FOR IMMEDIATE RELEASE

January 20, 2004.

ASINEX Announces 1 year extension to Lead Optimization program with Avalon Pharmaceuticals.

Moscow, January, 2003-ASINEX, A worldwide leader in lead generation and lead optimization, today announced a 1 year prolongation to their multi-FTE deal with Avalon Pharmaceuticals, a next-generation genomics-based company. ASINEX will perform chemical lead optimization of compounds discovered through the use of diverse, small molecule collections from both companies. Financial terms of the agreement were not disclosed.

To date, the medicinal chemistry departments at both ASINEX and Avalon have been involved in the design and synthesis of compounds derived from initial hits of certain high throughput screening assays. Several optimization programs have been completed resulting in the delivery of potential drug candidates to Avalon.
Staszek Pikul, Senior Scientific Director at Avalon stated, " We have been very pleased by the quality of work of Asinex chemists and by the contribution they made to a rapid progression of our Lead Optimization programs. It's been a good and productive collaboration and I am happy to see Asinex and Avalon continue working together for another year."

Prof. Dr. Mikhail Kirpichenok, Director of Research at ASINEX commented, "We are delighted that Avalon has agreed to continue its collaboration with ASINEX for another year. This is validation of the work that we have performed during the last year, we hope that this alliance will continue for many more years."

About ASINEX
ASINEX (www.asinex.com) is a full-service chemistry provider of 'Intelligent Chemistry` for the lead generation and optimization stage of drug discovery. Well known as a supplier of diverse, small molecule libraries for screening and building blocks for combinatorial chemistry, ASINEX has developed a reputation for cost-effective and efficient Lead Optimization, Custom Synthesis and Focused Library Generation. Based in Moscow, with a total of 111 chemists (48 Ph.D.), 8 computational chemists (6 Ph.D.) and 30 biologists (20 Ph.D.), ASINEX is a powerful drug discovery resource.

About Avalon Pharmaceuticals
Avalon Pharmaceuticals (http://www.avalonrx.com/) is a next-generation genomics-based company utilizing unique and proprietary methods to improve and accelerate the discovery of small molecule drugs directly from genomics data. Through its comprehensive approach, Avalon can identify gene transcription markers for disease activity and directly screen for drug effects using multi-parameter gene signatures in complex biological systems. The company is thus able to rapidly identify small molecule drug candidates and to optimize these for highly disease specific activity, thereby producing very high quality lead compounds much faster than traditional target based drug discovery. Currently, Avalon is focusing its efforts on identifying therapeutics with novel mechanisms of actions that counteract or arrest the malignant transformation of cancer cells.

Avalon Pharmaceuticals was established in 1999 and is headquartered in Gaithersburg, Maryland.

This press release includes forward-looking statements based on management's current expectations. Factors that could cause future results to differ materially from such expectations include, but are not limited to: the ability to secure future funding; the success of the Company's research strategy; the applicability of the discoveries made therein; the difficulties inherent in the development of pharmaceuticals, including uncertainties as to the timing and results of pre-clinical studies; delayed achievements of milestones; reliance on collaborators; uncertainty as to whether the Company's potential products will succeed in entering human clinical trials and uncertainty as to the results of such trials; uncertainty as to whether adequate reimbursement for these products will exist from the government, private healthcare insurers and third-party players; and the uncertainties as to the extent of future government regulation of the pharmaceutical business.

CONTACTS:

ASINEX Ltd Alistair Melvin Business Development Tel: (00)7 095 190 7960 Email: amelvin@asinex.com

Avalon Pharmaceuticals Kenneth Carter, Ph. D. Chief Executive Officer Tel: (301) 556-9810 Email: kcarter@avalonrx.com