMONAS IMMUNOSTIMULANT TRIAL IN PATIENTS WITH CYSTIC FIBROSIS.

COMMENCED PHASE I TRIAL OF FLUSTAT ORAL INFLUENZA VACCINE.

AGREEMENT SIGNED WITH INFLAZYME PHARMACEUTICALS LIMITED TO DEVELOP ELISA AND RAPID POINT-OF-CARE DIAGNOSTIC TESTS FOR TUBERCULOSIS.

AGREEMENT SIGNED WITH CANCER RESEARCH CAMPAIGN TECHNOLOGY LIMITED ("CRCT") RAPID POINT-OF-CARE TEST FOR NASOPHARYNGEAL CANCER.

DEVELOPMENTS IN HELICOBACTER PYLORI

NEW RAPID POINT-OF-CARE ONE STEP TECHNOLOGY LAUNCHED AS HELISAL ONE STEP.

IDENTIFICATION OF COCCOID ANTIGENS PRODUCES IMPORTANT NEW INFORMATION FOR DIAGNOSIS AND THERAPY.

HELICOBACTER IMMUNOSTIMULANT IN PREPARATION FOR FIRST HUMAN TRIAL.

DEVELOPMENTS IN OTHER PROJECTS

MALE HORMONE REPLACEMENT THERAPY 'HALO' TESTOSTERONE FORMULATION READY FOR TESTING IN MAN THIS SPRING.

NEW ONE STEP RAPID POINT-OF-CARE PLATFORM DIAGNOSTIC VALIDATED AND CAN BE UTILIZED FOR NEAR PATIENT DIAGNOSIS IN OTHER DISEASE STATES.

THREE NEW PEPTIDES INCORPORATED INTO MACROSOL FOR INITIAL EVALUATION.

FINANCIAL

CASH RESERVES AT 51.6 MILLION POUNDS.

NET LOSS FOR HALF-YEAR TO DECEMBER 31, 1996 ON TARGET AT 4.3 MILLION POUNDS.

INCREASED EXPENDITURES IN LINE WITH CHAIRMAN'S 1996 FORECAST.

AUSTRALIAN GOVERNMENT ANNOUNCED IT WILL BE OFFERING A$2.2 MILLION GRANT FOR OTITIS MEDIA MUCOSAL IMMUNOSTIMULANT (OTOSTAT ).

CHAIRMAN'S STATEMENT Introduction

Cortecs is a biopharmaceutical company developing enabling technologies which set it apart from Biotech companies engaged in the potentially higher risk development of new therapeutics. Our three main technology platforms of oral pharmaceutical delivery systems, oral mucosal and rapid point-of-care diagnostics have all advanced during the past half-year. They are proving adaptable and capable of development to provide more than one product without the need to significantly change our R & D focus. We believe our oral delivery technology for peptides and proteins is currently the most advanced in the field.

Progress

Our advances over the past half-year have confirmed a number of key facts which establish Cortecs as a rapidly maturing company with not only advanced clinical programs in a number of serious disease states, but also as a company with product already launched in rapid point-of-care diagnostics.

- We are the first biopharmaceutical company to have demonstrated in patients that it has an effective oral delivery method for peptides and proteins, most of which at present have to be injected.

- The adaptability of this enabling technology has also been demonstrated by our obtaining biological responses not only in our Macritonin Phase II trials but also in a second peptide in our Phase I oral insulin trials and also in animal trials with human growth hormone.

- Our oral mucosal immunology technology is proving adaptable and led by our Pseudostat Phase II trials in chronic bronchitis has demonstrated that it can act not only as a preventative but also as an effective therapeutic. With many pathogens beginning to develop resistance to antibiotics oral mucosal immunology may become increasingly important in the fight against significant infectious diseases.

