Offer for ReNeuron

RNS Number:4630J
St. James's MGP Limited
01 April 2003

1 April 2003
                                                  For immediate release


Not for release, publication or distribution in, into or from the United States,
Canada, Australia or Japan

                             RECOMMENDED CASH OFFER

                             at 10 pence per share

                                       by

                             KPMG Corporate Finance

                                  on behalf of

                    St. James's MGP Limited ("St. James's")

                                      for

                       ReNeuron Holdings plc ("ReNeuron")


Summary

The board of St. James's and the Independent Directors of ReNeuron are pleased
to announce that they have reached agreement on the terms of a recommended cash
offer, to be made by KPMG Corporate Finance on behalf of St. James's, to acquire
the entire issued share capital of ReNeuron not already owned or contracted to
be acquired by St. James's.  St. James's is a newly incorporated company formed
in order to implement the Offer and is owned and controlled by the Merlin
Consortium.

The Offer:

-  will be 10 pence in cash for each ReNeuron Share to which the Offer
   relates;

-  values the entire existing issued share capital of ReNeuron at
   approximately #3.6 million;

-  represents a premium of approximately 129 per cent. to the
   Closing Price of 4.375 pence per ReNeuron Share on 14 February 2003, the last
   dealing day prior to the commencement of the Offer Period; and

-  represents a premium of approximately 90 per cent. to the Closing
   Price of 5.25 pence per ReNeuron Share on 31 March 2003, the last dealing day
   prior to this Announcement.

ReNeuron has received financial advice from WestLB Panmure. The Independent
Directors have received financial advice from Nabarro Wells under Rule 3 of the
Code. The Independent Directors, who have been so advised by Nabarro Wells,
consider the terms of the Offer to be fair and reasonable and accordingly will
unanimously recommend the Offer.

St. James's has entered into conditional agreements with certain members of the
Merlin Consortium to acquire 18,888,890 ReNeuron Shares currently held by them
(representing approximately 52.7 per cent. of ReNeuron's existing issued share
capital) in exchange for new St. James's Shares.  In addition, St. James's has
entered into conditional agreements with Dr Martin Edwards (the Chief Executive
Officer of ReNeuron), Dr John Sinden (the Chief Scientific Officer and one of
the founders of ReNeuron) and Dr Helen Hodges (a departmental head and one of
the founders of ReNeuron) to acquire, in aggregate, 2,559,500 ReNeuron Shares
currently held by them (representing approximately 7.1 per cent. of ReNeuron's
existing issued share capital) in exchange for new St. James's Shares.

Accordingly, St. James's has entered into conditional agreements to acquire, in
aggregate, 21,448,390 ReNeuron Shares representing approximately 59.8 per cent.
of ReNeuron's existing issued share capital.

Commenting on the Offer:

Mark Clement, Chairman of St. James's and a director of Merlin Biosciences
Limited, said:

"We believe that the continued development of ReNeuron is best supported in a
private company environment and, accordingly, it is our intention, following
successful completion of the Offer, to cancel ReNeuron's trading facility on
AIM. The Offer, which will be recommended by the Independent Directors, presents
a certain cash exit for shareholders."

St. James's has been advised by KPMG Corporate Finance.

ReNeuron has been advised by WestLB Panmure.

The Independent Directors (being Andrew Hayden, Michael Hunt and Professor Peter
Stonier) have been advised by Nabarro Wells.


PRESS ENQUIRIES

For further information contact:


St. James's                                                     [phone]

Mark Clement, Chairman
Samantha Axtell

KPMG Corporate Finance                                          [phone]

Michael Higgins
Richard Barlow

Financial Dynamics                                              [phone]

David Yates
Ben Atwell

ReNeuron                                                         [phone]

Dr Martin Edwards, Chief Executive Officer

Nabarro Wells                                                   [phone]

Marc Cramsie
Harry Sutherland

WestLB Panmure                                                  [phone]

Nicholas Wells
Ronald Openshaw


Notes for editors:

The Merlin Consortium consists of The Merlin Fund, The Merlin Biosciences Fund
and Merlin Equity Limited. The Merlin Fund and The Merlin Biosciences Fund are
advised by Merlin Biosciences Limited, a specialised venture investor in life
sciences companies. Since 1997, Merlin funds have invested in 24 European
biotechnology companies and Merlin Biosciences Limited advises or manages funds
of over Euro400 million. Merlin funds invest in companies that are focused on human
medicine or medical-devices with groundbreaking technology and significant
commercial potential. They have a reputation as hands-on investors with
significant operational experience in the life sciences sector.

The Offer will be made subject to the conditions and further terms of the Offer
set out in Appendix I and to be set out in the Offer Document and the Form of
Acceptance, or otherwise as may be required to comply with the provisions of the
City Code.

The Offer Document, setting out the details of the Offer and enclosing the
notice of EGM, the Form of Acceptance and the form of proxy, will be dispatched
to ReNeuron Shareholders shortly and in any event within twenty eight days of
the date of this Announcement unless agreed otherwise by the Panel.

This summary should be read in conjunction with the full text of this
Announcement.

KPMG Corporate Finance, a division of KPMG LLP which is authorised by the
Financial Services Authority for investment business activities, is acting for
St. James's as financial adviser in relation to the Offer and is not acting for
any other person in relation to the Offer. KPMG Corporate Finance will not be
responsible to anyone other than St. James's for providing the protections
afforded to its clients or for providing advice in relation to the Offer or any
other matter referred to herein.

WestLB Panmure, which is regulated in the United Kingdom by the Financial
Services Authority, is acting only for ReNeuron as financial adviser (within the
meaning of the Rules of the Financial Services Authority) and no one else in
connection with the Offer and will not be responsible to anyone other than
ReNeuron for providing the protections afforded to customers of WestLB Panmure
or for providing advice in relation to the Offer.

Nabarro Wells, which is regulated in the United Kingdom by the Financial
Services Authority, is acting only for the Independent Directors as financial
adviser (within the meaning of the Rules of the Financial Services Authority)
and no one else in connection with the Offer and will not be responsible to
anyone other than the Independent Directors for providing the protections
afforded to customers of Nabarro Wells or for providing advice in relation to
the Offer.

The availability of the Offer to persons who are not resident in the UK may be
affected by the laws of the relevant jurisdiction.  Persons who are not resident
in the UK should inform themselves about and observe any applicable
requirements.

