OXFORD BIOMEDICA

RHONE-POULENC RORER GENCELL AND OXFORD BIOMEDICA ESTABLISH COLLABORATION ON GENE EXPRESSION CONTROL TECHNOLOGY

Oxford BioMedica and Rhône-Poulenc Rorer Gencell (RPR), the gene-therapy division of Rhône-Poulenc Rorer Inc, the pharmaceutical subsidiary of Rhône-Poulenc S.A. (NYSE-RP); announced a collaboration and licensing agreement involving an exclusive worldwide license of Oxford BioMedica's Hypoxia Response Element (HRE) to be used in RPR's cardiovascular gene therapy products. Under the terms of the agreement, Oxford BioMedica will receive research funding, milestones and royalties on sales of RPR products which incorporate the HRE technology. Oxford BioMedica has also agreed to develop screens for small molecule therapeutics for RPR. Further milestone payments may be received for this work. In addition, RPR has today agreed to make an equity investment in Oxford BioMedica.

Hypoxia Response Element, which Oxford BioMedica acquired exclusively last year, is a sophisticated control mechanism that can switch genes on or off in response to oxygen levels in the tissues of the body. RPR will use HRE in gene therapy approaches to treat coronary artery disease and peripheral arterial disease by stimulating growth of new blood vessels in areas where existing blood vessels have become diseased, and have ceased to function. Hypoxia is an intrinsic phenotype of ischemic diseases. The HRE system is designed to ensure that any new blood vessels will grow only where they are needed and will not continue to grow once a normal blood supply has been established.

RPR expects to use HRE in both viral and non-viral vectors. The market for gene therapy products to treat coronary artery disease and peripheral arterial disease in the US alone is estimated to be over $2 billion per annum.

Terms
Under the terms of the agreement, RPR has agreed to provide Oxford BioMedica with a minimum of US $1 million in research funding over the first two years of the collaboration. In addition, RPR will subscribe for 1,507,295 Oxford BioMedica 1 pence ordinary shares at 20 pence per share, a 100 percent premium to the closing price on December 9, 1998. RPR will subscribe for additional Oxford BioMedica 1 pence ordinary shares upon the achievement of certain milestones, all at a 10 percent premium to the then current market price. Over the course of the collaboration, subject to the achievement of certain milestones, Oxford BioMedica could receive up to US $16.4 million in milestone payments and further equity investment.

"It is particularly pleasing that we have been able to negotiate the first significant deal from our technology toolbox with RPR, one of the most committed gene therapy companies in the industry today," commented Professor Alan Kingsman, Chief Executive of Oxford BioMedica. "In the preclinical work on HRE to date, we have achieved exquisite control over switching genes on and off in response to levels of oxygen. If we are able to repeat this success in humans, this means that therapeutic genes linked to HRE could be made active when and where they are required."

"Development of successful gene therapeutics is a complex puzzle which includes a gene, a delivery vector and a promoter-inhibitor of the gene's protein expression," said Dr. Didier Branellec, RPR's Director of Cardiovascular Gene Therapy Research, " And we are delighted to be aligned with Oxford BioMedica's HRE Technology with the promise of achieving precise gene regulation. Finding and working with partners, such as Oxford BioMedica, who are each focused on advancing one of the multiple sciences behind gene therapeutics is essential to our success."

3. This release is also available on the World Wide Web at: http://www.rp-rorer.com