Details of £4.3 million Agreement Announced on 22 September 2004 Partner : Serono - Human Growth Hormone : Drug for Needle-free System

Medical House PLC ("TMH"), (AIM:MLH) the orthopaedic devices and drug delivery company, announced on 22 September 2004 a ground-breaking agreement expected to reach up to £4.3 million, but was unable to reveal the details until today. The definitive agreement between the parties has now been signed. The details are as follows:

• Serono, the global biotechnology leader, is TMH's partner in a five year contract - starting with the first commercial supply - which may reach up to £4.3 million under which TMH will manufacture and supply a reusable, user filled needle-free injection device and related consumables.
• The state of the art needle-free injector is to be developed by TMH with development costs of £435,000 being contributed by Serono.
• The drug to be delivered is human growth hormone. Worldwide sales of this product, which was first registered in 1988, were more than $240m in 2003.
• TMH will be able to provide the needle-free injector to pharmaceutical
  companies for the delivery of other drugs subject to certain Serono
  rights of first refusal.

Thierry Dalmas, Vice-President of Global Metabolic Endocrinology at Serono, said:

"We expect the new needle-free injector being developed by The Medical House will be popular with patients who receive human growth hormone daily. We are hopeful that this is a new step forward in needle-free delivery."

Ian Townsend, Chief Executive, Medical House, said:

"I am extremely delighted with this collaboration, it is a fantastic endorsement of our technology to develop new delivery systems for Serono, one of Europe's largest biotechnology companies. I look forward to this producing a substantial income stream for TMH over the coming years and the platform technology being developed is expected to have applications for a whole range of new and existing drugs."

For further information

The Medical House PLC
Ian Townsend, Chief Executive 0114
261 9011

www.themedicalhouse.com
Buchanan Communications
Tim Anderson/Lisa Baderoon/Rebecca Skye Dietrich 0207
7466 5000

Notes to Editors:
About Medical House - Market Background

TMH has progressively been developing needle free devices which are already successfully used in the market. TMH's own proprietary next generation device, the SQ-pen, is the latest spring powered re-useable system, has great potential in drug delivery worldwide. TMH also has several distribution agreements in place for the insulin market with its first needle free device, named the mhi-500.

TMH announced in November 2002 that it had received approval from the PPA (Prescription Pricing Authority) for the admission of the mhi-500 device to the NHS Drug Tariff, to be effective from 1 January 2003. This has enabled the device and the related consumables to be prescribed on a free of charge basis to the more than 500,000 people with diabetes in the UK who inject insulin daily. This makes TMH's device the first needle free injection system for liquid pharmaceuticals to be available on the Drug Tariff.

Medical House currently has distribution agreements already in place for its needle free injection systems for insulin use covering: Australia; the Southern Africa Development Communities (including South Africa, Angola, Namibia, Botswana, Zambia, Swaziland, Zimbabwe, Malawi, Mozambique and Lesotho); Israel; the Benelux countries (Belgium, Holland and Luxembourg), Turkey; Canada; Egypt, New Zealand, China, Poland, Pakistan, Morocco and Ireland.

Historically the majority of the Group's turnover has come from its orthopaedic company, Eurocut Limited. It designs and manufactures instruments and systems used in orthopaedic procedures for many of the world's leading orthopaedic companies. Eurocut was established in 1988 and now has a reputation as one of Europe's leading orthopaedic instrument businesses. In January 2004, the company moved into significantly enlarged premises enabling it to expand sales significantly. This enables Eurocut to take advantage of a growing orthopaedic market which has an increasing demand for ever more complex instrumentation to carry out minimally invasive and image guided procedures.

The market for Human Growth Hormone drugs is expected to reach $2.2 billion by 2006 according to AS Insights.