Sareum Holdings plc (AIM: SAR), the structure-based drug discovery and services business, announces its admission to the AIM market of the London Stock Exchange by way of a Placing, which has raised £2.0 million before expenses. Trading in Sareum shares commences today, 11 October 2004.

Sareum was founded in August 2003 by a group of senior managers from the structure-based discovery department of the US biopharmaceuticals company Millennium Pharmaceuticals Inc (Nasdaq: MLNM), following Millennium's decision to close its UK operations and concentrate its business in the United States.

Sareum's Directors believe that the Company has developed a leading approach to drug discovery by a combination of skills in biology, computational chemistry and high-throughput chemical synthesis. The Directors believe that Sareum has created an approach capable of reducing by up to half the time it takes to discover drug candidates for pre-clinical and clinical trials.

The Company intends to create value through generating successful drug candidates which it intends to out-license to, or partner with, pharmaceutical companies at the Phase I or Phase II clinical trials stage. In addition, the Company will offer services for fees. These services will include protein structure determination, chemical library synthesis and structure-based drug discovery project support.

Dr Paul Harper, former CEO of Cambridge Antibody Technology (LSE: CAT), is Sareum's Non-executive Chairman. Dr Tim Mitchell, former Director of the structure-based discovery department at Millennium, is its Chief Executive Officer.

The Company has raised £2.0 million (gross) by way of a Placing.

The Company's Nominated Advisor is Grant Thornton Corporate Finance and Seymour Pierce Ellis is Broker to the Company.

Commenting on the flotation, Tim Mitchell, Sareum's Chief Executive Officer, said: "Our ability to rapidly elucidate the three-dimensional structure of drug targets, and our ability to use those structures as the mould for generating potential new drugs, give us confidence of success in drug discovery. We believe our approach means we are capable of reducing, by up to half, the time it takes to discover drug candidates. We intend to leverage this capability both for our internal drug discovery programmes and to provide services to the pharmaceutical industry."

Sareum's Drug Discovery Process
Sareum's structure-based approach to drug discovery includes the use of parallelised baculovirus protein expression and high-throughput medicinal chemistry which reduces timelines in the development of therapeutic candidates and increases the probability of a project's success.

Structural Biology
In the five-stage drug discovery process, from identification of the target protein, through hit identification, lead identification and lead optimisation to the development of a candidate drug, the early solving of a protein structure has a substantial impact on the design of suitable ligands. Current timelines in the industry often result in protein structures being obtained during the lead optimisation phase, too late to effectively guide ligand design. Sareum's approach maximises the likelihood of solving the structure of a target protein for use both in the initial design of ligands and throughout the lifetime of the project.

Structure determination is conventionally an uncertain process owing to two unpredictable variables in the science: successful expression of a recombinant protein and formation of protein crystals suitable for x-ray structure determination. Sareum's Directors believe that they can significantly increase likelihood of success using their expertise and automated parallel protein expression technology, which addresses both variables. Sareum has what it believes to be a unique capability of parallel baculovirus expression, making at least 96 versions of any one protein from a eukaryotic source. The eukaryotic source ensures that there is a maximum chance that the protein will be suitably expressed and the multiple protein versions give a greater chance that protein crystals can be made. By providing this information far earlier in the drug discovery process Sareum is able to significantly increase the probability of a successful outcome of a drug discovery project.

Computational Chemistry
Computational chemistry enables the rapid and efficient design of focused libraries of novel chemical entities possessing desired biological and physico-chemical properties. Screening large virtual libraries against the structural information for a target makes possible the design of highly focused libraries for actual synthesis, and guides the medicinal chemist's decisions on prioritising subsequent target molecules.

High-Throughput Medicinal Chemistry
Sareum's medicinal chemistry platform, which makes extensive use of robotic automation and parallel processing, in conjunction with the most modern synthetic techniques, such as microwave chemistry, solid-supported reagents and scavenging resins, allows each scientist to synthesise several hundred molecules per week. The automated chemistry platform allows the use of many diverse chemical reactions and enables parallel modifications of multiple chemical families, maximising the chances of successfully delivering a pre-clinical drug candidate.

Summary

  • In response to the needs of the pharmaceutical and biotechnology industries, the Directors believe that Sareum has developed, optimised and integrated the use of a number of highly efficient platform technologies, which enable the company to significantly reduce the timelines traditionally taken in the process of drug discovery.
  • Sareum's parallel baculovirus platform gives the maximum chance of success in solving the 3-dimensional structure of the target protein and significantly shortens the timelines involved. Successful structure solution can therefore have the greatest impact on the drug discovery project.
  • The 3-dimensional structure of the protein is used in a computational screen of virtual libraries of molecules. This allows the chemist to focus on the synthesis of families of compounds that will have the maximum chance of success.
  • Sareum's automated chemistry platform allows rapid synthesis of many molecules from diverse chemical families. Cycle times in the iterative process of taking compounds from hits to leads and through the lead optimisation process are reduced.
  • Ongoing use of the protein structure and refinement of the computational model allow the chemists to focus on the synthesis of molecules with the maximum chance of success.

Highlights of the Placing

Placing price 2p
Number of existing Ordinary Shares 240,000,000
Number of new Ordinary Shares subject to the Placing 100,000,000
Number of Ordinary Shares on Admission (including Issue Shares) 347,750,000
Placing Shares as a percentage of Enlarged Issued Share Capital on Admission 28.8 percent
Market Capitalisation of the Company on Admission at the Placing Price GBP 6.96 million
Estimated gross proceeds of the Placing receivable by the Company GBP 2.0 million
Estimated net proceeds of the Placing (after expenses) receivable by the Company GBP 1.75 million

For further information:

Sareum Holdings                      01223 497700
Tim Mitchell, Chief Executive Officer

Buchanan Communications   020 7466 5000
Mark Court