PROXIMAGEN GROUP PLC

("Proximagen" or "the Company")

Proximagen enters into a Collaboration Agreement with the NIH

for a Phase II clinical trial on naluzotan

London, UK, 7 July 2010 - Proximagen Group plc (AIM: PRX), the biotechnology company focused on diseases of the central nervous system, today announces that it has signed a Collaboration Research and Development Agreement (CRADA) with the National Institute of Neurological Disorders and Stroke (NINDS) at the National Institutes of Health (NIH) in the United States. 

Under the terms of the CRADA, NINDS will fully fund and carry out a double-blind, cross-over, placebo-controlled, Phase II clinical trial in patients with epilepsy. Proximagen, which exclusively owns the worldwide rights to naluzotan, will use the data from this clinical trial to support the development and commercialisation of the product.

Naluzotan is a 5-HT1a receptor agonist that was acquired by Proximagen in October 2009.  In previous clinical trials, the compound was shown to be safe and well-tolerated in over 400 patients. Epilepsy patients with localisation-related epilepsy have reduced 5-HT1a receptor binding as indicated by positron emission tomography (PET scan).  It is thought that by increasing neurotransmitter activity at 5-HT1a receptor sites, seizure incidence and severity may be decreased.  This would represent a major breakthrough for sufferers of epilepsy, a disease affecting approximately 50 million people worldwide.  

Commenting on the collaboration with the NIH, Kenneth Mulvany, Chief Executive Officer of Proximagen, said:  "We are very excited to be collaborating with the National Institute of Neurological Disorders and Stroke on this Phase II clinical trial.  The signing of the CRADA supports our view taken at the time of the acquisition of naluzotan that the compound could be effective in reducing the incidence of seizures in patients suffering from epilepsy. Following the acquisition of tonabersat in February 2010, Proximagen now has two Phase II epilepsy programmes with novel mechanisms of action which have been shown to be safe and well-tolerated in humans.   Phase II clinical trials for both programmes are being funded by our partners while Proximagen retains the worldwide marketing rights to naluzotan and the European marketing rights to tonabersat."

William H Theodore MD, Chief of the Clinical Epilepsy Section at NINDS added: "We welcome the opportunity to collaborate with Proximagen on naluzotan, and assess its potential in a clinical setting as a treatment for epilepsy.  It offers a potentially novel therapy based on pre-clinical and human imaging data and we are hopeful that we can show naluzotan to be efficacious in helping reduce seizures." 

Commenting on the news, Graham Faulkner, chief executive of the National Society for Epilepsy, said, "We are delighted to see further research into novel therapeutics, such as naluzotan, taking place.  Epilepsy affects over 450,000 people in the United Kingdom alone and the need to identify treatments that are more effective and better tolerated than existing therapies remains pressing."

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About Proximagen

Proximagen is a leading biotechnology company committed to developing novel drugs and innovative new treatments for disorders of the central nervous system, bringing new hope to patients and value to our shareholders. Founded in 2003 as a spin-out from King's College London, Proximagen joined the Alternative Investment Market of the London Stock Exchange in March 2005, raising £13.5 million via a placing. In June 2009, the Company raised an additional £50 million.

Proximagen's growth strategy is science-driven and seeks to balance financial and scientific risk as it develops a pipeline of pre-clinical and clinical stage compounds, using its expertise in neuroscience and drug development. The company takes a flexible approach to how far it develops programmes before partnering, being mindful of a number of factors including development risk, the progress of competitor programmes, its financial position and its belief that the retention of rights to certain territories is an important long-term value driver.

Proximagen's pipeline now comprises a broad portfolio of programmes from discovery through clinical development, addressing a number of therapeutic areas including Parkinson's disease, epilepsy, cognition and neuropathic pain.

The Company continues to expand its drug pipeline through acquisition, in-licensing and partnering, with the aim of becoming one of the world's leading companies developing therapeutics for patients suffering from diseases of the central nervous system.

Treatments for epilepsy

Treatment of epilepsy by anticonvulsant drugs can eliminate seizures in one third of patients and can produce more than 50% reduction in seizures in another one third of patients. No single anticonvulsant controls all types of epilepsy. Different patients require different drugs and some may require multiple drugs. There remains a high unmet medical need for new, more effective and better tolerated drugs which treat seizure disorders. Epilepsy affects approximately 50 million people worldwide, making it one of the most common neurological diseases. (Source: World Health Organisation).

About naluzotan

Naluzotan is a 5-HT1a receptor agonist that has been shown to be safe and well tolerated in over 400 patients and it will be entering into phase II clinical development for epilepsy.

Additionally, compounds that activate the 5-HT1a receptor are thought to inhibit levodopa-induced dyskinesia associated with Parkinson's disease. The reversal of dyskinesias has been shown using other    5-HT1a agonists, both in functional models of the disorder and in clinical trials. Proximagen is currently undertaking studies in models of Parkinson's disease to determine the utility of naluzotan in alleviating dyskinesia induced by dopaminergic therapy.  These studies are due to read out later this year and if the results are positive, we would expect naluzotan to advance into Phase II clinical studies for dyskinesia.

For more information, please visit the company's website at www.proximagen.com