SOURCE: Xenova Group Plc

June 24, 2005 02:02 ET

Xenova Group Plc announces Offer by Celtic Pharma Part II

Berks, UK -- (MARKET WIRE) -- June 24, 2005 --

                             Appendix I

     Conditions to the implementation and operation of the Scheme
The Scheme will not become effective and the Acquisition will not be completed unless all the conditions in this Appendix 1 have been satisfied (or, if capable of waiver, waived) by the close of business (London time) on 20 September 2005, or such later date as Xenova and Celtic Pharma may agree and the Court may approve.

1. The Scheme is conditional on:

(a) The approval by a majority in number of the holders of Scheme Shares present and voting at the Court Meeting, either in person or by proxy, or at any adjournment of that meeting representing not less than three-fourths in value of the Scheme Shares held by such holders;

(b) The resolution required to approve and implement the Scheme set out in the notice of Extraordinary General Meeting being passed by the requisite majority at such Extraordinary General Meeting or at any adjournment of that meeting; and

(c) The sanction of the Scheme and confirmation of the reduction of capital involved therein by the Court (in both cases with or without modifications, on terms reasonably acceptable to Celtic Pharma) and an office copy of the Order of the Court sanctioning the Scheme and confirming the cancellation of share capital which forms part of it being delivered for registration to the Registrar of Companies in England and Wales and being registered by him.

2. Xenova and Celtic Pharma have agreed that, subject as stated in paragraph 3 below, application to the Court to sanction the Scheme will not be made unless conditions 1(a) and 1(b) have been fulfilled and unless immediately prior to the hearing of the petition the following conditions are satisfied or waived, as referred to below:

(a) without limitation to condition (c) below, Celtic Pharma, not having discovered or otherwise become aware that the Office of Fair Trading intends, or is reasonably likely, to refer the Acquisition, or any matters arising therefrom, to the Competition Commission pursuant to Section 33 of the Enterprise Act 2002;

(b) save as disclosed in Xenova's report and accounts for the year ended 31 December 2004, or as publicly announced by Xenova by the delivery of an announcement to a Regulatory Information Service prior to the Announcement Date, or as fairly disclosed in writing to Celtic Pharma prior to the Announcement Date (such public announcements, disclosures or information being referred to in these terms and conditions as being ''revealed''), there being no provision of any agreement, authorisation, arrangement, franchise, consent, licence, permit or other instrument to which any member of the Wider Xenova Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, which as a result of the Proposal or the Acquisition is reasonably likely to result (in any case to an extent which is material in the context of the Wider Xenova Group taken as a whole) in:

(i) any monies borrowed by, or any other indebtedness, actual or contingent, of or any grant available to, any such member being or becoming repayable or capable of being declared repayable immediately or earlier than its stated maturity date, or the ability of any such member to borrow monies or incur any indebtedness being withdrawn, prohibited or inhibited or becoming capable of being withdrawn, prohibited or inhibited;

(ii) any such agreement, authorisation, arrangement, franchise, consent, licence, permit or instrument or the rights, liabilities, obligations or interests of any such member thereunder being or becoming capable of being terminated or adversely modified or affected or any onerous obligation arising or any adverse action being taken or arising or any obligation or liability arising thereunder;

(iii) the rights, liabilities, obligations, interests or business of any such member in or with any other person, firm, company or body (or any arrangements relating to such rights, liabilities, obligations, interests or business) being terminated, modified or adversely affected;

(iv) any material assets or interests of any such member being or failing to be disposed of or charged or ceasing to be available to any such member or any right arising under which any such asset or interest could be required to be disposed of or charged or could cease to be available to any such member otherwise than in the ordinary course of business;

(v) the creation of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of any such member or any such mortgage, charge or security (whenever created, arising or having arisen) becoming enforceable;

(vi) the financial or trading position of any member of the Wider Xenova Group being materially prejudiced or adversely affected;

(vii) the creation of any liabilities (actual or contingent) by any member of the Wider Xenova Group;

(viii) any such member ceasing to be able to carry on business under any name under which it presently does;

(c) no government, government department or governmental, quasi-governmental, supranational, statutory, regulatory, environmental or investigative body or authority (including, without limitation, any national anti-trust or merger control authority), court, trade agency, professional body, association, institution or any other body or person whatsoever in any jurisdiction (each a ''Third Party'' and all collectively ''Third Parties'') having instituted, implemented or threatened, or having decided to institute, implement or threaten, any action, proceeding, suit, investigation, enquiry or reference or having made, proposed or enacted any statute, regulation, order or decision or taken any other steps which is reasonably likely to (in any case to an extent which is material in the context of the Wider Xenova Group taken as a whole), as the case may be:

