Bayer Technology Services and Physiomics sign collaboration

Clinical response prediction tools adds significant value to drug R&D

Leverkusen, Germany and Oxford, UK, September 14, 2004 – Bayer Technology Services, the engineering and applied science spin-off company of Bayer AG, and Physiomics announced today an agreement to cooperate in the field of clinical response prediction. Clinical response prediction measures the optimum dosing and efficacy of therapeutic compounds. This cooperation brings together two unique strengths in systems biology – the Bayer Technology Services’ PK-Sim® physiology-based pharmacokinetic (PBPK) modeling and Physiomics’ SystemCell technology which can determine and predict optimum drug levels. The collaboration reflects the growing demand from the pharmaceutical and biotechnology industries for simulation technology to streamline drug discovery from pre-clinical through Phase III.

Clinical response prediction is designed to smooth out dosing and related toxicity problems early in a drug’s development. Integrating pharmacokinetic and pharmacodynamic technologies into one predictive system aids portfolio attrition risk assessment, clinical protocol optimization and project troubleshooting. The integrated approach delivers quantitative arguments for prioritization of drug candidates in a pipeline, maximizes clinical trial outcomes and also interprets failures in trials of apparently promising drugs.

Under the terms of the agreement, Bayer Technology Services and Physiomics have committed themselves, under strict confidentiality, to undertake specific consulting projects according to customer requirements.

“We are delighted to be starting on this major collaborative project with Bayer,” said Physiomics CEO, Dr. John Savin. “We have made a considerable investment in the SystemCell technology and this collaboration is an excellent launchpad for us.” “The collaboration with Physiomics strengthens our position as a technology leader in the field of predictive biological simulations.” said Dr. Helmut Mothes, Senior Vice President Bayer Technology Services. “Together, we are able to add significant value to the whole R&D value chain of our customers in the pharmaceutical and biotech industry.”

Physiomics plc is a systems biology company which supplies in silico simulations customized to proprietary pharmaceutical development projects. It has developed SystemCellTM its proprietary software which simulates the network of biological interactions that occur within an organism and runs virtual experiments. These in silico tests help researchers to interpret the pharmacokinetics and the pharmacodynamics, drug activity and timelines respectively, of compounds being tested in clinical trials. The company was founded in 2001 and is based in Oxford, UK. In 2002 it won a UK government SMART award to develop its Therapy Design Environment. Physiomics is a subsidiary of EiRx Pharma Ltd.

Bayer Technology Services GmbH is the center for technological competence of the Bayer Group worldwide. Established in the course of the reorganization of the Bayer Group, Bayer Technology Services employs more than 2,300 experts worldwide at its headquarters in Leverkusen and other German locations, as well as in regional offices in Baytown, (Texas, USA), Antwerp (Belgium), Mexico City (Mexico), Rio de Janeiro (Brazil) and Shanghai (Peoples Republic of China). Bayer Technology Services posted sales of EUR 720 million in 2003. In addition to fully-integrated
solutions along the life cycle of pharmaceutical and chemical plants – from development through engineering and construction to process optimization, Bayer Technology Services offers a broad range of products and services for all stages of diagnostics and drug research and development. Examples include nano-phosphors for multiplexed detection of bio-molecules, the industry reference for pharmacokinetic
simulation software PK-MAPTM as well as sophisticated data mining and modelling techniques for process analysis, compound property prediction and biomarker development.

More details about Physiomics
http://www.physiomics-plc.com

Additional information about Bayer Technology Services is available at
www.bayertechnology.com

Leverkusen, September 14, 2004  raj               (2004-0532e)

Contacts:

Dr. Arnold Rajathurai, phone: +49 214 30-24144, fax: +49 214 30-9624144
E-mail: arnold.rajathurai@bayertechnology.com

Dr. Joerg Lippert, phone: +49 214 30-54813, fax: +49 214 30-64801
E-mail: joerg.lippert@bayertechnology.com

Dr. John Savin, phone: +44 1865 784 980, fax: +44 8701 671931
E-mail: jsavin@physiomics-plc.net

Fiona Brown, phone: +44 20 7886-8155, fax: +44 20 7886-8151
E-mail: f.brown@northbankcommunications.com

Forward-Looking Statements

This news release contains forward-looking statements based on current assumptions and forecasts made by Bayer Group management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in our public reports file with the
Frankfurt Stock Exchange and with the U.S. Securities and Exchange Commission (including our Form 20-F).
The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.

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