The Offer will not be made, directly or indirectly, in, into or from, or by the
use of mails or any means or instrumentality (including, without limitation,
telephonically or electronically) of interstate or foreign commerce of, or any
facility of a national securities exchange of United States, Canada, Australia
or Japan and the Offer will not be capable of acceptance by any such use, means,
instrumentality or facilities from within the United States, Canada, Australia
or Japan. Accordingly, copies of this Announcement are not being, and must not
be, directly or indirectly, mailed or otherwise forwarded, transmitted,
distributed or sent in, into or from the United States, Canada, Australia, Japan
and persons receiving this Announcement (including custodians, nominees and
trustees) must not mail or otherwise forward, transmit, distribute or send it
in, into or from the United States, Canada, Australia or Japan.

This Announcement does not constitute an offer or an invitation to purchase or
subscribe for any securities.


1 April 2003

Not for release, publication or distribution in, into or from the United States,
Canada, Australia or Japan

                             RECOMMENDED CASH OFFER

                             at 10 pence per share

                                       by

                             KPMG Corporate Finance

                                  on behalf of

                    St. James's MGP Limited ("St. James's")

                                      for

                       ReNeuron Holdings plc ("ReNeuron")



1. Introduction

The board of St. James's and the Independent Directors of ReNeuron are pleased
to announce that they have reached agreement on the terms of a recommended cash
offer, to be made by KPMG Corporate Finance on behalf of St. James's, to acquire
the entire issued share capital of ReNeuron not already owned or contracted to
be acquired by St. James's.  St. James's is a newly incorporated company formed
in order to implement the Offer and is owned and controlled by the Merlin
Consortium.

2. Responsibility for considering the Offer

Professor Trevor Jones, Chairman of ReNeuron and Peter Keen, a non-executive
director of ReNeuron are both members of the board of Merlin General Partner
Limited and Merlin General Partner II Limited and Peter Keen is also a member of
the board of Merlin Equity Limited, all these companies being members of the
Merlin Consortium. In addition, Dr John Sinden (Chief Scientific Officer of
ReNeuron and one of its founders) and Dr Martin Edwards (Chief Executive Officer
of ReNeuron) have entered into conditional agreements (as noted below) under
which they will acquire new St. James's Shares in exchange for their current
holdings of ReNeuron Shares (being 1,150,000 and 12,820 ReNeuron Shares
respectively).

In view of their actual and potential involvement with the Merlin Consortium and
St. James's (as the case may be), these directors of ReNeuron have taken no part
in the decision to recommend the Offer. The Independent Directors have no
interest in any member of the Merlin Consortium or St. James's and are not
connected with the Offer.

ReNeuron has received financial advice from WestLB Panmure. The Independent
Directors have received financial advice from Nabarro Wells under Rule 3 of the
Code. The Independent Directors, who have been so advised by Nabarro Wells,
consider the terms of the Offer to be fair and reasonable. In providing its
advice to the Independent Directors, Nabarro Wells has taken into account the
commercial assessments of the Independent Directors.  The Independent Directors
do not have any beneficial holdings of ReNeuron Shares.

3. The Offer

KPMG Corporate Finance, on behalf of St. James's, will offer to acquire all of
the issued and to be issued ReNeuron Shares not owned or contracted to be
acquired by St. James's, subject to the conditions and further terms of the
Offer set out in Appendix I and to be set out in the Offer Document and the Form
of Acceptance, or otherwise as may be required to comply with the provisions of
the City Code on the following basis:

for each ReNeuron Share to which the Offer relates 10 pence in cash

The Offer would value the existing entire issued share capital of ReNeuron at
approximately #3.6 million.  The Offer price of 10 pence per ReNeuron Share
represents a premium of 129 per cent. to the Closing Price of 4.375 pence per
ReNeuron Share on 14 February 2003 (being the last dealing day prior to the
commencement of the Offer Period) and also represents a premium of approximately
90 per cent to the Closing Price of 5.25 pence per ReNeuron share on 31 March
2003 (the last dealing day prior to this Announcement).

The ReNeuron Shares which are the subject of the Offer will be acquired fully
paid, or credited as fully paid, and free from all liens, equitable interests,
charges, encumbrances, rights of pre-emption and other third party rights or
interests of any nature whatsoever and together with all rights now or in the
future attaching to them, including the right to receive and retain all
dividends and other distributions (if any) declared, made or paid after the date
of this Announcement.

Appendix III contains the definitions used in this Announcement.

4. Agreements with the Merlin Consortium and certain members of ReNeuron
management

St. James's has entered into conditional agreements with certain members of the
Merlin Consortium to acquire 18,888,890 ReNeuron Shares currently held by them
(representing approximately 52.7 per cent. of ReNeuron's existing issued share
capital) in exchange for new St. James's Shares.  These agreements are
conditional upon St. James's resolving to declare the Offer unconditional in all
respects.

In addition, St. James's has entered into conditional agreements with Dr Martin
Edwards (the Chief Executive Officer of ReNeuron), Dr John Sinden (the Chief
Scientific Officer and one of the founders of ReNeuron) and Dr Helen Hodges (a
departmental head and one of the founders of ReNeuron) to acquire, in aggregate,
2,559,500 ReNeuron Shares currently held by them (representing approximately 7.1
per cent. of ReNeuron's existing issued share capital) in exchange for new St.
James's Shares. These agreements are conditional upon both St. James's resolving
to declare the Offer unconditional in all respects and on the approval of these
arrangements at the EGM as noted below.

Accordingly, St. James's has entered into conditional agreements to acquire, in
aggregate, 21,448,390 ReNeuron Shares representing approximately 59.8 per cent.
of ReNeuron's existing issued share capital.

5. Background to and reasons for the Offer

The directors of St. James's believe in ReNeuron's underlying technology and its
relevance as a valid therapeutic platform but believe that ReNeuron's continued
development is best supported as a private company.  Furthermore, the Merlin
Fund and the Merlin Biosciences Fund are prohibited from investing funds in
publicly quoted or traded companies. Therefore, St. James's intends, following
the Offer becoming unconditional, to cancel the AIM trading facility of ReNeuron
(as set out in the paragraph 12 below).  The Merlin Consortium believes that the
Offer represents fair value as well as providing a certain cash exit for
ReNeuron Shareholders.

St. James's intends to review, together with the management of ReNeuron, the
development programmes of ReNeuron and the funding requirements of such
programmes, and to consider refocusing the business on its stem cell technology.

Shareholders who do not accept the Offer should be aware that as stated under
the paragraph "Funding" below, ReNeuron will need to raise funds in the future,
potentially through further equity issues, which may result in the dilution of
any such ReNeuron Shareholder's interest in ReNeuron.