(i) make the Proposal or its implementation or the Acquisition void, illegal and /or unenforceable under the laws of any relevant jurisdiction, or otherwise, directly or indirectly, restrain, restrict, prohibit, challenge, frustrate, delay or interfere with the same, or impose additional material conditions or obligations with respect thereto, or otherwise require material amendment to the Scheme or any such acquisition (including, without limitation, taking any steps which would result in Celtic Pharma being required to dispose of all or some of its Xenova Shares or restrict the ability of Celtic Pharma to exercise voting rights in respect of some or all of such Xenova Shares);

(ii) require, prevent or delay the divestiture, or alter the terms envisaged for any proposed divestiture, by Celtic Pharma or any member of the Wider Xenova Group of all or any material portion of their respective businesses, assets or properties or impose any limitation on the ability of any of them to conduct their respective businesses or to own any of their respective assets or property to an extent which is material to Celtic Pharma or in the context of the Wider Xenova Group taken as a whole, respectively;

(iii) impose any limitation on, or result in a delay in, the ability of Celtic Pharma or of any member of the Wider Xenova Group to acquire or hold or exercise effectively, directly or indirectly, all or any rights of ownership in respect of shares or other securities (or the equivalent) in any member of the Wider Xenova Group or to exercise management control over any such member;

(iv) otherwise adversely affect in any respect any or all of the businesses, assets, profits or prospects of Celtic Pharma or any member of the Wider Xenova Group respectively;

(v) result in any member of the Wider Xenova Group ceasing to be able to carry on business or impose any limitation on the ability of Celtic Pharma or any member of the Wider Xenova Group to integrate or co-ordinate its business, or any part of it, with the business of any member of the Wider Xenova Group or Celtic Pharma;

(vi) save pursuant to the Proposal, require Celtic Pharma or any member of the Wider Xenova Group to offer to acquire any shares or other securities (or the equivalent) in any member of the Wider Xenova Group owned by any third party,

and all applicable waiting and other time periods during which any such Third Party could decide to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference under the laws of any relevant jurisdiction or enact any such statute, regulation, order or decision or take any steps having expired, lapsed or been terminated;

(d) all material authorisations, orders, recognitions, grants, determinations, consents, licences, confirmations, clearances, certificates, permissions and approvals (each an ''Authorisation'') which are necessary in any relevant jurisdiction for or in respect of the Proposal (including, without limitation, its implementation) or the Acquisition or the carrying on by any member of the Wider Xenova Group of its business having been obtained, in terms and in a form reasonably satisfactory to Celtic Pharma from all appropriate Third Parties or from any persons or bodies with whom any member of the Wider Xenova Group has entered into contractual arrangements, in each case where the absence of such Authorisation from such a person might have a material adverse effect on the Wider Xenova Group taken as a whole and all such Authorisations remaining in full force and effect and there being no notice or intimation of any intention to revoke, withdraw, withhold, suspend, restrict, modify, amend or not to renew any of the same;

(e) all notifications and filings which are necessary having been made, all appropriate waiting and other time periods (including any extensions of such waiting and other time periods) under any applicable legislation or regulation of any relevant jurisdiction having expired, lapsed or been terminated (as appropriate) and all necessary statutory or regulatory obligations in any relevant jurisdiction having been complied with in each case in connection with the Proposal or the Acquisition where, in each case, the absence of such compliance might have a material and adverse affect on the business of the Wider Xenova Group taken as a whole;

(f) no notification having been received from any relevant authority or other person that any interests held by the Wider Xenova Group under licences, patents, trademarks, leases and other rights in the UK and overseas will be adversely affected (in any case to an extent which is material to the Wider Xenova Group taken as a whole) by the Proposal or the Acquisition, or that such licences, patents, trademarks, leases and other rights are no longer in full force and effect, or that there is an intention to revoke any of the same;

(g) save as revealed, and to the extent material in any case in the context of the Wider Xenova Group taken as a whole, no member of the Wider Xenova Group having:

(i) (save as between Xenova and wholly-owned subsidiaries of Xenova, or for options or warrants granted or in issue or on the exercise of rights to subscribe for Xenova Shares pursuant to the exercise of options granted, or the exercise of rights under the Xenova Share Option Schemes, in each case prior to the Announcement Date) issued, agreed to issue, authorised or proposed the issue or grant 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 redeemed, purchased or reduced or announced any proposal to redeem, purchase or reduce any part of its share capital;

(ii) recommended, declared, paid or made or proposed to declare, pay or make any bonus, dividend or other distribution whether payable in cash or otherwise other than to Xenova or wholly-owned subsidiaries of Xenova;

(iii) (save for transactions between Xenova and wholly owned subsidiaries of Xenova) merged with or demerged any body corporate or acquired or disposed of or transferred, mortgaged or charged or created any security interest over any assets or any rights, title or interest in any asset (including shares and trade investments), or authorised or proposed or announced any intention to propose any merger, demerger, acquisition, disposal, transfer, mortgage, charge or the creation of any security interest over the same (other than in the ordinary course of business) or entered into any licence in respect of or disposal of or granted to any third party any right in respect of any intellectual property right that is material in the context of the Wider Xenova Group taken as a whole;

