Please find attached a release which maybe of interest. 17th December, 1997 OXFORD MOLECULAR GROUP PLC Investment in Cambridge Drug Discovery Limited The Board of Oxford Molecular Group PLC ("Oxford Molecular") announces that it has entered into an agreement to invest up to a total of £5.0 million (UK pounds)in cash in Cambridge Drug Discovery Limited ("Cambridge Drug Discovery" or the "Company"). Cambridge Drug Discovery is a new service company which will specialise in providing advanced high-throughput screening ("HTS") services for customers, ranging from large pharmaceutical groups to small biotech companies. HTS is an automated process which allows large numbers of chemical compounds to be rapidly tested for potential therapeutic activity, a critical step in the discovery of new drugs. Through a close collaboration with Cambridge Drug Discovery, Oxford Molecular will provide a fully integrated drug design, synthesis and screening service for discovery research. Cambridge Drug Discovery was recently established by four senior pharmaceutical research scientists who are former employees of Pfizer and independent of Oxford Molecular. All have expertise in HTS covering a wide range of therapeutic areas. Using state-of-the-art HTS robotic technology combined with novel drug targets derived from academic collaborations, Cambridge Drug Discovery aims to establish a leading position in the market for outsourced HTS services. The Company will have the capacity to screen up to 100,000 compounds a day from the customers' own libraries of chemical compounds against either novel or non-proprietary targets. The Company will also design HTS assays for customers and provide a range of related HTS consultancy services. Following the investment, Cambridge Drug Discovery will work closely with members of the Oxford Molecular Group. The Company's services will be sold through Oxford Molecular's sales network in Europe, the US and the Far East, for which the Company will pay an allocation of overheads. Oxford Molecular will also make available to Cambridge Drug Discovery its advanced HTS and data management software packages, RS3 DiscoveryTM, RS3 Discovery HTSTM and CSAP, on standard commercial terms. Most importantly, day-to-day collaboration between Cambridge Drug Discovery, Oxford Molecular and Cambridge Combinatorial Limited, the Group's specialist combinatorial chemistry partner, will provide customers with an integrated drug discovery service encompassing design, synthesis and screening. Under the terms of the agreement, Oxford Molecular is subscribing £2.0 million in cash for 19.99 per cent. of the issued ordinary share capital of Cambridge Drug Discovery. The remaining 80.01 per cent. has been subscribed for by the founders of the Company. In addition, Oxford Molecular has committed to invest up to a further £2.0 million in cash by way of a secured loan and up to a further £1.0 million in cash by way of preference shares. The total investment of up to £5.0 million will be financed from the Group's existing cash resources. In the event of a trade sale or flotation of the Company, a number of the preference shares will convert into ordinary shares, bringing Oxford Molecular's total holding of Cambridge Drug Discovery's issued ordinary share capital to 30.00 per cent. The agreement also gives Oxford Molecular the right, but not the obligation, to acquire the remaining 80.01 per cent. of the issued ordinary share capital of Cambridge Drug Discovery in either three or four years. The valuation of the Company at such time will be based on the greater of three times the previous year's revenue or fifteen times the relevant year's net profit. Should the Board of Oxford Molecular decide to exercise the option, the consent of shareholders will be sought at that time, if required by the Listing Rules of the London Stock Exchange. Dr. Tony Marchington, Chief Executive Officer of Oxford Molecular, said today: "We are delighted to announce this important strategic investment in Cambridge Drug Discovery. We believe that it represents the next step in developing our position as one of the leading providers of drug discovery services worldwide. The combination of Oxford Molecular's software and drug design expertise, Cambridge Combinatorial's chemical synthesis skills and Cambridge Drug Discovery's advanced screening capabilities will provide customers with a highly cost effective method of accelerating the drug discovery process. The team at Cambridge Drug Discovery has substantial experience in these technologies, and we believe that our new association with the Company represents a winning combination." Press enquiries Oxford Molecular Group PLC, Oxford Tony Marchington +44-1865 784 600 Oxford Molecular Group, Inc., USA Suzanne Mattingly +1 408 879 6300 Baring Brothers International Limited Douglas Brown +44-171 767 1000 Andrew Lloyd & Associates Ltd Andrew Lloyd +44-1273 675100 chemweb: A list for Chemical Applications of the Internet. To post to list: mailto:chemweb@ic.ac.uk Archived as: http://www.lists.ic.ac.uk/hypermail/chemweb/ To (un)subscribe, mailto:majordomo@ic.ac.uk the following message; (un)subscribe chemweb List coordinator, Henry Rzepa (mailto:rzepa@ic.ac.uk)