Sareum Holdings plc (AIM: SAR), the specialist structure-based drug discovery business, is pleased to announce that substantial progress has been made in its joint cancer drug discovery collaboration with The Institute of Cancer Research (The Institute), Europe's leading cancer research centre, and Cancer Research Technology Limited (CRT), the oncology-focused development and commercialisation company. Sareum, The Institute and CRT have discovered novel compound series which show efficacy in cancer cell models.

The collaboration, which was announced in July 2005, has discovered several novel compound series that target a specific enzyme in a key biochemical pathway, responsible for preventing the effectiveness of traditional cancer therapeutics such as chemotherapy. In the collaboration the team is now working to fully optimise a leading series of compounds to provide a validated candidate to take forward into clinical development. The new cancer therapeutics developed will potentially allow effective treatment of tumours which currently do not respond to current treatments as well as lowering the dose required of existing therapies to reduce adverse side effects.

Sareum has used its expertise in structure-based drug discovery to identify novel compounds using its innovative Template Screening technology. These compound series have been rapidly progressed utilizing Sareum's high throughput medicinal chemistry and structure determination platforms combined with the drug screening, specialist cancer biology and medicinal chemistry expertise at The Cancer Research UK Centre for Cancer Therapeutics at The Institute.

Under the terms of the agreement CRT will commercialise the drug candidates developed by the collaboration to secure future clinical development. Payments, milestones and royalties received by CRT will be shared with Sareum and The Institute.

Commenting on the agreement, Sareum's Chief Executive Officer, Dr Tim Mitchell, said: "The quality of the science and technology applied to this collaboration has led to outstanding progress. This demonstrates Sareum's ongoing commitment to the discovery of new treatments to meet unmet medical needs in cancer. We are now looking forward to advancing our novel chemical series through to clinical candidate nomination next year."

Professor Paul Workman, Director of The Cancer Research UK Centre for Cancer Therapeutics at The Institute of Cancer Research, said: "The addition of Sareum's powerful technology platform to our own in-depth expertise in the development of targeted molecular therapeutics has allowed us to move forward very rapidly on this exciting and important target. Development of a drug against this target would benefit patients who are currently resistant to current treatments."

For further information:

Sareum Holdings 01223 497700
Tim Mitchell, Chief Executive Officer

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

The Institute of Cancer Research 020 7153 5359
Nadia Ramsey, Science Press Officer

Cancer Research Technology Limited 020 7269 3640
Nick Wells, Head of Marketing

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

About Cancer Research Technology Limited

Cancer Research Technology Limited (CRT) is an oncology-focused development and commercialisation company that realises cancer patient benefit from publicly- funded research worldwide. CRT works closely with leading international cancer scientists, their institutes and funding bodies to protect, develop and commercialise oncology-related discoveries. CRT is wholly owned by Cancer Research UK, the largest independent funder of cancer research in the world. Further information about CRT can be found at www.cancertechnology.com.