Interim Results

Proteome Sciences PLC
30 September 2002





                             Proteome Sciences plc


                                 PRESS RELEASE


               INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2002


     30 September 2002

                                   HIGHLIGHTS

Proteomics

  • Acquisition of Xzillion completed in July 2002. Integration is well
    underway and on track.

  • Xzillion brings novel PSTT(TM) (protein sequence tagging) technology to
    Proteome Sciences. This is a unique proprietary solution for the
    identification and analysis of membrane proteins which are very important in
    the area of drug targeting and discovery. Current proteomics techniques are
    not effective in this area.

  • Other important developments during the period:
      • Patent granted to detect CJD and BSE in blood.
      • Announced blood test for diagnosis of stroke with high specificity and
        predictive accuracy - license agreement with strategic partner
        anticipated in coming months with test expected to be on market within
        next year and a half.
      • Completion of blood tests for acute and chronic organ rejection in
        final stages.
      • Collaborative research agreement signed with ReNeuron Holdings plc for
        drug target identification for stroke and other nuerodegenerative
        diseases.

Corporate

  • Xzillion wholly acquired for £12.6 million from Aventis Research and
    Technologies GmbH &Co (Aventis R&T) funded by issue of Proteome Sciences
    shares at 70 pence per share giving Aventis R&T 15.8% holding. Dr Wolfgang
    Schuller, CEO of Aventis R&T joins board of Proteome Scienecs as non-
    executive director.

  • Aventis R&T is committed to support the commercialisation of Proteome
    Sciences technology to secure licensing deals and further strategic
    partnerships.

  • Placing in June 2002 raised £2.6 million at 58 pence per share, increased
    by a further £3.5million following acquisition of Xzillion in July.

Intronn

  • Successful correction of cystic fibrosis gene defect and also mutant
    factor V111 (haemophilia) RNA repaired both using proprietary SMART(TM)
    transplicing technology.

  • Awarded $434,000 grant by National Cancer Institute.

Veri-Q Inc

  • Signed licensing agreement with North Carolina State University relating
    to impurity levels in synthetic oligonucleotides.



With respect to Proteome Sciences' progress and prospects, Christopher Pearce,
Chief Executive of Proteome Sciences, commented:


        'The acquisition of Xzillion combined with the creation of the
        proprietary research facility at King's College, London at the end of
        2001, concludes the transition of Proteome Sciences from a virtual
        company to an established business with a genuinely leading position in
        applied proteomics.


        'Of particular importance is our proprietary PST technology, which
        successfully addresses the complexity of membrane proteins which are
        known to be significant in relation to drug targeting. This places
        Proteome Sciences in a unique position to assist pharmaceutical
        companies in the critical area of drug discovery and development and in
        the provision of new generations of diagnostic and prognostic products
        and applications.


        'With the business development team having now been significantly
        strengthened and expanded, license agreements are expected to be
        concluded in the coming months, with products launched in the market
        within the next year and a half. We are also in active discussions that
        we are confident will result in a number of strategic alliances with
        pharmaceutical, diagnostic and biotechnology companies.


        'The outlook for the future is highly favourable as we continue to
        pursue the strategy adopted over these last years to focus the research
        to address the complex but high value area of differential protein
        expressions in disease using our expertise in combining high throughput
        and high sensitivity approaches.'




                                          ENDS


The full text of the interim statement is attached.

For further information please contact:



Proteome Sciences plc      Tel : [phone]

Christopher Pearce, Chief Executive    e-mail :[e-mail]

www.proteome.co.uk

Public Relations

Ikon Associates

Adrian Shaw   Tel : + 44 (0) 1483 535102

Mobile :  + 44(0) 797 9900733

e-mail :  [e-mail]



Notes to Editors

Proteome Sciences plc ('Proteome Sciences') applies high throughput combined
with high sensitivity proteomics to identify and characterise differential
protein expression in diseases for diagnostic, prognostic and therapeutic
applications. It has to date developed sensitive blood assays for stroke, nvCJD,
BSE and solid organ transplantation.


