Avacta Group plc Acquisition of Oxford Medical Diagnostics Limited

Avacta Group plc, which develops detection and analysis technology aimed at the defence & security, biopharmaceutical and clinical diagnostics markets, announced in December 2007 that it had acquired Oxford Medical Diagnostics Ltd.

Oxford Medical Diagnostics Limited ("OMD") is a specialist in high sensitivity, laser-based, gas-detection technology which was spun out from Oxford University in 2004. The patented technology exclusively licensed from Isis to OMD uses infrared absorption spectroscopy and is targeted at two major markets: industrial process monitoring and, in the longer term, clinical diagnosis through the rapid analysis of breath samples.

The initial purchase consideration of £3 million was paid in Avacta shares. The Consideration Shares represent 5.6% of the current issued ordinary share capital of Avacta.

OMD's laser-based gas analysis device has reached the final prototype stage and the first product, which will provide a measurement of moisture content in natural gas which drives gas value, is expected to reach the market late in calendar year 2008.

The market for industrial gas analysis technology includes security and defence applications, toxic gas detection in a range of industries, and gas quality analysis in sectors such as the petrochemical industry. OMD's technology will provide quick and sensitive measurements in a cost effective product. This equipment is expected to position Avacta as a leading developer of this type of technology.

The OMD technology is also applicable to point of care clinical diagnostics. A growing number of diseases, such as tuberculosis, asthma, lung cancer and some ulcers, can be diagnosed through the presence of certain molecules in the breath. At present such analysis is carried out using large, expensive and complex mass spectrometers.

Professor Alastair Smith, Chief Executive, Avacta, said: "OMD is a perfect fit for Avacta. It brings a highly complementary capability that has applications in our core markets of biopharmaceuticals, defence and healthcare and brings with it new routes to market for us in industrial process monitoring. The Oxford founders, led by Professor Gus Hancock, and the operational team are a huge asset to the wider Group."