(iv) (save as between Xenova and wholly-owned subsidiaries of Xenova) authorised or proposed, or announced an intention to propose, any change in its share or loan capital including the purchase of any of its own shares;

(v) issued, authorised or proposed the issue of or made any change in or to any debentures or incurred or increased any indebtedness or become subject to a liability (actual or contingent) which in any case is outside the ordinary course of business and material in the context of the Wider Xenova Group taken as a whole;

(vi) entered into, implemented, effected, varied, authorised or proposed any contract, reconstruction, amalgamation, scheme, commitment, merger, demerger or other transaction or arrangement or waived or compromised any claim in respect of itself or another member of the Wider Xenova Group, in each case otherwise than in the ordinary course of business, which in any case is material in the context of the Wider Xenova Group taken as whole;

(vii) terminated or varied the terms of any agreement or arrangement between any member of the Wider Xenova Group and any other person in a manner which is reasonably likely to have a material adverse effect on the financial position of the Wider Xenova Group;

(viii) proposed, agreed to provide or modified the terms of any share option scheme, incentive scheme or other benefit relating to the employment or termination of employment of any person employed by the Wider Xenova Group which, taken as a whole, are material in the context of the Wider Xenova Group taken as a whole;

(ix) entered into, varied, or authorised any agreement, transaction, arrangement or commitment (whether in respect of capital expenditure or otherwise) which:

(A) is of a long term, onerous or unusual nature or magnitude or which is or could involve an obligation of such nature or magnitude; or

(B) is other than in the ordinary course of business,

and which in any such case is material in the context of the Wider Xenova Group taken as a whole;

(x) entered into or changed the terms of any contract, agreement or arrangement with any director of any member of the Wider Xenova Group;

(xi) taken any corporate action or had any legal proceedings instituted or threatened against it or petition presented or order made for its winding-up (voluntarily or otherwise), dissolution or reorganisation or for the appointment of a receiver, trustee, administrator, administrative receiver or similar officer of all or any material part of its assets and revenues or any analogous or equivalent steps or proceedings in or under the laws of any jurisdiction having occurred or there having been appointed any analogous person in any jurisdiction which in any case is material in the context of the Wider Xenova Group taken as a whole;

(xii) been unable, or admitted in writing that it is unable, to pay its debts generally or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business in any case which is or would be material in the context of the Wider Xenova Group taken as a whole;

(xiii) made any material alteration to its memorandum or articles of association;

(xiv) entered into any agreement, contract, commitment or arrangement which consents to or results in the restriction of the scope of the business of any member of the Wider Xenova Group and which, in any such case, is material in the context of the Wider Xenova Group;

(xv) made or consented to any significant change to the terms of the trust deeds constituting pension schemes established for its directors and/or employers or their dependants or to the benefits which accrue or to the pensions which are payable thereunder or to the basis on which qualification for or accrual or entitlement to such benefits or pensions are calculated or determined, or to the basis upon which the liabilities (including pensions) of such pension schemes are funded or made, or agreed or consented to any change to the trustees involving the appointment of a corporation which would be material in the context of the Wider Xenova Group taken as a whole;

(xvi) entered into any agreement, commitment or arrangement or passed any resolution or made any offer (which remains open for acceptance) to enter into any agreement, commitment or arrangement or proposed or announced any intention with respect to any of the transactions, matters or events referred to in this condition (g);

(h) save as revealed and to the extent material in any case in the context of the Wider Xenova Group taken as a whole:

(i) no material adverse change or deterioration having occurred in the business, assets, financial or trading position or profits or prospects of any member of the Wider Xenova Group;

(ii) no claim being made, and no circumstance having arisen which might lead to a claim being made, under the insurance of any member of the Wider Xenova Group which might have a material adverse effect on the Wider Xenova Group;

(iii) no litigation, arbitration proceedings, prosecution or other legal proceedings or investigation having been instituted, announced, implemented or threatened by or against or remaining outstanding against any member of the Wider Xenova Group or to which any member of the Wider Xenova Group is or may become a party (whether as claimant, defendant or otherwise);

(iv) no contingent or other liability of any member of the Wider Xenova Group having arisen or become apparent or increased which in any such case might reasonably be expected materially and adversely to affect any member of the Wider Xenova Group;

(v) (other than as a result of the Proposal) no enquiry or investigation by, or complaint or reference to, any Third Party having been threatened, announced, implemented, instituted by or against or remaining outstanding against or in respect of any member of the Wider Xenova Group which in any such case is material and adverse in the context of the Wider Xenova Group taken as a whole;

(i) Celtic Pharma not having discovered after 7.00 a.m. on the Announcement Date:

(i) that any financial or business or other information publicly announced at any time by or on behalf of any member of the Wider Xenova Group is misleading or contains a misrepresentation of any fact or omits to state a fact necessary to make the information contained therein not misleading (and which was not subsequently corrected before the date of this announcement by disclosure either publicly or otherwise fairly in writing to Celtic Pharma) in each case to an extent that the effect of the inaccuracy or misrepresentation of fact or omission is material in the context of the Acquisition;

