CeNeS Pharmaceutical - Acquisition by Paion AG

RNS Number:0431S
CeNeS Pharmaceuticals PLC
10 April 2008

Not for release, publication or distribution, in whole or in part, in or into or
from Canada, Australia, New Zealand, South Africa or Japan or any other any
jurisdiction where to do so would constitute a violation of the relevant laws of
such jurisdiction.

FOR IMMEDIATE RELEASE 10 April 2008

Recommended Acquisition

Of

CENES PHARMACEUTICALS PLC ("CeNeS")

By

PAION AG ("Paion")

Summary

• The management board of Paion and the board of directors of CeNeS are
pleased to announce that they have reached agreement on the terms of the
recommended acquisition of all the issued and to be issued share capital of
CeNeS by Paion (the "Acquisition"). The Acquisition will be implemented by way
of a Court sanctioned scheme of arrangement under Part 26 of the Companies Act
2006.

• The Acquisition is intended to create a substantial international
biopharmaceutical company with a pipeline of clinical drug candidates focused on
innovative drugs for the treatment of thrombotic diseases and central nervous
system ("CNS") related interventions in the hospital setting. The Enlarged
Group will have the financial and management resources to progress the
development of the pipeline to maximise shareholder value. As at 31 December
2007, Paion and CeNeS together had approximately €49 million in cash and cash
equivalents.

• Under the terms of the Acquisition, CeNeS Shareholders will receive
0.3521 New Paion Shares for each CeNeS Share held.

• The Acquisition values each CeNeS Share at 48.9 pence and CeNeS's
ordinary share capital on a fully diluted basis at approximately £10.9 million
(based on the Closing Price of a Paion Share on 9 April 2008 of €1.74 and an
exchange rate of €1.2536 = £1).

• The terms of the Acquisition represent a premium of 52.7 per cent. to
the Closing Price of 32 pence per CeNeS Share on 4 February 2008, the last
Business Day before CeNeS announced that it was in discussions that may or may
not lead to an offer, and a premium of 32.1 per cent. to the Closing Price of 37
pence per CeNeS Share on 9 April 2008, the last Business Day before this
announcement.

• The New Paion Shares to be issued are expected to represent
approximately 31.9 per cent. of the issued share capital of Paion as enlarged by
the Acquisition.

• Following completion of the Acquisition, it is proposed that all Paion
Shares including the New Paion Shares, will be listed on the Regulated Market
(Regulierter Markt) of the Frankfurt Stock Exchange and admitted to trading on
AIM.

• Paion and CeNeS have agreed that, on completion of the Acquisition,
Gavin Kilpatrick (currently Chief Scientific Officer of CeNeS) will be appointed
to the management board of Paion.

• It is also intended that, following completion of the Acquisition, Alan
Goodman (currently Chairman of CeNeS) will become a member of the supervisory
board of Paion.

• The CeNeS Directors, who have been so advised by Nomura Code, consider
the terms of the Acquisition to be fair and reasonable. In providing their
advice to the CeNeS Directors, Nomura Code has taken into account the commercial
assessments of the CeNeS Directors.

• Accordingly, the CeNeS Directors unanimously recommend that CeNeS
Shareholders vote in favour of the resolutions to be proposed at the Court
Meeting and the General Meeting (or in the event that the Acquisition is
implemented by way of a Takeover Offer, accept or procure acceptance of such
offer) as the CeNeS Directors have irrevocably undertaken to do in respect of
their own aggregate beneficial holdings of 371,415 CeNeS Shares, representing
(as at the date of this announcement) approximately 1.7 per cent. of the
existing issued ordinary share capital of CeNeS.

• In addition, as at 9 April 2008 (the latest practicable date prior to
the date of this announcement), irrevocable undertakings to vote in favour of
the Scheme and the Acquisition at the Court Meeting and the General Meeting (or,
in the event that the Acquisition is implemented by way of a Takeover Offer, to
accept or procure acceptance of such offer) have been received from Gartmore
Investment Management in respect of 3,986,016 CeNeS Shares, from Avlar
Bioventures Fund II in respect of 2,436,449 CeNeS Shares, from ATM Investment
Limited in respect of 154,605 CeNeS Shares, from Avlar Bioventures Limited in
respect of 58,047 CeNeS Shares, from the Avlar Pension Fund in respect of 33,333
CeNeS Shares and from Gavin Kilpatrick (Chief Scientific Officer of CeNeS) in
respect of 15,079 CeNeS Shares.

• In addition, as at 9 April 2008 (the latest practicable date prior to
the date of this announcement) a letter of intent to vote in favour of the
Scheme and the Acquisition at the Court Meeting and the General Meeting has been
received from Universities Superannuation Scheme in respect of 1,081,162 CeNeS
Shares.

• Accordingly, Paion has received irrevocable undertakings and a letter
of intent in respect of, in aggregate, 8,136,106 CeNeS Shares, representing
approximately 37.1 per cent. of CeNeS's existing issued share capital.

• The irrevocable undertakings given by the CeNeS Directors, Avlar
Bioventures Fund II, ATM Investment Limited, Avlar Bioventures Limited, the
Avlar Pension Fund and Gavin Kilpatrick will cease to be binding if (i) Paion
announces (with the consent of the Panel) that it does not intend to proceed
with the Acquisition; or (ii) the Acquisition lapses or is otherwise withdrawn.

• The irrevocable undertaking given by Gartmore Investment Management
will cease to be binding if: (i) a higher competing offer is made for CeNeS
Shares which represents (in the reasonable opinion of Gartmore Investment
Management) an improvement of more than 10 per cent. of the value of the
consideration available under the Acquisition as at the date on which such
higher competing offer is made; (ii) Paion (with the consent of the Panel)
announces that it does not intend to proceed with the Acquisition; or (iii) the
Acquisition lapses or is otherwise withdrawn.

Dr Wolfgang Sohngen, CEO of Paion, commented: "With its combined strong
development portfolio targeted at both cardiovascular and CNS-related
conditions, I believe the Enlarged Group will be well-positioned to successfully
implement its realigned strategy. While we will continue to participate in the
upside potential of Desmoteplase we will now focus on a portfolio of drug
candidates with a diversified risk profile and move away from being perceived as
a 'one-product company'. By combining the two companies, Paion is taking a
first step towards creating a platform for building critical mass. If we manage
to carry the positive attitude of all parties involved in getting to today's
agreement on into the integration process, we will have a chance to build a
substantial biopharmaceutical company with an extraordinary profile."

Neil Clark, CEO of CeNeS, added: "We are pleased to have reached agreement with
Paion and are excited by the potential of the Enlarged Group. The combination
creates a diversified pipeline backed by a strong balance sheet and a proven
management team. The Enlarged Group will be well-placed to achieve significant
clinical and commercial milestones over the next 24 months."

The Acquisition is subject to a number of conditions including the approval of
CeNeS Shareholders and the sanction of the Court. Such conditions and further
terms are set out in Appendix I to this announcement and will be set out in full
in the Scheme Document. The Scheme Document will be sent to CeNeS Shareholders
as soon as practicable.

This summary should be read in conjunction with, and is subject to, the full
text of this announcement and the appendices thereto. Appendix I to this
announcement contains the conditions to, and certain further terms of, the
Acquisition. Appendix II to this announcement contains further details of the
bases and sources of certain information contained in this announcement.
Appendix III to this announcement contains further details relating to the
irrevocable undertakings and the letter of intent received by Paion and Appendix
IV contains definitions of certain terms used in this summary and in this
announcement.

Enquiries:

Paion +49 (0) 241 4453 0
Dr Wolfgang Sohngen, CEO

Landsbanki (Financial adviser to Paion) +44 (0) 20 7426 9000
Shaun Dobson, Managing Director
Thilo Hoffmann, Associate Director

CeNeS +44 (0) 1223 266 466
Neil Clark, CEO

Nomura Code (Financial adviser to CeNeS) +44 (0) 20 7776 1200
Uli Kinzel, Director
Jonathan Senior, Director

Landsbanki, which is authorised and regulated in the UK by the Financial
Services Authority, is (in its function as financial adviser) acting for Paion
and no-one else in connection with the Acquisition and will not be responsible
to anyone other than Paion for providing protections afforded to clients of
Landsbanki or for giving advice in relation to the Acquisition nor any other
matter referred to in this announcement.

Nomura Code, which is authorised and regulated in the UK by the Financial
Services Authority, is acting for CeNeS and no-one else in connection with the
Acquisition and will not be responsible to anyone other than CeNeS for providing
the protections afforded to clients of Nomura Code or for giving advice in
relation to the Acquisition nor any other matter referred to in this
announcement.

Overseas jurisdictions

This announcement does not constitute an offer or invitation to acquire or
exchange securities in Paion or CeNeS or the solicitation of any vote or
approval in any jurisdiction. This announcement does not constitute a prospectus
or a prospectus equivalent document. The Acquisition will be made solely through
the Scheme Document, which will provide and contain the full terms and
conditions of the Acquisition, including details of how to vote in respect of
the Acquisition. Any response to the Acquisition should be made only on the
basis of the information contained in the Scheme Document.

The implications of the Scheme for overseas CeNeS Shareholders may be affected
by the laws of the relevant jurisdictions. Such overseas CeNeS Shareholders
should inform themselves about and observe any applicable legal requirements. It
is the responsibility of each overseas CeNeS Shareholder to satisfy himself as
to the full observance of the laws of the relevant jurisdiction in connection
therewith, including the obtaining of any governmental, exchange control or
other consents which may be required to be observed and the payment of any
issue, transfer or other taxes in such jurisdictions. The distribution of this
announcement in jurisdictions other than the United Kingdom may be restricted by
law and therefore persons in such jurisdictions into whose possession this
announcement comes should inform themselves about and observe such restrictions.
This announcement has been prepared for the purposes of complying with the Code
and the information disclosed may not be the same as that which would have been
disclosed if this announcement had been prepared in accordance with the laws and
regulations of any jurisdiction other than the United Kingdom.

Notice to US shareholders of CeNeS

For US securities law purposes, the exchange offer described in this
announcement will be made for the securities of a foreign company by means of a
scheme of arrangement under Part 26 of the United Kingdom Companies Act 2006.
The New Paion Shares will not be registered under the Securities Act in reliance
on the exemption from registration contained in Section 3(a)(10) of the
Securities Act. The offer is subject to disclosure and procedural requirements
of a foreign country that are different from those which would apply to a public
offering of securities in the United States. Financial statements relating to
CeNeS and Paion included or incorporated in the Scheme Document will be prepared
in accordance with foreign accounting standards that may not be comparable to
the financial statements of United States companies.

It may be difficult for you to enforce your rights and any claim you may have
arising under United States federal securities laws, since CeNeS is located in a
foreign country, and some or all of its officers and directors may be residents
of a foreign country. You may not be able to sue CeNeS or its officers or
directors in a foreign court for violations of the US securities laws. It may be
difficult to compel CeNeS and its affiliates to subject themselves to a US
court's judgment.

This document has not been reviewed by any federal or state securities
commission or regulatory authority in the United States, nor has any such
commission or authority passed upon the accuracy or adequacy of this document.
Any representation to the contrary is unlawful and may be a criminal offence.

