Interim Results

Sareum Holdings PLC
06 February 2007


For immediate release                                            6 February 2007


                              SAREUM HOLDINGS PLC
                          ("Sareum" or "the Company")

                   FINANCIAL RESULTS FOR THE SIX MONTHS ENDED
                                31 DECEMBER 2006


Sareum Holdings plc (AIM: SAR), the specialist structure-based drug discovery
business, is pleased to announce its financial results for the six month period
ended 31 December 2006.

Financial highlights during period 1 July to 31 December 2006:

•    Three-fold increase in revenues to £1,205,000 (2005: £361,000) plus an 
     increase of £319,000 in deferred revenue (pre-payments to be recognised in
     current financial year)

•    Gross profit of £372,000 (2005: £115,000 loss)

•    65% reduction in loss on ordinary activities (after taxation) to £208,000 
     (2005: £602,000)

Business highlights during period 1 July to 31 December 2006:

•    Novel compounds discovered in cancer drug discovery collaboration with the 
     Institute of Cancer Research and Cancer Research Technologies Ltd

•    Progress made on further in-house cancer discovery programmes

•    Collaborations signed with Roche, Genentech and PIramed plus repeat 
     business from Almirall and Lundbeck

Post-period end highlights:

•    Patent applications filed from in-house drug discovery collaboration with 
     the Institute of Cancer Research and Cancer Research Technologies Ltd

•    Research collaboration signed with Johnson & Johnson

Dr Tim Mitchell, CEO of Sareum Holdings plc, said: "Sareum has enjoyed yet
another productive and successful period. The Company has progressed its
in-house drug discovery programmes in cancer significantly and achieved further
revenue-generating collaborations with major international pharmaceutical
companies. We look forward to expanding the business and to announcing further
advances in our in-house cancer programs whilst meeting the market's financial
expectations."


For further information please contact:

Sareum Holdings plc                                                 01223 497700
Tim Mitchell, Chief Executive Officer

Buchanan Communications                                            020 7466 5000
Tim Anderson, Mary-Jane Johnson


Notes for Editors

About Sareum Holdings plc

Sareum Holdings plc is a structure-based drug discovery business headquartered
in Cambridge, UK. The Company was formed in August 2003 to discover new drugs
for the treatment of cancer.  Sareum's unique approach aims to halve the time it
takes to discover new drug candidates.

A structure-based approach to drug discovery relies on knowledge of the
three-dimensional structure of the proteins that cause disease.  Once the
structure is known, potential drugs are designed to 'lock-in' to the protein
with the aim of reversing or arresting a disease's progression.  Knowledge of
the structure of the potential drugs and how they 'lock-in' to their target
protein assists greatly in the development of high-quality drug candidates.
Determining structure is a complex task and requires leading-edge equipment and
experienced staff.  Sareum's approach to structure determination utilises its
proprietary protein expression platform in order to produce multiple recombinant
proteins that accelerate structure determination using x-ray crystallography.

Once the structure is determined, the Company's innovative fragment screening
platform is used to identify novel chemical templates designed to interact with
the target protein.  Sareum then uses its high-throughput medicinal chemistry
platform to rapidly optimise these molecules and develop the most promising into
potential drug candidates.

Sareum aims to successfully deliver drug candidates for licensing to larger
pharmaceutical companies at the pre-clinical or early clinical trials stage.
This is funded by provision of its specialist drug discovery capabilities to
partners in the pharmaceutical and biotechnology industries.

Sareum joined the AIM market of the London Stock Exchange in October 2004 and
trades under the symbol SAR.  For further information, please visit
www.sareum.co.uk


           Interim Results for the six months ended 31 December 2006


Chairman's Statement

Sareum Holdings plc has enjoyed a further successful trading period, evidencing
the ability of the team to consistently focus on the business drivers that build
value.  We have continued to make significant advances in our in-house cancer
drug discovery programmes and in our revenue-generating business where a series
of collaborations have been signed with leading pharmaceutical research
partners.

It is now abundantly clear that the Sareum technology platform and business
model is able to meet the Company's objectives to generate quality anti-cancer
drug candidates, specifically targeted against solid tumours, using cash
generated from discovery research collaborations with quality partners.

Through its integrated structure-based drug discovery platform and the
management team's 90 plus years of pharmaceutical industry experience, Sareum
represents a unique offering.  The Company provides protein structures and novel
drug leads to some of the most prestigious pharmaceutical and biotech partners
in the world.  Sareum does this with significantly increased speed, delivering
solid IP results with great efficiency and flexibility for collaborators.  In
return Sareum receives fees for service with which it advances its own drug
discovery programmes in the field of cancer.