(ii) that any member of the Wider Xenova Group is subject to any liability (contingent or otherwise) which has not been revealed and which is material in the context of the Wider Xenova Group taken as a whole;

(iii) any information which affects the import of any information disclosed at any time by or on behalf of any member of the Wider Xenova Group to an extent which is material and adverse in the context of the Wider Xenova Group taken as a whole; and

(j) Celtic Pharma not having discovered that to an extent material in any case in the context of the Wider Xenova Group taken as a whole:

(i) either (i) any member of the Wider Xenova Group; (ii) any person in which any member of the Wider Xenova Group may have or have had an interest; or (iii) any former member or predecessor in business of any member of the Wider Xenova Group (where the liability of such former member or predecessor in business is or is likely to be enforced against any member of the Wider Xenova Group), has not complied with all applicable legislation or regulations of any applicable jurisdiction, all obligations in permits with regard to, and all contractual provisions relating to, the protection of the environment including relating to the storage, carriage, disposal, discharge, spillage or leak of waste or disposal or emission of any hazardous substance or any substance likely to impair the environment or harm human health which non-compliance would be likely to give rise to any material liability or cost (whether actual or contingent) on the part of any member of the Wider Xenova Group or Celtic Pharma;

(ii) there is or is likely to be any material liability or requirement (whether actual or contingent) under any applicable legislation or regulations or contract to which any member of the Wider Xenova Group is party to make good, repair, re-instate or clean up, or restore or provide after-care in respect of, or pay for or make contributions towards the same, any land or water or other asset owned, occupied, managed or made use of at any time by (i) any member of the Wider Xenova Group; (ii) any person in which any member of the Wider Xenova Group may have or have had an interest; or (iii) any former member or predecessor in business of any member of the Wider Xenova Group (where the liability of such former member or predecessor in business is likely to be enforced against any member of the Wider Xenova Group), or land or water lying near such land or water for which any member of the Wider Xenova Group is or could be held responsible under any applicable legislation or regulations or contract that would result in a material liability on the part of any member of the Wider Xenova Group or in which such member, person, former member or predecessor in business (where the liability of such former member or predecessor in business is likely to be enforced against any member of the Wider Xenova Group) may have an interest under any such contract or any environmental legislation, regulation, requirement, decision or order of any Third Party.

3. Certain further terms of the Scheme

Celtic Pharma reserves the right to waive, in whole or in part, all or any of the above conditions except condition 1. The Scheme will not become effective and the Offer will not be completed unless the conditions set out above are fulfilled or satisfied or, if capable of waiver, waived by Celtic Pharma or, where appropriate, have been determined by Celtic Pharma to be or to remain satisfied no later than 3.00 p.m. on 20 September 2005, or such later date as Xenova and Celtic Pharma may agree and the Court may approve.

Each of conditions 2(a) to (j) shall be regarded as a separate condition and shall not be limited by reference to any other condition.

Celtic Pharma shall be under no obligation to waive or treat as fulfilled any of conditions 2(a) to (j) (inclusive) by a date earlier than the date specified above for the fulfilment thereof notwithstanding that the other conditions of the implementation of the Scheme may at such earlier date have been fulfilled and that there are at such earlier date no circumstances indicating that any of such conditions may not be capable of fulfilment.

The Scheme is governed by English law and is subject to the jurisdiction of the Courts of England and Wales. The rules of the City Code, so far as they are appropriate, apply to the Scheme.

The Scheme will not become effective and the Acquisition will not be completed if, before the date of the Court Meeting, the Acquisition is referred to the Competition Commission. In such circumstances the Scheme will be withdrawn and will lapse.

4. The Cash and Secured Loan Note Alternative and the Cash Alternative

(a) The Cash and Secured Loan Note Alternative and the Cash Alternative are conditional upon the Scheme becoming effective.

(b) Further details of the Cash and Secured Loan Note Alternative and the Cash Alternative will be set out in the Scheme Document.

5. Bases and Sources

(a) The market value of a Xenova Share of 3.875 pence is based on the Closing Price per Xenova Share, as derived from the Daily Official List on 23 June 2005, being the latest practicable date prior to publication of this announcement.

(b) The value of the whole of the issued ordinary share capital of Xenova is based upon 431,547,821 Xenova Shares in issue as published on 23 June 2005.

(c) For the purposes of the financial comparisons contained in this announcement, no account has been taken of any liability to taxation.