- Our rapid point-of-care diagnostic technology is adaptable and offers a low risk and low cost method for the Company to identify patients with disease and to utilize new antigens developed and offered to us by third parties in collaboration agreements. Furthermore, the time scales involved in developing new rapid point-of-care diagnostics are not long.

- We are due to harvest data on our major programs within the first half of 1997. Positive progress in these will redefine the Company as a maturing biopharmaceutical company with not only existing diagnostic products but also as a Company with the first major product in registration from its oral delivery capability.

Management

The Company has continued to build its management capability in response to the progress of its programs. This progress creates new management challenges requiring suitably qualified staff to drive the projects forward through the technical, administrative and regulatory steps required for eventual product registration.

Financial

Financially, we remain in a strong position, following the international placing in June last year of 46 million pounds. As stated at the time of that raising, we anticipate our net expenditure for the year to June 1997 will amount to about 10 million pounds, which is a significant but prudent increase from previous years. At December 1996, our cash reserves amounted to 51.6 million pounds and our net loss for the half-year is on target at 4.3 million pounds. This compares with 1.6 million pounds for the half-year to December 1995. Turnover for the half-year of 4 million pounds is slightly down on the comparative period of last year due to greater "up front" payments in the prior period. Helisal sales remain flat with growth of 7%. Our distributors in Europe inform us that the lack of reimbursement status of the product in a number of European countries is a reason for the delay in their uptake of the product.

Sales in the U.S. are going in accordance with plan and we are awaiting the outcome of our registration application in Japan, due next quarter. Our pharmaceutical marketing company's sales have shown encouraging growth in the period due to the increase in sales of the Falk range of products.

At the AGM I announced that the Company intended to seek U.K. PLC status and we are now in discussions with the London Stock Exchange regarding U.K. residency for Cortecs, having lodged preliminary documentation in Australia.

Our Australian R & D syndication application for research into an immunostimulant against otitis media has resulted in an offer by the Government of an A$2.2 million direct research grant. This is one of only five offers made so far under the grant scheme in Australia. We continue to look for innovative ways of funding higher risk earlier stage R & D.

I am also pleased to announce that Cortecs has received a prestigious shareholder value award from L|E|K Consultants in conjunction with 'The Australian' newspaper. 'The Australian'/ L|E|K Scorecard Award recognizes the achievement of Cortecs management in the creation of shareholder value. Cortecs has generated the highest return for its shareholders relative to Australian publicly traded companies over the previous one year and three year periods.

Summary

Our three leading pharma projects are at the advanced stage where we intend vigorously drive them to completion. Their success should demonstrate the potential of the enabling technologies underpinning them.

As a new priority, following the clinical results of Macritonin now in analysis, we aim to increase investment in our U.S. activities and commence a pivotal U.S. clinical trial with a view to U.S. registration. Sales of a nasal version of calcitonin launched by a major pharmaceutical company in the U.S. have grown strongly, now reportedly taking a 32% share of new prescriptions for post-menopausal osteoporosis. Also, in oral insulin, we anticipate having data on results in patients late in the second quarter and would hope to move on to a broader Phase II clinical campaign thereafter. Similarly, subject to the satisfactory progress of our ongoing Pseudostat Phase II clinical trials, we would look to proceed towards registration lodgement in Europe early in 1998.

The past half-year has been characterized by positive forward progress in our R & D programs, leaving us at present with four lead projects in human trials and the completion of our One Step format for rapid diagnosis.

Cortecs fundamentals are very positive and the Company is poised at the beginning of an important and exciting period. Cortecs has achieved a very solid financial and technological foundation from which the Company has the potential to continue growth of shareholder value over the next several years.

Glen Travers Executive Chairman

PRESIDENT'S REVIEW

Cortecs has advanced all of its key technologies during this half-year and is moving closer to its aim of making available a range of enabling technologies which either singly or in combination will assist healthcare providers to achieve better patient outcomes cost-effectively. As our R & D programs move forward, our technologies are proving adaptable and capable of addressing more than one disease state.

