BTG Licensee Tolerx Forms Collaboration with GlaxoSmithKline to Develop and Commercialise TRX4

BTG Licensee Tolerx Forms Collaboration with GlaxoSmithKline to Develop and Commercialise TRX4

BTG Licensee Tolerx Forms Collaboration with GlaxoSmithKline to Develop and Commercialise TRX4

London, UK, 24 October 2007   BTG plc (LSE: BGC), the life sciences company, announces that its licensee, Tolerx, Inc. and GlaxoSmithKline have formed an alliance to develop and commercialise the humanised anti-CD3 monoclonal antibody TRX4 (otelixizumab) for type 1 diabetes and other autoimmune and immune-mediated inflammatory diseases.

BTG will receive a payment of $10m, being the relevant share of the initial $70m to be received by Tolerx. Furthermore, BTG is entitled under the terms of its licence agreement with Tolerx to receive 50% of any future milestone payments received by Tolerx in respect of the successful development, approval and commercialisation of TRX4 in all indications. BTG also has rights to receive royalties on product sales.

BTG will share around half of any amounts received with the original sources of the licensed patents.

Louise Makin, BTG’s CEO, commented: “We have been excited by the progress made by Tolerx in developing TRX4 in type 1 diabetes and psoriasis, and are delighted that they have attracted a world class partner in GlaxoSmithKline with which to move TRX4 forward, potentially in a broad range of disease indications.”

The text of the announcement by GlaxoSmithKline and Tolerx follows.

GlaxoSmithKline and Tolerx Form Worldwide Collaboration for Development and Commercialization Of Novel Medication

Collaboration Focuses on Type 1 Diabetes and Other Autoimmune Indications

London, UK and Cambridge, MA - October 23, 2007 – GlaxoSmithKline and Tolerx, Inc. today announced the execution of a worldwide alliance to develop and commercialize otelixizumab (TRX4), a novel humanized anti-CD3 monoclonal antibody that has potential across a broad range of autoimmune and immune-mediated inflammatory diseases, including type 1 diabetes. Otelixizumab has been evaluated in type 1 diabetes in two Phase II studies and in psoriasis in two Phase I studies. In clinical trials, otelixizumab has been shown to preserve the function of insulin-producing beta cells in the pancreas in patients with type 1 diabetes, reducing the amount of administered insulin needed to control blood glucose levels.

Under the terms of the agreement, Tolerx will have responsibility for the Phase III clinical program for type 1 diabetes in the US up to and including regulatory submission of the biologics license application (BLA). Tolerx has the option to co-promote otelixizumab in type 1 diabetes in the US with GSK, while GSK will have exclusive rights to develop and commercialize otelixizumab in all other indications in the rest of the world. GSK also has the exclusive right to develop the pediatric indication for type 1 diabetes in the US.

As part of the collaboration, Tolerx will receive an upfront payment, equity and advance R&D funding totaling $70 million. In addition, Tolerx may receive up to $155 million in future development costs of otelixizumab in type 1 diabetes. Tolerx may earn up to $350 million in milestone payments, assuming successful development and approvals of otelixizumab for type 1 diabetes and multiple additional indications. Tolerx may also receive up to $175 million in sales milestone payments based on tiered net sales thresholds of otelixizumab. At the time of an initial public offering of Tolerx’s common stock and at the request of Tolerx and certain other conditions, GSK will invest up to an additional $10 million in Tolerx’s common stock.

Dr. Moncef Slaoui, Chairman of Research and Development at GSK, commented, “Otelixizumab is another welcome addition to GSK’s rapidly expanding biopharmaceuticals pipeline. This is a key area of future growth and investment for GSK and, as a novel treatment for many T cell-mediated diseases, the potential of otelixizumab is significant. Together with Tolerx, who are pioneers in this area of science, we hope to realize the potential of this compound and bring a valuable new treatment option to patients suffering from type 1 diabetes and other autoimmune disorders.”

"GSK brings a wealth of experience, expertise, and global resources to this collaboration. The agreement with GSK enables us to operationally leverage Tolerx’s expertise in therapeutic immune regulation, expand the development of otelixizumab in type 1 diabetes and other indications, and capitalize on GSK’s considerable worldwide development, regulatory, and commercialization infrastructure and experience,” said Dr. Douglas J. Ringler President and Chief Executive Officer of Tolerx. “Moreover, it provides the infrastructural support required to advance our goal of being first-to-market with otelixizumab in type 1 diabetes. We anticipate the collaboration will allow the potential of this novel therapy to be fully explored globally, not only for the treatment of patients with type 1 diabetes but also for those with autoimmune disorders for which the current standard of care is inadequate.”