Appendix II

Definitions

The following definitions have the following meanings in this announcement, unless the context requires otherwise:

"ADS Depositary"        The Bank of New York, as depositary under
                        the Depositary Agreement;
"Acquisition"           the acquisition or proposed acquisition by
                        Celtic Pharma of Xenova Shares pursuant to
                        the Scheme, details of which are set out in
                        this announcement and will be set out in
                        the Scheme Document, or of control or
                        management of Xenova and any matters
                        arising therefrom;
"Announcement Date"     24 June 2005;
"Australia"             the Commonwealth of Australia, its states,
                        territories and possessions;
"Broadview"             Broadview, a division of Jefferies
                        International Ltd;
"Business Day"          a day (other than Saturdays, Sundays and UK
                        Public Holidays) on which banks are open
                        for business (other than solely for trading
                        and settlement in Euros) in the City of
                        London;
"Canada"                Canada, its provinces and territories and
                        all areas subject to its jurisdiction and
                        any political sub-division of such
                        territories and areas;
"Cash Alternative"      the alternative whereby holders of Scheme
                        Shares may, on the basis set out in this
                        announcement, elect to receive cash in lieu
                        of all but not some of the Secured Loan
                        Notes to which they would otherwise be
                        entitled pursuant to the Secured Loan Note
                        Offer;
"Cash and Secured Loan  the alternative whereby holders of Scheme
Note Alternative"       Shares may, on the basis set out in this
                        announcement elect to receive Secured Loan
                        Notes in lieu of all but not some of the
                        Secured Loan Notes to which they would
                        otherwise be entitled pursuant to the
                        Secured Loan Note Offer;
"Celtic Pharma"         Celtic Pharma Development UK PLC,
                        registered in England and Wales with number
                        5481475;
"Celtic Pharma          The board of directors of Celtic Pharma;
Directors"
"Celtic Pharma Group"   Celtic Pharmaceutical Holdings L.P. and its
                        subsidiaries and subsidiary undertakings;
"Celtic Pharma          Celtic Pharmaceutical Holdings L.P., a
Holdings"               limited partnership formed under the laws
                        of Bermuda;
"Celtic X"              Celtic X Ltd., a company registered in
                        Malta with number C36429;
"Celtic Pharma          Celtic Pharma Capital Ltd., a company
Capital"                registered in Malta with number 35991;
"Celtic X Licensee"     Celtic X Licensee Ltd., a company
                        registered in Malta with number C36431;
"certificated" or in    a share which is not in uncertificated form
"certificated form"     (that is, not held in CREST);
"City Code"             the City Code on Takeovers and Mergers;
"Closing Price"         the closing middle market price of a Xenova
                        Share, as derived from the Daily Official
                        List on any particular day;
"Companies Act" or      the Companies Act 1985 (as amended);
"Act"
"Compound Interest"     a rate of interest of 15 per cent. per
                        annum compounded annually on the principal
                        amount of the Secured Loan Notes
                        outstanding accruing from the date of issue
                        of the Secured Loan Notes on a daily basis
                        and on the basis of a 360 day year;
"Conditions"            the conditions to the implementation of the
                        Scheme and the Acquisition set out in
                        Appendix I to this announcement and
                        "Condition" means any one of them;
"Court"                 the High Court of Justice in England and
                        Wales;
"Court Hearing"         the hearing of the Court of the petition to
                        sanction the Scheme and confirm the
                        reduction of capital provided for by the
                        Scheme;
"Court Meeting          the meeting of holders of Scheme Shares
                        (and any adjournment thereof) to be
                        convened pursuant to an Order of the Court
                        pursuant to section 425 of the Act for the
                        purpose of considering and, if thought fit,
                        approving the Scheme (with or without
                        amendment) of which notice will be set out
                        in the Scheme Document;
"Court Order"           the order of the Court granted at the Court
                        Hearing sanctioning the Scheme under
                        section 425 of the Act and confirming the
                        reduction of capital provided for by the
                        Scheme under section 137 of the Act;
"Daily Official List"   the Daily Official List of the London Stock
                        Exchange;
"dealing day"           a day on which dealings in domestic
                        securities may take place on, and with the
                        authority of, the London Stock Exchange;
"Deposit Agreement"     the deposit agreement dated July 14, 1994
                        by and among Xenova, the ADS Depositary and
                        the holders from time to time of the Xenova
                        ADSs issued under it;
"Exchange Date"         the date on which, in accordance with the
                        terms of the Secured Loan Note Instrument,
                        Pharmaceutical Investment Notes are issued
                        to Noteholders who have elected to receive
                        them or, in the event that Celtic Pharma
                        notifies Noteholders that it is unable to
                        make Pharmaceutical Investment Notes
                        available to Noteholders, the date on which
                        cash is paid to those Noteholders who have
                        notified Celtic Pharma that they wish to
                        receive cash in exchange for their Loan
                        Notes or, if earlier, the date on which
                        payment is made to Noteholders in respect
                        of their Secured Loan Notes following the
                        exercise of the Loan Note Call Option;
"Extraordinary General  the extraordinary general meeting of
Meeting" or "EGM"       holders of Scheme Shares and
                        Securityholders of which notice is set out
                        in the Scheme Document;
"FSA"                   the Financial Services Authority;
"FSMA"                  the Financial Services and Markets Act 2000
                        (as amended);
"Hearing Date"          the date on which the Court sanctions the
                        Scheme and confirms the reduction of
                        capital which forms part of it;
"holder"                includes any person entitled by
                        transmission;
"Implementation         the implementation agreement entered into
Agreement"              on the Announcement Date between Xenova and
                        Celtic Pharma relating to the
                        implementation of the Scheme;
"Directors"             the Xenova Directors other than John
                        Waterfall;
"Investment Company     United States Investment Company Act of
Act"                    1940;
"Japan"                 Japan, its cities, prefectures, territories
                        and possessions;
"Lazard"                Lazard & Co., Limited;
"License Agreement"     the license agreement entered into between
                        Xenova, Xenova Limited and Celtic X
                        Licensee Ltd on the Announcement Date;
"Listing Rules"         the listing rules of the FSA in its
                        capacity as the competent authority under
                        Part VI of FSMA;
"Loan Note Call         the call option pursuant to which Celtic
Option"                 Pharma will be entitled to require
                        Noteholders to transfer their Secured Loan
                        Notes in consideration for the payment of
                        an amount equal to their nominal value and
                        Compound Interest accrued up to but not
                        including the date of transfer;
"London Stock           London Stock Exchange plc;
Exchange"
"Long Stop Date"        the date which is 24 months after the date
                        on which the Secured Loan Notes are issued
                        pursuant to the Scheme;
"Meetings"              the Court Meeting and the Extraordinary
                        General Meeting;
"NASDAQ"                the NASDAQ Stock Market;
"new Xenova Shares"     new Xenova Shares to be created and issued
                        fully paid to Celtic Pharma pursuant to the
                        Scheme which after their issue will rank
                        pari passu in all respects with the
                        existing Xenova Shares;
"Noteholder"            a registered holder of Secured Loan Notes;

