OXFORD BIOMEDICA

Oxford Biomedica Preliminary Results for the Year Ended 31 December 2000

• Financial performance: turnover for the year ended 31 December 2000 was £0.7 million (1999: £0.4 million), with revenue from 3 new commercial alliances. Loss after tax was £5.0 million (1999: £4.2 million).
• Research & development: R&D expenditure was £5.0 million (1999: £3.8 million), which included the establishment of the Gene Discovery Division.
• Cash position: the bank balance at 31 December 2000 was £11.6 million (1999: £3.0 million). £14.2 million was raised, net of costs, by issues of shares, including the placing of 13.7 million shares in January 2000 and 14.6 million shares in August 2000.
• Clinical progress: positive Phase I results from MetXia® with good safety and gene transfer data in BC1 (breast cancer) trial. MetXia® is also in a Phase I/II ovarian cancer trial. In January 2001 the cancer vaccine, TroVaxT entered Phase I/II clinical trials in colorectal cancer.
• Commercial activity: there are now 10 commercial alliances with pharmaceutical and biotech companies including AstraZeneca, Aventis, Nycomed Amersham and, signed in January 2001, a collaboration with Wyeth-Ayerst potentially worth $24 million.
• Gene discovery: This new division was established in August 2000 and has already identified new genes believed to be mechanistically linked with diseases such as cancer, cardiovascular disease and inflammation. Significant progress is expected from this division in the next financial year.
• New appointments: Dr Paul Durrands joined the Board as Commercial Director. Dr Peter Johnson replaced Alan Goodman as non-executive Chairman.

Commenting on the Preliminary Results, Dr Peter Johnson, Chairman of Oxford BioMedica said:
"This has been another year of substantial achievements for the Company, with the reporting of the first clinical results for MetXia®, approval of the clinical trials of our second product, TroVaxT, and the expansion of our work in the genomics field through the Gene Discovery Division.

We continue to focus on building shareholder value by creating as many routes as possible for our unique technology to enter substantial pharmaceutical markets. We are pleased with the position we have reached so far, with ten commercial collaborations, three clinical trials in progress and a pipeline of new opportunities, coupled with a stronger balance sheet as a result of the successful fund-raisings in 2000. We look forward to further growth in 2001."

Notes to Editors

1. Oxford BioMedica plc
   Established in 1995, the Company specialises in the development and application of gene-based therapeutics and immunotherapeutics for the treatment of disease in the areas of Oncology, Neurobiology and Viral Infection. During 2000 Oxford BioMedica expanded its activities by the establishment of a Gene Discovery Division which applies the Company's gene-based technologies in the field of genomics with the intention of identifying genes that may be linked to disease. Oxford BioMedica plc was floated on the Alternative Investment Market of the London Stock Exchange in December 1996.
   
   Currently Oxford BioMedica has corporate collaborations with Aventis, AstraZeneca, IDM, Modex Therapeutics, Nycomed Amersham, Valentis, Virbac and Wyeth-Ayerst. BioMedica has two products in Phase I/II clinical trials. MetXia® is in clinical trials for late-stage breast cancer (BC1) and ovarian cancer (OC1), and TroVaxT is in clinical trials for late-stage colorectal cancer.

CHAIRMAN'S STATEMENT

Oxford BioMedica has made substantial progress in 2000. In November the Company reported the successful completion of the first stage of the Phase I/II clinical trial of MetXia® in cancer patients with surface skin nodule tumours. In December BioMedica's second product, TroVaxT, received approval for a Phase I/II trial in colorectal cancer patients. This clinical trial commenced in January 2001. In addition, the Company's preclinical programmes have moved ahead well, particularly in the neurobiology field.

The formation of the Gene Discovery Division further broadened the Company's commercial base adding another route to value as the pharmaceutical and biotechnology industries enter the post-genome era. BioMedica now has ten corporate alliances in place including deals with Aventis, Nycomed Amersham and AstraZeneca and, signed in January 2001, a collaboration with Wyeth-Ayerst to develop antibody-based products with a potential value from access, option and milestone payments of $24 million.

FINANCIAL REVIEW

In 2000 Oxford BioMedica continued to manage its finances prudently, and was able to take advantage of two opportunities to raise new funds in institutional share placings.

