30 November 2006

Biofusion reinforces position as one of the UK’s leading university IP commercialisation companies with second top 10 university agreement

Agreement with Cardiff University and £7.75m Placing of 5,349,997 New Ordinary Shares at 145 pence per share

Biofusion plc (AIM: BFN) (“Biofusion” or the “Company”) today announces that it has entered into a long-term exclusive agreement with Cardiff University (the “Cardiff Agreement”) that will triple the research spend associated with Biofusion’s university agreements and expand its business into non-life science research. Cardiff is one of the UK’s leading research universities with an estimated research spend of approximately £1 billion over the ten-year life of the Cardiff Agreement.

In addition, the Board announces the placing of 5,349,997 new Ordinary Shares at 145 pence per share raising £7.75 million (£7.2 million net of expenses) which has been fully underwritten by Nomura Code Securities, the Company’s nominated adviser and broker. The Placing is conditional upon shareholder approval and a circular convening an EGM (the “Circular”) will be sent to Shareholders today. Shareholders who, in aggregate, hold 72.99 per cent of the current issued share capital of the Company have irrevocably undertaken to vote in favour of the Resolution at the EGM.

Highlights:

• 10 year exclusive deal for the right to commercialise 100% of all Cardiff University (“ Cardiff”) research-generated IP in return for an equity stake in Biofusion worth approximately £17 million;

• £8.2 million dedicated investment fund created;

• adds seven new companies to Biofusion’s portfolio, increasing Biofusion’s existing portfolio to 21 companies;

• expands focus into non-life science research;

• Cardiff ranked 7th in latest university rankings;

• deal triples pipeline annual R&D spend to approximately £114 million per annum.

• Cardiff research spend estimated to be over £1 billion during life of the agreement;

• £7.75 million underwritten placing at 145 pence per share.

David Baynes, CEO of Biofusion said: “This agreement with Cardiff is a significant milestone for Biofusion. In under two years we have completed agreements with two of the UK’s top 10 research intensive universities, which demonstrates the attractiveness of the Biofusion model for commercialising UK university research. The Cardiff Agreement allows us to build on our already successful partnership with the University of Sheffield by securing access to a further high quality IP pipeline and allows us to expand our portfolio into non-life science research. “ Cardiff is one of the UK’s leading research universities, with high quality research in a range of potentially high value fields including medicine, biological sciences, pharmacy, chemistry, engineering, computer science, energy and environmental sciences. We are eager to start working with the team there in order to best realise the commercial potential of this research.” Vice-Chancellor of Cardiff University, Dr David Grant, said: “We are delighted to have signed this agreement with Biofusion and look forward to a successful, long term partnership. The Biofusion model is an extremely attractive one, making the University a significant shareholder in Biofusion, providing access to Biofusion's investment funds and management team, and also incentivising the University’s academic researchers through significant shareholdings in the spin-out companies. The agreement should enable all parties, and the Welsh and UK economy, to benefit from the successful commercialisation of our world class research."