Sareum Holdings plc (AIM: SAR), the specialist structure-based drug discovery business, is pleased to announce that it has entered into an initial 12-month multi-target research services agreement with Genentech, Inc., a leading biotechnology company.

Under the terms of this agreement, Sareum will apply its skills in high throughput protein expression, purification and structure determination on multiple drug discovery targets designated by Genentech.

In return, Sareum will receive research fees and may receive specific success-dependent milestone payments, with a combined value in excess of $1.5 million. The agreement also provides an option to extend the agreement for a further 12 months.

Commenting on the agreement, Sareum's Chief Executive Officer, Dr Tim Mitchell, said: "I am delighted that Genentech has chosen Sareum as a collaborator in protein structure determination. I regard this multi-target collaboration as an outstanding validation of Sareum's technology and expertise."

For further information:

Sareum Holdings 01223 497700
Tim Mitchell, Chief Executive Officer

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

Notes for editors:

About Sareum Holdings plc

Sareum Holdings plc is a structure-based drug discovery business headquartered in Cambridge, UK. Sareum Limited 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.

A structure-based approach to drug discovery relies on knowledge of the three-dimensional structure of the proteins that cause disease. Once the structure is known, potential drugs are designed to 'lock-in' to the protein with the aim of reversing or arresting a disease's progression. Knowledge of the structure of the potential drugs and how they 'lock-in' to the protein permits the best potential drug to be discovered. Determining structure is a complex task and requires leading-edge equipment and experienced staff. Sareum's approach to structure determination is to produce multiple recombinant proteins primarily through a baculovirus expression system and to determine their structure using x-ray crystallography.

When the structure is determined, the Company's innovative Template Screening platform is used to identify novel chemical starting material designed to interact with the target protein. Sareum then uses its high-throughput medicinal chemistry platform to rapidly optimise these 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