Our in-house drug discovery programme was enhanced by the announcement in August
that the Company had achieved substantial progress in its joint research program
with Cancer Research Technology Ltd. and the Cancer Research UK Centre for
Cancer Therapeutics at the Institute of Cancer Research with the development of
novel compound series that showed efficacy in cancer cell models. This has
resulted in a number of patent application filings of these compounds and their
use in the treatment of cancer.  Consequently, we are expecting to be able to
nominate a compound to enter pre-clinical development in the next twelve months.
 The Institute of Cancer Research is one of the world's leading cancer research
organisations and thus a prestigious partner for Sareum's in-house research.  In
addition, we continue to work on a number of other quality cancer targets in our
in-house programmes in addition to the joint venture activities. Further patent
applications are expected to be made in the near future.

We have continued to make good progress in securing profitable service
collaborations that generate revenues to support our in-house research. In this
period, an agreement was reached with Roche, an initial one-year multi-target
collaboration was entered into with Genentech and a potential 18-month
multi-disciplinary drug discovery collaboration started with PIramed. In
addition, repeat business was secured from Almirall and Lundbeck. Our existing
collaborations continue to progress well, and success milestone payments have
been received from our multi-disciplinary drug discovery collaborations with
Organon and Idenix. These successes demonstrate the standard of excellence from
our growing, expert research team ensures that we both deliver challenging
milestones, and build a steady stream of new business from some of the largest
and most respected names in this sector.

The overall increase in activity on in-house programmes and fee for service
activities resulted in the need to create additional capacity and resource.  We
are currently upgrading our operations in Cambridge to accommodate additional
equipment, to create new facilities and to make space for additional staff.  The
placing of £312,000 in October was made to augment the cash available from our
own activities, to fund this investment.  The cash position was further
underpinned by a placing of £400,000 announced in January.

During this period, revenues of £1,205,000 have been recognised, over one third
of which (£423,000) came from success milestone payments., This represented a
more than three-fold increase in revenue over the same period last year, and is
only 18% less than the revenues reported for the full 2005/06  year.  In
addition, pre-payments of £401,000 were received in December which will be
recognised in the current financial year, an increase of £319,000 compared with
June 2006. Thus the total contracted sales for this period are £1,514,000 and in
line with Board expectations.  We ended the half year with net current assets of
£996,000, an increase of over £1 Million including £767,000 cash in bank.

The announcement in January 2007 of a research collaboration with Johnson and
Johnson Pharmaceutical R&D adds a further major global pharmaceutical company to
Sareum growing list of blue chip collaborators. The Company's order book
currently stands at £4 Million achievable over the next 18 months, assuming
successful delivery of milestones.

A focus on meeting (or exceeding) customer expectations to maximise the revenue
potential of each contract combined with careful management of costs has
resulted in a loss on ordinary activities (after taxation) of £208,000.  This is
approximately one third of that for the same period last year.  The Company's
short term cash position is expected to improve further in H2 as the revenues
from existing contracts and the additional revenues from the contracts signed in
this period flow through.

Sareum has demonstrated that it is able to advance its in-house research by
developing programmes to plan whilst at the same time investing in strategic
alliances to develop candidate drug molecules. In addition, there has been a
more than three-fold increase in its revenue generating activities and a healthy
cash position. This is a creditable performance and one that reflects the
professionalism and commitment of the entire Sareum team to excellence and to
generating shareholder value.  Sareum will continue to build on this position
via expansion of its facilities and advancement of its exciting in-house
anti-cancer drug pipeline.

Dr Paul Harper
Chairman
Sareum Holdings plc


                              Sareum Holdings plc
      Unaudited Consolidated Profit & Loss Account for the half year ended
                                31 December 2006


                                                                    Unaudited    Unaudited      Audited
                                                                 Half Year to Half Year to   Year ended
                                                                    31 Dec 06    31 Dec 05    30 Jun 06
                                                                        £'000        £'000        £'000

Turnover                                                                1,205          361        1,476

Cost of sales                                                           (833)        (476)      (1,080)

Gross profit (loss)                                                       372        (115)          396

Administrative expenses                                                 (671)        (555)      (1,146)

Operating loss                                                          (299)        (670)        (750)

Interest receivable and similar income                                      5            3           10

Interest payable and similar charges                                      (5)          (7)         (12)

Loss on ordinary activities before taxation                             (299)        (674)        (752)

Tax on loss on ordinary activities                                         91           72          128

Loss on ordinary activities after taxation                              (208)        (602)        (624)

Loss per share (pence)

Basic and diluted                                                       0.05p        0.17p        0.18p





                              Sareum Holdings plc
            Unaudited Consolidated Balance Sheet as at 31 December 2006


                                                                     Unaudited    Unaudited      Audited
                                                                     31 Dec 06    31 Dec 05    30 Jun 06
                                                                         £'000        £'000        £'000

