Sareum Holdings plc (AIM: SAR), the specialist structure-based drug discovery and services business, is pleased to anounce an update on trading for the six month period ended 31 December 2005. The Company expects to release its interim results for the period before the end of February, 2006.

The Company is pleased to report that contracted sales, including pre-payments, for the half year ended 31 December 2005 are ahead of the Board's expectations at £620,000. Of this amount, the Company expects to recognise revenues of circa. £350,000 during that period. Revenues for the year ended 30 June 2005 were £332,335.

In late December 2005 Sareum entered into collaborations with several international pharmaceutical and biotechnology companies, details of which will be announced as soon as the necessary approvals are obtained. These deals are worth a minimum of £360,000, with a potential maximum value, depending on results, in excess of £1,250,000 over the next 12 months.

For the second half of the year to 30 June 2006, the Board anticipates that sales will exceed those of the first half and moves the company closer to its goal of fully funding its current in-house research programs from its sales revenues.

Commenting on the agreement, Sareum's Chief Executive Officer, Dr Tim Mitchell, said: "Sareum has enjoyed a productive and successful period. In addition to trading ahead of Board expectations, the Company hopes to announce new collaborations and the successful completion of ongoing projects during the remainder of our financial year."

For further information:

Sareum Holdings 01223 497700
Tim Mitchell, Chief Executive Officer

Grant Thornton 020 7383 5100
Colin Aaronson

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

Notes for editors:

About Sareum Holdings plc

Sareum Holdings plc is a specialist structure based drug discovery and services 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