RNS Number:3824Q
British Biotech PLC
01 October 2003

                                                                  1 October 2003


                         British Biotech plc AGM Update


British Biotech plc (today to be renamed Vernalis plc, subject to shareholder
approval) has been transformed during 2003 through two substantial mergers, and
the Company is continuing to achieve further advances through important pipeline
progress and extensive post-merger restructuring.

The first merger with the privately-held company RiboTargets Holdings plc was
completed in April 2003 and brought a high quality, structure-based drug
discovery capability focused on novel cancer targets.  The second merger with
Vernalis Group plc was completed in September 2003 and brought a marketed
product, frovatriptan, a clinical portfolio and innovative discovery programmes
focused on central nervous system disorders.  The integration of British Biotech
and RiboTargets has been fully completed, and the integration of Vernalis is
progressing ahead of schedule.

The Company's sustained progress will be presented to shareholders at today's
AGM.

Presentation highlights will include:

* Continued growth of frovatriptan sales in North America and Europe,
  with total prescriptions in North America up 23% in the latest quarter;

* A stringent review of the Company's combined post-merger R&D portfolio
  in order to focus future investment on the most competitive opportunities,
  encompassing four products in full development and five late research
  programmes, two of which are funded by partners;

* Continuing advances with priority pipeline products

  - Initiation of a second Phase IIIb study with frovatriptan to support the
    successful menstrually-associated migraine trial completed in April 2003

  - Start of Phase I studies with R140, a new treatment for cancer pain

  - Entry into Phase I expected this year for VR2006, a novel treatment for
    Parkinson's disease

* Substantial progress in the integration of the three merged companies.
  Significant cost synergies have been identified, and are expected to amount 
  in total to #13m p.a., when implemented by Q1 2004, fully achieving initial
  estimates.


Simon Sturge, Chief Executive Officer, said:

"Following the transforming mergers of 2003, the Company is continuing to
increase shareholder value by focusing on its most competitive R&D pipeline
products and substantially reducing its cost base."

Further details:

I - Frovatriptan sales

Frovatriptan is approved and marketed in the US and Europe for the acute
treatment of migraine.  Just over one year after launch in the US, sales of
frovatriptan had reached 3.2% of the oral triptan migraine market, and are
continuing to grow with total prescriptions in North America of frovatriptan up
by 23% in the latest quarter. Prescriptions are being driven by hospital
specialists where the product now has a 7% market share.  Repeat prescriptions
have risen to 46% which is a good indicator of patient satisfaction. Ten months
after launch in Germany, the first European territory, ex-pharmacy sales of
frovatriptan had amounted to 6.4% of the oral triptan market.  The Company is
receiving a growing royalty income derived from the US and European sales.

II - Portfolio review and R&D pipeline

R&D investment will be primarily focused in the fields of central nervous system
disorders (including obesity-related targets) and in cancer.  In addition a
novel product for the treatment of thrombotic disorders will continue in
development.

The key priority programmes are as follows:

(i) Development pipeline

*   Frovatriptan for prophylaxis of menstrually-associated migraine

In April 2003 an initial clinical study demonstrated the efficacy of
frovatriptan as a preventive treatment for menstrually-associated migraine,
which affects around 50% of all women who suffer migraine.  The improvement in
headache-free rates was highly statistically significant for both the studied
dose regimens of frovatriptan compared to placebo (p< 0.0001).

Following discussion with regulatory authorities a long-term safety study and a
further Phase IIIb efficacy study are being undertaken to support the extension
of the existing frovatriptan label to this indication.  If the positive initial
results are confirmed, these studies will lead to regulatory submissions in the
US and Europe in H1 2005.

*   BB-10153

This novel recombinant thrombolytic protein, which is being developed to treat
thrombotic disorders, is expected to be targeted at peripheral arterial
occlusion and stroke.  It is currently being evaluated in a Phase IIa ascending
dose study in patients who have suffered acute myocardial infarction, in order
to establish proof-of-concept, i.e. that it can dissolve clots and restore
coronary blood flow.  It is expected that interim data from this study will be
reviewed at the end of the year.  If these data are positive, a partner will be
sought for further development.

*   R140

R140 is a GABAA agonist targeting the treatment of pain in cancer patients.  It
entered a Phase I clinical programme in September 2003 to evaluate its safety
and pharmacokinetic properties in single and multiple dose studies.  These
studies are expected to be completed in late 2004.

*   VR2006

This adenosine A2A receptor antagonist is being developed as a potential novel
treatment for Parkinson's disease.  It is expected to possess advantages over
current dopaminergic treatments. Preclinical studies with this product candidate
are largely completed, and Phase I clinical studies will be started by December
2003.


(ii) Research programmes

*   5HT2c agonists

Highly selective 5HT2c receptor agonists are being evaluated as novel treatments
for obesity, in a research collaboration with Roche under an agreement that
concludes in February 2004.  The collaboration aims to identify a development
candidate to progress to clinical studies, which would be undertaken by Roche.