Forward-looking statements

This announcement includes forward-looking statements with respect to the
financial condition, results of operations and businesses of Paion and CeNeS and
certain plans and objectives of the Paion Directors and the CeNeS Directors with
respect to them. These forward-looking statements can be identified by the fact
that they do not relate only to historical or current facts. Forward-looking
statements often use words such as "anticipate", "expect", "estimate", "intend",
"plan", "goal", "believe", "will", "may", "should", "would", "could", or other
words of similar meaning. These statements are based on assumptions and
assessments made by the Paion Directors and the CeNeS Directors in light of
their experience and their perception of historical trends, current conditions,
expected future developments and other factors they believe appropriate. By
their nature, forward-looking statements involve risk and uncertainty, because
they relate to events and depend on circumstances that will occur in the future
and the factors described in the context of such forward-looking statements in
this announcement could cause actual results and developments to differ
materially from those expressed in or implied by such forward-looking
statements.

These risks and uncertainties include, among others, the risk that (1) neither
Paion nor CeNeS have been profitable to date and may together as the Enlarged
Group never achieve profitability; (2) the Enlarged Group will to a large extent
rely on collaborations with third parties to progress the development of its
drug candidates; (3) the Enlarged Group might not succeed in entering into
collaborative agreements with third parties for the further clinical development
and marketing for its drug candidates, including M6G, and thus might not be able
to complete the clinical development of these drug candidates in a timely manner
or at all; (4) M6G, the CeNeS Group's most advanced drug candidate, is subject
to limited intellectual property protection and is developed for a
price-sensitive market segment; (5) the Enlarged Group may have difficulty
integrating its two constituent businesses, may have to incur significant
expenses in doing so and any expected synergies or other benefits may fail to
materialise or be less pronounced than expected; and (6) the Scheme may not be
completed or completion may be delayed, including the risk that required
shareholder and other approvals for the Scheme may not be obtained.

Should one or more of these risks or uncertainties materialise, or should
underlying assumptions prove incorrect, actual results may vary materially from
those described herein. CeNeS and Paion assume no obligation to update or
correct the information contained in this announcement.

Dealing disclosure requirements

Under the provisions of Rule 8.3 of the Code, if any person is, or becomes,
"interested" (directly or indirectly) in 1 per cent. or more of any class of
"relevant securities" of CeNeS or Paion, all "dealings" in any "relevant
securities" of that company (including by means of an option in respect of, or a
derivative referenced to, any such "relevant securities") must be publicly
disclosed by no later than 3.30 pm (London time) on the London business day
following the date of the relevant transaction. This requirement will continue
until the date on which the Scheme becomes effective or the Acquisition lapses
or is otherwise withdrawn or on which the "offer period" otherwise ends. If two
or more persons act together pursuant to an agreement or understanding, whether
formal or informal, to acquire an "interest" in "relevant securities" of CeNeS
or Paion, they will be deemed to be a single person for the purpose of Rule 8.3.

Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant
securities" of CeNeS or of Paion by CeNeS or Paion, or by any of their
respective "associates", must be disclosed by no later than 12.00 noon (London
time) on the London business day following the date of the relevant transaction.

A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.

"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.

Terms in quotation marks are defined in the Code, which can also be found on the
Panel's website. If you are in any doubt as to whether or not you are required
to disclose a "dealing" under Rule 8, you should consult the Panel.

In accordance with Rule 2.10 of the Code, Paion confirms that it has 16,755,552
ordinary no-par value bearer shares representing a notional value equal to €1.00
per share in issue and admitted to trading on the Frankfurt Stock Exchange under
the ISIN code DE 000A0B65S3. In accordance with Rule 2.10 of the Code, CeNeS
confirms that it has 21,920,192 ordinary shares of 30 pence each in issue and
admitted to trading on AIM under the ISIN GB 00B23MNL84.

Not for release, publication or distribution, in whole or in part, in or into or
from Canada, Australia, New Zealand, South Africa or Japan or any other any
jurisdiction where to do so would constitute a violation of the relevant laws of
such jurisdiction

FOR IMMEDIATE RELEASE 10 April 2008

Recommended Acquisition

Of

CENES PHARMACEUTICALS PLC ("CeNeS")

By

PAION AG ("Paion")

1. Introduction

The management board of Paion and the board of directors of CeNeS are pleased to
announce that they have reached agreement on the terms of the recommended
acquisition of all the issued and to be issued share capital of CeNeS by Paion
(the "Acquisition").

It is intended that the Acquisition will be effected by means of a scheme of
arrangement under Part 26 of the Companies Act 2006 (involving a reduction of
capital under section 135 of the Companies Act 1985) which requires the approval
of CeNeS Shareholders and the sanction of the Court. However, Paion reserves the
right, in its sole discretion (subject to the consent of the Panel), to proceed
by way of a Takeover Offer should it wish to do so.

2. Summary Terms of the Acquisition

Under the Scheme, which will be subject to the conditions and further terms set
out in Appendix I to this announcement and to be set out in full in the Scheme
Document, Scheme Shareholders will be entitled to receive:

for each CeNeS Share held 0.3521 New Paion Shares

Based on the Closing Price of a Paion Share on 9 April 2008 of €1.74 and an
exchange rate of €1.2536 =£1, the terms of the Acquisition value each CeNeS
Share at 48.9 pence and the ordinary share capital of CeNeS on a fully diluted
basis at approximately £10.9 million.

The terms of the Acquisition represent:

• a premium of 52.7 per cent. to the Closing Price of 32 pence per CeNeS
Share on 4 February 2008, the last Business Day before CeNeS announced that it
was in discussions which may or may not lead to an offer; and

• a premium of 32.1 per cent. to the Closing Price of 37 pence per CeNeS
Share on 9 April 2008, the last Business Day before this announcement.

Fractional entitlements to New Paion Shares will not be issued to CeNeS
Shareholders.

The Scheme is expected to result in the issue to CeNeS Shareholders of
approximately 7,850,000 New Paion Shares, representing approximately 31.9 per
cent. of the issued share capital of Paion as enlarged by the Acquisition.

On the Scheme becoming Effective, it will be binding on all CeNeS Shareholders
including any CeNeS Shareholders who did not vote to approve the Scheme or who
voted against the Scheme.

The New Paion Shares shall rank pari passu with all other Paion Shares in issue
on the date on which the New Paion Shares are issued and shall have the right to
receive all dividends, distributions and other entitlements made or paid on the
Paion Shares for which the record date occurs after such date of issue (but not
otherwise).

3. Recommendation

The CeNeS Directors, who have been so advised by Nomura Code, consider the terms
of the Acquisition to be fair and reasonable. In providing its advice to the
CeNeS Directors, Nomura Code has taken into account the commercial assessments
of the CeNeS Directors.

Accordingly, the CeNeS Directors unanimously recommend that CeNeS Shareholders
vote in favour of the resolutions to be proposed at the Court Meeting and at the
General Meeting to give effect to the Acquisition (or, in the event that the
Acquisition is implemented by way of a Takeover Offer, accept or procure
acceptance of such offer), as those CeNeS Directors who own CeNeS Shares have
irrevocably undertaken to do in respect of their beneficial holdings of 371,415
CeNeS Shares representing (as at the date of this announcement) approximately
1.7 per cent. of the existing issued ordinary share capital of CeNeS.

4. Background to and reasons for the recommendation by the
CeNeS Directors

The CeNeS Directors believe that the Acquisition would benefit CeNeS
Shareholders in a number of ways. First, the Enlarged Group should benefit from
a greater visibility in the market, a stronger position vis-a-vis potential
collaborative partners and a larger investor base. In addition, the Acquisition
would allow CeNeS to combine its portfolio of drug candidates, which is focused
on compounds for CNS-related interventions, with promising drug candidates for
the treatment of thrombotic diseases and thereby achieve a better
diversification of the risks inherent in its drug pipeline. A further benefit
is that, like CeNeS's own portfolio of drug candidates, Paion's portfolio is
focused on the hospital sector. The CeNeS Directors believe that this
commonality in the two companies' strategic focus positions the Enlarged Group
well to achieve synergies by (1) leveraging the companies' combined know-how to
develop innovative therapeutics for the treatment of thrombotic diseases and
CNS-related interventions and to conduct clinical trials and interact with
regulators in this area and (2) potentially building a single organisation to
co-commercialise these drugs once they achieve regulatory approval. The
portfolio of clinical projects of the Enlarged Group would consist of two Phase
III, one Phase II and one Phase I project with another compound scheduled to
enter Phase I in the near future.

The CeNeS Directors therefore believe, and have been so advised by Nomura Code,
that for the reasons expressed above, the interests of CeNeS Shareholders are
best served by the Acquisition.

5. Background to and reasons for the Acquisition

Strategy and strategic fit

The Enlarged Group's vision is to develop, partner and, potentially,
commercialise innovative drugs for the treatment of thrombotic diseases and
CNS-related interventions in the hospital setting. Consistent with this vision,
the Enlarged Group's primary strategic goal for the next several years will be
to use its existing cash balances and any payments it may receive from its
collaborative partners to achieve significant milestones for one or more of its
current drug candidates. Beyond that, the Enlarged Group plans to exploit the
expertise of its two constituent companies in identifying compounds with
potential in the treatment of thrombotic diseases and CNS-related interventions,
licensing or otherwise acquiring these compounds and advancing them through the
clinical development and regulatory approval process. Notwithstanding the
foregoing, the Enlarged Group may decide to pursue its goals in collaboration
with experienced partners or by obtaining additional external financing where it
believes that doing so is economically attractive.

Consistent with this overall goal, the key elements of the strategy of the
Enlarged Group will be as follows:

• support Lundbeck in finalising the development of Desmoteplase for the
indication acute ischaemic stroke and extending the therapeutic profile of this
drug candidate to other indications;

• seek to establish economically attractive collaborations with
experienced partners for the late-stage development and commercialisation of M6G
and, potentially, other drug candidates;

• streamline its drug pipeline and optimise its clinical development and
partnering decisions in light of its existing cash balances and any payments it
may receive from its collaborative partners, including seeking to outlicense
Solulin and discontinuing the clinical development of Enecadin;

• evaluate new drug candidates and potential mergers and acquisitions on
an opportunistic basis; and

• in the medium term, consider complementing collaborations with the
creation of a specialty sales and marketing organisation in certain parts of
Europe.

Financial strength and investment proposition

As at 31 December 2007, Paion and CeNeS had approximately €49 million in cash
and cash equivalents. The Enlarged Group will expect to benefit from milestone
and royalty payments from existing licences and the Paion Directors believe that
the Enlarged Group will be sufficiently well financed following the Acquisition
to continue development of the combined pipeline and achieve significant
pre-clinical, clinical and commercial milestones. Cost savings will be made
after the combination has been effected by the removal of duplicated
administration costs and a reduction in the use of external contractors.

The Paion Directors believe that the Acquisition will create a significant and
attractive international investment opportunity in the field of CNS product
development.

Product pipeline

The combination of CeNeS and Paion will allow the Enlarged Group to focus on the
development of a balanced drug pipeline. The Enlarged Group will have a strong
cash position which will allow for the exploitation of the broader pipeline to
create significant value and will help to reduce the portfolio risk profile.
The Enlarged Group will have two Phase III, one Phase II and one Phase I project
with another compound (CNS 7056) scheduled to enter Phase I in the near future.

