Sareum Holdings plc (AIM: SAR), the specialist structure-based drug discovery and services business, is pleased to announce it has entered into a collaborative agreement with Karus Therapeutics ("Karus"), a company developing novel drugs to treat cancer and heart disease.

Under the terms of the agreement, which is on a fee-for-service basis, Sareum will provide computational chemistry expertise to support Karus' therapeutic discovery programmes based on inhibitors of histone deacetylase (HDAC). Financial terms of the agreement were not disclosed.

Commenting on the agreement, Sareum's Chief Executive Officer, Dr Tim Mitchell, said: "We are delighted that we have been chosen by Karus to provide these drug discovery services and we look forward to making a valuable contribution to their development programmes."

Commenting on the announcement, Karus' Founder Director, Dr A Ganesan said: "We are excited at the opportunity to work with Sareum. In a short period of time they have established a reputation as a high-quality provider of research tools for drug discovery. We believe their expertise and resources will have a significant impact upon our programme."

For further information:

Sareum Holdings 01223 497700
Tim Mitchell, Chief Executive Officer

Karus Therapeutics 023 8059 3897
A Ganesan, Director

Buchanan Communications 020 7466 5000
Tim Anderson, Mary-Jane Johnson

Notes for editors:

About Sareum Holdings plc

Sareum Holdings plc is a specialist 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 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 template-molecule x-ray screening technology to identify new chemical entities designed to interact with the target protein. Sareum then uses its high-throughput medicinal chemistry platform to rapidly synthesise further molecules and develop the most promising into potential drug candidates.

Sareum provides its specialist drug discovery capabilities to partners in the pharmaceutical and biotechnology industries. The Company aims to successfully deliver: Programmes for complete gene-to-candidate structure-based discovery; projects to accelerate or improve the productivity of specific activities; and drug candidates for licensing 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. For further information, please visit www.sareum.co.uk

About Karus Therapeutics

Karus Therapeutics is a new spin-out company from the University of Southampton and is aiming to make the treatment of cancer and heart disease more patient friendly.

Chemist Dr A. Ganesan from the School of Chemistry, cancer scientist Dr Graham Packham and heart biologist Dr Paul Townsend from the School of Medicine have come together to create Karus Therapeutics, a company that plans to develop novel drugs known as histone deacetylase (HDAC) inhibitors to treat cancer and heart disease.

There has been intense interest in industry in HDAC inhibitors, which can slow abnormal cell growth, cause controlled cell death and/or correct abnormal cell differentiation in tumours. The next generation products to be developed by Karus are expected to offer patients a potent and less toxic treatment than their predecessors.