*   A2A antagonists

A programme is under way to identify and evaluate potent selective A2A receptor
antagonists for the treatment of depression.  It is expected that a development
candidate will be selected during 2004.  Discussions are currently being held
with a number of companies interested in collaborating in this programme.  Such
collaborations would also be likely to encompass the development of VR2006 in
both Parkinson's disease and depression.

*   Hsp90 inhibitors

This novel drug target is a molecular chaperone, inhibition of which is believed
to have significant potential in the treatment of a broad range of cancers.
This programme is utilising state-of-the-art structure-based design technology
to identify highly potent and specific inhibitors, with the aim of selecting a
preclinical development candidate during 2004.  Discussions are ongoing with
several major pharmaceutical companies with the aim of establishing an R&D
collaboration for this programme.

*   Metalloenzyme inhibitors

This collaboration with Serono is a research programme focused upon identifying
selective inhibitors of certain metalloenzymes for the treatment of inflammatory
/immune disorders, including multiple sclerosis.  Serono has informed the
Company that it is in the process of selecting a number of candidates for
further development.  In this event, Serono will undertake the further
development of these compounds, with the Company receiving milestone and royalty
payments.

*   CB1 antagonists

Selective cannabinoid CB1 receptor antagonists are being evaluated as novel
treatments for obesity.  They also have potential in other clinical indications
including smoking cessation.  The programme aims to identify a development
candidate during 2004.

(iii) Other programmes

*   An initial Phase IIa study with the product VML670 in treatment-emergent 
    sexual dysfunction met some secondary end-points but failed to meet its 
    primary end-point.  These data have been provided for review to Eli
    Lilly & Company which has the option to further develop this product.  The
    Company will not undertake any additional development.

*   Following completion of our portfolio review, it is our intention to
    discuss with ImmunoGen and MethylGene our collaborations on BB-10901 
    and MG98 respectively.

*   The Company's peptide deformylase inhibitor programme in the antibiotic
    field has been out-licensed in its entirety to GeneSoft.  GeneSoft will 
    conduct all further research and development with the Company receiving 
    milestone and royalty payments.

III - Integration and restructuring of the merged companies

The integration of British Biotech and RiboTargets was completed on schedule and
the cost synergies predicted at the time of the merger have been achieved.
Detailed plans for the integration of Vernalis are currently being implemented.

The combined headcount of the three companies which amounted to 271, will be
reduced to approximately 135 when the restructuring is completed.  An initial
reduction of 67 was implemented, linked to the integration of British Biotech
and RiboTargets, and headcount will be reduced by a further 70 positions,
approximately, during the integration of British Biotech and Vernalis.  Most of
the reductions will take place in late 2003 and the integration is expected to
be completed during Q1 2004.

As previously announced, the Company also plans to close its Oxford facility in
early Q4 2003, and then divest it.

Total cost savings identified from the two mergers will amount to approximately
#13m p.a., following their implementation, and it is anticipated that these will
be fully achieved.

As a result of the change of control of Vernalis Group plc, Roche became
entitled to repayment of a #7m convertible loan made to Vernalis Group plc in
May 2002.  The Company expects to repay this in the near future.  Roche remains
an important partner of the Company in relation to the 5HT2c agonist programme
summarised above.


Conclusion

During this year the Company has achieved a major transformation of its
structure and business.  It now has a highly focused development pipeline, which
it aims to strengthen through further M&A activity.  It also has a promising and
innovative portfolio of research programmes.  Importantly, it has acquired a
growing revenue stream through sales of its marketed product, frovatriptan.

The Company has been very aggressive in the restructuring of its cost base, and
expects to achieve the targeted cost reductions somewhat ahead of schedule.  In
order to manage further its cash position, the Company will generally seek
collaborative partnerships for its products in development, and for some of its
later stage research programmes.

Enquiries:

British Biotech plc +44 (0)20 7404 5959 (on 1/10/03)
                    +44 (0)1865 781166(thereafter)
Simon Sturge, Chief Executive Officer
Tony Weir, Chief Financial Officer

Brunswick Group +44 (0)20 7404 5959
Jon Coles



This announcement contains certain statements that are or may be forward-looking
with respect to the financial condition, results of operations and business
achievements/performance of British Biotech. In particular certain statements
with regard to the conduct of clinical trials and other development products and
the integration of Vernalis' operations into British Biotech including the
ability to generate cost synergies and the timing of integration benefits, are
all forward-looking in nature. By their nature forward-looking statements
involve risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by the forward-looking statements.
The following factors, although not exhaustive, could cause actual results to
differ materially from those the Company expects: unanticipated difficulties in
the design or implementation of clinical trials, studies and investigations,
results from clinical trials, studies and investigations that are inconsistent
with previous results and the Company's expectations and the failure of the
Company's development, manufacturing and marketing partners to perform their
contractual obligations.



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