Programme Indication Stage of development
Desmoteplase Acute ischaemic stroke Phase III
M6G Post-operative pain Phase III
CNS 5161 Neuropathic/cancer pain Phase II
Solulin Stroke, cardiovascular disorders Phase I
CNS 7056 Short-acting sedative Pre-Clinical
COMT inhibitor Parkinson's disease / schizophrenia Lead optimisation

Desmoteplase - for the causal treatment of acute ischaemic stroke

Desmoteplase is being developed for the causal treatment of acute ischaemic
stroke. Paion licensed Desmoteplase from Bayer Schering Pharma AG in 2001.
Since 29 January 2008, Lundbeck is solely responsible for the clinical
development of Desmoteplase and bears all Desmoteplase-related development,
registration and marketing costs.

Desmoteplase belongs to a group of blood clot-dissolving compounds known as
plasminogen activators. Plasminogen activators convert plasminogen, an inactive
enzyme circulating in the blood, into plasmin, a fibrin-digesting substance. By
attacking fibrin, the protein that keeps blood clots together, plasmin dissolves
blood clots and restores blood flow. Desmoteplase is a genetically engineered
version of a plasminogen activator found in the saliva of the vampire bat
desmodus rotundus.

Paion completed a Phase II clinical trial for Desmoteplase for the indication
acute ischaemic stroke in Europe, Singapore and Australia in 2003 and another
Phase II clinical trial in the United States in 2004. The DIAS-2 trial, which
was a Phase III clinical trial Paion conducted in the United States, Australasia
and Europe in collaboration with Paion's former collaborative partner Forest
Laboratories Holdings Limited was concluded in February 2007 and results for
this trial were published in May 2007. Lundbeck has informed Paion that it
plans to initiate a further Phase III clinical trial of Desmoteplase in acute
ischaemic stroke in the second half of 2008.

In a Phase III clinical trial, Desmoteplase failed to show a statistically
significant clinical improvement over placebo. Nonetheless, Paion continues to
believe that Desmoteplase offers substantial benefits in the causal treatment of
acute ischaemic stroke in the three- to nine-hour time window after the
occurrence of a stroke, for which no pharmaceutical treatment is currently
approved. This belief is based on Paion's evaluation of the results of a Phase
III clinical trial which showed that, compared to the previous Phase II clinical
trials conducted by Paion, a greater number of patients suffered from relatively
light stroke symptoms and did not have a visible vessel occlusion in the most
important brain arteries. These patients thus had a better chance of
spontaneous recovery and were less likely to benefit from treatment with
Desmoteplase. This difference may explain why patients treated with placebo
showed similar recovery to patients treated with Desmoteplase. A sub-group
analysis carried out as part of the evaluation further suggested that patients
who had a visible vessel occlusion or a particularly large penumbra may benefit
from Desmoteplase, although the number of patients in which this effect had been
observed was not large enough for the result to be statistically significant.
The penumbra is an at-risk area of cells in the brains of stroke patients that
surrounds the core infarct and is characterised by reduced blood supply.

M6G - for the treatment of post-operative pain

CeNeS Group's most advanced drug candidate is M6G, a drug candidate that is
being developed for the intravenous treatment of post-operative pain. M6G has
been under development since 1997. In 2000, additional clinical data and
know-how was licensed from Nycomed.

M6G is a metabolite of morphine, that is, a substance produced by the body while
processing morphine. Morphine is currently considered the "gold standard" in
the treatment of post-operative pain. Morphine is one of the most effective
painkillers available and is widely used for the management of moderate to
severe pain, including the pain experienced by patients following a wide range
of surgical operations. However, it is also associated with a number of adverse
drug reactions, including nausea and vomiting. In addition, at higher dosages,
morphine carries an increased risk of respiratory depression, a potentially
fatal condition. M6G is developed with a view to mitigating these adverse
reactions.

In total, 11 Phase II and 2 Phase III clinical trials have been conducted with
respect to M6G. Overall, these clinical trials suggest that M6G may achieve a
similar painkilling effect to morphine and at the same time has an improved side
effect profile, particularly with respect to nausea and vomiting and, possibly,
respiratory depression. However, in the most recent Phase III clinical trial,
which was completed in 2007, M6G achieved only one of the two primary clinical
endpoints but narrowly missed the other, preventing the filing of a registration
application. Specifically, M6G failed to show a statistically significant
improvement in post-operative nausea compared to morphine. At the same time,
the Phase III clinical trial demonstrated that M6G was non-inferior to morphine
in achieving pain relief in patients undergoing major abdominal surgery. Pain
relief was assessed by a standardised rating scale over the 24-hour
post-operative period. With respect to the secondary clinical endpoints, M6G
showed a reduction in the severity of post-operative nausea and vomiting in the
6 to 24 hours after treatment and a reduction in the incidence of dry retching
and vomiting in the 24 hours after treatment. Further clinical development of
M6G is currently on hold pending the successful conclusion of a collaborative
agreement with a third party.

As a well-known derivative of morphine, M6G itself is not eligible for patent
protection. CeNeS Group licensed the patent with respect to the M6G
manufacturing process from Nycomed. Nycomed's patent will expire in 2016. To
broaden its rights with respect to M6G, the CeNeS Group has obtained patents and
other rights regarding various manufacturing processes with respect to M6G and a
composition of matter patent with respect to a novel salt form of M6G. However,
the protection afforded by these patents and rights is more narrow than that
offered by a substance patent and would not prevent generics companies from
developing and marketing other chemical forms of M6G, including chemical forms
that could potentially be developed with a relatively limited investment. The
CeNeS Group expects that a certain amount of protection will be available to it
under the patent extension provisions of the Hatch-Waxman Act in the United
States and supplementary protection certificates under EU Regulation 1768/92 in
Europe. These additional protections may extend up to ten years following the
first approval of a drug in Europe and up to five years following the first
approval of a drug in the United States.

CNS 5161 - for the treatment of neuropathic pain

CNS 5161 is a drug candidate that is being developed for the treatment of
neuropathic pain from conditions such as diabetes, post-traumatic pain and
cancer. Neuropathy describes diseases of the peripheral nerves. The most
common form of neuropathic pain is pain affecting the feet and legs. The CeNeS
Group acquired the rights to CNS 5161 through the acquisition of another
biotechnology company in 2000.

While the CeNeS Group believes that CNS 5161 may be a potent painkiller without
causing significant adverse drug reactions, the drug candidate is still at an
early stage, and its exact profile is hard to predict. The Phase II clinical
trial currently being conducted is an open-label study aimed primarily at
showing tolerability of the drug candidate in cancer pain patients.

Solulin

Solulin is a thrombin modulator with anti-inflammatory potential that Paion has
historically developed for the treatment of thrombotic diseases and to reduce
the likelihood of a stroke following the occurrence of transitory ischaemic
attack (TIAs) or a minor stroke. TIAs are temporary conditions with symptoms
similar to those of a stroke. Thrombin modulators reduce the formation of
thrombin, which, in excess, can contribute to the formation of blood clots.
Solulin is an "intelligent anticoagulant" because it acts only from the moment
thrombin is formed, which should significantly reduce the risk of bleeding
compared with the anticoagulants currently available. Paion acquired the rights
to Solulin from Bayer Schering Pharma AG in 2001.

CNS 7056 - for use as a general anaesthetic and short-acting sedative

CNS 7056 is a short-acting sedative that is being developed primarily as a
sedative for short non-surgical and surgical procedures, which could fulfil a
substantial unmet need by materially shortening the time during which patients
require supervision following an operation. Possible applications include
diagnostic procedures such as gastroscopies and colonic endoscopies and certain
applications in the area of intensive care. The most commonly used sedative
today is Midazolam, which has various drawbacks, including a risk of causing
respiratory depression, potential interactions with other drugs and a prolonged
and variable duration of action. Ongoing pre-clinical studies suggest that,
compared with Midazolam, CNS 7056 may have a faster onset and, in particular a
shorter duration of sedation, potentially leading to a shorter recovery period,
and may carry a lower risk of causing respiratory depression and interact less
with other drugs. CeNeS Group acquired the rights to CNS 7056 from
GlaxoSmithKline plc in 2003. In 2007, the rights to CNS 7056 for Japan were
out-licensed to Ono Pharmaceutical Co., Ltd. for the indication of anaesthesia
in consideration for an initial payment of US$1 million. The CeNeS Group may
receive further payments, subject to certain milestones.

COMT inhibitor programme - for the treatment of Parkinson's disease and
schizophrenia

In addition, CeNeS operates a drug exploration program managing third-party
contractors, called the COMT inhibitor program, which is aimed at finding drug
candidates for the treatment of Parkinson's disease. COMT inhibitors are
believed to provide extended functional time in patients suffering from this
disease. The program is currently at an early stage.

Staff and facilities

Paion and CeNeS both benefit from strong management teams and staff experienced
in the drug development process. Paion intends to maintain the expertise that
exists within CeNeS through the retention of the majority of CeNeS staff within
the Enlarged Group, and Paion does not intend to make any material change in the
conditions of employment of CeNeS staff. Paion intends to maintain CeNeS and
Paion's facilities in Cambridge, UK and Aachen, Germany, respectively. This
will provide a means to expand the operational capabilities and form the basis
of an international biopharmaceutical.

6. Information on Paion

Paion is a biopharmaceutical company specialising in developing and
commercialising innovative drugs for the treatment of thrombotic diseases, that
is, diseases caused by the obstruction of a blood vessel by a blood clot.
Currently, Paion's focus is on the causal treatment of acute ischaemic stroke.
Paion intends to build and expand its portfolio of drug candidates using a "
search-and-development" approach. Accordingly, Paion seeks to identify
promising new compounds, license or otherwise acquire them and advance them
through the clinical development and regulatory approval process. Where
appropriate, particularly during the late stages of the clinical development and
approval process and the commercialisation phase, Paion seeks to collaborate
with experienced partners.

From its inception in July 2000 to 31 December 2007, Paion accumulated a net
loss of €66.8 million. In 2007, Paion had revenues of €4.8 million and generated
a net loss of €10.5 million. At 31 December 2007, Paion had total assets of
€45.5 million, cash and cash equivalents of €42.9 million and 53 full-time
equivalent employees.

7. Information on CeNeS

CeNeS is a biopharmaceutical company specialising in the development and
commercialisation of drugs for CNS disorders, which are a major cause of
mortality and disability. The CeNeS Group is focused on the development and
commercialisation of novel drugs for use by hospital-based anaesthetists, pain
specialists and neurologists. Its portfolio of drug candidates is targeted at
postoperative pain, neuropathic pain, sedation, anaesthesia and Parkinson's
disease.

In 2007, the CeNeS Group had revenues of £0.5 million and generated a net loss
of £6.6 million. As at 31 December 2007, the CeNeS Group had shareholders'
equity of £9.2 million, total assets of £11.9 million and 15 full-time
equivalent employees.