Income was £732,000 in 2000 (1999: £436,000). The increased revenue arose from expansion of existing collaborations with Aventis and Modex, and new collaborations with AstraZeneca, Nycomed Amersham and Virbac. The loss for the year after tax was £5.0 million (1999: £4.2 million).

Operating expenses were £6.8 million (1999: £5.1 million). Of this, research and development costs were £5.0 million (1999: £3.8 million). The increased research and development costs reflect the continuing expansion of research, preclinical and clinical programmes, and the establishment in August 2000 of the Gene Discovery Division. In addition it includes a substantial and growing investment in creating and maintaining the Company's intellectual property portfolio. Administrative expenses were £1.7 million (1999: £1.3 million). Grant income was £0.1 million (1999: £0.3 million) as the Company completed its three current grant programmes.

Capital expenditure in 2000 was £0.9 million (1999: £0.1 million); £0.6 million of this was used for advanced computer hardware and software to support the implementation of bioinformatics by the Gene Discovery Division.

From April 2000 the Company is entitled to claim tax credits for certain research and development expenditure, and consequently the 2000 accounts include a tax credit of £0.4 million (1999: nil). Tax losses on other expenditure will be available for offset against future taxable profits.

Financing
A total of £14.2 million was raised by the issue of shares in 2000, detailed in the table below. With the authority given to the Directors by the Company's shareholders, the Company was able to complete two institutional cash placings, free of statutory pre-emption rights, to raise new funds quickly and cost-effectively.

As a result of increased operating expenses and higher capital expenditure, the net outflow of funds before new share issues was £5.6 million in 2000 (1999: £3.7 million). The bank balance at 31 December 2000 was £11.6 million.

The funds raised in 2000 have allowed BioMedica to increase its investment in research and development, and in particular to establish the Gene Discovery Division. As a result the Directors believe that the potential for future returns from the Company's technology has been enhanced. Since it is the Company's commercial strategy to proceed with the clinical development of candidate products up to and including Phase I/II clinical trials, the Company will require further funds in due course.

OPERATIONAL REVIEW

During the year the Company made good progress in its three main activities: Gene Therapy, Gene-based Immunotherapy and Gene Discovery, and has progressed well with its external collaborations.

Clinical Development of BioMedica's Products
Oxford BioMedica made significant advances in its clinical programmes in 2000. In November, the Company reported that MetXia® had met all of the goals in the first part of the Phase I/II BC1 trial in cancer patients with surface skin nodule tumours, mainly arising from breast cancer. In addition the Company was granted approval to use MetXia® in a Phase I/II trial (OC1) in ovarian cancer patients, and that trial has started.

The successful completion of the first part of the BC1 trial has prompted the Company to build a product family around MetXia® thereby broadening its commercial potential. In December 2000, BioMedica established a collaboration with the major US gene therapy company Valentis to develop a version of MetXia® for systemic administration using Valentis' PEGylation technology.

In December 2000 the Company's second lead candidate product, TroVaxT, received approval from the Medicines Control Agency for a Phase I/II trial (TV1) in colorectal cancer patients. The TV1 trial is being conducted at the Christie Hospital, Manchester. Not only is this an important step in terms of the development of TroVaxT as a product, but it is also a major component of the Company's qualification for admission to the United Kingdom Listing Authority's Official List.

Preclinical Research and Development
During the year there were a number of major technical developments and the Company made significant progress in taking its products towards the clinic. Two areas are worthy of special note: neurobiology and immunotherapy.

The neurobiology programme gained pace with substantial achievements from both the LentiVector® team, in terms of efficiency of gene transfer to neurones, and the neurobiology team, in terms of the development of BioMedica's Parkinson's disease product, ProSavin®. The Directors believe that BioMedica has world leading technology for delivering genes to the cells of the central nervous system, and that this will create a range of commercial opportunities in the future.

In addition, the demonstration by the Company's immunotherapy group that an antibody against the proprietary tumour antigen OBA-1 has direct anti-tumour effects in model systems has opened the way for BioMedica to enter the antibody therapy field. The signing of a collaborative agreement with a potential value from access, option and milestone payments of US$ 24 million in January 2001 with Wyeth-Ayerst Laboratories (a division of American Home Products Corporation) is one example of the validation of BioMedica's antibody technology, and further developments are expected in this area during the coming year.

