Sareum Holdings plc (AIM: SAR), the structure-based drug discovery and services business, is pleased to announce that it has reached a key success milestone in its collaboration with an unnamed UK-based central nervous system (CNS) focused drug discovery and development company ("the Client"), with whom it has a collaborative agreement first announced on 15 December 2004. Under the agreement, Sareum is providing protein structure determination services to support the Client's research against diseases of the CNS. Sareum has now successfully delivered key structural data and as a result of this the Company is entitled to its first milestone payment under the agreement.

The collaboration is a key component of the Client's innovative research program to discover novel drug candidates for the treatment of CNS diseases. Sareum's expertise in protein expression and structure determination has lead to the successful determination of the three-dimensional structure of the protein target of the research program in complex with drug and potential drug compounds that inhibit its action.

This information will assist the Client's scientists understand the precise nature of the interactions between these compounds and the target protein, thereby assisting the Client's scientists in the development of more effective treatments of diseases of the central nervous system.

Sareum will continue to determine the structures of the Client's compounds in complex with the target protein as part of Sareum's ongoing commitment to this collaboration. Financial terms have not been disclosed.

Commenting on the agreement, Sareum's Chief Executive Officer, Dr Tim Mitchell, said: "We are extremely pleased to be successfully delivering on this collaboration. This demonstrates our ability to provide valuable information to our collaborators and improve the ultimate success of our Client's drug discovery programmes."

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 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 that 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 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