6. Background to the recommendation of the Offer

ReNeuron's Development Programmes

At the time of ReNeuron's flotation in November 2000, the Company had two main
development programmes in its portfolio, the development of human neural stem
cells for transplantation and the Neurins programme. Almost all in house
research effort is focussed on stem cells with non stem cell programmes run
through collaborations.

a) Human neural stem cells

In recent years there has been scientific and commercial interest in the
prospect of using stem cells to replace dead or diseased cells in the body and
restore lost function. ReNeuron's focus has been on human brain stem cells
initially obtained from minute samples of human fetal brain. ReNeuron's aim is
to grow specific types of brain cells for transplantation into patients with
neurological diseases such as Parkinson's disease, Huntington's disease and
stroke.

Fetal brain stem cells will not grow indefinitely unless they are engineered to
contain a gene enabling the cells to continue dividing more or less
indefinitely.  This process is known as immortalisation. ReNeuron's human cell
lines at the time of the flotation were immortalised using a
temperature-sensitive gene (a variant of the SV40 T-antigen) which allowed cell
division to be regulated by varying the temperature at which the cells were
grown.  Subsequent testing of many such cell lines showed them to be genetically
unstable, i.e.  having an abnormal and varying number of chromosomes. The
directors of ReNeuron have since concluded, following an exhaustive evaluation,
that this temperature-dependent immortalisation approach, also being used by a
competitor, is not capable of producing cell lines that will remain genetically
stable after the high number of doublings needed for clinical trials and
commercialisation.  Genetic stability of stem cells is a prerequisite for
transplantation therapy.

ReNeuron therefore licensed worldwide exclusive rights to the use of an
alternative immortalising gene, c-Myc, from Amrad Corporation in September 2002.
ReNeuron has since generated multiple cell lines using this immortalisation
approach.  These cells are genetically stable and mature readily and
reproducibly in vitro into both neurones and glia.

Despite this recent progress, the directors of ReNeuron recognise that
ReNeuron's human cell lines are still several years from commercial launch for
use in transplantation and that the clinical evaluation necessary to achieve
regulatory approval for commercial launch is costly, lengthy and still has a
high risk of failure.  However, they believe that ReNeuron's lead cell lines
offer significant potential for commercial exploitation.

ReNeuron continues to exploit the use of its stem cells as a drug discovery
tool, and has recently launched a range of new, stable, -Myc immortalised human
brain stem cell lines under the trade name ReNcell, which are marketed to
pharmaceutical companies and academia for use in drug discovery and for general
research.

b) Neurins and soluble receptors

ReNeuron commenced Phase II trials of its lead compound, ReN1869, in early 2001,
in both diabetic neuropathy and rheumatoid arthritis. ReN1869 is a conventional,
low molecular weight drug formulated as a tablet.  In January 2003, ReNeuron
announced that the trials had not shown any significant beneficial effects and
it is likely that development of the Neurins will be discontinued.

Since flotation, ReNeuron has in-licensed two proteins, ReN1820 and ReN1826,
with work currently focused on ReN1820, a molecule which opposes the effects of
nerve growth factor.  Manufacture is currently being scaled up to provide
material for pre-clinical safety and initial clinical trials at the same time as
protein characterisation is ongoing.  The initial clinical target is
interstitial cystitis, a disease of the bladder.  Meanwhile, third party
confirmation of the potential of ReN1826 as a potential treatment for prostatic
and pancreatic cancer has recently been published.

Funding

The directors of ReNeuron believe that the Company's existing cash balances are
insufficient to fund the Company's development significantly beyond December
2003.  Therefore, in the absence of a further fundraising, ReNeuron would cease
to be able to trade beyond that point.  The current funding environment for
biotechnology companies, particularly small companies and those engaged in early
stage research such as ReNeuron, is extremely challenging.  The directors of
ReNeuron are of the opinion that the Company is unable, at present, to raise
additional funds on terms which would be in the best interests of ReNeuron
Shareholders and are unable to give any assurance that the Company would be able
to raise additional funds before its existing cash balances are exhausted.

In view of the Company's funding situation, the directors of ReNeuron conducted
a review of the options available for securing value for all ReNeuron
Shareholders from the Company's technology.  All viable options were explored
including the possibility of the closure of ReNeuron's operations and the
distribution of cash to ReNeuron Shareholders, and the possibility of combining
ReNeuron's business with those of other companies.

Reasons for recommending the Offer

In evaluating the Offer on behalf of those ReNeuron Shareholders to whom it is
made, the Independent Directors have considered the benefits of the Offer
against the available alternatives.  They have concluded that the Offer is in
the best interests of such ReNeuron Shareholders for the following reasons:

(a)   The Offer represents a certain cash value per ReNeuron Share at a
premium of approximately 129 per cent. to the Closing Price of 4.375 pence per
ReNeuron Share on 14 February 2003, being the last dealing day prior to the
announcement by ReNeuron on 17 February 2003 that it had received an approach
which may or may not lead to an offer being made for the Company.

(b)   Whilst the Independent Directors believe that ReNeuron's
technology has long term potential, they can give no assurance that funding will
be available to allow the Company to continue to trade significantly beyond
December 2003 and thereby exploit that potential.

(c)   The value which ReNeuron Shareholders would receive in the event
of closure of the Company's operations and the distribution of cash is
uncertain.  The Independent Directors can give no assurance that the cash
ReNeuron Shareholders could receive would exceed the value of the Offer and it
may be below the value of the Offer.

7. Information on St. James's and Financing

St. James's, a private limited company registered in England and Wales, was
incorporated on 13 March 2003 with the registered number 4697300.  The company
was incorporated specifically for the purpose of acquiring ReNeuron and has not
traded since incorporation except for the purpose of implementing the Offer.

St. James's is wholly owned by the Merlin Consortium.

The issued share capital of St. James's will at the time of making the Offer be
held as follows: The Merlin Fund (40%); Merlin Equity Limited (12%); and The
Merlin Biosciences Fund (48%).  Upon St. James's resolving to declare the Offer
unconditional in all respects The Merlin Fund and Merlin Equity Limited will,
pursuant to the Subscription and Shareholders Agreement, exchange their ReNeuron
Shares for new St. James's Shares and the Merlin Biosciences Fund will subscribe
for new St. James's Shares in cash to permit St. James's to satisfy the
consideration payable to ReNeuron Shareholders who have accepted the Offer, and
subject further to approval by Independent Shareholders at the EGM, the ReNeuron
Shares held by each of Dr Martin Edwards, Dr John Sinden and Dr Helen Hodges
shall be exchanged for the same number of new St. James's Shares.

