Sareum Holdings plc (AIM: SAR), the structure-based drug discovery and services business, has entered into a collaborative agreement with an unnamed UK pharmaceutical company to provide protein structure determination services that will support the client's research against diseases of the central nervous system.

Sareum's expertise in protein expression and structure determination will support the client's drug discovery programme by seeking to illustrate the precise nature of the interactions between the drug candidates and the target protein, thereby assisting the client's scientists in the development of more effective medicines against diseases of the central nervous system.

This collaboration represents a significant new deal for Sareum and is on a fee-for-service basis. Under the terms of the agreement Sareum will receive substantial upfront and success payments.

This agreement, in combination with previously announced fee-for-service collaborations, potentially represents more than 80% of Sareum's budgeted revenues for the current financial year to 30 June 2005.

Commenting on the agreement, Sareum's Chief Executive Officer, Dr Tim Mitchell, said: "We are delighted to be providing provide drug discovery services in this important area of research. This is yet another key collaboration that Sareum has signed since we started trading on AIM and represents a significant step towards achieving our revenue targets for the year. We look forward to a successful outcome and further partnerships such as this one."

For further information:

Sareum Holdings 01223 497700
Tim Mitchell, Chief Executive Officer

Buchanan Communications 020 7466 5000
Mark Court, Mary-Jane Johnson

About Sareum Holdings plc

Sareum Holdings plc is a structure based drug discovery business headquartered in Cambridge, UK. The Company was formed in August 2003 to discover new drugs for the treatment of cancer and inflammation and to provide a range of drug discovery services to the pharmaceutical industry. Sareum's unique approach aims to halve the time it takes to discover new drug candidates.

Structure-based drug discovery involves the determination of a disease causing protein's three-dimensional structure. Once the structure is known, novel chemical entities are designed to 'lock-in' to the protein with the aim of reversing or arresting a disease's progression.

Sareum's approach to structure based drug discovery is to produce multiple recombinant proteins primarily through a baculovirus expression system; determine their structure using x-ray crystallography; and then use the Company's computational chemistry expertise to create virtual, focused libraries of new chemical entities designed to interact with the target protein. Sareum then uses its high-throughput medicinal chemistry platform to rapidly synthesise these molecules and develop the most promising into potential drug candidates.

Sareum offers its accelerated drug discovery capabilities on a fee basis to the pharmaceutical and biotechnology industries. Sareum intends to license out its internally generated drug candidates at the Phase I or Phase II clinical trials stage.

Sareum joined the AIM market of the London Stock Exchange in October 2004 and trades under the symbol SAR.