OSTEOPOROSIS Macritonin(TM) - Oral Calcitonin

The most advanced of Cortecs' oral delivery projects is our Macritonin(TM) program to orally deliver calcitonin to treat osteoporosis, where we are in Phase II/III clinical trials. The results of our additional single dose Phase I study to determine whether there is any restriction in the time of day for dosing with calcitonin suggested that there should be no restrictions on the time of day dosing is carried out. Subject to the results of a European trial currently in analysis, we hope to make our first registration application in Europe in April. A meeting took place in early 1997 with the U.S. Food and Drug Administration to establish the eligibility of a European program towards U.S. registration. We aim to commence U.S. trials in the summer of 1997.

Macritonin(TM) Distributors

In January we appointed our first marketing partner in Europe when appointing Ferrer Internacional S.A. ("Ferrer") as a marketing partner in Spain for Macritonin(TM). Ferrer is a Barcelona based pharmaceutical company with annual sales of $250 million and a strong position in the Spanish osteoporosis market. This agreement with Ferrer is the third Macritonin marketing agreement which Cortecs has concluded. The first two agreements are with Towa Pharmaceuticals of Japan and Teva Pharmaceuticals of Israel.

Osteosal(TM) - Rapid Diagnostic

Tests are continuing in the U.K. and in Denmark through our partner Osteometer BioTech A/S with our One Step test to identify patients with high bone turn-over. There are presently no rapid, simple, inexpensive tests available to identify osteoporosis patients who need treatment or further investigation. This is a need which Cortecs aims to meet during the coming months with Osteosal .

DIABETES Oral Insulin

Trials with oral insulin in pigs demonstrated the oral delivery technology's adaptability and encouraged us to commence Phase I trials with oral insulin last summer. These have produced positive data and we hope shortly to progress to Phase II clinical trials.

Neurulin

Cortecs has signed an agreement with the International Diabetes Institute ("IDI"), based in Melbourne, for the joint development of a new product for the treatment for diabetic peripheral neuropathy. This topical product was conceived at the IDI and has undergone early testing in patients with peripheral neuropathy with encouraging results. A double blind Phase II trial of this much needed product commenced in February.

Glycosal(TM) - Rapid Diagnosis and Monitoring for Diabetes

Last year, Cortecs achieved the first milestone in the exclusive collaboration with the privately held U.S. biomedical company, Exocell Inc., which has intellectual property in the field of diagnosis and treatment of diabetes. Under the agreement, the technologies of the two companies are being combined to produce a range of point-of-care rapid diagnostic kits to provide an accurate diagnosis during a normal consultation in doctors' offices. These will measure glycated proteins in diabetes sufferers. Levels of these glycated proteins in blood may be used for diagnosis and the monitoring of diabetes treatment over periods of up to ninety days. Cortecs announced in July 1996 that a further test for a glycated protein is to be developed which will indicate whether the disease has been controlled over the previous seven days.

OTHER PROJECTS Male Hormone Replacement Therapy

Clinical tests of Cortecs' 'HALO' formulation of oral testosterone are scheduled to commence this spring. Testosterone administered orally is largely broken down by the liver so that very little reaches the general circulation. It may also have toxic side effects on the liver. Cortecs' 'HALO' system aims to deliver the testosterone so that it enters the general circulation through the lymphatic system and therefore will avoid the liver and have increased bioavailability. This product is intended for use in the growing field of male hypogonadism.

RESPIRATORY TRACT AND OTHER MUCOSAL INFECTIONS Pseudostat(TM)

Our key programs in this new field are directed at respiratory tract infections. The Australian Institute of Mucosal Immunology ("AIMI") has provided exciting evidence that our oral mucosal immunostimulant Pseudostat may be a very effective therapeutic against the pathogen Pseudomonas aeruginosa. This organism afflicts patients with damaged lungs as in the diseases bronchiectasis, chronic bronchitis and cystic fibrosis ("CF") and can be very difficult to eliminate. Antibiotics do not adequately control chronic infection with the organism and its presence often heralds a more aggressive progression of the disease. Pseudomonas infection is the cause of death in the majority (90%) of CF patients. Our Phase II Pseudostat trials in chronic bronchitis and CF commenced in 1996. Further trials in CF, chronic bronchitis and bronchiectasis are scheduled to commence this calendar year.

