Oxford Molecular invests in HTS specialist Cambridge Drug Discovery

[Andrew Lloyd (laptop)]

 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



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