Research Update

EpiStem Holdings plc
22 May 2007




22nd May 2007

EpiStem Plc announce biomarker studies for new drug development with AstraZeneca


EpiStem Plc (LSE: EHP), the UK epithelial stem cell company, announced today
that it had entered into feasibility studies with AstraZeneca to use its
proprietary plucked hair biomarker technology to help guide preclinical and
clinical development of new cancer drugs.

EpiStem's biomarker technology is a potentially powerful tool to enable drug
companies to measure the effects of new cancer treatments over time in a
minimally invasive manner. The biomarker technology may help inform the
early-stage assessment of drugs in preclinical development thereby assisting go/
no-go decisions thereby reducing the risk of an expensive drug failure in later
clinical trials.

The biomarker program has evolved from the discovery by EpiStem scientists of
the link between the stem cells in the small intestine and the hair follicle.
From this knowledge, the 'plucked hair' biomarker has been developed as a
non-invasive tool to measure drug effects on adult epithelial stem cells and
tissues.

The biomarker technology works by taking plucked human hairs at various times
during cancer treatment and analyzing the corresponding changes in gene
expression. Gene expression change in hairs can provide drug development
companies with a measure of drug exposure, toxicity, dose/schedule and patient
selection in preclinical and clinical drug development. This approach also has
the potential to offer oncologists a simple means to more effectively treat
cancer patients.

Dr Jeff Moore, Managing Director of Novel Therapies at EpiStem said, 'The FDA
has made it clear that they want new drugs to have biomarkers that show the
direct impact of that drug.  We are very excited about our biomarker
developments and believe that our technology will accelerate the development of
new cancer therapeutics throughout development and is well placed to improve the
effectiveness of existing treatment regimens. Our partnership with AstraZeneca,
one of the leading global pharmaceutical companies, offers an exceptional
prospect for our biomarker technology in helping to guide the development of new
drugs. Dr Moore also said 'at this stage of our development, there were no
forecast commercial values associated with the technology programme'.

Vice President of AstraZeneca's Oncology Therapy Area, Brent Vose, said, 'The
ability to use minimally invasive biomarkers to help guide our preclinical and
clinical drug development is an important step forward for AstraZeneca's drug
development programme. We have been impressed by the 'plucked hair' biomarker
technology and look forward to working closely with EpiStem Plc in the
successful delivery of our joint feasibility studies.'



For more information please contact:

Matthew Walls
Chief Executive Officer - EpiStem Ltd             [phone]

Mike Wort, Anna Dunphy
MC Bio-Communications Limited                     [phone]



                             Additional Information

EpiStem is a biotechnology company commercialising adult stem cells in the areas
of oncology and gastrointestinal diseases as well as cosmeceutical applications.
EpiStem develops innovative therapeutics and diagnostic biomarkers and provides
contract research services to drug development companies. The Group's expertise
is focused on the regulation of adult stem cells located in epithelial tissue,
which includes the gastrointestinal tract, skin, hair follicles, breast and
prostate. EpiStem does not conduct research in the areas of embryonic stem cells
or stem cell transplantation.

EpiStem operates two distinct business divisions, Contract Research Services and
Novel Therapies.



Contract Research Services

Contract Research Services provides specialised preclinical efficacy testing
primarily for drug development companies on a fee for service basis. This
division on a standalone basis is cash generative and profitable with a
five-year track record of providing testing services to over 72 international
company clients primarily in Europe and the United States.


Novel Therapies

Novel Therapies is focused on developing its own innovative therapeutics and
diagnostic biomarkers. Through its discovery platform, Novel Therapies has
identified 250 potential drug candidates, of which a subset will undergo further
evaluation as stem cell regulators for the Group's emerging drug development
pipeline. Novel Therapies is also developing its clinical diagnostic biomarker
technology.


Combined Business Model

The Group is exploiting its combined business model to advance its own
therapeutic candidates to late preclinical stage development. The business model
integrates the discovery efforts of Novel Therapies with the efficacy testing
assays of its Contract Research Services Division, to identify and characterise
new drug candidates. Revenues generated by Contract Research Services will
assist in offsetting Novel Therapies' investment requirements for the discovery
and development of therapeutics. In February 2007, EpiStem licensed its first
drug candidate to a clinical development company. With the validation of the
Novel Therapies discovery platform and the achievement of discovery milestones,
the Directors believe that additional licensing partnerships will be forthcoming
for therapeutics, diagnostics and cosmeceuticals starting in 2008.


About AstraZeneca

AstraZeneca is a major international healthcare business engaged in the
research, development, manufacture and marketing of prescription pharmaceuticals
and the supply of healthcare services.  It is one of the world's leading
pharmaceutical companies with healthcare sales of $26.47 billion and leading
positions in sales of gastrointestinal, cardiovascular, neuroscience,
respiratory, oncology and infection products.  AstraZeneca is listed in the Dow
Jones Sustainability Index (Global) as well as the FTSE4Good Index.





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            The company news service from the London Stock Exchange