Ad hoc: PAION AG: PAION AG intends to acquire CeNeS Pharmaceuticals plc in implementation of realigned strategy

PAION AG / Acquisition / PAION AG intends to acquire CeNeS
Pharmaceuticals plc in
implementation of realigned strategy

Ad hoc announcement according to §15 WpHG processed and transmitted
by Hugin ASA. The issuer is solely responsible for the content of
this announcement.

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Aachen (Germany), 10 April 2008 - PAION AG (Frankfurt Stock Exchange,
Prime Standard: PA8) intends to acquire Cambridge (UK) based CeNeS
Pharmaceuticals plc (London AIM, CEN.L), a London listed
biopharmaceutical company focused on the development of drugs for
central nervous system (CNS) related interventions. Furthermore PAION
is going to discontinue the development of Enecadin and has decided
to reduce its headcount by approximately 20 employees.

The Management Board of PAION has reached agreement with the Board of
Directors of CeNeS on the terms of the proposed acquisition, which
will be implemented by way of a court sanctioned scheme of
arrangement under the United Kingdom Companies Act 2006. The
acquisition is intended to create a new international
biopharmaceutical company whose vision is to develop, partner and,
potentially, commercialise innovative drugs for the treatment of
thrombotic diseases and CNS-related interventions in the hospital
setting.

Under the terms of the acquisition, CeNeS shareholders will receive
0.3521 new PAION shares for each CeNeS share held. Based on the XETRA
closing price of a PAION share on 9 April 2008 of EUR 1.74 and an
exchange rate of EUR 1.2536=GBP 1, the terms of the Acquisition value
each CeNeS share at 48.9 pence and the ordinary share capital of
CeNeS on a fully diluted basis at approximately GBP 10.9 million. The
terms of the acquisition represent a premium of 32 per cent. to the
closing price of 37 pence per CeNeS share on 9 April 2008, and 53 per
cent. to the closing price of 32 pence per CeNeS share on 4 February
2008, being the last business day before CeNeS announced that it was
in discussions which may or may not lead to an offer.

The scheme is expected to result in the issue to CeNeS shareholders
of approximately 7.85 million new PAION shares, representing
approximately 32 per cent. of the issued share capital of PAION as
enlarged by the acquisition. The Management Board of PAION AG has,
with the approval of the Supervisory Board, resolved to increase the
capital of the company against contributions in kind and excluding
subscription rights on the basis of the authorization granted by the
Annual General Meeting on 10 May 2006. The capital increase will only
be implemented after the scheme of arrangement has become effective
and PAION has (by way of a contribution in kind) become the owner of
the whole of the issued share capital of CeNeS.

The scheme of arrangement requires, among other conditions, the
approval by CeNeS' shareholders and the sanction of the court. PAION
expects the acquisition to be completed by the end of June 2008.

All PAION shares, including the new shares, will be listed on the
Regulated Market of the Frankfurt Stock Exchange (Prime Standard
segment) and are intended to be admitted to trading on the
Alternative Investment Market of the London Stock Exchange (AIM).

PAION and CeNeS have agreed that, on completion of the acquisition,
Gavin Kilpatrick (currently Chief Scientific Officer of CeNeS) will
be appointed to the Management Board of PAION. It is also intended
that, following completion of the acquisition, Alan Goodman
(currently chairman of CeNeS) will become a member of the Supervisory
Board of PAION.

With Lundbeck having assumed sole responsibility for the future
development of Desmoteplase, PAION's contribution to the program has
been significantly reduced.

Furthermore PAION is going to discontinue the development of
Enecadin, a neuroprotectant which was originally intended for use in
connection with Desmoteplase. PAION took this decision in light of
scientific data that has called into question the viability of this
substance class.

In light of these developments and the proposed transaction PAION has
decided to reduce its headcount by approximately 20 employees. The
total reduction in headcount for the enlarged group is expected to be
approximately 24 employees over the course of 2008.

This decision reflects, among other things, management's expectation
that the acquisition will allow the enlarged group to benefit from
CeNeS' technical expertise as well as the fact that the drug pipeline
of the enlarged group will require a significantly less complex
organisational structure than the one the constituent companies had
historically. Based on the new structure and the broadened pipeline
management believes the enlarged group to be able to achieve
significant pre-clinical, clinical and commercial milestones and to
have sufficient funding until 2010.

The enlarged group will have two Phase III (Desmoteplase for acute
ischemic stroke and M6G for post-operative pain), one Phase II (CNS
5161 for neuropathic/cancer pain) and one Phase I project (Solulin
for stroke, cardiovascular disorders) with another compound (CNS
7056, a short acting sedative) scheduled to enter Phase I in the near
future.

In addition, PAION is currently considering a product acquisition
within its defined therapeutic areas, which may or may not be
completed in the near future. If this acquisition is completed,
PAION's initial financial commitment is expected to be small and not
to have a material impact on its cash position.

As of 31 December 2007, the enlarged group had cash and cash
equivalents of EUR 49 million on a pro forma basis. The upfront
payment of EUR 8 million PAION received under the new Lundbeck
agreement in February 2008 further strengthened its cash balance.

For further information please refer to the announcement released
this morning by CeNeS and PAION in accordance with the Takover Code
of the United Kingdom and in a press release available on our website
at www.paion.de.

Disclaimer
This communication is neither an offer to buy securities nor a
solicitation for an offer to sell securities. Securities may not be
offered or sold in the United States absent registration or an
exemption form registration. There will be no public offer of the
shares of PAION AG in the United States.

Contact PAION
Dr. Peer Nils Schroeder
Head of Investor Relations / Public Relations PAION AG
Martinstrasse 10-12
52062 Aachen - Germany
Tel. +49 (0)241 4453 152
E-mail pn.schroeder@paion.de
www.paion.de

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PAION AG
Martinstrasse 10 - 12 Aachen Germany

WKN: A0B65S; ISIN:
DE000A0B65S3; Index: Prime All Share, CDAX;
Listed: Prime Standard in Frankfurter Wertpapierbörse, Amtlicher
Markt in Frankfurter Wertpapierbörse,
Freiverkehr in Bayerische Börse München, Freiverkehr in Börse
Stuttgart;