"Note Programme"        the Pharmaceutical Investment Note
                        programme pursuant to which Celtic Pharma
                        Capital may issue Pharmaceutical Investment
                        Notes or other debt obligations as more
                        particularly described in paragraph 8 of
                        this announcement;
"Offer Period"          the period commencing on the Announcement
                        Date and ending on the Scheme Effective
                        Date;
"Official List"         the list maintained by the FSA in
                        accordance with section 74(1) of FSMA for
                        the purposes of Part VI of FSMA;
"Panel"                 the Panel on Takeovers and Mergers;
"Pharmaceutical         a registered holder of Pharmaceutical
Investment              Investment Notes;
Noteholder"
"Pharmaceutical         the Secured Loan Stock 2011 to be issued by
Investment Notes"       Celtic Pharma Capital, Celtic Pharma or an
                        Affiliate of either of them on terms no
                        less favourable than the terms of the Loan
                        Notes save in respect of: (i) the
                        exchangeability of such Loan Notes and the
                        mechanics related thereto; (ii) the ability
                        of the issuer thereof to effect compulsory
                        transfer to comply with the Investment
                        Company Act and (iii) a guarantee;
"Pharmaceutical         the terms of the Pharmaceutical Investment
Investment Terms"       Notes and upon which they are made
                        available to Noteholders;
"pounds sterling" or    the lawful currency of the United Kingdom;
"GBP"
"Proposal"              the proposal for Xenova to become a
                        wholly-owned subsidiary of Celtic Pharma
                        pursuant to the Scheme, details of which
                        are set out in this announcement and will
                        be set out in the Scheme Document and other
                        related matters to be considered at the
                        Meetings;
"Registrars"            Computershare Investor Services PLC, P.O.
                        Box 82, The Pavilions, Bridgwater Road,
                        Bristol BS99 7NH, United Kingdom;
"Regulated Market"      shall have the meaning ascribed to it in
                        Article 1(13) of Directive 93/22/EEC of 10
                        May 1993 on investment services in the
                        securities field;
"Regulations"           the Uncertificated Securities Regulations
                        2001 (SI 2001/3272);
"Regulatory Information any information service authorised from
Service"                time to time by the UKLA for the purposes
                        of dissemination of regulatory
                        announcements required by the Listing Rule
                        and as set out in schedule 12 of the
                        Listing Rule;
"Resolutions"           the resolution to be proposed at the Court
                        Meeting and the special resolution to be
                        proposed at the EGM;
"Restricted             a jurisdiction in which an offer of Secured
Jurisdiction"           Loan Notes would constitute a violation of
                        relevant laws or regulations or require
                        registration of the Secured Loan Notes;
"Restricted Overseas    a person (including an individual,
Persons"                partnership, incorporated syndicate,
                        incorporated association, trust, trustee,
                        executor, administrator or other legal
                        representative) residing in or resident in
                        Canada, Australia, Japan or any Restricted
                        Jurisdiction or any person who is deemed to
                        be a Restricted Overseas Person in
                        accordance with the Scheme;
"Scheme" or "Scheme of  the scheme of arrangement under section 425
Arrangement"            of the Act between Xenova and the holders
                        of Scheme Shares, with or subject to any
                        modification thereof or addition thereto or
                        condition agreed by Xenova and Celtic
                        Pharma and which the Court may think fit to
                        approve or impose;
"Scheme Document"       the document to be despatched to Xenova
                        Securityholders, and for information
                        purposes only, to Xenova Optionholders and
                        Xenova Warrantholders containing details of
                        the Scheme;
"Scheme Effective       the date on which the Scheme becomes
Date"                   effective in accordance with its terms;
"Scheme Record Time"    the close of business on the Business Day
                        immediately preceding the Scheme Effective
                        Date;
"Scheme Shares"         the Xenova Shares (including those
                        represented by Xenova ADSs) in issue at the
                        date of the issue of the Scheme Document
                        and any Xenova Shares issued:
                        (i) after the date of the Scheme Document
                        and prior to the Voting Record Time; or
                        (ii) at or after the Voting Record Time and
                        before the close of business on the
                        Business Day preceding the Hearing Date on
                        terms that the holder thereof shall be
                        bound by the Scheme or, in the case of any
                        such shares issued prior to the adoption of
                        the amendment of the articles of
                        association set out in the notice of the
                        Extraordinary General Meeting, in respect
                        of which the original or any subsequent
                        holder thereof is or shall have agreed in
                        writing to be bound by the Scheme;
"SEC"                   the US Securities and Exchange Commission;

