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Lipoxen PLC (XEN)

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Thursday 03 August, 2006

Lipoxen PLC

Re Agreement

Lipoxen PLC
03 August 2006

                                                             3 August 2006

                                  LIPOXEN PLC
                          ('Lipoxen' or 'the Company')

   Development and Manufacturing Agreement with the Serum Institute of India

London, UK, 3rd August 2006 - Lipoxen PLC (AIM: LPX), a biopharmaceutical
company specialising in the development of differentiated biologicals, vaccines
and oncology drugs, today announced that it has entered into  a Development and
Manufacturing Agreement ('DMA') with the Serum Institute of India Limited

Pursuant to the DMA, SIIL will develop the technology for the manufacture of
polysialic acid ('PSA') and its derivatives to the US Food and Drug
Administration ('FDA') standards on a commercial scale to meet the demands of
the Company's collaborative partners and for pre-clinical and clinical trials

While the Company has made considerable progress in its pre-clinical lab scale
programmes, it does not have the infrastructure or financial capacity to
initiate a commercial-scale FDA compliant manufacturing facility. Pursuant to
the DMA, SIIL will provide Lipoxen with a unique source of polysialic acid
(biopolymer) according to Good Manufacturing Practices ('GMP') standards and
customized to Lipoxen's specifications which will allow clinical development of
Lipoxen's protein drug pipeline and continuous supply of the biopolymer to the
Company's current and future collaborative partners.

SIIL is widely recognised as a world-class contract manufacturer and is able to
deliver a wide range of products and clinical assistance to the Company on a
market competitive basis. In particular, SIIL has developed a complete process
of fermentation, purification and manufacture of PSA and the DMA provides the
framework for this process to be taken forward to enable production on a
competitive commercial basis.

The terms of the DMA require the Company to make a single capital payment
against which SIIL has contracted to establish a fully functional FDA-compliant
PSA production facility in early 2007 in order to supply suitable quantities of
PSA both to the Company (in support of its ongoing pre-clinical programmes) and
to the Company's collaborative partners as certain product candidates move to
the clinical trials stage. Provision has also been made for the Company to
receive royalty payments from SIIL under certain circumstances.  The DMA further
provides for compensation to be payable to the Company in the unlikely case of
SIIL failing to meet its basic obligations under the agreement.  The term of the
DMA runs in parallel with that of a licensing agreement dated 16 December 2004
(as amended on 11 October 2005) between SIIL and Lipoxen Technologies Limited
(the wholly owned subsidiary of the Company) being for, effectively, an
indefinite term.

Accordingly, the DMA lies at the heart of the Company's strategy to bring its
(and its collaborative partners') product candidates to market at the earliest
date and the further collaboration with this globally leading producer is
considered pivotal to achieving that goal. The DMA establishes SIIL as the
Company's key contract manufacturing partner and represents a substantial
milestone in the continuing development of PolyXen(R), Lipoxen's patented
protein drug-delivery technology.


Lipoxen PLC
Scott Maguire, CEO                                           +44 (0)20 7691 2153

Citigate Dewe Rogerson                                       +44 (0)20 7638 9571
David Dible/Yvonne Alexander

Notes to Editor

Lipoxen PLC (AIM: LPX) is a biopharmaceutical company specialising in the
development of high value differentiated biologicals, vaccines and oncology
drugs. Potential products, which address markets in excess of US$1 billion,
currently under development include improved formulations of important
biologicals including EPO, G-CSF, insulin and Interferon-alpha based on
Lipoxen's proprietary PolyXen(R) technology. This technology is designed to
improve the stability, biological half-life and immunologic characteristics of
therapeutic proteins naturally. Lipoxen has two further naturally-derived
proprietary delivery technologies ImuXen(R) and a related liposomal technology
for the formulation of cytotoxic oncology drugs, which are being developed to
enhance the efficacy and safety of various vaccines such as Hepatitis B and
pneumococcal vaccines, as well as a number of anti-cancer agents like
paclitaxel. The Company's proprietary delivery technologies are attracting
significant interest and Lipoxen is already co-developing products with Serum
Institute of India, one of the world's leading vaccine companies. In addition,
its technologies are being currently evaluated by leading biotechnology
companies such as Baxter, Amgen, Genzyme and Genentech.

Lipoxen was admitted to trading on the AIM Market of the London Stock Exchange
in January 2006.

This announcement includes 'forward-looking statements' which include all
statements other than statements of historical facts, including, without
limitation, those regarding the Company's financial position, business strategy,
plans and objectives of management for future operations (including development
plans and objectives relating to the Company's products and services), and any
statements preceded by, followed by or that include forward-looking terminology
such as the words 'targets', 'believes', 'estimates', 'expects', 'aims',
'intends', 'will', 'can', 'may', 'anticipates', 'would', 'should', 'could' or
similar expressions or the negative thereof. Such forward-looking statements
involve known and unknown risks, uncertainties and other important factors
beyond the Company's control that could cause the actual results, performance or
achievements of the Company to be materially different from future results,
performance or achievements expressed or implied by such forward-looking
statements. Such forward-looking statements are based on numerous assumptions
regarding the Company's present and future business.

                      This information is provided by RNS
            The company news service from the London Stock Exchange