Press Release

For further information contact:
info@osmetech.plc.uk

Osmetech, the developer of medical diagnostics devices, is pleased to announce that the acquisition of the assets of the Atlanta-based 'OPTI' product line of blood gas analysers owned by Swiss healthcare company Roche Diagnostics ("Roche") was completed yesterday.

The net consideration is approximately $2.5 million. Osmetech is paying $3.5 million, subject to adjustment for final inventory levels, over a 12-month period and Roche is investing $1 million in Osmetech by way of a subscription.

The Company yesterday issued 21,821,422 Ordinary Shares of 1p each ("Ordinary Shares") to Roche at an average price of approximately 2.8p. This represents approximately 4.4% of the current issued ordinary share capital. Application has been made for such shares to be admitted to trading on AIM and it is expected that trading in the Ordinary Shares will commence tomorrow, 4 April 2003.

James White, Chief Executive of Osmetech said:

"Today Osmetech has moved from pre-revenue to a business with a robust revenue stream and established product portfolio. We now have a strong presence in the US market where Osmetech is looking to sell its integrated vaginal infection product and we have secured an experienced team with a track record of successfully driving products from development through to revenue.

"This acquisition brings forward Osmetech's profitability timescales and enhances our ability to implement our product development strategy. We are pushing ahead with the development and launch of the integrated vaginal infection product based upon our innovative electronic nose technology."

Enquiries

Notes to Editors

Osmetech plc

* Osmetech's strategy is to build a healthcare diagnostics business in the fast growing near patient testing and point of care markets.

* Osmetech's e-nose technology is based around an array of conducting polymer sensors that are designed to detect ("sniff") the volatile components emitted by bacteria as they metabolise. The sensors can therefore screen patient samples and test for the presence of infection-causing bacteria.

* The Company, which is based in Crewe, is currently focusing its e-nose IP development on sensors that can detect bacteria associated with a number of healthcare applications in the near patient and point of care testing markets.

* On 22 November 2001, Osmetech announced that it had received FDA approval for its UTI sensor product. This was the first time the FDA had approved e-nose technology for use in the healthcare diagnostic industry.

* On 29 January 2003, Osmetech announced that it had received FDA approval for its bacterial vaginosis (BV) sensor device. This sensor is now being incorporated into a new integrated point of care device for diagnosing and differentiating between the most prevalent and clinically important vaginal infections, including chlamydia and gonorrhea.

The OPTI Business

* The OPTI business is focused on portable instruments incorporating optical sensors for blood gas, electrolyte and metabolite analysis. These are primarily set in the emergency room and cardiac monitoring hospital settings.

* The OPTI business has established market positions throughout the world with an existing customer base of over 4,000 instruments already in use, with approximately one-third in the US. Revenue is generated through sales of new instruments and ongoing repeat sales of proprietary reagents to facilitate analysis.

* An experienced team of about 50 employees under the management of Alfred Marek, who pioneered this business, has transferred to Osmetech.

* Osmetech will continue the development of a new hand-held blood gas analyser, which will have significant technological and commercial advantages over other products available for point of care blood gas analysis. Roche has retained an option to sell and distribute the finalised product.

* The OPTI analysers utilise a sensor technology based on optical fluorescence sensors and the process of optical reflectance. The major advantages of this technology are its reliability and stability, which makes the technology superior to electrochemical based systems.

* The OPTI product range will continue to be developed and manufactured from the current facility in Atlanta, Georgia in the US.

* A market survey of 584 larger hospitals in the USA conducted by Enterprise Analysis Corporation (EAC) in 2001 concluded that point-of-care blood gas testing is growing, with 50 per cent of hospitals using a point-of-care device, up from 34 per cent in 1999. Blood gas devices were used throughout hospitals. Operating suites and ICU were the most common locations, but the emergency room, general wards, cardiac catherization laboratory and even outpatient departments were using the devices. EAC concludes that strong growth will continue, with more than 60 hospitals from the sample considering adding blood-gas point-of-care testing within a year.