PCI Biotech has developed a unique method for the light-directed drug delivery of therapeutic molecules directly into tumor cells. This internal delivery of drugs has the potential to enhance the efficacy of current approaches to the treatment of cancer. The technology, called photochemical internalisation (PCI), can be used both for existing anti-cancer drugs and for emerging treatments, such as gene therapy using siRNA, and as such is of increasing interest in the pharmaceutical and biotech industry.

The Board of Photocure has made this decision for two key reasons. First, PCI Biotech's focus on drug delivery is clearly distinct from Photocure's existing and future business opportunities. The de-merger, therefore, will enable Photocure to focus entirely on its commercial ambitions and on the development of its exciting R&D pipeline. Second, Photocure believes that de-merging PCI Biotech will give PCI Biotech the best possible opportunity to develop its unique drug delivery technology and to release the value that this creates to shareholders.

PCI Biotech has been a subsidiary of Photocure since 2000, and the company has built a solid technology platform, generated significant preclinical documentation and established a strong intellectual property position. PCI Biotech plans to start the first clinical Proof-of-Concept study in 2008 to evaluate the ability of PCI Biotech's technology to deliver an established anti-cancer agent into tumour cells.   

PCI Biotech's business strategy is to create value by improving the terapeutic profile of drugs, and capture value through licensing deals with pharmaceutical and biotechnology companies. Therefore, the company will be well positioned for further development through a listing on the Oslo Stock Exchange (Oslo Axess).

Photocure currently owns 91.4% of the shares in PCI Biotech AS. The remaining shares are owned by the Radium Hospital's Research Foundation 6.9%, and the employees of PCI Biotech AS 1.7%.

As a result of the de-merger, Photocure shareholders will receive one share in PCI Biotech for every share they own in Photocure. The plan is to strengthen the financial base of PCI Biotech by raising additional capital through a share issue in connection with the listing on the Oslo Stock Exchange (Oslo Axess).

 

The Board of Photocure will prepare a plan for the de-merger that will be sent to each shareholder during the first quarter 2008. The de merger plan will be on the agenda for a general assembly one month after distribution to the shareholders. After the general assembly there will be a two-month creditor notice period before the de-merger can be executed. 

Photocure ASA has to shift the share premium reserve to other equity before 31 December 2007 in order to be able to execute the de-merger as planned. The Board of Photocure has therefore decided that this will be presented for an extraordinary general assembly on 3 December 2007. The invitation to the extraordinary general assembly will be distributed to shareholders today.

Photocure President and CEO, Kjetil Hestdal, said: "Today's announcement is an important step for both Photocure and PCI Biotech. By executing this planned de-merger we will allow both companies to focus on their respective strengths in the treatment and diagnosis of cancer and in drug delivery. At Photocure we believe we have an exciting future based on our current product portfolio and the new projects that we have in clinical development. I am also confident that PCI Biotech's delivery technology has an important role to play in enhancing the effectiveness both of current and of emerging treatments for cancer. By adopting this approach, the Board of Photocure believes that better returns for shareholders can be generated."

For further information, please contact:

President and CEO Kjetil Hestdal

E-mail: kh@photocure.no

Mobile: +47 913 19 535

CFO Christian Fekete

E-mail: cf@photocure.no

Mobile: +47 916 42 938