Acquisition

Avacta Group plc

Acquisition of Oxford Medical Diagnostics Limited

Complementary gas detection and analysis technology to broaden market reach

Avacta Group plc ("Avacta" or the "Company"), which develops detection and
analysis technology aimed at the defence & security, biopharmaceutical and
clinical diagnostics markets, announces that it has conditionally agreed to
acquire Oxford Medical Diagnostics Limited ("OMD"), a specialist in high
sensitivity, laser-based, gas-detection technology which was spun out from
Oxford University in 2004. OMD's applications are synergistic with Avacta's
existing products and customers and its technology is complementary, providing
gas phase detection capabilities to work alongside Avacta's core strengths in
liquids and solids analysis.

The initial purchase consideration of £3 million will be satisfied by the issue
of 43,908,069 ordinary shares of 0.1 pence each in the capital of Avacta (the
"Consideration Shares") at an issue price of 5.0 pence per share, a cash
payment of approximately £64,000 and the grant of options to subscribe for a
further 14,822,213 ordinary shares of 0.1 pence each in the capital of Avacta
at a weighted average exercise price of 0.7 pence per share. In addition,
options to subscribe for 37,409,242 ordinary shares of 0.1 pence each in the
capital of Avacta at an exercise price of 0.1 pence per share will be granted
to certain key personnel of OMD the exercise of which will be subject to the
satisfaction of certain operational and commercial milestones over a period of
up to four years. The Consideration Shares represent 5.6% of the current issued
ordinary share capital of Avacta.

The acquisition is conditional upon:

  * The approval of resolutions to increase the authorised share capital of
    Avacta; to give the directors of Avacta the required powers and authorities
    to issue and allot the Consideration Shares and the ordinary shares which
    are the subject of the options to be issued pursuant to the acquisition;
    and to dis-apply the statutory pre-emption rights in respect of the issue
    of such shares. These resolutions will be proposed as special business at
    the forthcoming Annual General Meeting of the Company; and
   
  * Tax clearance being obtained by the selling shareholders of OMD. This is
    expected to be obtained by 16 December 2007.
   
Application will be made for the Consideration Shares to be admitted to trading
on AIM when the acquisition becomes unconditional in all respects.

The patented technology exclusively licensed to OMD uses infrared absorption
spectroscopy and is targeted at two major markets: industrial process
monitoring and, in the longer term, clinical diagnosis through the rapid
analysis of breath samples.

Industrial Process Monitoring

OMD's laser-based gas analysis device has reached the final prototype stage and
the first product, which will provide a measurement of moisture content in
natural gas which drives gas value, is expected to reach the market late in
calendar year 2008. The market for industrial gas analysis technology is
estimated at approximately $1.5 billion (The Freedonia Group - Chemical
Sensors: Liquids, Gas and Biosensors Study) and includes security and defence
applications, toxic gas detection in a range of industries, and gas quality
analysis in sectors such as the petrochemical industry. OMD's technology will
provide quick and sensitive measurements in a cost effective product. This
equipment is expected to position Avacta as a leading developer of this type of
technology.

Point of Care Clinical Diagnostics

A growing number of diseases, such as tuberculosis, asthma, lung cancer and
some ulcers, can be diagnosed through the presence of certain molecules in the
breath. At present such analysis is carried out using large, expensive and
complex mass spectrometers. OMD has a strong patent position to use its
technology to analyse breath for diagnostic purposes and Avacta believes that
the equipment under development will lead to lower cost, portable devices which
can be used easily by clinicians to give accurate, rapid diagnoses.

For the year ended 31 December 2006, OMD reported turnover of £25,000 and a
loss on ordinary activities before taxation of £381,469. The net asset value of
OMD as at 31 December 2006 was £348,266.

As the vendors of OMD include IP Group PLC ("IP Group") which, through its
subsidiary company, Techtran Group Limited, is a substantial shareholder of
Avacta, the acquisition is classified as a related party transaction under the
AIM Rules. With the exception of Alan Aubrey, who is a director of Avacta and
of IP Group, the directors of Avacta consider, having consulted with WH Ireland
Limited, the Company's nominated adviser, that the terms of the transaction are
fair and reasonable insofar as its shareholders are concerned.

The vendors of OMD have agreed, subject to certain exceptions, not to dispose
of any Consideration Shares without the consent of the Company for a period of
12 months following Admission and only to dispose of such shares with the prior
consent of, and through, the Company's broker for a period of 12 months
thereafter.

Professor Alastair Smith, Chief Executive, Avacta, commented:

"OMD is a perfect fit for Avacta. It brings a highly complementary capability
that has applications in our core markets of biopharmaceuticals, defence and
healthcare and brings with it new routes to market for us in industrial process
monitoring. The Oxford founders, led by Professor Graham Hancock, and the
operational team are a huge asset to the wider Group.

The long term goals of the two companies are also perfectly aligned - to
provide high value products for the lucrative clinical diagnostics market. 
Point-of-care health diagnosis is increasing in importance, driven by the need
to effect more immediate treatments. We believe that the OMD technology, which 
has a well-protected position in this application area, will become an
important tool for clinicians helping to make breath diagnostics a routine
method of health assessment in the future."

                                                               14 November 2007

Enquiries:

Avacta Group plc                          Tel: [phone]                 
Alastair Smith, Chief Executive                                              
                                                                             
Nexus Financial Ltd                       Tel: [phone]                 
Nicholas Nelson/Kathy Boate               [e-mail]   
                                                                             
WH Ireland Limited                        Tel: [phone]                 
David Youngman/Robin Gwyn                                                    
                                                                             
BankOra Limited - Nominated Broker        Tel: [phone]                 
Henry Turcan/Michael Brennan                                                 


Notes to Editors:

About Avacta

Avacta was spun-out from the University of Leeds in 2004 by its current
management team as a biophysics company, with the aim of combining the
disciplines of physics and biology to develop innovative technologies and
expert technical services to address needs in the pharmaceutical, defence and
clinical diagnostics markets. Avacta has a core bio-analytical technology
development programme addressing the needs of the biopharmaceutical sector to
fully characterise their new products at the earliest stage in their
development to reduce the risk of late stage failure. High value solutions in
defence and clinical diagnostics are also being provided by Avacta's
development programmes. A successful and growing part of the Avacta business
model is its technical services arm, Avacta Analytical Ltd which is focused on
providing leading edge contract research to the biopharmaceutical and
healthcare/personal-care materials sectors. Avacta was admitted to AIM in
August 2006. On completion of the acquisition, Avacta will have 822,386,111
Ordinary Shares in issue and options over 9.4 per cent. of the enlarged issued
share capital.