Product Development Partnership

Avacta Group plc Product development partnership Laser based gas detection for safety applications within the petrochemical industry Avacta Group plc ("Avacta"), which develops detection and analysis technology aimed at the pharmaceutical, healthcare, industrial and security sectors, is pleased to announce that it has entered into a product development partnership with one of the market leaders in toxic and flammable gas detection for the development of a new hydrogen sulphide (H2S) sensor for industrial safety applications. Avacta's trace gas detection exploits its cavity enhanced absorption spectroscopy ("CEAS") technology. Using this technology Avacta recently announced the completion of a trace gas analysis prototype for a constituent of breath and a collaboration agreement for clinical gas diagnostics with V&F Medical Instrumente (Austria). However, the same CEAS detection engine is equally applicable within industrial settings as within medical diagnostics and provides significant improvements over existing `industry standard' detection technologies such as electrochemical sensors. H2S is a colourless toxic gas and may be found wherever a mixture of hydrocarbons and sulphur occurs, which happens most commonly within petrochemical processing environments. Despite being associated with an odour of rotten eggs, H2S quickly deadens the sense of smell, therefore potential victims may not be aware of its presence until too late. While electrochemical sensors can adequately detect H2S at the regulated exposure limit of 5ppm they possess inherent limitations such as: limited lifetimes, slow response and recovery times, plus the possibility for them to `sleep' and also be poisoned by contaminating gases. Furthermore, electrochemical sensor failures are undetectable as they continue to give an `all OK' reading when they cease to operate, even in the presence of the target gas. This clearly presents a dangerous scenario for workers and a highly expensive maintenance schedule for companies, who are required to continuously check and replace electrochemical sensors. Under the terms of the agreement Avacta has entered into a product development partnership aimed at providing the market with a CEAS based H2S detection solution which overcomes the limitations of electrochemical sensors, thereby improving working environment safety. It will also provide increased economic benefit to companies through the opportunity to significantly reduce maintenance costs. Avacta's partner (the name of which cannot be given for reasons of commercial sensitivity) is an established manufacturer and distributer of, inter alia, toxic gas detection equipment throughout the world and it is intended that Avacta will receive a royalty-based licence payment on product sales, which Avacta and its partner believe has the potential to be several hundred units per annum. Alastair Smith, Chief Executive of Avacta commented "We are very pleased to be working closely with one of the market leaders on the application of our CEAS technology for an H2S detection solution. Our partner is ideal to co-develop and commercialise this product and other products based on our CEAS technology. Industrial gas sensing products will provide near term revenues to underpin the continued development of our gas sensing technology towards valuable clinical applications." 14 August 2008 Enquiries: Avacta Group plc Tel: 0870 835 4367 Alastair Smith, Chief Executive Officer Tim Sykes, Chief Financial Officer Haggie Financial LLP Tel: 020 7417 8989 Nicholas Nelson / Kathy Boate Nicholas.nelson@haggie.co.uk WH Ireland Limited Tel: 0161 832 2174 David Youngman Novum Securities Limited Tel: 020 7562 4700 Henry Turcan / Michael Brennan Notes to Editors: About Avacta Avacta was spun-out from the University of Leeds in 2004 by its current management team as a biophysics company, with the aim of combining the disciplines of physics and biology to develop innovative technologies and expert technical services to address needs in the pharmaceutical, defence and clinical diagnostics markets. Avacta has a core bio-analytical technology development programme addressing the needs of the biopharmaceutical sector to fully characterise their new products at the earliest stage in their development to reduce the risk of late stage failure. High value solutions in defence and clinical diagnostics are also being provided by these core bio-analytical technologies. A successful and growing part of the Avacta business model is its technical services arm, Avacta Analytical Ltd, which is focused on providing leading edge contract research to the biopharmaceutical and healthcare/personal-care materials sectors. Avacta listed on AIM in August 2006 through the reverse takeover of Readybuy plc which changed its name to Avacta Group plc.