Deal covers lead optimisation project

Avidex and ChemOvation today announced that they have entered into a collaboration to further develop a small molecule product for rheumatoid arthritis (RA). Under the terms of the agreement, full details of which have not been disclosed, ChemOvation will be providing Avidex with medicinal and synthetic chemistry services and expertise for lead optimisation of Avidex's RhuDex™ product.

Commenting on the collaboration, David McGibney, Avidex's Executive Director Drug Discovery and Development, said: "We are making very good progress with the RhuDex programme and firmly believe this collaboration will provide us with an excellent lead candidate by the end of 2003. We intend to then rapidly progress into the clinic."

RhuDex™ is Avidex's orally available small molecule drug, initially indicated for the treatment of rheumatoid arthritis. RhuDex™ addresses the underlying disease causing mechanism of RA - RhuDex™ acts in a very specific manner on a clearly defined target and it is hoped it will avoid some of the side effects of current therapies. As an orally delivered small molecule, RhuDex™ also potentially offers a competitive therapeutic advantage over the new generation of protein therapeutics to RA, such as anti-TNF antibodies, which will only be available in parenteral forms. The interaction of CD80 with its co-receptor, CD28, found on cells of the immune system called CD4 positive T cells, is an important step in the inflammatory progression of RA. RhuDex™ specifically blocks the binding CD28 to CD80 so inhibiting activation of CD4 positive T cells and suppressing this part of the immune response.

Notes to Editors

About Avidex

Avidex is a biotechnology company focussed on the development of therapeutics for cancer and autoimmune diseases. Through its knowledge and understanding of T cell receptors (TCRs), the Company has developed novel therapeutic approaches where TCRs act as the target or targeting molecule. In addition to protein

therapeutics, Avidex is also progressing with lead optimisation of the CD80 antagonist, RhuDex™ for rheumatoid arthritis. Avidex is developing this pipeline of protein and small molecule drugs and its strategy is to take products through final developmental phases and to the market through corporate alliances. Avidex also commercialises its proprietary mTCR platform through partnerships.

The Company's lead programmes include MiDex™, a protein therapeutic for autoimmune disease, RhuDex™ a small molecule immune suppressant, and mTCRs, fully human, soluble T cell receptors.

Avidex was formed in 1999 as a spin out from Oxford University. The Company employs 52 staff and is based in Milton Park, near Oxford, UK. The Company has raised £23.2 million to date, with investors including Advent Venture Partners, The University of Oxford, Oxford Technology Venture Capital Trust plc and Quester. www.avidex.com

About ChemOvation

ChemOvation is a leading provider of drug discovery services to the pharmaceutical and biotechnology sector. It provides a fully integrated service specialising in:

· Medicinal chemistry
· Organic chemistry
· Computational chemistry
· Screening
· Early Process Development / Scale-up
· ADME and early Toxicology

ChemOvation offers clients a wealth of scientific knowledge and expertise to ensure success in their drug discovery projects.

Whether it's for lead optimisation, hit expansion or custom synthesis, ChemOvation provides the complete outsourcing solution for drug discovery projects.

Dr M. Hashim Javaid
Business Development
ChemOvation Ltd
Foundry Lane
Horsham
West Sussex
RH13 5PX
Phone: +44 (0) 1403 248844
Fax: +44 (0) 1403 248855
Email: hashim.javaid@chemovation.com

For more information please contact:

Avidex Limited Dr Neill Moray MacKenzie +44 (0) 1235 438600
Chief Business Officerneill.mackenzie@avidex.com

ChemOvation Limited Dr. Hashim Javaid +44 (0) 1403 248844
Business Development hashim.javaid@chemovation.com

HCC De Facto Ltd Dr Chris Gardner +44 (0) 20 7496 3300
Associate Director c.gardner@hccdefacto.com