Sareum Holdings plc (AIM: SAR), the specialist structure-based drug discovery business, is pleased to announce today that it has entered into a significant research collaboration with PIramed Ltd, a privately owned UK biotechnology company, to discover novel, targeted drug therapies for the treatment of immune inflammatory diseases.

Under the terms of this collaboration, which is scheduled to run for a period of up to 18 months, Sareum will provide multi-disciplinary research teams with the aim of generating novel drug lead series for further development by PIramed. This involves the generation of novel chemical material using Template Screening, Sareum's innovative fragment-based drug discovery technology, and optimisation into drug leads using Sareum's automated medicinal chemistry platform.

In return, Sareum will receive undisclosed research fees and success milestone payments, including additional milestone payments if compounds arising out of the collaboration advance to clinical development.

This is the third multi-disciplinary drug discovery collaboration Sareum has signed this year. Sareum announced agreements of similar scope with Organon and Idenix in January and February 2006.

Commenting on the agreement, Sareum's Chief Executive Officer, Dr Tim Mitchell, said: "This major collaboration with PIramed is a further endorsement of Sareum's leading position in structure-based drug discovery. We look forward to successfully using our multi-disciplinary platform to deliver drug candidates against these important disease targets."

For further information:

Sareum Holdings 01223 497700
Tim Mitchell, Chief Executive Officer

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

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