About Type 1 Diabetes
Diabetes (medically known as diabetes mellitus) is the name given to disorders in which the body has difficulty regulating its blood glucose, or blood sugar, levels. There are two major types of diabetes: type 1 and type 2. Type 1, also called juvenile diabetes or insulin-dependent diabetes, is a disorder of the body's immune system. In type 1 diabetes, the pancreas produces little or no insulin as a result of the immune system attacking and destroying the insulin-producing beta cells in the pancreas. Therefore, type 1 diabetes patients require frequent administration of insulin therapy each day to control their blood sugar levels.

About Otelixizumab
Otelixizumab is a monoclonal antibody that binds to a receptor component found on all T cells known as CD3, which is involved in normal T cell signaling. Otelixizumab is designed to block the function of autoreactive T-effector cells that attack the body’s tissues and cause autoimmune disease while inducing a subset of T cells called T-regulatory cells that are thought to protect against T-effector cell damage well after the drug has been eliminated from the body. In a Phase II clinical study of subjects with new-onset type 1 diabetes, otelixizumab demonstrated the potential to preserve the function of insulin-producing beta cells in the pancreas and reduce the amount of administered insulin needed to control blood glucose levels for up to 18 months after only a single six day course of therapy. In the study, residual beta cell function was assessed by measuring glucose clamp-induced C-peptide release before and after the administration of glucagon. Otelixizumab administration was associated with transient symptoms of flu-like syndrome and transient Epstein-Barr Virus (EBV) reactivation. Tolerx has completed dose optimization studies in subjects with type 1 diabetes and psoriasis and has identified a dosing regimen that thus far has significantly reduced or eliminated these side effects while maintaining important biological activity.

About GlaxoSmithKline
GlaxoSmithKline is one of the world's leading research-based pharmaceutical and healthcare companies and is committed to improving the quality of human life by enabling people to do more, feel better and live longer. For more information, visit GlaxoSmithKline at www.gsk.com.

About Tolerx
Tolerx is a biopharmaceutical company engaged in the discovery and development of novel therapies to treat patients with immune-mediated diseases. Tolerx currently has two antibodies in clinical development: otelixizumab in type 1 diabetes and psoriasis, and TRX1 in cutaneous lupus erythematosus (CLE). TRX1 is a humanized anti-CD4 antibody that is being developed in collaboration with Genentech, Inc. Tolerx is also engaged in preclinical development of new product candidates that induce immunological tolerance for the treatment of autoimmune diseases and circumvent tolerance for the treatment of cancer or chronic viral diseases.

GlaxoSmithKline Forward-Looking Statements
Under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, GSK cautions investors that any forward-looking statements or projections made by GSK, including those made in this announcement, are subject to risks and uncertainties that may cause actual results to differ materially from those projected. Factors that may affect GSK's operations are described under 'Risk Factors' in the Operating and Financial Review and Prospects in the company's Annual Report on Form 20-F for 2006.

Tolerx Forward-Looking Statements
This press release contains certain statements that are preceded by, followed by, or that include the words “will” “may,” “if,” “assuming” or similar expressions or the negation thereof, Such statements, which are not historical facts, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Statements regarding GSK’s financing commitment to Tolerx, the potential value of payments that may be received by Tolerx pursuant to the agreement with GSK, and the anticipated progress and development of otelixizumab, in type 1 diabetes and other disease indications, are all forward-looking statements. Such forward-looking statements involve risks, uncertainties and other factors that may cause the actual performance or achievements of Tolerx to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Factors and risks that may affect the forward-looking statements include the ability of the parties to collaborate successfully to develop the product candidates, results of future clinical studies, the ability to obtain regulatory approvals for otelixizumab for type I diabetes or any other indication, and the introduction of competing therapies by other companies. These statements reflect the view of Tolerx as of the date of this press release, and Tolerx undertakes no obligation to update or revise any forward-looking statements to reflect events or circumstances after the date of this press release.

For further information contact:

BTG
Andy Burrows, Director of Investor Relations
+44 (0)20 7575 1741; mobile: +44 (0)7990 530605
Christine Soden, Chief Financial Officer
+44 (0)20 7575 1591

Financial Dynamics
Ben Atwell
+44 (0)20 7831 3113

About BTG
BTG in-licenses, develops and commercialises pharmaceuticals and other medical technologies. With a substantial and growing revenue stream of royalties and milestone payments from out-licensed products, BTG continues to strengthen its pipeline of preclinical and clinical development programmes. Active in the fields of oncology, diseases of ageing, neuroscience, drug repositioning and medical devices, BTG works from its offices in London, Philadelphia and Osaka with a global partner network of healthcare companies and research organisations. For further information, visit: www.btgplc.com.

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