8. Information on the Merlin Consortium

The Merlin Consortium consists of The Merlin Fund, The Merlin Biosciences Fund
and Merlin Equity Limited. The Merlin Fund and The Merlin Biosciences Fund are
advised by Merlin Biosciences Limited, a specialised venture investor in life
sciences companies. Since 1997, Merlin funds have invested in 24 European
biotechnology companies. Merlin funds invest in companies that are focused on
human medicine or medical-devices with groundbreaking technology and significant
commercial potential. They have a reputation as hands-on investors with
significant operational experience in the life sciences sector. Merlin
Biosciences Limited advises or manages The Merlin Fund, The Merlin Biosciences
Fund, The Merlin Biosciences Fund III and Finsbury Life Sciences Investment
Trust plc with commitments of over Euro400m.

Merlin was founded by Sir Christopher Evans in 1996 who serves as its Chairman.
Sir Christopher is known to be an innovative scientist and entrepreneur who is
regarded as a leader in biotechnology.  He was a founder of Chiroscience (now
merged with Celltech), Celsis and several other companies.  He has over 100
scientific papers and patents to his name.

The Merlin Fund totalling #38m (Euro57m), has investments in Ark Therapeutics,
BioVex, Cyclacel, KinderTec, Microscience, PanTherix, ReNeuron and Vectura.  The
Merlin Biosciences Fund totalling Euro247m, has investments in Amedis
Pharmaceuticals, Ardana, Arakis, Ark Therapeutics, BioVex, Cambridge
Biotechnology, Cyclacel, De Novo Pharmaceuticals, Epicept, Graffinity,
Intercytex, LiDCO, Microscience, Morphochem, Neurotech, Noxxon, Onyvax,
PanTherix, Vectura, Wilex and XTL.  Merlin Biosciences Fund III, which is still
in the process of fundraising, has received commitments of Euro98 million to date
and has made one investment, Biowisdom.

Merlin Equity Limited has in the past provided seed-stage investment and founded
a number of life science companies, one of which was ReNeuron. It now acts as an
investment holding company and holds investments in the same companies as the
Merlin Fund.

Investors in the Merlin funds include leading institutional shareholders,
corporations, high net worth individuals and government agencies.

Certain directors of members of the Merlin Consortium own or control in
aggregate 129,230 ReNeuron Shares, representing approximately 0.4 per cent. of
ReNeuron's existing issued share capital.

9. Information on ReNeuron

ReNeuron is a UK bio-pharmaceutical company developing proprietary treatments
for neurological disorders. Its focus is developing innovative neural stem cell
technology that has the potential to treat brain diseases including stroke,
Alzheimer's disease and Parkinson's disease. ReNeuron has been also exploiting
the use of its stem cell lines as a drug discovery platform.

For the financial year ended 31 March 2002 ReNeuron reported (audited) turnover
of #0.02 million (2001: #0.2 million), and a loss on ordinary activities before
taxation of #5.0 million (2001: a loss of #7.4 million). ReNeuron also reported
as at 31 March 2002 audited net assets of #11.3 million.

For the six month period ended 30 September 2002 ReNeuron reported (unaudited)
turnover of #0.02 million (2001: #0.0 million), and a loss on ordinary
activities before taxation of #2.2 million (2001: a loss of #2.3 million).
ReNeuron also reported as at 30 September 2002 unaudited net assets of #9.2
million.

ReNeuron's net cash position as at 28 February 2003 was approximately #5.7
million.

10. Employees

The board of St. James's has confirmed to the directors of ReNeuron that, in the
event of the Offer becoming or being declared unconditional in all respects, the
existing employment rights, including pension rights, of all employees of the
ReNeuron Group will be fully safeguarded.

11. Management and Extraordinary General Meeting

Dr Martin Edwards (the Chief Executive Officer of ReNeuron), Dr John Sinden (the
Chief Scientific Officer and one of the founders of ReNeuron) and Dr Helen
Hodges (a departmental head and one of the founders of ReNeuron) have entered
into a conditional contract to exchange their holdings of ReNeuron Shares for an
equivalent number of new St James's Shares as set out above.  Further details of
these arrangements will be set out in the Offer Document.

The Code requires that the arrangements set out above with Dr Martin Edwards, Dr
John Sinden and Dr Helen Hodges be approved by the Independent Shareholders in a
general meeting.  Accordingly, an EGM of ReNeuron will be convened at which an
ordinary resolution will be proposed to approve these arrangements.  Notice of
the EGM will be despatched with the Offer Document.  Voting on this resolution
will be on a poll from which The Merlin Fund and Merlin Equity Limited, the
directors of members of the Merlin Consortium and each of Dr John Sinden, Dr
Helen Hodges and Dr Martin Edwards (together with their respective concert
parties, if any) will abstain.  The Offer will, however, not be conditional upon
the passing of the resolution.  Dr John Sinden, Dr Helen Hodges and Dr Martin
Edwards have undertaken not to accept the Offer if the ordinary resolution is
not passed at the EGM.

Nabarro Wells, financial adviser to the Independent Directors, considers the
terms of the arrangements between St James's and Dr John Sinden, Dr Helen Hodges
and Dr Martin Edwards to be fair and reasonable in the context of the Offer.
Accordingly, the Independent Directors intend to unanimously recommend that
ReNeuron Shareholders vote in favour of the resolution approving these
arrangements.

Further details of the arrangements will be included in the Offer Document and
the accompanying notice of EGM.

12. Cancellation of the AIM trading facility, re-registration and compulsory
acquisition

As soon as it is appropriate so to do and subject to the Offer becoming or being
declared unconditional in all respects, St. James's intends to procure that
ReNeuron applies for cancellation of its trading facility on AIM and to propose
a resolution to re-register ReNeuron as a private company.

Shareholders should note that the cancellation of the AIM trading facility will
significantly reduce the liquidity and marketability of the ReNeuron Shares.
Shareholders should also be aware that they may also incur dealing costs in the
event shares are sold outside of the Offer.

The intention of the Merlin Consortium and St James's, following conclusion of
the Offer, will be to ensure that all ReNeuron Shareholders are treated
commercially and economically, on an equivalent basis, as if they were
shareholders in St. James's, whose sole asset will be its holding of ReNeuron
Shares.

Upon St. James's receiving acceptances under the Offer in respect of, and/or
otherwise acquiring, 90 per cent. or more of the ReNeuron Shares to which the
Offer relates, St. James's intends to exercise its rights pursuant to the
provisions of sections 428 to 430F of the Act to acquire compulsorily ReNeuron
Shares to which the Offer relates.