8. Current trading and prospects

Paion

Following the New Lundbeck Agreement, which has allowed Paion to secure the
future clinical development of Desmoteplase, Paion has turned to reviewing its
company strategy and the strategic focus of its drug pipeline. In doing so, its
goal is to diversify the risks associated with the development of new innovative
therapeutics, not just by entering into collaborative agreements with third
parties but also by adding new drug candidates to its portfolio, including
compounds for thrombotic diseases and CNS-related interventions other than
stroke. Paion has evaluated a number of compounds and companies in the past and
intends to continue to do so in 2008.

The future clinical development of Desmoteplase will be led by Lundbeck. Since
Lundbeck will bear all Desmoteplase-related development costs going forward,
Paion expects that the level of its research and development expenses will
decline compared with past periods.

Paion expects to publish complete results of its ongoing Phase I clinical trial
of Solulin in the course of 2008. Going forward, Paion will be open to
expanding the profile of Solulin to include a broader range of cardiovascular
indications.

In addition, Paion has decided to discontinue the clinical development of
Enecadin, a neuroprotectant that it had previously developed for use in
connection with Desmoteplase. Paion took this decision in light of scientific
data that has called into question the viability of this substance class.

Paion is currently considering a product acquisition within its defined
therapeutic areas, which may or may not be completed in the near future. If this
acquisition is completed, Paion's initial financial commitment is expected to be
small and not to have a material impact on its cash position.

Given that Lundbeck has assumed sole responsibility for the future development
of Desmoteplase, which has significantly reduced Paion's role in the development
of this drug candidate, the fact that Paion has decided to discontinue the
clinical development of Enecadin, and in light of the proposed Acquisition,
Paion has decided to reduce its headcount by approximately 20 employees over the
course of 2008. If the Acquisition is completed, this reduction will be part of
the overall headcount reduction that the Enlarged Group plans to implement. See
"Enlarged Group" below for more information on the planned headcount reduction
and the underlying reasons.

CeNeS

Following the completion of the M6G Phase III study in February 2007 CeNeS is
continuing to pursue partnering arrangements for M6G. The combination with Paion
will strengthen CeNeS's negotiation position and its flexibility in partnering
negotiations.

CeNeS is currently undertaking a Phase II cancer pain trial with CNS 5161 and
that is expected to report Phase II data later in 2008. CeNeS is also planning
to file an IND for its short acting sedative CNS 7056 later in 2008 and
thereafter to complete a proof of concept Phase I trial. CeNeS is also
continuing to progress its COMT discovery programme and seeking to identify a
lead candidate from the current lead series.

The transaction with Paion will give CeNeS greater in-house resource and
financial strength in progressing all its development programmes through to
significant pre-clinical, clinical and commercial milestones.

The preliminary audited results of CeNeS for the year ended 31 December 2007
were also announced today. Financial highlights for the twelve months ended 31
December 2007 include:

• Loss after tax of £6.6 million (2006: £8.6 million)

• Cash at period end of £4.3 million (2006: £6.3 million)

During the year ended 31 December 2007, CeNeS has made significant progress in
developing its business and progressing the clinical development of its
pipeline.

Since 31 December 2007, CeNeS has continued to operate in line with the CeNeS
Directors' expectations.

Enlarged Group

The Paion Directors believe that the combination of Paion and CeNeS will create
an international biopharmaceutical company focused on thrombotic diseases and
CNS related interventions in the hospital setting.

The Enlarged Group will support Lundbeck in obtaining regulatory approval of
Desmoteplase and marketing the drug as an innovative therapeutic for the causal
treatment of acute ischaemic stroke. Paion has been informed by Lundbeck that it
intends to submit data to the regulatory authorities with a view to obtaining
their approval of a new Phase III clinical trial of Desmoteplase. Lundbeck has
informed Paion that it expects to initiate this clinical trial in the second
half of 2008.

In addition, the Enlarged Group will seek to outlicense M6G on economically
attractive terms. Similarly, outlicensing of Solulin is envisaged following the
completion of Phase I clinical trials, in which it expects to demonstrate this
drug candidate's mechanism of action in humans, and to discontinue the clinical
development of Enecadin in light of scientific data that has called into
question the viability of this substance class. A decision regarding the
further clinical development of CNS 5161 will be made based on the results of
the ongoing Phase II clinical trial. With respect to CNS 7056, an innovative
sedative which in preclinical studies has shown a superior onset of action and
clearance profile compared with the sedatives currently on the market, the
Enlarged Group plans to conduct a Phase I clinical trial in 2008.

In addition, Paion is currently considering a product acquisition within its
defined therapeutic areas, which may or may not be completed in the near future.
If this acquisition is completed, the initial financial commitment is expected
to be small and not to have a material impact on the Enlarged Group's cash
position.

As of 31 December 2007, the Enlarged Group had cash and cash equivalents of
approximately €49 million on a pro forma basis. The upfront payment of €8
million Paion received under the New Lundbeck Agreement in February 2008 further
strengthened its cash balance.

Given that Lundbeck has assumed sole responsibility for the future development
of Desmoteplase, which has significantly reduced the Enlarged Group's role in
the development of this drug candidate, the fact that Paion and CeNeS have
decided to discontinue the clinical development of Enecadin and in light of the
proposed Acquisition, the Enlarged Group has decided to reduce its headcount by
approximately 24 employees over the course of 2008. This decision reflects,
among other things, the Paion Directors' expectation that the Acquisition will
allow the Enlarged Group to benefit from CeNeS's technical expertise as well as
the fact that the drug pipeline of the Enlarged Group will require a
significantly less complex organisational structure than the one the constituent
companies had historically. Based on the new structure and the broadened
pipeline, the Paion Directors believe the Enlarged Group to be able to achieve
significant pre-clinical, clinical and commercial milestones and to have
sufficient funding until 2010.

9. CeNeS Share Schemes

Appropriate proposals will be made to participants in the CeNeS Share Schemes.
Details of these proposals will be sent to participants in the CeNeS Share
Schemes in due course.

10. Irrevocable Undertakings

• CeNeS Directors who hold CeNeS Shares have irrevocably undertaken to
vote such CeNeS Shares (amounting, in aggregate, to 371,415 CeNeS Shares,
representing approximately 1.7 per cent. of the existing issued share capital of
CeNeS), or procure that they are voted, in favour of the Scheme and the
Acquisition at the Court Meeting and the General Meeting (or, in the event that
the Acquisition is implemented by way of a Takeover Offer, to accept or procure
acceptance of such offer).

• In addition, as at 9 April 2008 (the latest practicable date prior to
the date of this announcement), irrevocable undertakings to vote in favour of
the Scheme and the Acquisition at the Court Meeting and the General Meeting (or,
in the event that the Acquisition is implemented by way of a Takeover Offer, to
accept or procure acceptance of such offer) have been received from Gartmore
Investment Management in respect of 3,986,016 CeNeS Shares, from Avlar
Bioventures Fund II in respect of 2,436,449 CeNeS Shares, from ATM Investment
Limited in respect of 154,605 CeNeS Shares, from Avlar Bioventures Limited in
respect of 58,047 CeNeS Shares, from the Avlar Pension Fund in respect of 33,333
CeNeS Shares and from Gavin Kilpatrick (Chief Scientific Officer of CeNeS) in
respect of 15,079 CeNeS Shares.

• In addition, as at 9 April 2008 (the latest practicable date prior to
the date of this announcement) a letter of intent to vote in favour of the
Scheme and the Acquisition at the Court Meeting and the General Meeting has been
received from Universities Superannuation Scheme in respect of 1,081,162 CeNeS
Shares.

• Accordingly, Paion has received irrevocable undertakings and a letter
of intent in respect of, in aggregate, 8,136,106 CeNeS Shares, representing
approximately 37.1 per cent. of CeNeS's existing issued share capital.

• The irrevocable undertakings given by the CeNeS Directors, Avlar
Bioventures Fund II, ATM Investment Limited, Avlar Bioventures Limited, the
Avlar Pension Fund and Gavin Kilpatrick will cease to be binding if (i) Paion
announces (with the consent of the Panel) that it does not intend to proceed
with the Acquisition; or (ii) the Acquisition lapses or is otherwise withdrawn.

• The irrevocable undertaking given by Gartmore Investment Management
will cease to be binding if: (i) a higher competing offer is made for CeNeS
Shares which represents (in the reasonable opinion of Gartmore Investment
Management) an improvement of more than 10 per cent. of the value of the
consideration available under the Acquisition as at the date on which such
higher competing offer is made; (ii) Paion announces (with the consent of the
Panel) that it does not intend to proceed with the Acquisition; or (iii) the
Acquisition lapses or is otherwise withdrawn.

• Each CeNeS Director and Gavin Kilpatrick has agreed with Paion (i) not,
directly or indirectly, to solicit, initiate, encourage or otherwise seek to
procure any competing transaction, to (ii) notify Paion promptly of any approach
made to him in relation to a competing transaction or any request for
information under Rule 20.2 of the Code, and (iii) subject to the fiduciary
duties of the CeNeS Directors, not to participate in discussions regarding a
competing transaction.

11. Disclosure of interests in CeNeS

As at the close of business on 9 April 2008 (the latest practicable date prior
to the date of this announcement):

• Neither Paion nor any of the Paion Directors nor, so far as Paion is
aware, any person acting in concert with Paion (i) has any interest in, or right
to subscribe for, any relevant securities of CeNeS, (ii) has any short position
(whether conditional or absolute and whether in the money or otherwise),
including any short position under a derivative, or any agreement to sell or any
delivery obligation or right to require another person to purchase or take
delivery in relation to relevant securities of CeNeS, or (iii) has borrowed or
lent any relevant securities of CeNeS (save for any borrowed shares which have
been either on-lent or sold).

• Neither Paion nor CeNeS, nor, so far as Paion and CeNeS are aware, any
associate of Paion or CeNeS is party to any indemnity or option arrangement or
any agreement or understanding, formal or informal, of whatever nature, relating
to relevant securities of CeNeS which may be an inducement to deal or refrain
from dealing in such securities.

12. Management and Employees

Paion and CeNeS have agreed that, on completion of the Acquisition, Gavin
Kilpatrick (currently Chief Scientific Officer of CeNeS) will be appointed to
the management board of Paion.

It is also intended that, following completion of the Acquisition, Alan Goodman
(currently Chairman of CeNeS) will become a member of the supervisory board of
Paion.

Each of Ron Irwin, Peter Johnson and Alan Smith (currently non-executive
directors of CeNeS), Neil Clark (currently CEO of CeNeS) and Tony Osborne
(currently Finance Director of CeNeS) has agreed to resign as a CeNeS Director
on the Scheme becoming effective.

Paion and CeNeS both benefit from strong management teams and staff experienced
in the drug development process. Paion intends to maintain the expertise that
exists within CeNeS through the retention of the majority of CeNeS staff within
the Enlarged Group and does not intend to make any material change in the
conditions of employment of CeNeS staff.

The Paion Directors intend to maintain CeNeS and Paion's facilities in
Cambridge, UK and Aachen, Germany, respectively.

Given that Lundbeck has assumed sole responsibility for the future development
of Desmoteplase and in light of the Acquisition, the Paion Directors have
decided to reduce Paion's headcount by approximately 20 employees over the
course of 2008. If the Acquisition is completed, this reduction will be part of
the overall headcount reduction that the Enlarged Group plans to implement.
This decision reflects, among other things, the Paion Directors' expectation
that the Acquisition will allow the Enlarged Group to benefit from CeNeS's
technical expertise as well as the fact that the drug pipeline of the Enlarged
Group will require a significantly less complex organisational structure than
the one Paion had historically.