The main focus of its research currently addresses neurological,
neurodegenerative, diabetes/obesity, oncology and cardiovascular conditions.
Commercialisation of these programmes will be effected through strategic
alliances and licensing agreements.






The Company is headquartered in Cobham, Surrey in the UK and has laboratories at
Kings College Hospital, London and in Frankfurt. It employs 40 full time
scientists in addition to its corporate and business development staff. The
Company has been listed on the Alternative Investment Market since 1994.


Proteome Sciences is also the largest shareholder in two US companies:

      • Intronn Inc., (31% interest) the company that has developed SMaRT(TM), a
        technology able to modify gene expression at the mRNA level; and
      • Veri-Q Inc., (55 % interest) which was formed to acquire synthetic
        oligonucleotide and quality control marker technologies.








Chairman's Statement


The main events of the year to date can be summarised as follows:


Proteomics


  • Through the acquisition of Xzillion Proteomics GmbH & Co KG (Xzillion) in
    July, Proteome Sciences has achieved critical mass and the ability to
    combine high output with high-throughput proteomics, thereby providing a
    complete proteomics approach to address disease.


  • Xzillion's technology has been developed from a strong background in
    chemistry and is totally complementary to Proteome Sciences' existing
    activities.


  • Proprietary techniques have been developed: PST(TM) for protein sequence
    tagging, PSS(TM) for image analysis, TMT(TM) for tandem mass tags, 
    Sensitiser(TM) for mass spectrometry and bioinformatics support for PST(TM)
    and TMT(TM).


  • PST(TM) offers a novel solution to address membrane proteins, an area of
    high complexity which has been poorly addressed by existing approaches,
    including 2DE. This will generate increased activity across a broad range of
    diseases where membrane proteins play an important role for drug targets and
    discovery. The technology is developed and is now ready to be applied
    externally by strategic alliances.


  • A patent was granted in January to detect CJD and BSE in blood. A number
    of other patents exploiting Proteome Sciences technology to test for the
    presence of TSE (transmissable spongiform encephalopathy) in CSF
    (cerebrospinal fluid) and blood have been filed. At the 5th Siena Meeting '
    From Genome to Proteome' in September 2002, Proteome Sciences presented a
    paper showing the detection of a fatty acid binding protein in either the
    CSF or serum of CJD affected patients as a highly sensitive and specific
    marker of the disease.


  • A collaborative research agreement was concluded with ReNeuron Holdings
    plc to identify proteins expressed in brain repair in response to stroke as
    possible therapeutic entities or drug targets relevant for the treatment of
    stroke and other neurodegenerative diseases.


  • In May, Proteome Sciences released significant results from new data
    generated from its stroke research programme using blood. The data revealed
    that the assay had high specificity (100%), sensitivity (68.2%) and positive
    predictive accuracy (100%) in a non invasive procedure that should now
    enable the test to be used in clinical applications. The results have been
    provided to a short list of strategic licensing partners and a license
    agreement is anticipated this year, with a test expected on the market in
    approximately 12 to 18 months time.


  • The research projects relating to diabetes/obesity and for rejection
    following cardiac transplantation continue to make good progress and were
    presented at the Siena meeting. ELISA assays for the proteins identified in
    transplantation will be used to complete the development of non invasive
    tests from blood samples for acute and chronic rejection.


Intronn, Inc. (Intronn)


  • A paper published by Dr John Engelhardt from the University of Iowa
    featured on the front cover of Nature Biotechnology earlier this year showed
    that SMaRT(TM) had successfully corrected the cystic fibrosis gene defect in a
    human lung cell model.


  • Intronn relocated from Raleigh-Durham, North Carolina to Rockville,
    Maryland in March 2002. A number of key appointments have been made
    including Dr Ed Otto as Chief Operating Officer (formerly COO at Genetic
    Therapy Inc. a subsidiary of Novartis). The headcount stands at 20.


