CEO Message

Our customers are the leading, global pharmaceutical, biotech and diagnostic companies. Although these companies are considered part of a growth industry, they continue to face enormous challenges. To develop and discover new drugs and therapies, they need to invest huge sums in Research & Development (R&D) while dramatically reducing their expense budgets due to our current global economic crisis. (For example, this year PhRMA, the association for the top Pharmaceutical companies in t he U.S., estimated a 9% reduction in R&D over last year). At the same time, the number of approved drugs is decreasing. Over 90% of potential drugs fail in clinical trials despite years of pre-clinical discovery and development. Therefore, our clients are increasingly focused on the effectiveness and productivity of their R&D - perhaps their key determinant of success.

One reason drug trials fail is science dependence on animal research. Responses in animals are only a partial guide to responses in humans. To bridge this gap, our clients are increasingly using human tissue. Human tissue offers a way to support progression of human targets and check the efficacy and safety of drug candidates before testing in humans.

In the past, our customers have sourced their required human tissue themselves, and carried out their own analyses. However, excellence in this area requires:

• A wide network of donor sites
• An extensive biobank
• Ethical and consent compliance
• Tightly controlled QC procedures
• Comprehensive clinical information
• Scientists versed in the procurement and use of human tissue

Asterand is one of the few companies that specialize in this area - we provide human tissue-based solutions to support activities across the entire drug discovery and development process. We can supply tissues obtained with ethical approval and informed consented for research or actually perform the research services using these tissues. Through our focus we have created expertise and we believe that we offer significant advantages to our customers. For example, we regularly source from over 100 active donor sites, and are thus able to access tissues from a wide variety of ethnic backgrounds and disease type/stage with unrivaled turnaround.

We announced our strategy to secure our leading position in this specialized area in June 2007, and are currently making good progress. Despite poor economic conditions, Asterand is faring well. We continue to secure our place as a leader within this niche. As demand for our quality human tissue solutions continues to grow, we continue to invest in the future. Our recent expansions include our acquisition of BioSeek, which adds BioMAP^®, innovative predictive human disease models, into our extensive product line. In addition, we made substantial investments at our Royston, U.K. laboratories. Our state-of-the-art facility now offers Good laboratory Practices (GLP) compliant studies, which provide critical data required by the Food & Drug Administration (FDA) and the European Medicines Agency (EMEA).

As our customers move to outsource and concentrate on their own core capabilities, our goal is to become the partner of choice in human tissue, enabling our customers to move candidate drugs to the clinic more quickly, more cost-effectively, and with greater confidence.