13. Recommendation

The Independent Directors, who have been so advised by Nabarro Wells under Rule
3 of the Code, consider the terms of the Offer to be fair and reasonable.  In
providing its advice to the Independent Directors of ReNeuron, Nabarro Wells has
taken into account the commercial assessments of the Independent Directors.  The
Independent Directors will unanimously recommend that ReNeuron Shareholders
accept the Offer. The Independent Directors do not have any beneficial holdings
of ReNeuron Shares.



PRESS ENQUIRIES

For further information contact:

St. James's                                                     [phone]

Mark Clement, Chairman
Samantha Axtell

KPMG Corporate Finance                                          [phone]

Michael Higgins
Richard Barlow

Financial Dynamics                                              [phone]

David Yates
Ben Atwell

ReNeuron                                                         [phone]

Dr Martin Edwards, Chief Executive Officer

Nabarro Wells                                                   [phone]

Marc Cramsie
Harry Sutherland

WestLB Panmure                                                  [phone]

Nicholas Wells
Ronald Openshaw



                                   Appendix I

                   Conditions and Further Terms of the Offer


The Offer

The Offer, which will be made by KPMG Corporate Finance on behalf of St. James's
will be subject to the conditions and further terms of the Offer set out in this
Appendix I and to be set out in the Offer Document and the Form of Acceptance,
or otherwise as may be required to comply with the provisions of the City Code.

The Offer will be subject to the following conditions:

(a)  valid acceptances being received (and not, where permitted,
withdrawn) by not later than 3.00 p.m. (London time) on the date falling 21 days
after the date on which the Offer Document is posted ("the first closing date of
the Offer") (or such later time(s) and/or date(s) as St. James's may, with the
consent of the Panel and subject to the rules of the City Code, decide) in
respect of not less than 70 per cent. (or such lesser percentage as St. James's
may decide) in nominal value of the ReNeuron Shares to which the Offer relates
(the "Relevant Percentage"), provided that this condition will not be satisfied
unless St. James's shall have acquired, or agreed to acquire, pursuant to the
Offer or otherwise, ReNeuron Shares carrying in aggregate more than 50 per cent.
of the voting rights then normally exercisable at general meetings of ReNeuron,
including for this purpose, to the extent (if any) required by the Panel, any
such voting rights attributable to or attaching to (or which would, if issued,
attach to) any ReNeuron Shares which have been unconditionally allotted or
issued as fully paid before the date on which the Offer becomes or is declared
unconditional as to acceptances, whether pursuant to the exercise of any
outstanding conversion or subscription rights or otherwise and for this purpose:

(i)  the expression "ReNeuron Shares to which the Offer
relates" shall mean those ReNeuron Shares issued, and to be issued, not already
owned by or to be issued to any member of the Merlin Consortium or by Dr Martin
Edwards or Dr John Sinden or Dr Helen Hodges;

(ii) valid acceptances" shall include any ReNeuron Shares to
which the Offer relates which are acquired by St. James's; and

(iii)ReNeuron Shares which have been unconditionally allotted but not
issued shall be deemed to carry the voting rights they will carry upon their
being entered in the register of members of  ReNeuron;

(b)  no central bank, government or governmental, quasi-governmental,
supranational, statutory, regulatory or investigative body, court or trade
agency, professional association, institution or professional body or any other
person or body whatsoever having statutory or regulatory competence in any
jurisdiction (each a "Third Party") prior to the date when the Offer becomes
otherwise unconditional in all respects, having taken, instituted, implemented
or threatened, or having announced its intention to take, institute, implement
or threaten, any action, proceeding, suit, investigation, enquiry or reference
or having made, proposed or enacted by statute, regulation or order or required
any action to be taken or information to be provided which would or might:

(i)  make the Offer or its implementation or the acquisition or
the proposed acquisition by St. James's of any or all of the ReNeuron Shares, or
the acquisition or proposed acquisition of control of ReNeuron by St. James's,
void, illegal or unenforceable under the laws of any relevant jurisdiction, or
otherwise directly or indirectly restrict, restrain, prohibit or interfere with
or delay the implementation of, or impose additional conditions or obligations
with respect to, or otherwise challenge or interfere with  the Offer or the
acquisition or proposed acquisition of any or all ReNeuron Shares or control of
ReNeuron by St. James's or require amendment to the terms of the Offer; or

(ii) require the divestiture by St. James's of any of its shares or
other securities (or the equivalent) in any member of the ReNeuron Group; or

(iii)require the divestiture by St. James's or by any member of the
ReNeuron Group of all or any portion of their respective businesses, assets or
properties or impose any material limitation on the ability of any member of the
ReNeuron Group to conduct their respective businesses or own their respective
assets or property or any material part of them; or

(iv) impose any limitation on, or result in any delay in the ability of
any member of the ReNeuron Group or St. James's to acquire or to hold or
exercise effectively, directly or indirectly, all or any rights of ownership
shares or loans or other securities (or the equivalent) in any member of the
ReNeuron Group or of St. James's held or owned by it to exercise management
control over any such member of the ReNeuron Group or St. James's to maintain
its rights of substantial interest in or significant influence over any such
member; or

(v)  save pursuant to the Offer or Part XIIIA of the Act or the City
Code, require any member of the ReNeuron Group or St. James's to acquire or to
offer to acquire any shares or other securities (or the equivalent) in any
member of the ReNeuron Group owned by any third party; or

(vi) result in any member of the ReNeuron Group ceasing to be able to
carry on all or any part of its business under any name, trade name or trade
mark under which it presently does so, in each such case in a manner which is
material in the context of the ReNeuron Group taken as a whole; or

(viii) result, directly or indirectly, in a material delay in the
ability of St. James's or render St. James's unable, to acquire some or all of
ReNeuron Shares, or control ReNeuron; or

(ix)  otherwise adversely affect the business, assets, liabilities or
prospects, of any member of the ReNeuron Group, in each such case in a manner
which is material in the context of the ReNeuron Group taken as a whole;

(c)   all authorisations, orders, recognitions, grants, consents,
clearances, confirmations, licences, permissions and approvals ("Approvals")
necessary for, or in respect of, the Offer or the proposed acquisition of any
ReNeuron Shares, or control of ReNeuron by St. James's or which are necessary
for the carrying on of the business of the ReNeuron Group and St. James's or any
part thereof having been obtained, from all appropriate Third Parties and all
Approvals remaining in full force and effect at the time the Offer becomes
otherwise unconditional and there being no notice or written intimation of any
intention to revoke suspend, restrict or amend or not to renew the same;

