AGM Statement

Proteome Sciences PLC
04 August 2004



                             Proteome Sciences plc



                                 PRESS RELEASE



For immediate release
                    4th August, 2004



                                 AGM STATEMENT



At the Annual General Meeting of Proteome Sciences plc ('Proteome Sciences')
held at 12 noon today, the following statement was read out by Steve Harris,
Chairman :



I propose to make a short address to shareholders to cover the three main
questions most asked by investors about Proteome Sciences :



1.         What is the annual cash burn?

2.         How much cash have you got?

3.         What is happening with commercialisation?



I will address each of these and talk about our prospects ahead of opening the
meeting to shareholders for questions, but before that I would like to clarify
the situation in respect of our biomarkers on the Biosite Point of Care Panel.
We released a holding statement on 29th July and have been spending the
intervening period understanding the reasons for this decision and the
implications, if any, for Proteome Sciences biomarkers.



I am pleased to be able to report to you that the underlying value of Proteome
Sciences stroke markers is not affected by Biosite's decision and more
importantly, to reassure you that there are no adverse implications either for
the biomarkers we have discovered in other diseases or for the research which we
are undertaking in other areas.   I will now take you through the background and
try to explain what has occurred and why it does not impact on our main research
programmes in plasma and serum.



Biosite have been evaluating and developing  antibodies to Proteome's stroke
markers for approximately 18 months, and have yet to complete the process for
all of the markers delivered.  Of the earlier markers, a number were selected
for the final candidate list for the first point of care panel. When testing
human serum, that is blood from which the white and red blood cells have been
removed, Proteome's markers were found to be highly sensitive and specific for
both stroke and transient ischaemic attack (mini-stroke) at very early time
points of disease (between 60 minutes and 24 hours) as was shown in the recent
data presented at the 5th World Stroke Congress in Vancouver on 28th June.



Biosite's proposed point of care panel currently uses whole blood in which the
blood cells remain.  In whole blood there is a risk that during sample
collection and handling the blood cells can break open, a process called
haemolysis, and proteins can leak into the fluid.



Biosite has now tested the sensitivity of its current final candidate markers
list for haemolysis and found a number, including several of Proteome's markers,
that were affected by haemolysis.  The problem of haemolysis is well understood
within the diagnostics industry, and many markers of disease are sensitive to it
and, where applicable, the diagnostic companies provide users with guidance on
how to treat haemolysed samples.



Most tests requiring high sensitivity and specificity use plasma or serum and
not whole blood where the additional sample complexity creates more noise.  As a
consequence, this should not have any negative implications for the
commercialisation of the stroke markers for the main market application, high
throughput diagnosis, which accounts for over 90% of the total market size where
it is normal practice to use serum or plasma in central laboratories running
high throughput equipment.  Proteome has retained the rights for the high
throughput applications in stroke and is actively pursuing licensing deals with
major diagnostics manufacturers with discussions in an advanced state with
several companies.



The specific issues surrounding Proteome's leading candidate stroke markers
should  not be interpreted more widely. Shareholders should be aware that even
within the stroke programme we have delivered and continue to deliver a
significant number of new markers to Biosite of which only a small number have
been found to be affected by haemolysis.  At this stage Biosite have not had
time to complete the testing process for all of Proteome Sciences biomarkers for
haemolysis against highly characterised stroke patient samples and they continue
to evaluate these in parallel to the wider stroke trials they will shortly
commence.



The terms of the exclusive license agreement with Biosite for Point of Care
applications included certain 'non performance provisions' so that in the event
that Biosite did not utilise Proteome Sciences biomarkers in a timely manner,
the rights of these biomarkers for Point of Care application revert back to
Proteome Sciences.  We believe that Biosite are the right partner for the
development of our stroke biomarkers in Point of Care applications and we will
continue to assist their diligent efforts in resolving this issue.



Reverting now back to the three main questions that people most ask about our
company:



1.         What is the annual cash burn?

2.         How much cash have you got?

3.         What is happening with commercialisation?



Firstly the cash burn.  In the recently published Annual Report and Accounts we
decided to try and simplify the process for shareholders by separating cash and
non cash operating costs and establishing a headline figure which excludes the
non cash items to show a realistic rate of cash burn for the Company.  Presented
in this way, the results show a headline loss of £4.25m, which compares
favourably and a little lower than the cash burn of £4.5m expected for 2003.
This excludes the non cash items which accounted for £1.95m and the notional
share of associates losses at Intronn of £573,000.  As you can see, the £2.52m
non cash items increase the headline loss by 59% when included in the loss after
taxation of £6.78m in the P & L account.  This presentation of headline losses
clearly reflects a realistic and more meaningful  rate of cash burn.