Fixed assets

Intangible assets                                                           14           20           18

Tangible assets                                                            720          857          792

                                                                           734          877          810

Current assets
                                                                           
Debtors                                                                    997          469          437
       
Cash at bank and in hand                                                   767          153          528

                                                                         1,764          622          965

Creditors: amounts falling due within one year                           (367)        (403)        (435)

               deferred income                                           (401)        (302)         (82)

Net current assets                                                         996         (83)          448

Total assets less current liabilities                                     1730          794        1,258

Creditors: amounts falling due after more than one year                   (45)         (77)         (63)

Net assets                                                               1,685          717        1,195

Capital and reserves

Called up share capital                                                    112           87           93

Share premium account                                                    3,767        2,594        3,088

Merger reserve                                                               0            0            0

Profit and loss account                                                (2,194)      (1,964)      (1,986)

Equity shareholders' funds                                               1,685          717        1,195



                              Sareum Holdings plc
       Unaudited Consolidated Cash Flow Statement for the half year ended
                                31 December 2006


                                                                    Unaudited    Unaudited      Audited
                                                                 Half year to Half year to      Year to
                                                                    31 Dec 06    31 Dec 05    30 Jun 06
                                                                        £'000        £'000        £'000
Net cash outflow from operating activities                              (415)        (467)        (363)
Returns on investments and servicing of finance                           -            (4)          (2)
Taxation                                                                  128          120          120
Capital Expenditure                                                      (54)          (9)         (66)
Cash flow before financing                                              (341)        (408)        (311)
Financing - share issue                                                   698            0          500
Financing - loans and leases                                            (118)          120        (102)
Increase (decrease) in cash                                               239        (288)           87


Reconciliation of operating loss to net cash outflow from operating activities

                                                                    Unaudited    Unaudited      Audited
                                                                 Half year to Half year to      Year to
                                                                    31 Dec 06    31 Dec 05    30 Jun 06
                                                                        £'000        £'000        £'000
Operating profit (loss)                                                 (299)        (670)        (750)
Depreciation and amortisation                                             129          120          244
Increase in debtors                                                     (597)        (275)         (67)
Increase in creditors                                                     352          310          210
Net cash outflow from operations                                        (415)        (515)        (363)


Reconciliation of net cash flow to movement in net funds

                                                                    Unaudited    Unaudited      Audited
                                                                 Half year to Half year to      Year to
                                                                    31 Dec 06    31 Dec 05    30 Jun 06
                                                                        £'000        £'000        £'000
Increase/(Decrease) in cash                                               239        (288)           87
Cash inflow from financing                                                119           54          102
Change in net funds resulting from cash flows                             358        (234)          189
Net funds at period start                                                 332          143          143
Net funds at period end                                                   690         (91)          332


Analysis of changes in net funds

                                                                    1 Jul 06    Cash flow    31 Dec 06
                                                                       £'000        £'000        £'000
Cash in hand and at bank                                                 528          239          767
Debt:        due within one year                                        (30)          (2)         (32)
             Due after one year                                         (63)           18         (45)
Finance lease agreements                                               (103)          103          -
Net funds                                                                332          358          690


                              SAREUM HOLDINGS PLC

            NOTES TO THE UNAUDITED RESULTS FOR THE SIX MONTHS ENDED
                                31 DECEMBER 2006


 1. FINANCIAL INFORMATION

The results for the six months ended 31 December 2006 are unaudited and do not
constitute statutory accounts within the meaning of section 240 of the Companies
Act 1985.  The 30 June 2006 Annual Report and Accounts are available from
Sareum's web site, www.sareum.co.uk.


 2. BASIS OF ACCOUNTING

They have been drawn up using the same accounting policies and principles as are
detailed in the Company's 30 June 2006 Annual Report and Accounts.


 3. TAXATION

No liability arises for corporation tax for the period ended 31 December 2006.
Research and Development tax credits receivable as cash are estimated to be
£91,100 for the period.


 4. DIVIDENDS

The directors do not propose the payment of a dividend in respect of the six
months ended 31 December 2006.


 5. LOSS PER SHARE

Basic and diluted loss per share 0.05p (2005: 0.17p)

The basic loss per ordinary share is based on the Group's loss for the six
months of £208,000 (2005: £602,000) divided by the weighted average number of
shares in issue.  The weighted average number of shares in issue during the
period was 388,662,000 (2005: 347,750,000).


 6. DEFERRED INCOME

Deferred income has increased substantially during the half year. Deferred
income arises when sales invoices have been issued to clients but the work
covered by the invoices has not been completed at the end of the accounting
period.  Deferred income will be credited to turnover once the invoiced work is
complete.



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