(d)   except as disclosed in this Announcement or in the annual report
and accounts of ReNeuron for the year ended 31 March 2002 or in the unaudited
interim financial statement of ReNeuron for the six month period ended 30
September 2002, or disclosed or publicly announced by or on behalf of  ReNeuron
at or before 5.30 p.m. (London time) on 31 March 2003 through a Regulatory
Information Service prior to 31 March 2003 (such information being referred to
as "publicly disclosed" for the purposes of this Appendix 1) there being no
provision of any arrangement, agreement, lease, licence, permit, joint venture,
franchise agreement, partnership or other instrument to which any member of the
ReNeuron Group is a party, or by or to which any such member or any of its
assets may be bound or be subject, or any circumstances which could, as a
consequence of the making of the Offer or the proposed acquisition of ReNeuron
Shares or any part thereof by St. James's or because of a change in the control
or management of ReNeuron, would or might reasonably be expected  to result in:

(i)   any monies borrowed by, or any other indebtedness (actual or
contingent) of, or any grant available to, any such member of the ReNeuron Group
which is not already repayable on demand, being repayable or being or becoming
capable of being declared repayable, immediately or prior to the stated
repayment date; or

(ii)  the creation or enforcement of any mortgage, charge or other
security interest over the whole or any part of the business, property or assets
of any member of the ReNeuron Group or any such security, mortgage or charge
becoming enforceable; or

(iii) any such arrangement, agreement, lease, licence, permit, joint
venture, partnership or instrument the rights, liabilities, obligations and
interests of any member of the ReNeuron Group or thereunder being or becoming
capable of being terminated or revoked or materially modified or affected or any
material and adverse action being taken or any obligation or liability arising
thereunder; or

(iv)  any assets or interests of, or any asset the use of which is
enjoyed by, any member of the ReNeuron Group being or falling to be disposed of
or charged or any right arising under which any such asset or interest could be
required to be disposed of or charged, in each case other than in the ordinary
course of business, or ceasing to be available to any member of the ReNeuron
Group other than in the ordinary course of business; or

(v)   save pursuant to the Offer or Part XIIIA of
the Act or the City Code, require any member of the ReNeuron Group or St.
James's to acquire or to offer to acquire any shares or other securities (or the
equivalent) in any member of the ReNeuron Group owned by any third party; or

(vi)  the interests or business of any member of the ReNeuron Group
in or with any person, firm or company (or any arrangements relating to such
interests or business) being terminated or revoked or materially and adversely
modified; or

(vii) any member of the ReNeuron Group ceasing to be able to carry
on all or any part of its business under any name, trademark, trade name under
which it at present does so; or

(viii)the creation of any material liability (actual or contingent)
any member of the ReNeuron Group other than in the ordinary course of business;

(in any such case to an extent which is material in the context of the ReNeuron
Group taken as a whole) and no event having occurred which, under any provision
of any agreement, arrangement, licence, permit joint venture, franchise
agreement, partnership or other instrument which or might result in any of the
events or circumstances as are referred to in sub paragraphs (i) to (viii) of
this paragraph (d) (in any such case to an extent which is material in the
context of the ReNeuron Group taken as a whole);

(e)   save as publicly disclosed or disclosed, no members of the
ReNeuron Group having since 31 March 2002:

(i)   (save for transactions solely between members of the
ReNeuron Group) having issued or agreed to or authorised or proposed or
announced its intention to authorise or propose the issue of additional shares
of any class, or securities convertible into, or rights, warrants or options to
subscribe for or acquire, any such shares or convertible securities; or

(ii)  recommended, declared, paid or made or proposed the
recommendation, declaration, paying or making of any bonus, capitalisation
issue, dividend or other distribution whether payable in cash or otherwise other
than to ReNeuron or another member of the ReNeuron Group; or

(iii) merged with or de-merged or acquired any body corporate or
authorised or announced an intention to authorise any merger or acquisition,
demerger, disposal or transfer, or granted or created any mortgage, charge,
security or other encumbrance over any assets (including shares and trade
investments) or over any right, title or interest in any such asset which in any
such case is material in the context of the assets as the ReNeuron Group taken
as a whole; or

(iv)  save as between members of the ReNeuron Group issued,
authorised or proposed the issue or made any changes in or to, any debentures or
loan capital or (save in the ordinary course of business) incurred or increased
any indebtedness or contingent liability, which in any such case in material in
the context of the ReNeuron Group taken as a whole; or

(v)   entered into or changed the terms of or authorised, proposed
or announced its intention to enter into or change the terms of, any contract
arrangement, transaction or commitment (whether in respect of capital
expenditure, trading obligations or otherwise) which is of a loss making, long
term, onerous or unusual nature or which involves or could involve an obligation
of such a nature or magnitude in each case which is other than in the ordinary
course of business or which might reasonably be expected to be restrictive on
the business of any member of the ReNeuron Group or St. James's, which in any
such case in material in the context of the ReNeuron Group taken as a whole; or

(vi)  entered into or varied the terms of, or made any offer (which
remains open for acceptance) to enter into or vary the term, of any service
agreement for services with any director or senior executives of any member of
the ReNeuron Group; or

(vii) announced a proposal to purchase, redeem or repay, or
purchased, redeemed or repaid, any of its own shares or other securities; or

(viii)implemented, authorised, proposed or announced its intention
to propose or implement any reconstruction, amalgamation, scheme, commitment or
other transaction or arrangement in each case otherwise than in the ordinary
course of business; or

(ix)  made an alteration to its memorandum or articles of
association or other incorporation documents; or

(x)   waived or compromised any claim other than in the ordinary
course of business to an extent which is material in the context of the ReNeuron
Group taken as a whole; or

(xi)  been unable or having admitted in writing that it is unable
to pay its debts or having stopped or suspended (or threatened to stop or
suspend) payment of its debts generally or having ceased or threatened to cease
carrying on all or a substantial part of its business; or

(xii) taken or proposed any corporate action or had any legal
proceedings initiated or threatened against it or petition presented or any
order made, in each case for its winding-up (voluntary or otherwise),
dissolution or reorganisation or for the appointment of a receiver,
administrative receiver, administrator, trustee or similar officer of all or any
material part of its assets or revenues, or any analogous or similar proceedings
or steps in any jurisdiction or had any such person appointed; or

(xiii)entered into any material arrangement, agreement or
commitment or passed any resolution or made any offer (which remains open for
acceptance) with respect to any of the transactions, matters or events referred
to in this paragraph (e);

