Serum Institute picks up 14% stake in Lipoxen

Diversifies into oncology and recombinant products

Mumbai, August 17, 2006 "� Serum Institute Ltd., the largest manufacturer of vaccines in India and also the largest manufacturer of Measles and DTP group of Vaccines in the world, has picked up a 14% stake in Lipoxen PLC (AIM: LPX), a biopharmaceutical company specialising in the development of differentiated biologicals, vaccines and oncology drugs. Lipoxen has raised £2.6 million in new funds from the Serum Institute of India Limited ("SIIL") through a subscription agreement and associated warrant agreement.

The funds raised through the subscription will allow Lipoxen to drive clinical development of its pipeline of potential protein drugs and vaccines into clinical trials and appoint a leading biologic Contract Research Organisation. It will also allow Lipoxen to recruit additional laboratory staff in order to capitalize on the potential to broaden the Company's revenue generating collaborations. Lipoxen's proprietary delivery technologies are attracting significant interest and it is already co-developing products with Serum Institute. This agreement will enable Serum Institute diversify into oncology and recombinant products which will be differentiated from the generics existing in the market.

Dr Cyrus Poonawalla, Chairman and Managing Director of Serum Institute of India said, "We are excited about our strategic investment in Lipoxen and feel their technology is a key component to our strategy to create high value differentiated biologics and vaccines. Our investment and increased strategic collaboration was prompted by Serum's desire to become a large contributor in the biopharmaceutical world and by the very positive preliminary scientific data."

M. Scott Maguire, Chief Executive Officer of Lipoxen stated, "Serum Institute of India is one of the worlds largest manufacturer of vaccines and is committing large sums to become a leading player in biologics. This combination makes Serum an ideal fit for Lipoxen's twin novel technologies in the field of vaccines and biologics. The coupling of Serum's vast manufacturing infrastructure with Lipoxen's novel technologies make for a powerful partnership that positions our companies as potential key players in the world of vaccines and protein drugs."

Pursuant to the subscription agreement, Lipoxen has agreed to issue to SIIL 10,000,000 ordinary shares in the Company at a subscription price of 26 pence per share ("Subscription Shares"). Lipoxen has also entered into a warrant agreement with SIIL pursuant to which SIIL has the right to subscribe for up to 2.7 million ordinary shares in the Company for a period of two years from 3 August 2006 at a subscription price of 35 pence per share. As part of these agreements, SIIL has also been granted the right to appoint a non-executive director to the board of the Company.

About Serum Institute of India Limited

Serum Institute of India Ltd. is a leader in the vaccine technology and the largest manufacturer of vaccines in India. The company is India's largest exporter of vaccines and immuno-biologicals. The total turnover of the company for the year ended March 2006 was Rs. 742 crores, out of which the exports turnover was Rs. 550 crores. Serum Institute supplies vaccines to more than 130 countries across the globe. Serum Institute has recently set up India's first biotech Special Economic Zone in Pune for biotechnology and pharmaceutical products.

About Lipoxen PLC

Lipoxen PLC (AIM; LPX) is a biopharmaceutical company specializing in the development of high value differentiated biologicals, vaccines and oncology drugs. Potential products, which address markets in excess of US $1 Billion, currently under development include improved formulations of important biologicals including EPO, G-CSF, insulin and interferon-alpha based on Lipoxen's proprietary PolyXen technology. This technology is designed to improve the stability, biological half-life and immunologic characteristics of therapeutic proteins naturally. Lipoxen has two further naturally-derived proprietary delivery technologies ImuXen and a related liposomal technology for the formulation of cytotoxic oncology drugs, which are being developed to enhance the efficacy and safety of various vaccines such as Hepatitis B and pneumococcal vaccines, as well as a number of anti-cancer agents like paclitaxel.