Gene Discovery Division
2000 was an historic year for biomedical science with the completion of the sequencing of the human genome. Oxford BioMedica, as a leader in gene-based technology, is ideally placed to realise the potential of the post-genome era, particularly through the activities of the Gene Discovery Division.

The establishment of the Gene Discovery Division in the second half of the year addresses the problem of identifying those genes, amongst the 100,000 genes in the genome, that are mechanistically involved in disease processes and are therefore prime candidates as targets for product development. The Company raised £8.5 million by a share placing in August 2000 to accelerate the development of business opportunities in this field.

The Gene Discovery Division has already achieved commercial success through target validation deals with AstraZeneca and Aventis, and further deals are in discussion with both pharmaceutical companies and genomics companies. In addition, patents have been filed covering the first genes identified using BioMedica's proprietary SmartomicsT technology. These genes may have applications in cancer, cardiovascular disease and inflammation. In the coming year, the Company expects to make significant further progress with the Gene Discovery Division as new collaborations are agreed and as more genes are identified, particularly in the field of neurological disorders.

External Collaborations
The Company's collaborative alliances are progressing well. In June 2000 BioMedica announced the expansion of the collaboration with Aventis in cardiovascular disease. In addition six new collaborations have been signed:

• January 2000 IDM S.A. in the field of cell-based therapies;
• February 2000 AstraZeneca in the field of genomics;
• February 2000 Virbac S.A. for the development of a veterinary version of TroVaxT;
• March 2000 Nycomed Amersham for tumour imaging;
• December 2000 Valentis Inc. for the development of MetXia®; and
• January 2001 AHP/Wyeth in the field of anti-cancer antibody therapy.

Intellectual Property
BioMedica's intellectual property portfolio represents the foundations of the Company's value. New patents were filed in 2000, seven patents were granted and notices of allowance were received for a further five patents. Of particular importance has been the Company's increasing portfolio of successful patent applications in the field of LentiVector® technology.

Commercial Strategy
The BioMedica management team recognises that the commercial development of novel therapeutics is a process that offers substantial reward, but that has a number of associated risks. These risks are a function of the gap in knowledge that exists between the data generated in preclinical studies and the ability to predict efficacy of a product in human clinical trials. It is the responsibility of any biotech management to manage that risk effectively and BioMedica faces this challenge head-on through its technical and commercial strategies.

The overriding principle followed by the Company is to develop as many credible routes to major pharmaceutical markets as possible while containing costs within strict budget constraints. BioMedica is developing in-house technologies and a range of candidate products, designed to address unmet medical needs where there is substantial market potential, in the areas of cancer, neurodegenerative disease and AIDS.

Also, the Company creates market opportunities by joining with others and applying its technology and product components to collaborative product development projects, often outside the fields of the internal programmes. As part of these alliances, the partner often pays for all or a significant part of the research and development programme, and therefore the early risk to BioMedica is reduced.

In addition the Company further leverages its proprietary technology by supplying, through the Gene Discovery Division, leading edge capabilities to the pharmaceutical industry for developing new products that arise out of genomics and proteomics.

The continued pursuit of this strategy means that BioMedica's value does not reside in any single product, product component or technology. Instead, the Company's value is distributed across several short-term and long-term revenue opportunities any one of which has the potential to yield substantial returns. The directors believe, therefore, that the overall prospects for BioMedica are good.

Appointments
In June 2000 Dr Paul Durrands joined the Board as commercial director. He has specific responsibility for the commercial development of the Gene Discovery Division. On 1 January 2001 Alan Goodman retired from the board of BioMedica. Mr Goodman had served as a non-executive director for over four years and had been chairman since June 1998. I am pleased to be extending my role as a non-executive director and taking over the role of Chairman. I am looking forward to being involved as Oxford BioMedica enters a year of exciting opportunities.

