Release issued 25th October 2004

ALLIANCE PHARMA PLC (AIM: APH)

('Alliance' or 'the Company')

Alliance Pharma plc ('Alliance' or the 'Company') announces today that it has conditionally agreed to buy various pharmaceutical assets of Unigreg Limited (in administration) ('Unigreg') including the Forceval(R) and Uniflu (R) brands. Simultaneously Alliance has conditionally agreed to acquire certain dental assets from CollaGenex International Limited, a subsidiary of CollaGenex Inc. of the US ('CollaGenex') including the marketing rights for Periostat(R), an adjunctive therapy for periodontitis, in the UK and certain other territories. Total consideration for the two acquisitions is approximately £8.82 million.

The assets to be acquired from Unigreg include Forceval Capsules, Forceval Junior Capsules, Forceval Protein Powder and Uniflu. The main brand Forceval is a range of licensed multivitamin and mineral supplements that are prescribed and reimbursed on the NHS in the UK. The Forceval and Uniflu brands are sold in the UK directly to pharmaceutical wholesalers and to a number of overseas markets via distributors. Normalised sales in the year to 31st December 2003 were approximately £2.8 million. Gross profits attributable to these sales in that year were approximately £1.6 million. The consideration payable by Alliance for the assets is approximately £7.0 million.

The assets to be acquired from CollaGenex include the marketing rights to Periostat in the UK and all the other countries in the European Union as well as Switzerland, Israel, South Africa, Australia and New Zealand. Periostat currently has marketing authorisations in the UK, Austria, Finland, Ireland, Israel, Italy, the Netherlands, Luxembourg, Switzerland and Portugal.

Periostat is the first and only approved oral pharmaceutical product for the adjunctive treatment of adult periodontal disease by the inhibition of those enzymes that destroy periodontal support tissues. It is an additional therapy to mechanical scaling and root planing - the traditional treatment for the disease. Periostat is a prescription only medicine.

Periostat achieved sales of £334,161 and gross profits of £184,884 in the year ended 31st December 2003 following approval in tablet form by the FDA and the UK MHRA in 2001. In the US, where marketing rights have been retained by CollaGenex, sales of Periostat in the year ended 31st December 2003 were in excess of US$ 40 million. CollaGenex will supply Periostat tablets to Alliance under a supply contract. The consideration payable by Alliance for the Periostat assets is US$3.3 million (approximately £1.82 million).

The consideration for both transactions will be paid as £4.43 million in cash and £4.39 million in ordinary shares of 1p each in the capital of Alliance ('Ordinary Shares'). Numis Securities Limited has today conditionally placed 36,561,987 Ordinary Shares (the 'Placing Shares') with several UK institutional investors (the 'Placing') at a subscription price of 12p per share which was oversubscribed. The Placing is subject to the placing agreements between, inter alios, Numis Securities Limited and the Company becoming unconditional and not being terminated on or before 3rd November 2004. The Placing Shares will rank pari passu in all respects with the existing Ordinary Shares in issue. It is expected that dealings in the Placing Shares will commence on 28th October 2004.

In addition the Bank of Scotland has increased its debt facilities to the Company by £5.25 million.

Commenting on the acquisitions, John Dawson, CEO of Alliance said, 'the Forceval brands are a stable and profitable, but under-marketed, portfolio which we intend to revitalise internationally. Periostat is an exciting new product with substantial growth potential that we will market aggressively.''We are very pleased that Alliance will be promoting and selling Periostat in the U.K. and Europe as we continue to build this brand in the U.S.' said Colin Stewart, president and chief executive officer of CollaGenex Pharmaceuticals, Inc. 'Alliance has the people, skills and organisation to take this product to the next level and beyond in these territories'.

Please refer to the Company's interim financial results that have been released separately today.

For further information contact:

John Dawson, Alliance Pharma Plc 01249 466966

Charles Spicer, Numis Securities Ltd 020 7776 1500

Mike Wort/John Moriarty, Beattie Financial 020 7398 3300

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