(f)   save as publicly disclosed or disclosed, since 31 March 2002:

(i)   there having been no material adverse change or deterioration in the
business, financial or trading position, prospects, or assets of any member of
the ReNeuron Group which, in each case, is material in the context of the
ReNeuron Group taken as a whole; and

(ii)  no litigation, arbitration proceedings, prosecution or other legal
proceedings having been threatened in writing, announced, or instituted by or
remaining outstanding against or in respect of any member of the ReNeuron Group
(whether as claimant or defendant or otherwise) and no investigation having been
threatened in writing by a Third Party against or in respect of any member of
the ReNeuron Group (whether as claimant or defendant or otherwise), which, in
each such case, is or could reasonably be expected to be material in the context
of the ReNeuron Group taken as a whole; and

(iii) no contingent or other liability having arisen or become apparent to
ReNeuron which would or might reasonably be expected to have a material and
adverse effect on the ReNeuron Group taken as a whole; and

(iv)  no event having occurred which would or might reasonably be expected
to result in any of the intellectual property rights of any member of the
ReNeuron Group being or being capable or being terminated or modified or
affected or in any material and adverse action being taken or arising
thereunder, which, in each case, is material in the context of the ReNeuron
Group taken as a whole;

(g)   save as publicly disclosed or disclosed, St. James's not having
discovered:

(i)   that any financial, business or other information concerning the
ReNeuron Group or any member of the ReNeuron Group disclosed at any time by or
on behalf of any member of the ReNeuron Group, whether publicly or to St.
James's in writing, is materially misleading, contains a misrepresentation of
fact or omits to state a fact necessary to make the information contained
therein not materially misleading in the context of the ReNeuron Group taken as
a whole and in any such case which has not subsequently been corrected by a
specific disclosure prior to the date of this Announcement;

(ii)  that any member of the ReNeuron Group is subject to any
liability, contingent or otherwise, such liability being material in the context
of the ReNeuron Group taken as a whole; or

(iii) that any past or present member of the ReNeuron Group has
not complied with all applicable laws, statutes, ordinances and regulations of
any jurisdiction and other requirements of any Third Party which non-compliance
might reasonably be expected to give rise to any liability (whether actual or
contingent) or cost on the part of any past or present member of the ReNeuron
Group which, in each case, is material in the context of the ReNeuron Group
taken as a whole; or

(iv)  any information which affects materially the import of any
information disclosed by or on behalf of any member of the ReNeuron Group to St.
James's or its advisers.

Upon the Share Exchange Condition being satisfied prior to midnight on the day
falling 60 days after the date on which the Offer Document is posted, St.
James's shall not be entitled (without the consent of the Panel) to invoke
condition (a). Subject to the requirements of the Panel, St. James's reserves
the right to waive all or any of conditions (b) to (g) inclusive, in whole or in
part.  Conditions (b) to (g) inclusive must be satisfied as at, or waived on or
before midnight, on the 21st day after the later of the first closing date of
the Offer and the date on the Share Exchange Condition is satisfied (or in each
case such later date as the Panel may agree), or the Offer will lapse. St.
James's shall be under no obligation to waive or treat as satisfied any of
conditions (b) to (g) inclusive by a date earlier than the latest date specified
above for the satisfaction thereof notwithstanding that the other conditions of
the Offer may, at such earlier date, have been waived or satisfied and that
there are at such earlier date no circumstances indicating that the relevant
condition may not be capable of satisfaction.  If the Offer so lapses, the Offer
will cease to be capable of further acceptance and persons accepting the Offer
and St. James's shall thereupon cease to be bound by Forms of Acceptance
submitted on or before the date on which the Offer lapses.

If St. James's is required by the Panel to make an offer for ReNeuron Shares
under the provisions of Rule 9 of the City Code, St. James's may make such
alterations to the above conditions, including condition (a) above, as are
necessary to comply with the provisions of that Rule.

The Offer will be governed by English law and be subject to the non-exclusive
jurisdiction of the English courts.

For the purposes of this Appendix I (other than paragraph (g)) "disclosed" shall
mean disclosed in writing by or on behalf of ReNeuron to St. James's or its
professional advisers prior to the date hereof with express reference to the
Offer.


                          FURTHER DETAILS OF THE OFFER

                         Additional terms of the Offer


The Offer


The ReNeuron Shares to which the Offer relates will be acquired free from all
liens, charges and encumbrances, rights of pre-emption and any other third party
rights of any nature whatsoever and together with all rights attaching thereto,
including the right to all dividends or other distributions declared, paid or
made after the date hereof.

If the Offer lapses, the Offer will cease to be capable of further acceptance
and persons accepting the Offer and St. James's shall thereupon cease to be
bound by acceptances delivered on or before the date on which the Offer so
lapses.

ReNeuron Share Option Schemes


The Offer will extend to any ReNeuron Shares issued or unconditionally allotted,
while the Offer remains open for acceptance, pursuant to the exercise of options
issued under the ReNeuron Share Option Schemes.  To the extent that such options
are not or cannot be exercised in full, and have an exercise price in excess of
the Offer price, it is intended that appropriate proposals will be made in due
course to the participants in the ReNeuron Share Option Schemes once the Offer
becomes unconditional in all respects.  It is currently intended that no
proposals will be made to participants in any ReNeuron Share Option Schemes
where the exercise price is less than the Offer price.

Subject to the resolution being passed at the EGM, upon the Offer becoming or
being declared unconditional in all respects, each of Dr John Sinden and Dr
Martin Edwards will enter into the Put and Call Agreements where any ReNeuron
Shares to be issued pursuant to certain existing option agreements may be
exchanged on a like for like basis for new St. James's Shares.

General

KPMG Corporate Finance, a division of KPMG LLP which is authorised by the
Financial Services Authority for investment business activities, is acting for
St. James's as financial adviser in relation to the Offer and is not acting for
any other person in relation to the Offer. KPMG Corporate Finance will not be
responsible to anyone other than St. James's for providing the protections
afforded to its clients or for providing advice in relation to the Offer or any
other matter referred to herein.

WestLB Panmure, which is regulated in the United Kingdom by the Financial
Services Authority, is acting only for ReNeuron as financial adviser (within the
meaning of the Rules of the Financial Services Authority) and no one else in
connection with the Offer and will not be responsible to anyone other than
ReNeuron for providing the protections afforded to its customers or for
providing advice in relation to the Offer.