IN SUMMARY

This has been an excellent year for BioMedica. A great deal has been achieved, and there is still more to come. However, none of this would have been possible without the dedication and extraordinary skills of our research and development staff or the support of our shareholders, new and old. The Directors were particularly pleased to welcome new institutional shareholders who took part in the two share placings during 2000. The Board also extends its thanks to Alan Goodman for his many contributions to the development of BioMedica over its first four years

Dr Peter Johnson
Chairman

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Consolidated profit & loss account for the year ended 31 December 2000
		2000 (unaudited) £000's	1999 (unaudited) £000's
Turnover		732	436
Research and development Administrative expenses		(5,033) (1,731)	(3,764) (1,346)
Operating expenses Other operating income: government grants receivable		(6,764) 96	(5,110) 267
Net operating expenses		(6,668)	(4,843)
Operating loss		(5,936)	(4,407)
Interest receivable		541	218
Loss on ordinary activities before taxation		(5,395)	(4,189)
Tax credit on loss on ordinary activities		393	-
Loss for the year		(5,002)	(4,189)
Basic loss and diluted loss per ordinary share		(3.1p)	(3.0p)

Consolidated balance sheet at 31 December 2000
		2000 (unaudited) £000's	1999 (unaudited) £000's
Fixed assets
Intangible assets		283	332
Tangible assets		1,304	773
Investments		26	26
		1,613	1,131
Current assets
Debtors		1,069	432
Cash at bank and in hand		11,635	3,039
		12,704	3,471
Creditors: amounts falling due within one year		(1,340)	(801)
Net current assets		11,364	2,670
Net assets		12,977	3,801
Capital and reserves
Called-up share capital		1,721	1,422
Share premium account		26,428	12,549
Other reserves		711	711
Profit and loss account (deficit)		(15,883)	(10,881)
Equity shareholders' funds		12,977	3,801

Consolidated cash flow statement for the year ended 31 December 2000
		2000 (unaudited) £000's	1999 (unaudited) £000's
Operating activities
Net cash outflow from continuing operating activities (reconciliation to operating loss)		(5,306)	(3,800)
Returns on investments and servicing of finance
Interest received		407	218
Capital expenditure
Purchase of tangible fixed assets		(683)	(136)
Acquisitions and disposals
Investment in joint venture		-	(26)
Net cash outflow before management of liquid resources and financing		(5,582)	(3,744)
Management of liquid resources
Net transfer to deposit accounts		(11,092)	-
Financing
Issue of ordinary shares		14,603	3,556
Expenses of share issue		(425)	(339)
		14,178	3,217
Decrease in cash in the year		(2,496)	(527)

Reconciliation of operating profit to net cash outflow from operating activities
		2000 (unaudited) £000's	1999 (unaudited) £000's
Continuing activities
Operating loss		(5,936)	(4,407)
Amortisation on intangible fixed assets		49	49
Depreciation on tangible fixed assets		321	296
Loss on disposal of tangible fixed assets		5	1
Decrease/(increase) in trade debtors		(24)	(24)
(Increase)/decrease in other debtors and other tax receivable		(52)	27
Increase in prepayments and accrued income		(82)	(77)
Increase in trade creditors		99	162
Increase in other taxation and social security		57	29
Increase in accruals and deferred income		209	144
Net cash outflow from continuing operating activities		(5,306)	(3,800)

Notes to accounts

1. The preliminary results for the year ended 31 December 2000 are unaudited and do not constitute the Company's statutory financial statements within the meaning of s227 of the Companies Act 1985. The financial information for the year ended 31 December 1999 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified. The statutory accounts for the year ended 31 December 2000 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting.
2. The basic loss per share has been calculated on a weighted average number of shares of 161,851,789 in issue during the year (1999: 137,599,908). The Company had no dilutive potential shares in either period which would serve to increase the loss per ordinary share. There is therefore no difference between the loss per ordinary share and the diluted loss per ordinary share.
3. Copies of this announcement are available from the Company Secretary. The audited statutory financial statements for the year ended 31 December 2000 are expected to be distributed to shareholders by 28 February 2001 and will be available at the registered office of the Company, Medawar Centre, Oxford Science Park, Oxford, OX4 4GA.
4. This announcement was approved by the Board of Oxford BioMedica plc on 25 January 2001.

For further information please contact:
Oxford BioMedica plc Professor Alan Kingsman, Chief Executive	Tel: +44 (0)1865 783 000
City/Financial Enquiries David Simonson, Melanie Toyne Sewell Merlin Financial Communications	Tel: +44 (0)207 606 1244
Scientific/Trade Enquiries Chris Gardner, HCC•De Facto Group	Tel: +44 (0)207 496 3300

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