Offer Update

microgen

Information Management Solutions

3 August 2004

                  Update on Potential Offer for Diagonal plc                   

Following the announcement on 13 July 2004 that the Diagonal Board was
recommending an Offer by Morse plc within the valuation range indicated by
Microgen in its announcement of 7 June 2004, the Board of Microgen has
continued to evaluate the potential opportunity. Appropriate due diligence,
including requesting information under Rule 20.2 of the City Code from
Diagonal, has been undertaken and the Board of Microgen now considers it
appropriate to advise of the Group's intentions following completion of this
activity. In evaluating the opportunity, the Board has taken into consideration
the information received, the relative valuations of Microgen and Diagonal and
the interim results of each company announced earlier this month.

Based on the current valuation of the Morse Offer, and in the absence of a more
attractive competing offer, the Board of Microgen would anticipate accepting
the Offer with regard to Microgen's 7.46% shareholding in Diagonal, acquired at
an average purchase price of 38.9p. At the current valuation, Microgen would
anticipate recognising an exceptional profit in respect of its investment in
Diagonal after deducting the costs incurred in evaluating the potential
acquisition.

Given the above considerations, Microgen will not be making an offer for
Diagonal.

Contact:                                                                       
                                                                               
Microgen plc                            01753-847122                           
                                                                               
Martyn Ratcliffe, Executive Chairman                                           
                                                                               
Mike Phillips, Group Finance Director                                          
                                                                               
UBS                                     020-7567-8000                          
                                                                               
Nick Adams                                                                     
                                                                               
Financial Dynamics                      020-7831-3113                          
                                                                               
Ed Bridges / Ben Way                                                           

www.microgen.co.uk

The directors of Microgen plc accept responsibility for the information
contained in this announcement, except that the only responsibility accepted in
respect of information regarding the Offer by Morse plc for Diagonal plc, which
has been taken from the announcement by Morse plc on 13 July 2004, is that it
has been correctly and fairly reproduced or presented. Subject thereto, to the
best of their knowledge and belief (having taken all reasonable care to ensure
that such is the case) the information contained in this announcement is in
accordance with the facts and does not omit anything that is likely to affect
the import of such information.

UBS Investment Bank is acting exclusively for Microgen and no one else in
connection with any potential offer for Diagonal and will not be responsible to
anyone other than Microgen for providing the protections afforded to customers
of UBS Investment Bank nor for providing advice in relation to any potential
offer for Diagonal.