13. Implementation Agreement and inducement fee

CeNeS and Paion have entered into the Implementation Agreement which sets out,
among other things, various matters in relation to the implementation of the
Scheme (or, if applicable the Takeover Offer), the conduct of CeNeS's business
prior to the Effective Date or the lapse or withdrawal of the Acquisition, an
inducement fee, and non-solicit undertakings.

Under the Implementation Agreement, CeNeS will be required to pay Paion an
inducement fee equal to 1 per cent. of the value of the fully diluted share
capital of CeNeS calculated by reference to the value of the Acquisition set out
in this announcement (being approximately £109,000) if, following the
publication of this announcement:

• before the Scheme (or Takeover Offer, as applicable) lapses, terminates
or otherwise fails, or within 60 days of such date, a competing proposal to
acquire CeNeS is announced and that competing proposal, or any other competing
proposal, becomes effective or is otherwise completed;

• the CeNeS Directors do not in the Scheme Document unanimously and
without qualification recommend CeNeS Shareholders to vote in favour of the
Scheme at the Meetings (or, in the case of a Takeover Offer, to accept the
Takeover Offer), or they withdraw, qualify or adversely modify such
recommendation, or recommend a competing proposal;

• the Panel allows Paion not to make or withdraw the Acquisition by
reason of a breach of the Conditions which arises as a result of an act or
omission of CeNeS; or

• CeNeS breaches its non-solicit undertakings described below.

CeNeS has agreed that it will not, directly or indirectly, solicit, initiate,
encourage or otherwise seek to procure any competing transaction. In addition,
CeNeS has agreed to notify Paion promptly of any approach made to CeNeS in
relation to a competing transaction or any request for information under Rule
20.2 of the Code. CeNeS has also agreed, subject to the fiduciary duties of the
CeNeS Directors, not to participate in discussions regarding a competing
transaction.

The Implementation Agreement will terminate upon:

• either party giving notice following a material breach of the
Implementation Agreement by the other party;

• the CeNeS Directors withdrawing, modifying or qualifying their
unanimous recommendation of the Acquisition or the Scheme or agreeing or
resolving to recommend or recommending a competing proposal;

• CeNeS Shareholders voting not to approve the Scheme at the Court
Meeting or the relevant resolutions not being passed at the General Meeting;

• a competing proposal becoming or being declared wholly unconditional or
being completed;

• unless the parties agree otherwise in writing, if the Effective Date
has not occurred on or before 31 July 2008; or

• the Acquisition lapsing or being withdrawn.

14. Structure of the Acquisition

It is intended that the Acquisition will be implemented by means of a Court
sanctioned scheme of arrangement under Part 26 of the Companies Act 2006. The
purpose of the Scheme is to provide for Paion to become the owner of the whole
of the issued share capital of CeNeS. This is to be achieved by the cancellation
of the Scheme Shares and the application of the reserve arising from such
cancellation in paying up in full a number of new CeNeS Shares (which is equal
to the number of Scheme Shares cancelled) and issuing the same to Paion, in
consideration for which Scheme Shareholders will receive consideration on the
basis set out in paragraph 2 of this announcement.

The management board of Paion has, with the approval of the supervisory board,
resolved to increase the capital of Paion against contributions in kind and
excluding subscription rights on the basis of the authorisation granted by the
annual general meeting of Paion on 10 May 2006. The capital increase will only
be implemented after the Scheme has become Effective and Paion has (by way of a
contribution in kind) become the owner of the whole of the issued share capital
of CeNeS.

The Acquisition is subject to a number of conditions and certain further terms
set out in Appendix I to this announcement and to be set out in full in the
Scheme Document.

In particular, the Scheme requires the approval at the Court Meeting of a
majority in number of the CeNeS Shareholders who are present and voting either
in person or by proxy at the Court Meeting (or at any adjournment thereof)
representing not less then 75 per cent. in value of all CeNeS Shares present and
voting in person or by proxy at the Court Meeting (or at any adjournment
thereof).

Implementation of the Scheme will also require, among other things, the passing
of certain resolutions to facilitate the Acquisition at the General Meeting,
which will be held immediately after the Court Meeting, and the filing of an
application for the listing of the New Paion Shares on the Regulated Market of
the Frankfurt Stock Exchange such that upon the issuance of the New Paion Shares
the Frankfurt Stock Exchange will admit the New Paion Shares to trading.

Following the passing of the appropriate resolutions at the Meetings, the Scheme
and the Reduction must be sanctioned by the Court and will only become Effective
upon delivery to the Registrar of Companies of a copy of (i) the Court Order(s)
sanctioning the Scheme and confirming the Reduction and (ii) the Minute, and in
relation to the Reduction, the registration of such order and the Minute. Upon
the Scheme becoming Effective, it will be binding on all CeNeS Shareholders,
irrespective of whether or not they attended or voted at the Court Meeting or
the General Meeting.

The Scheme Document will be posted to CeNeS Shareholders as soon as practicable
and in any event (save with the consent of the Panel) within 28 days of the date
of this announcement. It is expected that the Scheme will become Effective by
the end of June 2008, subject to the satisfaction or waiver of the conditions to
the Acquisition and the Scheme.

15. De-listing and compulsory acquisition

It is intended that the London Stock Exchange will be requested to cancel
trading in CeNeS Shares on AIM with effect from the close of business on the
Business Day immediately prior to the Effective Date.

If the Acquisition is effected by way of a Takeover Offer and such Takeover
Offer becomes or is declared unconditional in all respects and sufficient
acceptances are received, Paion intends to exercise its rights under Sections
979 to 991 (inclusive) of the Companies Act 2006 to compulsorily acquire the
remaining CeNeS Shares on the same terms as the Acquisition.

16. Admission

Application will be made for the New Paion Shares to be admitted to trading on
the Regulated Market (Regulierter Markt) of the Frankfurt Stock Exchange (with
simultaneous admission to the sub-segment of the Regulated Market with
additional post admission obligations (Prime Standard)) and for all Paion
Shares, including the New Paion Shares, to be admitted to trading on AIM.
Unless the Scheme becomes Effective the New Paion Shares will not be issued and
neither such admission will become effective.

The Paion Shares are being traded under the ISIN code DE 000A0B65S3. The
quotation of the Paion Shares on the Frankfurt Stock Exchange is in Euro. The
quotation of the Paion Shares on AIM will be in pounds sterling.

It is expected that admission to trading of the New Paion Shares on the
Regulated Market of the Frankfurt Stock Exchange will become effective on the
Effective Date, or the first dealing day thereafter. It is expected that
admission of the Paion Shares to trading on AIM will become effective within two
dealing days after the Effective Date.

Settlement of the consideration to which any CeNeS Shareholder is entitled under
the Scheme will be effected within 14 days after the Effective Date.

17. Overseas shareholders

The availability of the Acquisition to overseas holders of CeNeS Shares may be
affected by the laws of their relevant jurisdiction. Such persons should inform
themselves of, and observe, any applicable legal or regulatory requirements of
their jurisdiction. CeNeS Shareholders who are in any doubt regarding such
matters should consult an appropriate independent professional adviser in the
relevant jurisdiction without delay.

18. Further information

Appendix I contains the conditions to, and certain further terms of, the
Acquisition. Appendix II contains further details of the bases and sources of
certain information contained in this announcement. Appendix III to this
announcement contains further details relating to the irrevocable undertakings
and the letter of intent received by Paion and Appendix IV contains the
definitions of certain terms used in this announcement.

This announcement does not constitute an offer or invitation to acquire or
exchange securities in Paion or CeNeS. Holders of CeNeS Shares are advised to
read carefully the formal documentation relating to the Acquisition, once it has
been dispatched.

There are no agreements or arrangements to which Paion is a party which relate
to the circumstances in which it may or may not invoke or seek to invoke a
pre-condition or a condition to completion of the Acquisition.

Enquiries:

Paion +49 (0) 241 4453 0
Dr. Wolfgang Sohngen, CEO

Landsbanki (Financial advisor to Paion) +44 (0) 20 7426 9000
Shaun Dobson, Managing Director
Thilo Hoffmann, Associate Director

CeNeS +44 (0) 1223 266 466
Neil Clark, CEO

Nomura Code (Financial advisor to CeNeS) +44 (0) 20 7776 1200
Uli Kinzel, Director
Jonathan Senior, Director

Landsbanki, which is authorised and regulated in the UK by the Financial
Services Authority, is (in its function as financial adviser) acting for Paion
and no-one else in connection with the Acquisition and will not be responsible
to anyone other than Paion for providing protections afforded to clients of
Landsbanki or for giving advice in relation to the Acquisition nor any other
matter referred to in this announcement.

Nomura Code, which is authorised and regulated in the UK by the Financial
Services Authority, is acting for CeNeS and no-one else in connection with the
Acquisition and will not be responsible to anyone other than CeNeS for providing
the protections afforded to clients of Nomura Code or for giving advice in
relation to the Acquisition nor any other matter referred to in this
announcement.

Overseas jurisdictions

This announcement does not constitute an offer or invitation to acquire or
exchange securities in Paion or CeNeS or the solicitation of any vote or
approval in any jurisdiction. This announcement does not constitute a prospectus
or a prospectus equivalent document. The Acquisition will be made solely through
the Scheme Document, which will provide and contain the full terms and
conditions of the Acquisition, including details of how to vote in respect of
the Acquisition. Any response to the Acquisition should be made only on the
basis of the information contained in the Scheme Document.

The implications of the Scheme for overseas CeNeS Shareholders may be affected
by the laws of the relevant jurisdictions. Such overseas CeNeS Shareholders
should inform themselves about and observe any applicable legal requirements. It
is the responsibility of each overseas CeNeS Shareholder to satisfy himself as
to the full observance of the laws of the relevant jurisdiction in connection
therewith, including the obtaining of any governmental, exchange control or
other consents which may be required to be observed and the payment of any
issue, transfer or other taxes in such jurisdictions. The distribution of this
announcement in jurisdictions other than the United Kingdom may be restricted by
law and therefore persons in such jurisdictions into whose possession this
announcement comes should inform themselves about and observe such restrictions.
This announcement has been prepared for the purposes of complying with the Code
and the information disclosed may not be the same as that which would have been
disclosed if this announcement had been prepared in accordance with the laws and
regulations of any jurisdiction other than the United Kingdom.

Notice to US shareholders of CeNeS

For US securities law purposes, the exchange offer described in this
announcement will be made for the securities of a foreign company by means of a
scheme of arrangement under Part 26 of the United Kingdom Companies Act 2006.
The New Paion Shares will not be registered under the Securities Act, in
reliance on the exemption from registration contained in Section 3(a)(10) of the
Securities Act. The offer is subject to disclosure and procedural requirements
of a foreign country that are different from those which would apply to a public
offering of securities in the United States. Financial statements relating to
CeNeS and Paion included or incorporated in the Scheme Document will be prepared
in accordance with foreign accounting standards that may not be comparable to
the financial statements of United States companies.

