Summary of Disposal

The Company has entered into a formal sale agreement (the "Disposal Agreement") for the sale of certain assets which comprise the majority of its woundcare business carried on by the Group (the "Woundcare Business") to Crawford Woundcare Limited (the "Purchaser") (the "Disposal"), a wholly owned subsidiary of Crawford Healthcare Holdings Limited.

The consideration payable by the Purchaser shall be up to £2,700,000 comprising: (a) £765,000 in cash, which is payable on completion of the Disposal; plus (b) up to a further £1,935,000 payable upon the achievement of certain revenue and other milestones and events (the "Contingent Consideration").

The Company and the Purchaser have also entered into certain other commercial arrangements in respect of the Disposal.

Completion of the Disposal is expected to occur on 1 March 2011.

Background to and reasons for the Disposal and use of proceeds
The Board believes that the Disposal is in the best interests of the Shareholders for a number of reasons. The Disposal will generate cash for the ongoing business of the Group, with the proceeds helping to extend the current cash runway of the Group and thereby allowing the Company to deliver on a number of other short-term objectives. The Disposal will also enable the Company's management to focus on the development and commercialisation of the core areas of the Group's activities and will lead to a further reduction in the fixed cost base where there are shared resources. In arriving at this view, the Board has taken into account the continuing growth and the potential future performance of the business and the investment required to deliver on this potential.

Martyn Williams, CEO of the Company commented "Crawford have impressed us with their expertise and plans for the future and we are delighted to have reached this agreement. In our strategic restructuring announcement of 9 September 2010, we identified a number of short term objectives, including the disposal of our woundcare business. We are pleased to deliver on the first of these."

Principal terms and conditions of the Disposal Agreement

Under the terms of the Disposal Agreement, the Company has conditionally agreed to sell the entire issued share capital of Patient Plus Limited (the woundcare business operating company) and certain assets (including certain intellectual property) used in the Woundcare Business which are owned by Ark Therapeutics Limited (the principal trading company of the Group). Under the Disposal Agreement the Company may also sell certain additional assets to the Purchaser.

By way of security in respect of the Purchaser's obligation to pay the consideration, the Company will take the benefit of: (i) a share charge granted by Crawford Healthcare Holdings Limited, the parent company of the Purchaser, over its shares in the Purchaser; (ii) a debenture granted by the Purchaser over the assets bought from Ark Therapeutics Limited; and (iii) a debenture granted by Patient Plus Limited in respect of all of its assets. In the event of any failure by the Purchaser to pay any of the consideration that is due and payable, or if it breaches any of its other obligations under the Disposal Agreement, the Company will be entitled to enforce this security accordingly.

Financial effects of the Disposal

As at 30 June 2010, the Company had £14,100,000 of cash. The net proceeds of the Disposal will be added to the Company's cash balances and will be used to progress the Company's core activities.

Other matters

The value of the gross assets which is the subject of this transaction at 30 June 2010 was £1,153,000 and the losses on ordinary activities after tax attributable to such business was £428,000.(1)

In accordance with Listing Rule 10.4.2, further announcements will be made as and when appropriate.

Any statements made in this announcement that are not based on current or historical facts are forward-looking in nature. These forward looking statements speak only as at the date of this announcement. The Company and other members of the Group expressly disclaim any obligations or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any changes in the Group's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

This announcement is not intended to, and does not, constitute or form part of any offer, invitation or solicitation of any offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities.

The transaction constitutes a class 2 transaction for the purposes of the UKLA Listing Rules and as such shareholder approval is not required
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