"Secured Loan Notes"    the US Dollar denominated 15% Secured Loan
                        Notes 2011 of Celtic Pharma to be
                        constituted by the Secured Loan Note
                        Instrument;
"Secured Loan Note      the instrument constituting the Secured
Instrument"             Loan Notes;
"Secured Loan Note      the arrangement whereby Secured Loan Notes
Offer"                  are being made available to holders of
                        Scheme Shares (other than certain
                        Restricted Overseas Persons) pursuant to
                        the Proposal;
"Security Trustee"      the security trustee to be appointed under
                        the debentures entered into pursuant to
                        respectively the Secured Loan Note
                        Instrument and the Pharmaceutical
                        Investment Note Instrument (if entered
                        into);
"Series"                Pharmaceutical Investment Notes which are
                        (i) expressed to be consolidated and form a
                        single series and (ii) identical in all
                        respects (including as to listing) except
                        for the respective issue dates and/or issue
                        prices. Subsequent Series of Pharmaceutical
                        Investment Notes will be issued either (i)
                        in exchange for other notes, whether issued
                        by Celtic Pharma or another affiliate of
                        Celtic Pharma Capital, upon the assignment
                        of any security for those obligations and
                        the giving of any other consideration to
                        Celtic Pharma Capital or (ii) directly to
                        holders;
"significant            a direct or indirect interest on 20 per
interest"               cent. or more of the total voting rights
                        conferred by the equity capital of an
                        undertaking;
"subsidiary",           shall be construed in accordance with the
"subsidiary             Act (but for this purpose ignoring
undertaking",           paragraph 20(1)(b) of Schedule 4A of the
"associate undertaking" Act);
and "undertaking"
"uncertificated" or in  recorded on the relevant register as being
"uncertificated form"   held in uncertificated form in CREST and
                        title to which by virtue of the
                        Regulations, may be transferred by means of
                        CREST;
"US Person"             a US person as defined in Regulation S
                        under the US Securities Act;
"US Securities Act      the United States Securities Act of 1933,
                        as amended, and the rules and regulations
                        promulgated thereunder;
"UK"                    the United Kingdom of Great Britain and
"UKLA"                  Northern Ireland;
                        the UK Listing Authority, being the FSA
                        acting its capacity as the competition
                        authority for the purposes of Part VI of
                        the FSMA;
"United States" or      the United States of America (including the
"US"                    States and the District of Columbia), its
                        territories, its possessions and other
                        areas subject to its jurisdiction;
"US$" or "US Dollars"   the lawful currency of the United States of
                        America;
"Voting Record Time"    the voting record time for the Scheme;
"Wider Xenova Group"    Xenova or any of its subsidiaries or
                        subsidiary undertakings or any joint
                        venture, partnership, firm or company in
                        which any of them has a significant
                        interest;
"Xenova"                Xenova Group plc;
"Xenova ADR"            an American Depositary Receipt evidencing
                        title to one or more Xenova ADSs;
"Xenova ADSs"           American Depository Shares, each
                        representing ten Xenova Shares, issued by
                        the ADS Depositary in accordance with the
                        Deposit Agreement;
"Xenova Articles"       the current articles of association of
                        Xenova;
"Xenova Awardholders"   the holders of awards under the Xenova
                        Share Plan;
"Xenova Directors" or   Dr John Frederick Waterfall, Mr Daniel
"Directors"             Abrams, Mr David Aufrere Oxlade, Dr Michael
                        Young, Mr John Leonard Rennocks, Mr John
                        Benard Haysom Jackson, Mr Peter Lewis
                        Gillett, Mr Thomas Ronald Irwin and
                        Professor Adrian Lewellyn Harris;
"Xenova Group"          Xenova and its subsidiaries and its
                        subsidiary undertakings or any one of them
                        as the context may require;
"Xenova Shares"         ordinary shares of 1 pence each in Xenova;