  • At the American Society of Gene Therapy Annual Meeting in June, Dr
    Christopher Walsh of the University of North Carolina demonstrated that the
    mutant factor VIII (haemophilia) RNA was successfully repaired and that the
    'RNA repair' was effected by using SMaRT(TM) trans-splicing.


  • Intronn was awarded a Phase I small business grant by the National Cancer
    Institute, USA for $434,000 to support a programme in molecular imaging, a
    new application for SMaRT(TM).


Veri-Q, Inc.




  • Veri-Q concluded a licensing agreement in July 2002 with North Carolina
    State University in respect of the research relating to the levels of
    impurity in synthetic oligonucleotides. A paper was published in Analytical
    Biochemistry in June which shows that 31% of commercial DNA products from
    eight different suppliers had impurities. Veri-Q has developed and filed
    patents on antibodies against the protecting/de-protecting groups, which
    selectively identify and quantify picomoles of remaining protecting groups
    for applications in antisense therapeutics and oligonucleotide diagnostics.


  • A commercialisation strategy is underway which will involve the
    outlicensing of the technology for key applications in DNA assays and for
    quality control in synthetic oligonucleotide production and re-agents.


Corporate


  • The acquisition of Xzillion in July 2002 for £12.6m was funded through the
    issue of 18 million Proteome Sciences ordinary shares each at a price of 70p
    per share. Xzillion had cash holdings of £3.5m at the date of acquisition.


  • Following the transaction, Aventis Research and Technologies GmbH & Co
    (Aventis R &T) owns a 15.8% shareholding in Proteome Sciences and is
    committed to support the commercialisation of Proteome Sciences technology
    to secure significant licensing deals and further strategic partnerships
    with a range of pharmaceutical, biotechnology and diagnostic companies.


  • Proteome Sciences raised £2.6 million at 58p per share by way of a placing
    completed in June, representing 5% of the ordinary share capital.


  • Dr. Wolfgang Schuller, CEO of Aventis R&T, joined the Board in July as a
    non-executive director.


  • James Green, the business development director, was appointed Commercial
    Director for Proteome Sciences in July.


  • Dr Anthony Walker has informed the Board that he has to stand down as a
    non executive director of Proteome Sciences due to the pressure of other
    business commitments.


  • Following the acquisition of Xzillion, Dr Gunther Schmidt has agreed to
    assist in the integration of its activities within Proteome Sciences and to
    support the management of Xzillion with his scientific, strategic and patent
    expertise.


Financial Results


The financial results for the six months to June, 2002 show a loss before
taxation of £1,507,365 compared with £509,108 in the corresponding period in
2001. The period to 30th June 2002 includes for the first time a share of
associates' operating loss at Intronn, Inc. of £127,324 (In 200l the loss of
£30,959 of Intronn LLC is shown under discontinued operations) and a realised
exchange loss of £143,560 (2001: a realised exchange gain of £225,778) and costs
at King's Laboratory of £276,786 (2001: £20,865). Cash at 30th June, 2002 stood
at £2.6m. This was increased in July by the £3.5m cash holding at Xzillion at
the date of acquisition.


Future Prospects


Through the acquisition of Xzillion in July and the creation of the proprietary
research facility at King's College, London at the end of 2001, Proteome
Sciences has concluded the transition from a virtual company to one having a
complete approach in applied proteomics.


The combination of high-throughput with high sensitivity has established new
levels of high output proteomics capability. These will be key facilitators for
drug discovery and development and will also provide new generations of
diagnostic and prognostic products and applications.


The PST(TM) technology is developed and amongst other areas, provides a novel
solution to address the complexity of membrane proteins. These are one of the
main targets for the pharmaceutical industry.


The business development team has been significantly strengthened and expanded,
and license agreements are expected to be concluded before the current year end,
with products launched in the market in the next 12 to 18 months. Strong
progress has been made throughout Proteome Sciences research programmes and
these should result in a number of strategic alliances with pharmaceutical,
diagnostic and biotechnology companies.