Nabarro Wells, which is regulated in the United Kingdom by the Financial
Services Authority, is acting only for the Independent Directors as financial
adviser (within the meaning of the Rules of the Financial Services Authority)
and no one else in connection with the Offer and will not be responsible to
anyone other than the Independent Directors for providing the protections
afforded to customers of Nabarro Wells or for providing advice in relation to
the Offer.

The availability of the Offer to persons not resident in the United Kingdom may
be affected by the laws of the relevant jurisdiction. Persons who are not
resident in the United Kingdom should inform themselves about and observe any
applicable requirements.

The Offer will not be made, directly or indirectly, in, into or from, or by the
use of mails or any means or instrumentality (including, without limitation,
telephonically or electronically) of interstate or foreign commerce of, or any
facility of a national securities exchange of United States, Canada, Australia
or Japan and the Offer will not be capable of acceptance by any such use, means,
instrumentality or facilities from within the United States, Canada, Australia
or Japan. Accordingly, copies of this Announcement are not being, and must not
be, directly or indirectly, mailed or otherwise forwarded, transmitted,
distributed or sent in, into or from the United States, Canada, Australia, Japan
and persons receiving this Announcement (including custodians, nominees and
trustees) must not mail or otherwise forward, transmit, distribute or send it
in, into or from the United States, Canada, Australia or Japan.

Other than as set out in this Announcement, neither St. James's nor, as far as
St. James's is aware, any person presumed to be acting in concert with St.
James's, owns or controls any ReNeuron Shares or has any option to acquire any
ReNeuron Shares.

This Announcement does not constitute an offer or an invitation to purchase any
securities.


Appendix II - Sources of information and bases of calculations


(i)     The value placed by the Offer on the entire issued share
capital of ReNeuron is based on 35,873,705 ReNeuron Shares in issue on 31 March
2003.

(ii)    The financial information relating to ReNeuron is extracted
from the annual report and accounts of ReNeuron for the year ended 31 March 2002
and unaudited interim financials for the six months ended 30 September 2002, and
the cash balance of the Company on 28 February 2003 is provided by ReNeuron.


Appendix III - Definitions


The following definitions apply throughout Announcement, unless the context
requires otherwise:

"Act"                               the Companies Act 1985 (as amended)

"AIM"                               the Alternative Investment Market of the London Stock Exchange

"Announcement"                      this announcement

"Code" or "City Code"               the City Code on Takeovers and Mergers

"Closing Price"                     the closing middle market quotation of a ReNeuron Share as derived
                                    from the Daily Official List

"Daily Official List"               the London Stock Exchange's Daily Official List

"EGM"                               extraordinary general meeting of ReNeuron

"Form of Acceptance"                the form of acceptance accompanying the Offer Document

"Independent Directors"             Andrew Hayden, Michael Hunt, and Professor Peter Stonier

"Independent Shareholders"          the ReNeuron Shareholders other than Dr John Sinden, Dr Helen Hodges,
                                    Dr Martin Edwards and the  members of the Merlin Consortium and any of
                                    their respective concert parties

"London Stock Exchange"             London Stock Exchange plc

"Merlin Biosciences Fund"           The Merlin Biosciences Fund L.P. and Merlin Biosciences Fund GbR
                                    acting by their general partner and managing partner respectively,
                                    Merlin General Partner II Limited

"Merlin Consortium"                 The Merlin Fund, The Merlin Biosciences Fund and Merlin Equity Limited

"Merlin Fund"                       The Merlin Fund L.P. acting by its general partner, Merlin General
                                    Partner Limited

"Nabarro Wells"                     Nabarro Wells & Co. Limited

"Offer"                             the recommended Offer to be made by KPMG Corporate Finance on behalf
                                    of St. James's to acquire all of the issued and to be issued share
                                    capital of ReNeuron not already owned (or contracted to be acquired)
                                    by St. James's on the terms and conditions set out or referred to in
                                    this Announcement

"Offer Document"                    the formal offer document making the offer expected to be despatched
                                    to ReNeuron Shareholders shortly

"Offer Period"                      the offer period relating to ReNeuron, which commenced on 17 February
                                    2003, being the date of the announcement by ReNeuron that it had
                                    received an approach which may or may not lead to an offer

"Put and Call Agreements"           the put and call agreements over any and all ReNeuron Shares to be
                                    issued to Dr John Sinden and/or Dr Martin Edwards (as the case may be)
                                    upon exercise of certain of their existing options with members of the
                                    ReNeuron Group for an equal number of new St. James's Shares

"ReNeuron" or "Company"             ReNeuron Holdings plc

"ReNeuron Group"                    ReNeuron and its subsidiary undertakings and, where the context
                                    permits, each of them

"ReNeuron Shareholders" or          holders of ReNeuron Shares
"Shareholder"

"ReNeuron Shares" or "Shares"       ordinary shares of 10 pence each in the capital of ReNeuron

"ReNeuron Share Options"            options over ReNeuron Shares granted under the ReNeuron Share Option
                                    Schemes

"ReNeuron Share Option Schemes"     the ReNeuron Company Share Option Scheme, the ReNeuron Share Option
                                    Plan, any option agreement entered into by ReNeuron with any director
                                    or employee of or consultant or provider of services to any member of
                                    the ReNeuron Group and any agreement under which any person shall have
                                    the right or obligation to transfer shares as acquired by them in
                                    ReNeuron Limited to ReNeuron in consideration for the issue of shares
                                    in the capital of ReNeuron

"Share Exchange Condition"          the acceptance of the Offer by ReNeuron Shareholders to whom it is
                                    made in respect of the Relevant Percentage of the ReNeuron Shares to
                                    which the Offer relates

"St. James's"                       St. James's MGP Limited, a company incorporated in England and Wales
                                    and registered with company number 4697300

"St. James's Shares"                ordinary shares of 10 pence each in the share capital of St. James's

"Subscription and Shareholders      means the agreement dated 31 March 2003 between St James's, the Merlin
Agreement"                          Consortium, Dr John Sinden, Dr Helen Hodges and Dr Martin Edwards,
                                    relating, inter alia to the exchange of ReNeuron Shares for new St
                                    James's Shares

"subsidiary", "subsidiary           shall be construed in accordance with the Act (but for this purpose
undertaking", "associated           ignoring paragraph 20(1)(b) of Schedule 4A of the Act)
undertaking" and "undertaking"

"UK" or "United Kingdom"            the United Kingdom of Great Britain and Northern Ireland

"US" or "United States"             the United States of America, its territories and possessions, any
                                    state of the United States and the District of Columbia, and all other
                                    areas subject to its jurisdiction

"WestLB Panmure"                    WestLB Panmure Limited



                      This information is provided by RNS
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