Genedrive Regulatory News (GDR)

 Monday 9th September 2013: 7:00am

 Further: re Trading Update

Epistem Holdings Plc ("Epistem" or "the Company")

Epistem (AIM: EHP), the biotechnology and personalised medicine company, today announces an update to its trading statement for the year ended 30 June 2013.

In its trading statement dated 1 August 2013, the Company advised shareholders that it was in discussions with Becton Dickinson ("BD") for an expansion of the supply and distribution agreement of its TB test which, if successful, would lead to additional revenues for the year ended 30 June 2013 of £1.0m - £1.2m being recognised. The Company today advises that the discussions with BD have not been successfully concluded and the supply and distribution agreement originally entered into in August 2012 has been terminated. The previous guidance for the results for the year ended 30 June 2013 of revenues of £5.4m (2012: £5.6m) and a loss after tax of £1.2m (2012: £0.2m) remains unchanged. Development of Genedrive® has been the key focus of the Personalised Medicine division, with Preclinical Research Services and Novel Therapies broadly in line with the prior year. Net cash as at 6 September 2013 was £6.1m. This will be reduced to £5.5m post the repayment of $1m to BD under the terms of the original agreement.

Notwithstanding this development, the Company can report significant progress over the past few months in relation to its assay manufacturing, pre-market support for independent TB clinical studies and preparations for the launch of TB, alongside the development of its expanding menu of infectious disease and pharmacogenomic product applications for Genedrive®.

The Company has previously announced the appointment of Xcelris as its distribution channel partner in India. The Company will complete its Indian clinical trials and launch its TB test once the latest test modifications (RIF mutations) have been fully validated, with this work ongoing. The Board believes these modifications represent a significant competitive advantage over existing TB products. We anticipate that this will result in the comparative performance being subject to independent peer review in clinically relevant publications. We will update the market accordingly on publication.

Commenting Matthew Walls, Chief Executive Officer of Epistem, said "Whilst we are disappointed that the BD partnership agreement was not successfully concluded, development of our finished product offering is progressing, with our sights firmly fixed on accelerating our Indian regulatory approval and delivering our first competitive TB sales to market."

Commenting David Evans, Non-Executive Chairman of Epistem, said "Whilst this represents an initial disappointment, it will enable us to undertake the necessary work to validate our TB assay without the challenging timelines set out in the BD agreement. We see significant value in the TB opportunity and we will look to exploit this in different ways with other channel partners. We believe that our platform offers significant advantages in terms of cost, accuracy and time to result over other existing 'Point of Care' tests. Additionally we have a robust pipeline and I am pleased to see visible progress with our Pharmacogenomics offering where Genedrive is being used to lever advantage in our discussions with potential pharma partners. We look forward to reporting further progress with Genedrive over the coming months."

The Company will announce its preliminary results for the year ended 30 June 2013 on Tuesday, 22 October 2013. An analysts' meeting will be held that morning.

For further information contact:

Epistem Plc

Matthew Walls, Chief Executive Officer ++44 161 606 7258 John Rylands, Chief Financial Officer

Peel Hunt LLP

Nominated Adviser: James Steel/Vijay Barathan ++44 207 418 8900

Walbrook

Mike Wort/Anna Dunphy ++44 207 933 8780

Notes to Editors:

About Epistem

Epistem is a biotechnology and personalised medicine company commercialising its expertise in epithelial stem cells and pharmacogenomics in the areas of oncology, gastrointestinal, dermatological and infectious disease.

Epistem develops novel therapeutics, biomarkers and diagnostics alongside providing preclinical services to drug development companies. Epistem's core expertise is focused on the regulation of adult stem cells located in epithelial tissue which includes the gastrointestinal tract, skin, hair follicles, breast and prostate. Epistem also has a range of proprietary amplification (RNA and DNA) technologies for use in drug discovery, development and diagnostics.