"Xenova                 the holders of options under the Xenova
Optionholders"          Share Option Schemes;
"Xenova Share Option    the Xenova Limited 1988 Share Option
Schemes"                Scheme, the Xenova Group 1992 Share Option
                        Scheme, the Xenova Group 1996 Share Option
                        Scheme, and the Xenova Group 1996 Savings
                        Related Share Option Plan;
"Xenova Share Plan"     the Xenova Deferred Share Bonus Plan;
"Xenova Shareholders"   registered holders of Xenova Shares
or "Shareholders"       including The Bank of New York in its
                        capacity as the Depositary under the
                        Depositary Agreements;
"Xenova                 Xenova Shareholders and/or holders of
Securityholders"        Xenova ADSs;
"Xenova                 registered holders of Xenova Warrants;
Warrantholders"
"Xenova Warrants"       the 56,259,429 registered equity warrants
                        each entitling the holder thereof to
                        subscribe for 1 Xenova Share at a price of
                        12.5p per Xenova Share.

Notes to Editors

Celtic Pharma is a unique global private equity firm focused on the pharmaceutical industry. Celtic Pharma is based in Bermuda, and also maintains offices in New York and London. The Company was founded by its two Managing General Partners, Stephen Evans-Freke and John Mayo. Celtic Pharma is seeking to acquire late stage pharmaceutical programmes, and entities that are in pursuit of the necessary resources for such projects and are attracted to Celtic Pharma's model of a broadly diversified, late stage development platform are invited to make contact. Further information can be found on the company website at www.celticpharma.com

Details of the team at Celtic Pharma follows below:

Stephen Evans-Freke, Managing General Partner

Stephen Evans-Freke was the Founder, Chairman and CEO of SUGEN, Inc., until its sale for $720mm to Pharmacia in 1999. He also co-founded Selectide Corporation, Fibrogen Inc., Royalty Pharma AG, and other successful biotechnology companies. He is also a former Managing Director and Board Member of Painewebber, Inc. where he was the lead investment banker to Genentech, Amgen, Centocor and other leading biotechnology companies for which he established and managed over $600 million of successful investment partnerships to fund product development.

John Mayo, Managing General Partner

John Mayo is a former Director of S.G Warburg, the leading London Investment Bank, and investment banker to Burroughs Wellcome, ICI and many other UK and Irish companies. He directed the spin-off of ICI's Life Sciences Operations as Zeneca Group plc and thereafter served as Zeneca's Finance Director from 1992 to 1997, during which time its market value increased from GBP6bn to GBP24bn. He also managed the tax free spin-off of the defence business of GEC to its shareholders (and its simultaneous merger with BAe Systems plc) as its Finance Director, prior to becoming Finance Director and then Deputy CEO of the remaining communications business, Marconi plc.

Dr. Radomir Julina, Managing Director

Dr Radomir Julina was a co-founder and Head of Commercial Operations and Performance Planning at Protodigm Ltd., Hoffman-La Roche's Virtual Pharma venture. Prior to joining Protodigm he was the Head of New Molecular Entity Planning, Pharma Operations at Hoffman-La Roche, Inc.

Dr. Stephen Parker, Managing Director

Dr Stephen Parker was the Finance Director of Oxford GlycoSciences Plc prior to its takeover by Celltech plc and a former Life Sciences Banker at SBC Warburg.

Averill Powers, Managing Director

Averill Powers was a General Counsel of JP Morgan's Investment Banking and Private Equity Divisions in Europe and a former Davis Polk & Wardwell Attorney in New York and Hong Kong.

Lisa Rhoads, Business Strategy and Intellectual Property

Lisa Rhoads was a Senior Director of Consumer Marketing at the Pharmaceutical Division of Bristol-Myers Squibb and a former BDN Consultant who advised on commercial and marketing strategy to all J&J and BMS Companies around the world.

Ellen Lubman, Associate

Ellen Lubman was a biotechnology analyst at Robertson Stephens and formerly worked at Roche, Amgen and Genentech.

Andrew Sayre, Associate Andrew Sayre was a life sciences analyst at Credit Suisse First Boston who has extensive experience in financial modeling and decision support in the pharmaceutical industry.

Kathy Armstrong, Investor Relations Manager Kathy Armstrong was a Marketing and Investment Service Manager at Harbor Capital Management and most recently a member of Pfizer's marketing team.

                  This information is provided by RNS
          The company news service from the London Stock Exchange