Flustat(TM)

In November we announced commencement of a Phase I trial of our Flustat oral influenza vaccine. The trial involves forty healthy human subjects and is to assess the safety of the vaccine and to determine whether Flustat can produce an appropriate immune response in man.

Moniliastat(TM)

First human tests with our oral Candida albicans immunostimulant against thrush to evaluate safety and immune responses are now scheduled to commence this spring. They will follow the completion of current animal toxicology trials and subsequent approval by Ethics Committee.

Otostat(TM)

This early stage program aims to produce an immunostimulant for persistent and recurrent chronic otitis media. Present treatment of this condition is not satisfactory. Disease models have been established and the appropriate antigens against the three predominant causal organisms are being selected using these models.

Ulsastat(TM)

The Ulsastat(TM) program, which is to develop an immunostimulant against H.pylori, is currently in pre-clinical trials. Phase I clinical trials are planned for 1997 with H.pylori infected patients with at least two failed eradication courses of antibiotics. This is to assess the effect on the mucosal host parasite relationship and responsiveness to subsequent antibiotic therapy.

RAPID POINT-OF-CARE DIAGNOSTICS ("RPOC") Helicobacter Pylori Disease

Cortecs believes it is at the leading edge of rapid point-of-care ("RPOC") diagnostics. As planned, in December 1996 Cortecs launched the Helisal One Step test for Helicobacter pylori ("H. pylori"). The One Step device is a new, simple and streamlined point-of-care test, whose technology potentially can be applied to diagnosing or monitoring a range of disease states. When tested on over 400 volunteers, Helisal One Step had an accuracy comparable with serology based laboratory tests. The test will be distributed by Cortecs and Astra (Europe), Axcan (Canada) and Zenyaku Kogyo (Japan), with discussions for other territories currently in progress.

During this financial year, Boehringer Mannheim Inc. has entered the U.S. market with Helisal Rapid Blood, our first RPOC test. We are generating the data for a 510(k) application in the U.S. for the new One Step test. In Japan, our partners, Zenyaku Kogyo, have submitted a registration application for Helisal Rapid Blood to the Japanese authorities and subject to their approval we expect its launch to take place during the summer of 1997.

Cortecs has signed a new agreement with the Department of Microbiology, National University of Singapore in the field of H. pylori research. This agreement expands the extent of the collaboration of Cortecs' existing agreement with the University in the field of differentiating antibodies. This research may enable future diagnostic tests to more accurately diagnose clinical syndromes and prognosis of H. pylori infections.

NEW RPOC ANALYTES

The efficacy of our RPOC technology is now attracting new collaboration opportunities from groups with expertise and intellectual property in other disease states. By combining these skills and assets we can broaden our product range and provide Cortecs with commercial opportunities of significant potential at low risk and cost.

Tuberculosis

Cortecs signed an exclusive world wide agreement in November 1996 with the Canadian company, Inflazyme Pharmaceuticals Limited, for the development of ELISA and also RPOC tests for the diagnosis of tuberculosis. The companies plan to utilize their existing technologies and expertise to develop and commercialize a series of diagnostic products, using whole blood, plasma, serum or saliva, suitable to assist in diagnosing tuberculosis in a shorter time frame than many current diagnostic tools. The World Health Organization (WHO) estimates that tuberculosis testing will increase 10-14% annually through the year 2000 to nearly 1 billion tests.