It may be difficult for you to enforce your rights and any claim you may have
arising under United States federal securities laws, since CeNeS is located in a
foreign country, and some or all of its officers and directors may be residents
of a foreign country. You may not be able to sue CeNeS or its officers or
directors in a foreign court for violations of the US securities laws. It may be
difficult to compel CeNeS and its affiliates to subject themselves to a US
court's judgment.

This document has not been reviewed by any federal or state securities
commission or regulatory authority in the United States, nor has any such
commission or authority passed upon the accuracy or adequacy of this document.
Any representation to the contrary is unlawful and may be a criminal offence.

Forward-looking statements

This announcement includes forward-looking statements with respect to the
financial condition, results of operations and businesses of Paion and CeNeS and
certain plans and objectives of the Paion Directors and the CeNeS Directors with
respect to them. These forward-looking statements can be identified by the fact
that they do not relate only to historical or current facts. Forward-looking
statements often use words such as "anticipate", "expect", "estimate", "intend",
"plan", "goal", "believe", "will", "may", "should", "would", "could", or other
words of similar meaning. These statements are based on assumptions and
assessments made by the Paion Directors and the CeNeS Directors in light of
their experience and their perception of historical trends, current conditions,
expected future developments and other factors they believe appropriate. By
their nature, forward-looking statements involve risk and uncertainty, because
they relate to events and depend on circumstances that will occur in the future
and the factors described in the context of such forward-looking statements in
this announcement could cause actual results and developments to differ
materially from those expressed in or implied by such forward-looking
statements.

These risks and uncertainties include, among others, the risk that (1) neither
Paion nor CeNeS have been profitable to date and may together as the Enlarged
Group never achieve profitability; (2) the Enlarged Group will to a large extent
rely on collaborations with third parties to progress the development of its
drug candidates; (3) the Enlarged Group might not succeed in entering into
collaborative agreements with third parties for the further clinical development
and marketing for its drug candidates, including M6G, and thus might not be able
to complete the clinical development of these drug candidates in a timely manner
or at all; (4) M6G, the CeNeS Group's most advanced drug candidate, is subject
to limited intellectual property protection and is developed for a
price-sensitive market segment; (5) the Enlarged Group may have difficulty
integrating its two constituent businesses, may have to incur significant
expenses in doing so and any expected synergies or other benefits may fail to
materialise or be less pronounced than expected; and (6) the Scheme may not be
completed or completion may be delayed, including the risk that required
shareholder and other approvals for the Scheme may not be obtained.

Should one or more of these risks or uncertainties materialise, or should
underlying assumptions prove incorrect, actual results may vary materially from
those described herein. CeNeS and Paion assume no obligation to update or
correct the information contained in this announcement.

Dealing disclosure requirements

Under the provisions of Rule 8.3 of the Code, if any person is, or becomes,
"interested" (directly or indirectly) in 1 per cent. or more of any class of
"relevant securities" of CeNeS or Paion, all "dealings" in any "relevant
securities" of that company (including by means of an option in respect of, or a
derivative referenced to, any such "relevant securities") must be publicly
disclosed by no later than 3.30 pm (London time) on the London business day
following the date of the relevant transaction. This requirement will continue
until the date on which the Scheme becomes effective or the Acquisition lapses
or is otherwise withdrawn or on which the "offer period" otherwise ends. If two
or more persons act together pursuant to an agreement or understanding, whether
formal or informal, to acquire an "interest" in "relevant securities" of CeNeS
or Paion, they will be deemed to be a single person for the purpose of Rule 8.3.

Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant
securities" of CeNeS or of Paion by CeNeS or Paion, or by any of their
respective "associates", must be disclosed by no later than 12.00 noon (London
time) on the London business day following the date of the relevant transaction.

A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.

"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.

Terms in quotation marks are defined in the Code, which can also be found on the
Panel's website. If you are in any doubt as to whether or not you are required
to disclose a "dealing" under Rule 8, you should consult the Panel.

In accordance with Rule 2.10 of the Code, Paion confirms that it has 16,755,552
ordinary no-par value bearer shares representing a notional value equal to €1.00
per share in issue and admitted to trading on the Frankfurt Stock Exchange under
the ISIN code DE 000A0B65S3. In accordance with Rule 2.10 of the Code, CeNeS
confirms that it has 21,920,192 ordinary shares of 30 pence each in issue and
admitted to trading on AIM under the ISIN code GB 00B23MNL84.

APPENDIX I
CONDITIONS TO THE ACQUISITION AND THE SCHEME

(1) The Acquisition is conditional upon the Scheme becoming
Effective by no later than 31 July 2008 or such later date (if any) as, subject
to the Code, CeNeS and Paion may agree and (if required) the Court may allow.

(2) The Scheme is conditional upon:

(a) its approval by a majority in number representing not less
than 75 per cent. in value of the CeNeS Shareholders present and voting either
in person or by proxy at the Court Meeting (or any adjournment thereof);

(b) the resolutions in connection with or required to approve and
implement the Scheme and to approve certain related matters being duly passed by
the requisite majority at the General Meeting (or any adjournment thereof);

(c) (i) the sanction of the Scheme and the confirmation of the
Reduction by the Court (in either case with or without modification, but subject
to such modification being acceptable to Paion), (ii) an office copy of the
Court Order(s) and of the Minute being delivered for registration to the
Registrar of Companies and (iii) the registration of the Reduction Order and of
the Minute by the Registrar of Companies;

(d) the filing of an application for the listing of the New Paion
Shares on the Regulated Market of the Frankfurt Stock Exchange and compliance
with all other requirements under the statutory and listing rules of such
exchange to ensure that upon the issuance of the New Paion Shares such exchange
will admit the New Paion Shares to listing and trading;

(e) prior to the Scheme becoming Effective, Paion not having
received any notice or intimation from the Frankfurt Stock Exchange that, as a
result of any action or steps taken by a third party or any other matters
outside the control of Paion, it would not upon the issuance of the New Paion
Shares admit the New Paion Shares to listing and trading; and

(f) prior to the Scheme becoming Effective, no action or other
steps having been taken by a third party which would prevent the registration by
the Commercial Register (Handelsregister) of the local court (Amtsgericht) of
Aachen of the capital increase in relation to the issue of the New Paion Shares
in accordance with the German Stock Corporation Act.

(3) In addition, CeNeS and Paion have agreed that the Scheme will
also be conditional upon, and accordingly the necessary actions to make the
Scheme become effective will only be taken upon, the satisfaction or waiver of
the following Conditions:

(a) the Office of Fair Trading or the appropriate Minister in the
United Kingdom not referring the proposed acquisition of CeNeS by Paion or any
matter arising therefrom or related thereto to the Competition Commission;

(b) no government or governmental, quasi-governmental,
supranational, statutory, regulatory, environmental or investigative body,
court, trade agency, association, institution or any other person or body
whatsoever in any relevant jurisdiction (each a "Third Party") having decided to
take, institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference, or having made, proposed or enacted any
statute, regulation, decision or order, or taken any other steps which would or
might reasonably be expected to:

(i) require, prevent, limit or delay the divestiture by any
member of the Wider CeNeS Group or by any member of the Wider Paion Group of all
or any portion of their respective businesses, assets, undertakings or
properties or impose any limitation on the ability of any of them to conduct all
or any portion of their respective businesses or own or control all or any
portion of their respective assets or properties or integrate or co-ordinate all
or any portion of their respective businesses;

(ii) require, prevent, limit or delay the divestiture by any
member of the Wider Paion Group of any shares or other securities in any member
of the Wider CeNeS Group;

(iii) impose any limitation on, or result in any delay in the
ability of any member of the Wider Paion Group to acquire or to hold or to
exercise effectively, directly or indirectly, all or any rights of ownership of
shares or loans or securities convertible into shares or other securities (or
the equivalent) in any member of the Wider CeNeS Group or the Wider Paion Group
or the ability of any member of the Wider Paion Group to exercise management
control over any member of the Wider CeNeS Group;

(iv) make the Acquisition or its implementation or the acquisition
or proposed acquisition by Paion or any member of the Wider Paion Group of any
shares or other securities in, or control of, CeNeS or any other member of the
Wider CeNeS Group void, illegal, and/or unenforceable under the laws of any
relevant jurisdiction, or otherwise, directly or indirectly, restrain, restrict,
prohibit, delay or otherwise interfere with the same, or impose any additional
conditions or obligations with respect thereto, or otherwise challenge, hinder
or interfere therewith;

(v) require any member of the Wider Paion Group or the Wider
CeNeS Group to acquire, offer to acquire, redeem or repay any shares or other
securities (or the equivalent) or interest in any member of the Wider CeNeS
Group or the Wider Paion Group owned by any third party;

(vi) impose any limitation on the ability of any member of the
Wider Paion Group to co-ordinate its business, or any part of it, with the
business of any member of the Wider CeNeS Group; or

(vii) result in any member of the Wider Paion Group ceasing to be
able to carry on business under any name under which it presently does so,

and all applicable waiting and other time periods during which any Third Party
could institute, implement or thereafter take any such action, proceedings,
suit, investigation, enquiry or reference or otherwise intervene under the laws
of any relevant jurisdiction having expired, lapsed or been terminated;

(c) all necessary filings or applications having been made in
connection with the Scheme or the Acquisition and all necessary statutory or
regulatory obligations in any jurisdiction having been complied with in
connection with the Scheme or the Acquisition or the acquisition by any member
of the Wider Paion Group of any shares or other securities in, or control of,
CeNeS, and all necessary authorisations, orders, recognitions, grants, consents,
licences, confirmations, clearances, permissions and approvals having been
obtained in terms and in a form satisfactory to Paion (acting reasonably) from
all appropriate Third Parties or persons with whom any member of the Wider CeNeS
Group has entered into contractual arrangements and all such authorisations,
orders, recognitions, grants, consents, licences, confirmations, clearances,
permissions and approvals together with all authorisations, orders,
recognitions, grants, licences, confirmations, clearances, permissions and
approvals necessary or appropriate to carry on the business of any member of the
Wider CeNeS Group remaining in full force and effect and all filings necessary
for such purpose having been made and there being no notice or intimation of any
intention to revoke or not to renew any of the same at the time at which the
Scheme becomes effective and all necessary statutory or regulatory obligations
in any jurisdiction having been complied with;

(d) except as fairly disclosed in writing by CeNeS to Paion or as
publicly announced by CeNeS in accordance with the AIM Rules for Companies, in
each case prior to the date hereof, there being no provision of any arrangement,
agreement, licence, permit or other instrument to which any member of the Wider
CeNeS Group is a party or by or to which any such member or any of its assets
may be bound, entitled or subject and which, in consequence of the Scheme or the
Acquisition, or the acquisition or proposed acquisition by any member of the
Wider Paion Group of any shares or securities in CeNeS or because of a change in
the control or management of CeNeS or otherwise could or might reasonably be
expected to result in:

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

(ii) any such arrangement, agreement, licence, permit or
instrument or the rights, liabilities, obligations or interests of any member of
the Wider CeNeS Group thereunder being (or becoming capable of being)
terminated, or adversely modified or affected, or any adverse action being taken
by any third party, or any obligation or liability of any member of the Wider
CeNeS Group arising thereunder;

