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OXFORD BIOMEDICA - AGREEMENT WITH VIRAGEN INC RE. LICENCE TO LENTIVECTOR TECHNOLOGY

March 18, 2003

Oxford BioMedica announced that it has signed an option agreement with the US biotechnology company Viragen Inc that may lead to a licence for the use of Oxford BioMedica's LentiVector® gene transfer technology for the production of therapeutic proteins from the eggs of transgenic chickens. The attached announcement by Viragen provides more detailed information.


Viragen Enters into Transgenics Agreement with Oxford BioMedica

Milestone Achievement Announced

PLANTATION, FLORIDA - March 18, 2003 - Viragen, Inc. (AMEX: "VRA") today announced that the Company has entered into an agreement with Oxford BioMedica plc (LSE: "OXB") to obtain rights to a technology that may prove key in its collaboration with Roslin Institute to develop avian transgenic technology as a novel platform for the efficient, cost-effective manufacturing of protein drugs. The agreement provides Viragen with an option to acquire an exclusive worldwide license for proprietary gene transfer vectors, biotechnology tools designed to transfer genes into cells at high efficiency. Initial studies evaluating a novel use for these vectors, transfer of genes for therapeutic proteins into developing chicken embryos, have yielded successful and consistent results. Terms of the agreement were not disclosed.

In order to produce human therapeutic proteins in avian eggs, a gene delivery method must be optimized to transfer genes for therapeutic proteins into chickens, so that subsequent generations of birds will carry the genes and express adequate quantities of the target drugs in the whites of their eggs. Viragen and Roslin utilized Oxford BioMedica's vector technology to conduct a "Proof of Principle" study. The study successfully resulted in production of transgenic cockerels that pass on the introduced gene to their offspring with consistent results (germline transmission), a milestone achievement.

In the study, a "reporter gene" was used to measure the efficiency of the vectors. Chick embryos were transfected with the reporter gene carried by the vectors and analysis showed that 100% of the resulting male birds possessed the gene in their sperm, meaning that they were successfully transgenic. The second stage of the study involved breeding these first generation transgenic cockerels to determine the frequency of transgenic birds in the next generation. This resulted in successful production of transgenic male and female birds, the frequency far exceeding requirements for commercial viability.

"We continue to develop multiple technology pathways to commercialize avian transgenics, but we are very optimistic about what this agreement with Oxford BioMedica may represent," stated Viragen's President and CEO, Mr. Robert Salisbury. "Additional studies are ongoing to further confirm the value of this particular technology."

Roslin Institute's Dr. Helen Sang, one of the world's foremost authorities on avian transgenics research, stated, "To evaluate the efficiency and consistency of this vector technology, we introduced the Oxford BioMedica vectors into chick embryos and raised hatched chicks for breeding. Nine developed into adult transgenic roosters, indicating that stable transfection had been consistently achieved. We then bred from these roosters to determine the frequency of transgenic offspring produced. Each rooster successfully produced transgenic offspring, with frequencies ranging from one percent to 29 percent of the chicks hatched transgenic. I believe that these results represent a much higher frequency of production of transgenic chickens than those presented in previously published avian transgenics data. Even at our lowest rate, where one in 100 offspring are transgenic, we met the criteria necessary for commercial viability. These are potentially break-through findings and we are hopeful that we will reproduce these results with the targeted expression in hens of a clinically relevant human monoclonal antibody. These studies are ongoing."

Oxford BioMedica's CEO, Professor Alan Kingsman, stated, "We are very pleased to be associated with Viragen and Roslin in an innovative project to provide an efficient and cost-effective alternative to present drug manufacturing systems. The avian application may represent yet another promising commercial opportunity for our gene delivery technology. We are very excited by Dr. Sang's initial results and we look forward to a long and successful relationship."

Northbank Communications