Nasopharyngeal Cancer

In December 1996, Cortecs signed an exclusive agreement with Cancer Research Campaign Technology Limited ("CRCT") for the development of diagnostic tests for nasopharyngeal cancer ("NPC") which primarily affects certain Chinese and black populations. Cortecs plans to develop simple diagnostic tests suitable to assist in diagnosing NPC. NPC patients show an abnormal response to Epstein Barr Virus infection and CRCT have developed technology which may make it possible to identify patients showing this response. In 1982, the International Union Against Cancer recommended that "screening programs and reliable test systems for the early detection of individuals at risk by immunological and biomedical surveys should be extended as a high priority". It is estimated that the population at risk in S.E. Asia alone totals almost 1.7 billion people.

COMMERCIAL OPERATIONS

During this financial year, our pharmaceutical marketing company continued to expand its presence in the U.K. market through increasing sales of its existing product lines and introduction of two new licensed-in products. Clotam was licensed from a subsidiary of Bristol Myers Squibb in October 1996 for the treatment of migraine and in January we licensed-in Calceos( from Innothera Laboratoire in Paris. Calceos( is a calcium and vitamin D3 product recognized as being useful in the management of osteoporosis. This is Cortecs' first commercial exposure to the osteoporosis market in the U.K. Thames now has a sales force of 24 representatives servicing the U.K. market and anticipates product sales to increase during the coming years as we prepare for the first launch of our developing pharmaceutical products.

SUMMARY

The first half of 1997 has been one of solid progress on a broad front. As forecast, R & D expenditure has increased as the number of therapeutic products in clinical testing has increased to five and we have three further therapeutic products expected to move into clinical trials in this calendar year. Management teams have been strengthened, with special emphasis on program planning and project management. The new One Step diagnostic technology is now being applied to a range of diagnostic application which aim to meet major clinical needs.

During the next twelve months the Company aims to move its therapeutic and diagnostic products forward towards registration in Europe and to expand its clinical and commercial programs in the U.S. We continue to pursue our objective of making Cortecs a major player in the healthcare industry through creation of significant products satisfying important healthcare needs and we aim to succeed.

Dr. Michael Flynn, President

"Safe Harbor" Statement under the U.S. Private Securities Litigation Reform Act of 1995: Some or all of the statements in this document that relate to future plans, expectations, events, performances and the like are forward-looking statements, as defined in the U.S. Private Securities Litigation Reform Act of 1995. Actual results or events could differ materially from those described in the forward looking statements due to a variety of factors, including those set forth in the Company's filings with the U.S. Securities and Exchange Commission.

Press releases and other Cortecs International Limited information are available on the Cortecs International web site: http://www.cortecs.com.

                    CONSOLIDATED PROFIT AND LOSS ACCOUNT

For the six months ended
December 31, 1996
                              Unaudited  Unaudited  Audited
                              Six months Six months Year
                              ended      ended      ended
                              Dec. 31,   Dec. 31,   June 30,
                              1996       1995       1996
                                 (pounds in millions)

Turnover                      4.0         4.9        10.5
                            ______      ______       ______
Operating Costs
 Cost of Sales               (2.0)       (1.7)       (4.0)
 Selling, Distribution
  and Administration         (3.2)       (2.5)       (5.0)
 Research and Development    (4.6)       (2.5)       (5.9)
                             ______     _______     _______
Operating Loss on ordinary
 activities before interest  (5.8)       (1.8)       (4.4)
Interest Income (net)         1.5         0.2         0.6
                             ______     _______     _______
Loss on ordinary activities
 before taxation             (4.3)       (1.6)       (3.8)
Taxation on ordinary
 activities                     -           -           -
                            ______      _______     _______

Loss for the period         (4.3)        (1.6)       (3.8)
                            ______       ______      ______

Loss per ordinary share
 in pence                  (3.0p)        (1.4p)      (3.0p)
                          ______         ______      ______