(iii) any assets or interests of, or any asset the use of which is
enjoyed by, any member of the Wider CeNeS Group being or falling to be disposed
of or charged or ceasing to be available 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;

(iv) the creation 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 Wider CeNeS Group or any such security (whenever created, arising
or having arisen) being enforced or becoming enforceable;

(v) the rights, liabilities, obligations, interests or business
of any member of the Wider CeNeS Group in, or the business of any such member
with, any person, firm or body (or any arrangement or arrangements relating to
any such interest or business) being terminated or adversely modified or
affected;

(vi) the value of any member of the Wider CeNeS Group or its
financial or trading position or prospects being prejudiced or adversely
affected;

(vii) any member of the Wider CeNeS Group ceasing to be able to
carry on business under any name under which it presently does so; or

(viii) the creation of any liability, actual or contingent, by any
member of the Wider CeNeS Group,

and no event having occurred which, under any provision of any agreement,
arrangement, licence, permit, or other instrument to which any member of the
Wider CeNeS Group is a party or by or to which, any such member or any of its
assets may be bound, entitled or subject, is likely to result in any of the
events or circumstances as are referred to in sub-paragraphs (i) to (viii) of
this paragraph (d);

(e) except as publicly announced by CeNeS in accordance with the
AIM Rules for Companies, or fairly disclosed in writing by CeNeS to Paion, in
each case prior to the date hereof, no member of the Wider CeNeS Group having
(in the case of sub-paragraphs (i), (ii) and (vii) below, at any time, or in the
case of each other sub-paragraph, since 31 December 2007):

(i) save as between CeNeS and wholly-owned subsidiaries of
CeNeS, issued, authorised or proposed the issue of additional shares of any
class (other than the issue of shares in exercise of options as contemplated by
the Implementation Agreement or the issue of shares to Paion pursuant to the
Scheme);

(ii) save as between CeNeS and wholly-owned subsidiaries of
CeNeS, issued or agreed to issue, authorised or proposed the issue of securities
convertible into shares of any class or rights, warrants or options to subscribe
for, or acquire, any such shares or convertible securities;

(iii) other than to another wholly owned member of the CeNeS
Group, recommended, declared, paid, made or proposed to recommend, declare, pay
or make any bonus, dividend or other distribution (whether payable in cash or
otherwise);

(iv) save for transactions between CeNeS and a wholly-owned
subsidiary or between wholly-owned subsidiaries of CeNeS, merged or demerged
with any body corporate or acquired or disposed of or transferred, mortgaged or
charged or created any security interest over any assets or any right, 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
or disposal, transfer, mortgage, charge or security interest, in each case,
other than in the ordinary course of business;

(v) save for transactions between CeNeS and a wholly-owned
subsidiary or between wholly-owned subsidiaries of CeNeS, made or authorised or
proposed or announced an intention to propose any change in its loan capital;

(vi) issued, authorised or proposed the issue of any debentures or
incurred or increased any indebtedness or become subject to any contingent
liability;

(vii) other than pursuant to the Scheme, purchased, redeemed or
repaid or announced any proposal to purchase, redeem or repay any of its own
shares or other securities or reduced or, save in respect to the matters
mentioned in sub-paragraph (i) above, made any other change to any part of its
share capital;

(viii) entered into, varied or authorised, proposed or announced its
intention to enter into or vary any agreement, transaction, arrangement or
commitment (whether in respect of capital expenditure or otherwise) which:

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

(B) is or is reasonably likely to be materially restrictive on the
businesses of any member of the Wider CeNeS Group or the Wider Paion Group or
which involves or could involve an obligation of such a nature or magnitude; or

(C) is other than in the ordinary course of business;

(ix) implemented, or authorised, proposed or announced its
intention to implement, any reconstruction, amalgamation, scheme, commitment, or
other transaction or arrangement, in each case otherwise than in the ordinary
course of business, or entered into or changed the terms of any contract with
any CeNeS Director or senior executive of the CeNeS Group;

(x) waived or compromised any material claim;

(xi) taken or proposed any corporate action or had any proceedings
started or threatened against it for its winding-up (voluntary or otherwise),
dissolution, striking-off or reorganisation or for the appointment of a
receiver, administrative receiver, administrator, trustee or similar officer of
all or any of its assets or revenues or any analogous proceedings in any
jurisdiction or had any such person appointed;

(xii) been unable, or admitted publicly or in writing that it is
unable, to pay its debts (within the meaning of section 123 of the Insolvency
Act 1986), 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 or proposed or entered into any
composition or voluntary arrangement with its creditors (or any class of them)
or the filing at Court of documentation in order to obtain a moratorium prior to
a voluntary arrangement or, by reason of actual or anticipated financial
difficulties, commenced negotiations with one or more of its creditors with a
view to rescheduling all or any of its indebtedness or any form of insolvency
proceeding or event similar or analogous to any of the aforementioned events in
any jurisdiction;

(xiii) made any alteration to its memorandum or articles of
association or other constitutional documents save as is necessary to implement
the Scheme or the Acquisition;

(xiv) made or announced any proposal to make any change or addition to
any retirement, death or disability benefit or any other employment-related
benefit of or in respect of any of its directors, employees, former directors or
former employees;

(xv) entered into any trust deeds constituting pension schemes
established for its directors, employees, former directors or former employees
and their dependants;

(xvi) save as contemplated by the Implementation Agreement, 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 CeNeS Group; or

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

(f) Since 31 December 2007 and save as publicly announced in
accordance with the AIM Rules for Companies by CeNeS prior to the date hereof or
as fairly disclosed in writing by CeNeS to Paion prior to the date hereof:

(i) no adverse change or deterioration having occurred in the
business, assets, financial or trading position, profits, prospects or value of
any member of the Wider CeNeS Group (other than the depletion of financial
resources in the ordinary course of business in accordance with the business
plan fairly disclosed in writing by CeNeS to Paion prior to the date hereof);

(ii) no litigation, arbitration proceedings, prosecution or other
legal proceedings to which any member of the Wider CeNeS Group is or may become
a party (whether as plaintiff or defendant or otherwise) and no investigation by
any third party against or in respect of any member of the Wider CeNeS Group
having been instituted, threatened or publicly announced by or against or
remaining outstanding in respect of any member of the Wider CeNeS Group which in
any such case might be expected to adversely affect any member of the Wider
CeNeS Group;

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

(iv) no steps having been taken which are likely to result in the
withdrawal, cancellation, termination or modification of any licence held by any
member of the Wider CeNeS Group which is necessary for the proper carrying on of
its business;

(g) except as disclosed in the annual report and accounts of
CeNeS for the year ended 31 December 2007, or as publicly announced in
accordance with the AIM Rules for Companies by CeNeS prior to the date hereof or
as fairly disclosed in writing by CeNeS to Paion prior to the date hereof, Paion
not having discovered:

(i) that the financial, business or other information
concerning the Wider CeNeS Group disclosed at any time by or on behalf of any
member of the Wider CeNeS Group (whether publicly, to any member of the Wider
Paion Group, or otherwise) is misleading, or contains a misstatement of facts,
or omits to state a fact necessary to make the information contained therein not
misleading;

(ii) that any member of the Wider CeNeS Group is subject to any
liability, contingent or otherwise, which is not disclosed in the annual report
and accounts of CeNeS for the year ended 31 December 2007;

(iii) that any member of the Wider CeNeS Group has failed to
comply with applicable statutory or regulatory obligations in any relevant
jurisdiction;

(iv) that any partnership or company in which any member of the
Wider CeNeS Group has a significant economic interest (being, in the case of a
company, an interest carrying 20 per cent. or more of the voting capital of that
company) and which is not a subsidiary of CeNeS is subject to any liability,
contingent or otherwise, which is not disclosed in the annual report and
accounts of CeNeS for the year ended 31 December 2007;

(v) that any past or present member of the Wider CeNeS Group has
not complied with any applicable legislation or regulations of any jurisdiction
with regard to the use, treatment, handling, storage, transport, release,
disposal, discharge, spillage, leak or emission of any waste or hazardous
substance or any substance likely to impair the environment or harm human
health, or otherwise relating to environmental matters or the health and safety
of any person, or that there has otherwise been any such use, treatment,
handling, storage, transport, release, disposal, discharge, spillage, leak or
emission (whether or not the same constituted a non-compliance by any person
with any legislation or regulations and wherever the same may have taken place)
which, in any case, would be likely to give rise to any liability (actual or
contingent) or cost on the part of the member of the Wider CeNeS Group;

(vi) that there is, or is reasonably likely to be, any liability
(actual or contingent) to make good, repair, reinstate or clean up any property
or any controlled waters now or previously owned, occupied or made use of or
controlled by any past or present member of the Wider CeNeS Group or any other
property or any controlled waters under any environmental legislation,
regulation, notice, circular, order or other lawful requirement of any relevant
authority or third party or otherwise; or

(vii) that circumstances exist whereby a person or class of persons
would be reasonably likely to have a claim in respect of any damage, loss or
injury suffered as a result of or otherwise caused by any product or process of
manufacture or materials used therein now or previously manufactured, sold or
carried out by any past or present member of the Wider CeNeS Group.

(4) Subject to the relevant requirements of the Panel, Paion
reserves the right to waive, in whole or in part, all or any of the above
Conditions, except Condition 2.

(5) Paion shall be under no obligation to waive or treat as
fulfilled any such Conditions earlier than the date of the sanction of the
Scheme referred to in Condition 2 notwithstanding that the other Conditions may
at such earlier date have been waived or fulfilled and that there are at such
earlier date no circumstances indicating that any of such Conditions may not be
capable of fulfilment.

(6) If Paion is required by the Panel to make a general offer for
CeNeS Shares under the provisions of Rule 9 of the Code, Paion may make such
alterations to any of the above Conditions as are necessary to comply with the
provisions of that Rule.

(7) Save with the consent of the Panel, the Acquisition will lapse
and the Scheme will not proceed if the proposed acquisition of CeNeS by Paion is
referred by the Office of Fair Trading or the appropriate Minister to the
Competition Commission before the Meetings are held.

(8) Paion reserves the right, in its sole discretion (subject to
the consent of the Panel), to elect to implement the Acquisition by way of a
Takeover Offer. In such event, such offer will be implemented on the same terms
(subject to appropriate amendments, including (without limitation and subject to
the consent of the Panel) an acceptance condition set at such percentage (being
more than 50 per cent.) as Paion may decide of (i) the CeNeS Shares to which
such offer relates and (ii) the voting rights carried by the CeNeS Shares to
which such offer relates), so far as applicable, as those which would apply to
the Scheme.

(9) In the event that the Acquisition is to be implemented by way
of Takeover Offer, any CeNeS Shares acquired under the Acquisition will be
acquired fully paid and free from all liens, equities, charges, encumbrances,
rights of pre-emption and other interests and rights and together with all
rights now and hereafter attaching thereto, including voting rights and the
right to receive and retain in full all dividends and other distributions and
other distributions (if any) declared, made or paid on or after 8 February 2008.

(10) The Implementation Agreement will be governed by English law and
will be subject to the jurisdiction of the English courts. The Scheme will be
governed by Scottish law and be subject to the jurisdiction of the Scottish
courts. The Scheme will comply with the rules and regulations of the Financial
Services Authority, the London Stock Exchange, the Code, applicable US
securities laws and applicable German laws and regulations.

