CAMBRIDGE ANTIBODY TECHNOLOGY AND XERION PHARMACEUTICALS EXPAND ALLIANCE INTO ANTIBODY DRUG DEVELOPMENT

Xerion granted options to take licences to commercialise human antibody-based drugs

3rd September 2003 Cambridge, UK and Martinsried, Germany… Cambridge Antibody Technology (LSE: CAT; NASDAQ: CATG) and Xerion Pharmaceuticals AG today announce that they have entered into an agreement that paves the way for Xerion to develop and commercialise human monoclonal antibody-based drugs. Under the terms of the agreement, CAT has granted to Xerion options to take licences to develop and commercialise antibodies derived from CAT’s proprietary antibody phage display libraries. These antibodies are directed against critical disease-associated protein targets characterised using Xerion’s proprietary Xstream^TM technologies. CAT will receive development based milestone payments and royalties on antibody products developed by Xerion and its collaborators. This agreement strengthens and expands the existing relationship between the two companies established through a licence in June 2001 involving the research use of CAT’s proprietary antibody phage display libraries. Subsequently, the companies initiated a joint research collaboration in 2002 to investigate the druggability of a target to treat allergic conditions.

Peter Chambré, CAT's Chief Executive Officer, commented: "We are impressed by Xerion’s achievements to date with the CAT libraries and their continued commitment to target discovery and validation using our technology. The present agreement allows both parties to benefit from Xerion’s strategy to build an antibody drug pipeline for itself and its partners”.

“We are very pleased with today’s extension of our relationship with CAT into drug development,” said Markus Ewert, PhD, President and Chief Executive Officer of Xerion, “We have very successfully and to our full satisfaction integrated and applied CAT’s human antibody libraries to identify key disease targets. Xerion now can truly exploit its integrated drug discovery platform, Xstream^TM, to further create and commercialise antibody therapeutic drugs. In this way, we expect to generate significant value for both companies.”

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Notes to Editors

Cambridge Antibody Technology (CAT):

·      CAT is a UK-based biotechnology company using its proprietary technologies and capabilities in human monoclonal antibodies for drug discovery and drug development. Based near Cambridge, England, CAT currently employs around 290 people.

·      CAT is a leader in the discovery and development of human therapeutic antibodies and has an advanced proprietary platform technology for rapidly isolating human monoclonal antibodies using phage and ribosome display systems. CAT has extensive phage antibody libraries, currently incorporating more than 100 billion distinct antibodies. These libraries form the basis for the Company’s strategy to develop a portfolio of antibody-based drugs.

·       Humira^TM, the leading CAT-derived antibody, isolated and optimised in collaboration with Abbott, has been approved by the US Food and Drug Administration for marketing in the US as a treatment for rheumatoid arthritis. Approval in Europe is expected by Abbott in mid-2003.

·       Eight further CAT-derived human therapeutic antibodies are at various stages of clinical trials. There are five candidate therapeutic antibodies in pre-clinical development.

·       CAT has alliances with a number of pharmaceutical and biotechnology companies to discover, develop and commercialise human monoclonal antibody-based products. CAT has co-development programmes wirh Amgen, Amrad, Elan and Genzyme.

·       CAT has also licensed its proprietary technologies to several companies. CAT’s licensees include: Abbott, Amgen, Chugai, Human Genome Sciences, Merck & Co, Pfizer and Wyeth Research.

·       CAT is listed on the London Stock Exchange and on NASDAQ since June 2001. CAT raised £41m in its IPO in March 1997 and £93m in a secondary offering in March 2000.

Application of the Safe Harbor of the Private Securities Litigation Reform Act of 1995: This press release contains statements about Cambridge Antibody Technology Group plc ("CAT") that are forward looking statements. All statements other than statements of historical facts included in this press release may be forward looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. These forward looking statements are based on numerous assumptions regarding CAT’s present and future business strategies and the environment in which CAT will operate in the future. Certain factors that could cause CAT’s actual results, performance or achievements to differ materially from those in the forward looking statements include: market conditions, CAT’s ability to enter into and maintain collaborative arrangements, success of product candidates in clinical trials, regulatory developments and competition.

Xerion Pharmaceuticals AG (Xerion):

·         Xerion Pharmaceuticals is building a pipeline of novel therapeutic targets and antibodies. To identify targets, the Company uniquely focuses on proteins, using proprietary technologies to selectively block their function in diseased cells thereby mimicking the activity of a drug. Xerion integrates this approach with the ability to rapidly generate therapeutic antibody leads. The Company is developing these targets and antibodies independently and in conjunction with partners with an emphasis on cancer indications. For additional information, please visit our website at www.xerion-pharma.com.

·         Xerion is headquartered in Martinsried, Germany and its subsidiary Xerion Pharmaceuticals Inc. is based in Cambridge, MA, USA. The Company has license and collaborative agreements with Altana Pharma AG, Arius Research Inc., Cambridge Antibody Technology Ltd., Procorde GmbH, Xoma Ltd., and several research institutes.