                            CONSOLIDATED BALANCE SHEET

As at December 31, 1996
                            Unaudited   Unaudited   Audited
                            Dec. 31,    Dec. 31,    June 30,
                              1996        1995        1996
                                  (pounds in millions)

Fixed Assets
 Intangible assets            0.1          0.1         0.1
 Tangible assets              2.7          1.3         1.7
 Investments - restricted
  deposits                    7.7          7.7         8.5
                            ______       ______      ______
                             10.5          9.1        10.3
                            ______       ______      ______
Current Assets
 Stocks                       1.4          1.3         1.2
 Debtors                      2.1          1.6         1.7
 Investments - restricted
  deposits                    1.3          1.3         1.3
 Cash and cash equivalents   51.6         16.5        57.2
                            ______       ______      -------
                             56.4         20.7        61.4

Creditors  - amounts
 falling due within
 one year                     3.3         3.5          3.0
                            ______      ______       ______
Net Current Assets           53.1        17.2         58.4
                            ______      ______       ______

Total Assets less
 Current Liabilities         63.6        26.3         68.7
                            ______     ______        ______

Creditors - amounts falling
 due after more
 than one year                1.3         1.6          1.4

Provisions for liabilities
 and charges -
 R & D Syndications           9.0         9.0          9.8
                            ______      ______       ______
                             10.3        10.6         11.2
                            ______      ______       ______
Net Assets                   53.3        15.7         57.5
                            ______      ______       ______
Total Shareholders' Funds    53.3        15.7         57.5
                            ______      ______       ______

                         CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months
ended December 31, 1996
                         Unaudited    Unaudited     Audited
                         Six months   Six months    Year
                         ended        ended         ended
                         Dec. 31,     Dec. 31,      June 30,
                         1996         1995          1996
                              (pounds in millions)

Net cash outflow from
 operating activities   (5.9)         (1.8)         (5.0)
Returns on investments
 and servicing of finance
Interest received (net)  1.4           0.2           0.6
                       ______        ______        ______
Net cash outflow        (4.5)         (1.6)         (4.4)
                       ______        ______        ______
Investing activities
Purchase of tangible
 fixed assets          (0.8)            -           (0.2)
                      ______        ______         ______
Net cash outflow from
 investing activities (0.8)             -           (0.2)
                     ______         ______         ______
Financing activities
 Issue of ordinary
  shares               0.1           12.3           58.3
 Expenses of
  share issue            -           (0.2)          (2.2)
 Capital element of
  finance lease
  rental repayments  (0.3)           (0.1)          (0.3)
 Receipt of R & D
  Syndications -
  Restricted Deposits   -             2.8            3.3
 Transfers to Restricted
  Deposits -
  R & D Syndications    -            (2.8)          (3.3)
                      ______        ______         ______
Net cash (outflow)/inflow
 from financing      (0.2)           12.0           55.8
                     ______         ______        ______
Increase\(decrease)
 in cash held       (5.5)            10.4           51.2
Cash at the beginning
 of the period      57.2              5.9            5.9
Foreign exchange
 movements          (0.1)             0.2            0.1
                   ______           ______         ______
Cash at the end
 of the period      51.6             16.5           57.2
                  ______            ______         ______

The information for the year to June 30, 1996 is abridged from the Company's accounts which were lodged with the Registrar of Companies. The accounts are prepared in accordance with U.K. GAAP. The exchange rates adopted in these accounts at December 31, 1996 are U.S.$1.71 = 1 pound (1995: U.S.$1.54 = 1 pounds) A$2.15 = 1 pounds (1996: A$2.08 = 1 pound).

CONTACT: Cortecs International

Glen Travers, Jonathan Pockson,

011 44 181-568-7071

or

Kehoe, White, Savage & Company, Inc.

John P. Kehoe/Van Negris, 212/888-1616

or

Buchanan Communications

Zena Bates/Lisa Baderoon

011 44 171 489 1441