At the year end cash stood at £6.2m.  This in broad terms should cover the
historic cash burn for approximately 18 months assuming no revenue.  Our
assumptions, however, are that we will be generating sustainable and growing
revenue and royalties as we move into 2005.  Additional costs will be taken out
from the business following the move of our research facilities in Frankfurt.
The Company is well funded and continues to have a low and predictable rate of
cash burn with no major capital expenditure anticipated for the foreseeable
future.



Before moving into commercialisation, there is an additional and crucial factor
that often is taken for granted or completely ignored.  The research.  Without
good research and results together with a strong intellectual property position
around our programmes, we would have nothing to commercialise.  As you have seen
from the Report and Accounts, there has been a strong flow of announcements
since the end of the third quarter of 2003, which we believe have considerably
enhanced and increased the asset value of the Company.  This has been partly
evidenced through the grant and issuance of ten patents.  Many patent
applications are filed, but only a small percentage of these are granted to
diagnose and treat disease.  We would appear to have been successful because of
our early strategy to pursue differential protein expression in disease in the
late 1990's and that early and continuing vision with the substantial patent
portfolio we have established looks as though it will serve us in good stead for
a long time into the future.



We have been able to demonstrate the power of our ProteoSHOP toolbox which was
launched in the middle of 2003 and through which in the period of less than 12
months we have established a very strong position in Alzheimer's disease.
Typically it is considered that a patient will have had Alzheimer's disease for
ten to fifteen years before there are any clinical symptoms, and onset increases
dramatically in those over 65  With the considerable extension of life
expectancy and the increase in an ageing global population, this is a major
concern.    No objective clinical assay currently exists and in March 2004 we
announced a panel of CSF biomarkers, followed by the discovery of serum
biomarkers at the end of June for the early detection of Alzheimer's disease.
In parallel in a separate programme, we presented the discovery of novel kinase
activity in the early development of Alzheimer's disease as potential new drug
targets to prevent and / or delay the progression of Alzheimer's disease.



The award of two grants in early 2004, one under the EU 6th Framework to address
patient response to drugs for depression and the other for the early detection
of Alzheimer's disease in blood and the discovery of new targets for therapy
further endorses the quality and originality of our research and most
importantly provides valuable access to cohorts of well characterised patient
samples.  Without samples we cannot undertake the research, and without the
research we cannot commercialise the discoveries.



What about commercialisation?  At the end of December 2002 we announced the
first commercialisation of our proprietary biomarkers in stroke for Point of
Care application.  In April 2003 we outlicenced the blood biomarkers we had
discovered in BSE and scrapie to Idexx Laboratories Inc., the world leader in
veterinary diagnostics.  Good progress has been made to date and we expect to
accelerate this  over the next twelve months.



This will be generated from all three main parts of the business :



•        Proprietary Biomarkers for diagnostic and therapeutic application

•        ProteoSHOP for external strategic alliances

•        Reagents



From the biomarkers we expect to outlicence high throughput stroke applications,
blood transfusion screening, Alzheimer's disease and cancer.  From ProteoSHOP we
expect to enter into a number of strategic alliances and from the reagents we
anticipate concluding licences for several of the Sensitizer(R) family reagents.
  In addition to these, we have identified four major new areas of application
for ProteoSHOP from which we are convinced that we can realise major economic
value and for which our technical capabilities are ideally suited.  These are
for :



•        Toxicoproteomics

•        Responder Profiling      - Responder vs Non Responder

•        Drug Recovery             - Drugs failed under development at Pharma

•        Drug Refurbishment      - Compounds that have gone off patent



We are working diligently to convert our outstanding scientific position and
proprietary biomarkers in proteomics into further commercial deals and this is
our main priority.  With increasing visibility of a full and widening pipeline
of biomarkers and strategic alliances, we believe that the commercialisation
process is well underway and having a significant impact on our business,
shifting the equilibrium to generating sustainable and growing revenue and
royalties as we move into 2005.  We are very confident about our future
prospects.


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