Alliance Pharma PLC - Hydromol Acquisition

RNS Number:1858Y
Alliance Pharma PLC
09 February 2006

For immediate release                 9th February 2006

                          ALLIANCE PHARMA PLC

                      ('Alliance Pharma' or 'the Company')

Significant expansion of skincare portfolio through acquisition of Hydromol dermatology range.

Click  www.hydromol.co.uk

Alliance Pharma plc (AIM: APH), an emerging speciality pharmaceutical company,
is pleased to announce that it has agreed to acquire the Hydromol range of
prescription dermatological products for eczema and other skin conditions from
Ferndale Pharmaceuticals Ltd for a cash consideration of £3.25 million.

The Hydromol range, comprising ointments, creams and bath oils, will be
distributed through Alliance Pharma's existing dermatology salesforce,
delivering critical mass to the Company's skincare franchise.

The Hydromol range, which grew at 31% in 2005, recorded pro-forma sales of £0.95 million in the year to 31 December 2005 and gross profit of £0.57 million.

Alliance Pharma intends to maximise the sales of Hydromol by extending the
product's range and widening its geographic distribution via the Company's
network of international distributors.

Funding for the acquisition, which is expected to be earnings enhancing in the
year to 31 December 2006, will be via senior debt provided by the Bank of
Scotland. The Company believes that this financing method is appropriate for the
acquisition of cash generative assets where interest cover is generous.

Alliance Pharma's current dermatology portfolio includes Aquadrate, Alphaderm,
Occlusal, Pentrax, Meted and Acnisal.

John Dawson, Alliance Pharma's Chief Executive, commented: 'This is the ninth
acquisition that we have made in the past eight years and it will significantly
strengthen our dermatology franchise. The cash flow from the acquisition will
help fund trials into our innovative treatment for sleep disorders, PosidormTM,
for which we are currently in early stage out-licensing discussions.'

For further information:

Alliance Pharma plc           + 44 (0) 1249 466966
John Dawson, Chief Executive
Maddy Scott, Finance Director
www.alliancepharma.co.uk

Buchanan Communications  + 44 (0) 20 7466 5000
Mark Court/Lisa Baderoon/Rebecca Dietrich

Hydromol Brand Website

www.hydromol.co.uk

Notes to editors

About Alliance Pharma

Alliance Pharma, founded in 1996, is an AIM listed emerging speciality
pharmaceutical company based in Chippenham, Wiltshire, UK. The company has a
strong track record of acquiring the rights to established niche brands and
owns, or shares, the rights to 30 branded pharmaceutical products and continues
to explore opportunities to expand the range.

Alliance Pharma's products are prescribed in the treatment of a wide range of
conditions and include brands used in periodontitis (a serious gum disease), the
prevention of heart disease, in Parkinson's disease, in nutrition, in nasal
infections, in the treatment of dermatological conditions and in childbirth.
Alliance Pharma's sales are mainly prescription driven.  Its products are
distributed to hospitals directly and to pharmaceutical wholesalers which
service both hospital and retail pharmacies with their prescription
requirements.

Alliance Pharma is also developing novel products for sleep disorders and the
induction of labour.

Alliance Pharma joined the AIM market of the London Stock Exchange in December
2003 and trades under the symbol APH.

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