1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.

What does Theratase do?
Where does the name "Theratase" come from?
What are enzymes?
How do you sell your products?
Who is a typical customer for the enzymes you make?
Which are your key market territories?
Who are your competitors?
Explain your relationship with ISTA Pharmaceuticals
Explain your relationship with Lifescan Europe
What is AM-Pharma?
What happened with the Preference shares?
What is your strategy for growth?
What's your cash burn?

1.

What does Theratase do?

Theratase Limited is a holding company whose principal operating businesses, Biozyme Laboratories and Seravac Biotech, are specialists in the development, manufacture, and marketing of high quality enzymes and biochemical intermediates to the diagnostic and pharmaceutical industries. Theratase has a small London-based head office. Biozyme has its main operations in Blaenavon, in South Wales. Seravac has its main operations in Cape Town, South Africa. We also have a sales and distribution office in San Diego, California. On 15 May 2007 Theratase was acquired by BBI Holdings Plc.

Theratase also has a stake in a Dutch biotechnology company, AM-Pharma Holding bv, which is developing therapeutic products for the treatment of sepsis and irritable bowel disease.

2.

Where does the name "Theratase" come from?

The name combines the "Thera" from therapeutic (from the Greek word for "cure") with the suffix "ase" which is used in the name of many enzymes. It is pronounced "thera-tayz".

3.

What are enzymes?

The word "enzyme" comes from the Greek "in yeast" and they have been known to science for well over 100 years. Enzymes are proteins acting as biological catalysts for the complex reactions that occur in living organisms. Their most striking feature is their selectivity in catalysing these reactions, a property that has been exploited over the years in the diagnostic industry. Enzymes were one of the first biological molecules to find applied usage and they continue to play a central role in modern biotechnological endeavour.

Theratase specialises in the supply of high quality enzymes for diagnostic and therapeutic purposes. In the diagnostic market, where Theratase has traditionally been strong, there are three main categories - enzymes for control sera, for clinical chemistry, and for immunodiagnostics. Theratase's expertise is in the separation, isolation, and purification of naturally occurring enzymes.

Enzymes for control sera are used by testing laboratories as a reference tool to check that they are producing accurate results. Product examples include Alkaline Phosphatase. Enzymes for clinical chemistry are used as key raw materials for the production of reagent kits. These reagents are used in highly automated machines which analyse human blood or urine as an aid to the diagnosis and treatment of disease. Enzymes are also supplied for use in home blood glucose test kits. Product examples include Glucose Oxidase. Enzymes for immunodiagnostics are used as labels, typically linked to an antibody to enable laboratory analysers to test very specifically for the presence of a targeted substance.

4.

How do you sell your products?

Biozyme and Seravac each have their own marketing departments and share a sales and distribution office in San Diego in California. These offices concentrate on supporting researchers with the aim that they will specify the use of a Theratase enzyme in their final product. Researchers will specify Biozyme or Seravac products because of the high quality and activity levels of our finished products and the excellent customer support offered.

As back up, there is a regularly produced catalogue, and technical websites at www.biozyme.com and at www.seravac.co.za.

5.

Who is a typical customer for the enzymes you make?

Biozyme and Seravac have historically served four types of customers: those that manufacture clinical diagnostic kits, manufacturers of immunodiagnostic kits, producers of glucose testing strips for home diabetes monitoring and finally universities and research organisations.

6.

Which are your key market territories?

We sell enzymes all over the world although the USA, Europe, and the Far East are our key territories.

7.

Who are your competitors?

Divisions of Roche (Swiss/German), Genzyme (USA/UK) and Toyobo (Japan) are the key competitors and then a host of small companies including Amano (Japan). Interestingly, this is a market sector where a competitor may be at the same time a customer and/or supplier.

8.

Explain your relationship with ISTA Pharmaceuticals

ISTA Pharmaceuticals Inc is a US based biotechnology company which is focused on saving and improving eyesight by developing proprietary products to treat serious diseases and conditions of the eye. They are quoted on the NASDAQ Exchange.

We are supplying ISTA with our enzyme hyaluronidase which is the key active ingredient in their product Vitrase(TM), which has been approved for use as a spreading agent and has completed Phase III clinical trials for treatment of severe vitreous haemorrhage, or bleeding in the back of the eye. Unless the product is approved for this application, it is likely that our relationship with ISTA will cease at the end of the current contract.

9.

Explain your relationship with Lifescan Europe

Lifescan Europe (formerly Inverness Medical Limited) is the UK glucose test manufacturing subsidiary of the US based company Johnson & Johnson, which is a world leader in diabetes testing. Theratase has a three year supply agreement with Lifescan Europe for the supply of glucose oxidase.

10.

What is AM-Pharma?

Theratase has been working for several years with the Dutch pharmaceutical company AM-Pharma Holding bv. AM-Pharma has several products in development, two of which are currently based on different therapeutic grades of alkaline phosphatase supplied by the Group’s Biozyme subsidiary. In October 2005, AM-Pharma successfully completed a second round fund raising of €9.0m. As at 30 September 2005 Theratase owned 8.82% of AM-Pharma on an undiluted basis. Following the completion of the first tranche of the second round financing, and the invocation of certain anti-dilution provisions, the Group’s percentage ownership increased to 9.99% (before taking into account dilutive share options).

The AM-Pharma product which uses the higher grade of alkaline phosphatase is being trialled for use in the treatment of sepsis and septic shock. This product has huge market potential if successful. The Group has an exclusive supply agreement for this product following eventual approval of the product.

In addition, AM-Pharma is using a lower activity grade of alkaline phosphatase, supplied by Biozyme, in early stage trials for a new product for the treatment of irritable bowel disease (IBD). This is another potentially enormous market. Because of the large amount of alkaline phosphatase that would be required to meet the market requirements for the IBD product, it is likely that the eventual finished product will not use the Group’s product.

In addition to its sepsis and IBD products, AM-Pharma is also developing products which while they do not use active ingredients supplied by the Group have the potential to enhance AM-Pharma’s future valuation.

11.

What is happening with the Preference shares?

All the remaining preference shares were redeemed in full in March 2004. If you have any queries about the preference shares, please contact the Company.

12.

What is your strategy for growth?

Within the existing group, we expect to see some short term organic growth from our traditional diagnostics market, particularly in supplying the diabetes home testing market. In the medium to long term, the group's strategic move into manufacturing active pharmaceutical intermediates opens a market where the sales potential is several orders of magnitude greater than that for diagnostic enzymes.

Coupled to this, a key part of our strategy is to seek further acquisitions and collaborations which will represent good synergy and promote growth and enhance profitability.

13.

What's your cash burn?

Theratase has been cash generative for several years and now has net cash.