First Patients treated in Type 2 Diabetes Programme

Farnham, UK, 23 September 2010: Biocompatibles (LSE:BII), the medical technology company, is pleased to announce the treatment of an initial group of Type 2 diabetes patients in the third of four studies in the CM3 Product Development Programme partnered with AstraZeneca.

The third trial¹ in the programme, now underway, is in patients with Type 2 Diabetes and is a Single Ascending Dose study in up to 16 patients of which the initial group has now been treated. The fourth trial will be in a larger group of patients with a Multiple Ascending Dose, and is expected to start later in 2010 and be concluded in the first half of 2011.

Biocompatibles entered into an agreement with AstraZeneca in December 2008 to develop CM3. The agreement included pre-clinical, Phase I and Phase IIa activities managed by Biocompatibles’ subsidiary, CellMed.

The agreement provides AstraZeneca with an exclusive option to license relevant patents for further exploitation, at any time during the course of the development programme, which is expected to be completed in 2011. On the exercise of the Option-to-License, AstraZeneca would pay a licence fee of €25m and would assume financial and management responsibility for the programme. Further milestones of €37.5m would be payable prior to first sale of product.

Commenting on the news, Crispin Simon, Chief Executive of Biocompatibles International plc, said: “We are delighted with the progress of our programme with AstraZeneca and look forward to the completion of the patient studies."

Dealing Disclosure Requirements

Following the announcement made on Monday, 20 September 2010 that the Company is in an offer period for the purposes of the Takeover Code, the Company is required to restate the following:

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified. An Opening Position Disclosure must contain details of the person’s interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person’s interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel’s website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel’s Market Surveillance Unit on +44 (0)20 7638 0129.

Biocompatibles International plc (www.biocompatibles.com)
Biocompatibles International plc is a leading medical technology company in the field of drug-device combination products.

The Oncology Products Division supplies medical devices from facilities in Farnham, UK and Oxford, CT. These include Drug-Eluting Bead Products which are used in more than 40 countries for the treatment of primary liver cancer (HCC), liver metastases from colorectal cancer, and other cancers; and Brachytherapy products (Radiation-Delivering Seeds) which are used in the treatment of prostate cancer. Our distribution partners include AngioDynamics Inc., Terumo Corporation and Eisai Co. Ltd. We have a clinical collaboration agreement with Bayer Healthcare Pharmaceuticals Inc.

Our Licensing Division includes CellMed, in Alzenau, Germany, which is developing a Drug-Eluting Bead product for the treatment of stroke, based on proprietary stem cell technology; a GLP-1 analogue for the treatment of diabetes and obesity partnered with AstraZeneca; and a cosmetic Dermatology Bead partnered with Merz Pharmaceuticals GmbH. We also have a PC Licensing agreement with Medtronic Inc. in the field of Drug-Eluting Stents.

This news release contains forward-looking statements that reflect Biocompatibles’ current expectation regarding future events. Forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein and depend on a number of factors including the success of Biocompatibles’ research strategy, the applicability of the discoveries made therein, the successful and timely completion of clinical studies and the uncertainties related to the regulatory and commercialisation processes.

Notes to Editors:

Diabetes is a chronic, progressive disease and an ever-growing health care problem worldwide. Diabetes alone can lead to premature death but is particularly life threatening in patients with co-existing cardiovascular disease. More than six percent of the world's adult population suffer from diabetes and the incidence of newly diagnosed diabetes in the US has nearly doubled in the last 10 years. Approximately 285 million people worldwide have diabetes today and it is predicted that, by 2030, this will grow to more than 430 million people.²

Diabetes is a disorder characterised by either lack of insulin (Type 1 Diabetes) or lack of proper response to, or poor production of, insulin (Type 2 Diabetes). Both diseases are associated with elevated concentrations of blood sugar, which affect the vascular system and the nerves, thereby increasing the risk of coronary artery disease, stroke and peripheral artery disease. Complications in organs that depend on the patency of small vessels such as the eye and kidney can lead to disabling conditions and costly and traumatic medical interventions.

CM3 is an investigational drug in the GLP-1 class. CM3 is unique because it contains the complete human amino acid sequence of GLP-1 in its primary structure. GLP-1 is a peptide naturally released in the gut after food intake to help maintain normal blood-sugar levels and to control appetite. This, the natural, GLP-1 has a very short duration of action due to rapid degradation. The completed preclinical programme indicates that CM3 has an extended duration of action in relation to the natural GLP-1 as well as excellent tolerability compared to other GLP-1 mimetics.

¹ http://clinicaltrials.gov/ct2/show/NCT01196728

² International Diabetes Federation Diabetes Atlas (http://www.diabetesatlas.org/)

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