APPENDIX II
ADDITIONAL INFORMATION

1. Bases and sources

(a) Unless otherwise stated, the financial information on CeNeS
is extracted from CeNeS's preliminary financial statements for the year ended 31
December 2007.

(b) Unless otherwise stated, the financial information on Paion is
extracted from Paion's consolidated financial statements for the year ended 31
December 2007.

(c) The value of £10.9 million attributed to the fully diluted
share capital of CeNeS is based upon (i) the 21,920,192 CeNeS Shares in issue as
at the date of this announcement, (ii) the 252,644 CeNeS Shares in total which
may be issued pursuant to the exercise of outstanding options under the
Executive Option Plan at a total exercise price of £8, and (iii) the 120,752
CeNeS Shares in total which may be issued to SmithKline Beecham Corporation and
Glaxo Group Limited as deferred consideration.

(d) Unless otherwise stated in this announcement, all prices for
CeNeS Shares have been derived from the London Stock Exchange and represent the
Closing Price on the relevant date.

(e) Unless otherwise stated in this announcement, all prices for
Paion Shares have been derived from the Frankfurt Stock Exchange and represent
the Closing Price on the relevant date.

(f) The exchange rate used in this announcement is €1.2536 = £1
(being the Euro foreign exchange reference rate as at 9 April 2008 as quoted by
the European Central Bank on
http://www.ecb.int/stats/exchange/eurofxref/html/index.en.html), save that for
the purpose of stating the value of the cash and cash equivalents of the
Enlarged Group on a pro-forma basis as at 31 December 2007 in this announcement,
the exchange rate used is €1.36361 = £1 (being the Euro foreign exchange
reference rate as at 31 December 2007 as quoted by the European Central Bank on
http://www.ecb.int/stats/exchange/eurofxref/html/index.en.html).

APPENDIX III
IRREVOCABLE UNDERTAKINGS AND LETTER OF INTENT

The following CeNeS Directors have given irrevocable undertakings as described
in paragraph 10 of this announcement in respect of the number of CeNeS Shares
set out below.

Name of CeNeS Director Number of CeNeS Shares
Alan Goodman 313,046
Neil Clark 24,020
Tony Osborne 4,500
Alan Smith 4,760
Peter Johnson 4,444
Ron Irwin 20,645

In addition, the following CeNeS Shareholders have given irrevocable
undertakings as described in paragraph 10 of this announcement in respect of the
number of CeNeS Shares set out below.

Name of CeNeS Shareholder Number of CeNeS Shares
Gartmore Investment Management 3,986,016
Avlar Bioventures Fund II 2,436,449
ATM Investment Limited 154,605
Avlar Bioventures Limited 58,047
Avlar Pension Fund 33,333
Gavin Kilpatrick 15,079

In addition, the following CeNeS Shareholder has given a letter of intent as
described in paragraph 10 of this announcement in respect of the number of CeNeS
Shares set out below.

Name of CeNeS Shareholder Number of CeNeS Shares
Universities Superannuation Scheme 1,081,162

APPENDIX IV
DEFINITIONS

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

"Acquisition" the proposed acquisition of all of the issued and to be issued
share capital of CeNeS by Paion, to be effected by means of the
Scheme

"AIM" the AIM market operated by the London Stock Exchange

"AIM Rules for Companies" the rules of the London Stock Exchange which govern the admission
to trading, and the operation, of companies on AIM

"Australia" Australia, its possessions, provinces and all areas subject to its
jurisdiction or any political subdivision thereof

"Business Day" a day (excluding Saturdays, Sundays and public holidays) on which
banks are generally open for normal business in the City of London,
Edinburgh and Aachen

"Canada" Canada, its possessions, provinces and all areas subject to its
jurisdiction or any political subdivision thereof

"CeNeS" CeNeS Pharmaceuticals plc, incorporated in Scotland with registered
number SC166791

"CeNeS Directors" the directors of CeNeS

"CeNeS Group" CeNeS and its subsidiaries and subsidiary undertakings

"CeNeS Shares" ordinary shares of 30 pence each in the capital of CeNeS

"CeNeS Share Schemes" (i) the CeNeS Pharmaceuticals plc Approved Share Option Scheme;
(ii) the CeNeS Pharmaceuticals plc Unapproved Share Option Scheme;
(iii) the Executive Option Plan; (iv) those options granted to
certain employees of CeNeS Limited prior to its acquisition by
CeNeS and the shares in CeNeS Limited arising on the exercise of
which are exchangeable for CeNeS Shares; and (v) those options
granted to certain employees of Cambridge Neuroscience Inc. prior
to its acquisition by CeNeS and which are exercisable in respect of
CeNeS Shares.

"CeNeS Shareholders" the holders of CeNeS Shares

"Closing Price" as regards securities quoted on AIM, the closing middle market
quotation of such security derived from the London Stock Exchange
and, as regards securities listed on the Frankfurt Stock Exchange,
the XETRA closing price of the security as reported by the
Frankfurt Stock Exchange

"Code" the Takeover Code

"Conditions" the conditions set out in Appendix I of this announcement

"Court" the Court of Session in Edinburgh, Scotland

"Court Hearing" the hearing by the Court of the petition to sanction the Scheme
under section 896 of the Companies Act 2006 and confirm the
Reduction under section 137 of the Companies Act 1985

"Court Meeting" the meeting of the holders of Scheme Shares (or any adjournment or
postponement thereof) to be convened by an order of the Court
pursuant to Part 26 of the Companies Act 2006 for the purpose of
considering and, if thought fit, approving the Scheme

"Court Order(s)" the order(s) of the Court granted at the Court Hearing to sanction
the Scheme under Part 26 of the Companies Act 2006 and confirm the
Reduction under section 137 of the Companies Act 1985

"Effective" (i) if the Acquisition is implemented by way of Scheme, the
Scheme having become effective pursuant to its terms; or

(ii) if the Acquisition is implemented by way of Takeover
Offer, the Takeover Offer having been declared or become
unconditional in all respects in accordance with the requirements
of the Code

"Effective Date" the date upon which the Acquisition becomes Effective

"Enlarged Group" Paion and its subsidiaries and subsidiary undertakings following
completion of the Acquisition

"Excluded Shares" any CeNeS Shares beneficially owned by Paion or any member of the
Paion Group and any shares held by CeNeS in treasury at the Scheme
Record Time

"Executive Option Plan" the CeNeS Pharmaceuticals plc Executive Share Incentive Plan

"General Meeting" the general meeting of CeNeS (and any adjournment or postponement
thereof) to be convened in connection with the Acquisition

"holder" includes any person entitled by transmission

"Implementation Agreement" the implementation agreement dated 10 April 2008 entered into
between CeNeS and Paion

"Japan" Japan, its possessions, provinces and all areas subject to its
jurisdiction or any political subdivision thereof

"Landsbanki" Landsbanki Securities (UK) Limited

"London Stock Exchange" London Stock Exchange plc

"Lundbeck" H. Lundbeck A/S

"Meetings" the Court Meeting and the General Meeting

"Minute" the minute (approved by the Court) confirming the Reduction in
accordance with section 138 of the Companies Act 1985

"New Lundbeck Agreement" the license and sublicense agreement between Paion and Lundbeck
dated 29 January 2008

"New Paion Shares" the Paion Shares proposed to be issued credited as fully paid and
ranking pari passu with the existing Paion Shares pursuant to the
Scheme

"New Zealand" New Zealand, its possessions, provinces and all areas subject to
its jurisdiction or any political sub-division thereof

"Nomura Code" Nomura Code Securities Limited

"Nycomed" Nycomed Danmark ApS

"Paion" PAION AG, a stock corporation incorporated in Germany at the local
court (Amtsgericht) of Aachen with registered number HRB12528

"Paion Directors" the members of the management board (Vorstand) of Paion

"Paion Group" Paion and its subsidiaries and subsidiary undertakings

"Paion Shares" shares with a notional value of €1.00 each in the capital of Paion

"Panel" or "Takeover Panel" the Panel on Takeovers and Mergers

"Reduction" the proposed reduction of capital pursuant to section 137 of the
Companies Act 1985, to be provided for by the Scheme

"Reduction Order" the order of the Court confirming the Reduction under section 137
of the Companies Act 1985

"Regulatory Information Service" any of the services authorised by the London Stock Exchange for the
distribution to the public of AIM announcements and included within
the list maintained on the London Stock Exchange's website
www.londonstockexchange.com

"Scheme" the scheme of arrangement under Part 26 of the Companies Act 2006
to be proposed by CeNeS to the Scheme Shareholders in connection
with the Acquisition, with or subject to any modification, addition
or condition approved or imposed by the Court and agreed by CeNeS
and Paion

"Scheme Document" the document to be sent to CeNeS Shareholders giving full
particulars of the Scheme and containing, inter alia, an
explanatory statement in compliance with Part 26 of the Companies
Act 2006 and the notices of the Meetings

"Scheme Record Time" 6.00pm on the Business Day immediately preceding the Court Hearing

"Scheme Shares" all CeNeS Shares:

(a) in issue at the date of the Scheme Document;

(b) (if any) issued after the date of the Scheme Document
and prior to the Voting Record Time; and

(c) (if any) issued on or after the Voting Record Time but
before the Scheme Record Time on terms that the original or any
subsequent holder thereof shall be, or shall have agreed in writing
by such time to be, bound by the Scheme,

in each case excluding any Excluded Shares
"Scheme Shareholders" the holders of Scheme Shares

"Securities Act" the United States Securities Act of 1933

"Takeover Offer" a takeover offer as defined in section 974 of the Companies Act
2006

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

"United States" or "US" the United States of America (including the states of the United
States and the District of Columbia), its possessions and
territories and all other areas subject to its jurisdiction or any
political subdivision thereof

"Voting Record Time" the time fixed by the Court and CeNeS for determining the
entitlement to vote at the Court Meeting as set out in the notice
thereof

"Wider CeNeS Group" the CeNeS Group and associated undertakings of CeNeS and any other
body corporate, partnership, joint venture or person in which CeNeS
and/or such undertakings (aggregating their interests) have an
interest of more than 20 per cent. of the voting or equity capital
or the equivalent

"Wider Paion Group" the Paion Group and associated undertakings of Paion and any other
body corporate, partnership, joint venture or person in which Paion
and/or such undertakings (aggregating their interests) have an
interest of more than 20 per cent. of the voting or equity capital
or the equivalent

Unless otherwise stated, all times referred to in this announcement are
references to London time.

All references to legislation in this announcement are to United Kingdom
legislation unless the contrary is indicated. Any reference to any provision of
any legislation shall include any amendment, modification, re-enactment or
extension thereof.

Words importing the singular shall include the plural and vice versa, and words
importing the masculine gender shall include the feminine or neutral gender.

For the purpose of this announcement "subsidiary", "subsidiary undertaking",
"undertaking" and "associated undertaking" have the meanings given by the
Companies Act 1985.

References to "€" and "Euro" are to the single currency unit of the European
Union.

References to "£", "Sterling", "p" and "pence" are to the lawful currency of the
United Kingdom.

References to "US$" and "Dollars" are to the lawful currency of the United
States.

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