Provalis PLC - Chairman's AGM Statement

RNS Number:9060C
Provalis PLC
21 December 1999


PROVALIS PLC ANNUAL GENERAL MEETING

At the AGM held today, Frank Harding, Chairman, made the following statement:

"Since the issue of the Offer document I am pleased to say that we have
secured an important deal with SmithKline Beecham on the licence of some of
our vaccine technology.  We announced this on 3rd November.  This was an
important event for the Company as it helped to validate the value of our
vaccine portfolio and our revised approach to R&D.  This outsourced approach
to R&D, with strong collaboration with development partners, has got off to a
good start under our new R&D Director Dr Les Davies.

Dr Davies is now working with Phil Gould to establish a Scientific Advisory
Board from the Company.  We now have a number of academic and industry trained
scientists that have agreed to join that Board and we expect to make a formal
announcement of its composition shortly.  This will then ensure that as well
as providing valuable input to the Company's strategy and direction in our R&D
programmes, we comply fully with the new BIA code of practice for Companies
such as ourselves.

Many of you will be keen to know of the latest news on our development
products Macrulin(TM) and Pseudostat(TM).  We have now prepared partner
packs on these products and the Executive team is beginning to talk to other
Companies who may partner these developments.  The Macrulin(TM) project in
particular has a demanding and costly development programme and at the present
stage of its development, the Company cannot undertake a high risk project
such as this without a collaboration from a partner Company.  During 2000 we
will seek to identify a suitable partners based on our clinical research data.
I am pleased to say since the Offer document the Company has augmented its
formulation patents on Macrulin(TM).

With Pseudostat(TM) we still await the outcome of our application to the F&DA
on the orphan drug status with the project but have now begun some further
contracted pre-clinical work in the USA.  These outcomes are important if we
are to secure a partner for the project.

Part of our strategy was to allow our Operating Divisions; Healthcare and
Medical Diagnostics to focus on the generation of sales.

We  have  now focused our Healthcare Division on ethical pharmaceutical  sales
and I am pleased to report that since the Offer document and Annual Report  we
have  now  agreed the disposal of our non-core over the counter pharmaceutical
sales  businesses, Chancellor Group and Consolidated Chemicals, for  #760,000.
Regrettably  this has lead to a closure of our Wrexham manufacturing  business
and  we intend to close that site by February 2000.  This now brings the asset
disposal  income  for calendar 1999 to #4.6million, which will  enable  us  to
sustain  our  R&D programmes whilst using new funds to support  the  Operating
parts of our business.

The Healthcare Division continues to perform strongly with record sales and  a
movement to net profit.  Sales are growing strongly and we have maintained our
growing  movement  in  to net profit for that business.   The  Falk  range  of
gastroenterological  products has continued to sell well  and  we  are  seeing
encouraging growth in the sale of CALCEOS and CLOTAM.
In  the  next year we expect that we will begin to expand the sales force  and
license new products for sale.

The news on our Medical Diagnostics Division since the Offer document has been
more  mixed.   We launched both Osteosal and Glycosal at Medica - the  largest
medical  diagnostic  exhibition  in  Europe,  in  late  November  and  got  an
overwhelmingly positive response to both products.  I am pleased to  say  that
we  have now launched Osteosal in the UK using a contracted sales force and we
expect  the first sales by year-end.  Distribution contracts are now in  place
for a number of markets in Europe and we now also have the product launched in
South  Korea  with  encouraging  repeat orders.   We  have  however  run  into
difficulties  on our plans for the launch of the product in Germany  with  the
Distributor IMACO.  They were unable to meet certain criteria laid out for the
launch  plan  for  the product.  We have therefore decided to  terminate  that
distribution contract and we are already in discussion with a new  distributor
in Germany.

We  have  been  active,  post Medica, in beginning  to  identify  distribution
partners for Glycosal, which has now completed all its field clinical testing,
and  independent  laboratory assessments.  I am pleased  to  report  that  the
recent  independent assessment of Glycosal by the European Centre for glycated
haemoglobin testing has given this diagnostic product an 'excellent' rating.

The  next  year  2000  promises to be an exciting year for  the  newly  formed
Provalis."

All resolutions proposed at the AGM were duly passed.

Contacts:

Lee Greenbury    Provalis plc               Tel: +44 (0)1244 833 402
Emily Bruning    Shandwick International    Tel: +44 (0)171 905 2442

END

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