Having established a leading position in applied proteomics, the prospects for
Proteome Sciences appear highly favourable and clearly endorse the strategy
adopted over these last years to focus the research to address the complex but
high value area of differential protein expressions in disease.










Unaudited consolidated profit and loss account for the six months ended 30th
June, 2002


                                             Six months ended         Six months ended             Year ended 31st
                                              30th June 2002           30th June 2001              December 2001
                                            
                                                    £                         £                         £

Administrative expenses                     (730,347)                 (574,118)                    (1,455,005)
Realised exchange (losses)/gains            (143,560)                 225,778                      65,213
Research and development expenses           (507,060)                 (205,566)                    (720,856)
Other operating expenses                    -                         -                            -


Operating Loss                              (1,380,967)               (553,906)                    (2,110,648)

Continuing operations                       (1,380,967)               (522,947)                    (2,028,489)
Discontinued operations                     -                         (30,959)                     (82,159)
                                            (1,380,967)               (553,906)                    (2,110,648)

Share of associates' operating loss         (127,324)                 -                            (33,774)
Interest receivable                         7,321                     62,260                       104,197
Interest payable and similar charges        (6,395)                   (17,462)                     (32,846)

Loss on ordinary activities before taxation (1,507,365)               (509,108)                    (2,073,071)
Tax on loss on ordinary activities          -                         -                            69,919


Loss on ordinary activities after taxation  (1,507,365)               (509,108)                    (2,003,152)
Minority interest                           -                         -                            26,128

Loss for the period                         (1,507,365)               (509,108)                    (1,977,024)

Loss per share

Basic and diluted                           (1.64p)                   (0.56p)                      (2.16p)










                       Notes to the Financial Information



        1.     There has been no change to any of the accounting policies set
        out in the 2001 statutory accounts.


        2.     Following the loss of £1,507,365 incurred in the period, the
        Directors do not recommend the payment of a dividend.


                3.     a.     The calculation of the loss per share for the six
                months ended 30th June 2002 is based on the loss for the
                financial period of £1,507,365 and on 92,297,005 Ordinary
                Shares, being the weighted average number of shares in issue and
                ranking for dividend during the period (six months ended 30th
                June 2001 - loss £509,108, number of Ordinary Shares in issue
                and ranking for dividend, 91,538,400).


                b.     The calculation of the loss per share for the year ended
                31st December 2001 is based on the loss for the year of
                £1,977,024 and on 91,538,400 Ordinary Shares, being the number
                of shares in issue and ranking for dividend during the year.


        4.     In October 2001 Intronn LLC transferred the intellectual property
        for its SMaRT technology and substantially all of its assets and
        liabilities to a newly formed company, Intronn Inc, in exchange for the
        issue of common stock in Intronn Inc to the previous members of Intronn
        LLC and to certain of the holders of 8% Convertible Promissory Notes
        2001 in Intronn LLC who did not elect to have notes redeemed for cash.
        In these accounts Intronn LLC has been treated as an associate company
        for the six months ended 30 June 2002, and Intronn Inc as a subsidiary
        company in the corresponding period in the previous year. Intronn Inc
        has both Common Stock and Series A Convertible Preferred Stock in issue,
        and upon full conversion of the latter the Company would own 30.87% of
        Intronn Inc's Common Stock.


        5.     Formal completion of the acquisition of Xzillion Proteomics GmbH
        & Co. KG (Xzillion) did not take place until the 4th July 2002 and the
        figures for the six months to the 30 June 2002 do not include the
        results of Xzillion.


        6.     The preceding financial information does not constitute statutory
        accounts as defined in Section 240 of the Companies Act 1985. The
        financial information for the year to 31st December 2001 is based on the
        statutory accounts for that year. These accounts, upon which the
        auditors issued an unqualified opinion, and which did not contain any
        statement under Section 237(2) or (3) of the Companies Act 1985, have
        been delivered to the Registrar of Companies.






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