For Immediate Release 16 August 2005

The Medical House PLC

TRADING STATEMENT

The Medical House PLC (“TMH”), (AIM:MLH) the orthopaedic devices and drug delivery company, provides the following trading update.

Eurocut Ltd, the Orthopaedic Instrument division of The Medical House Plc had a record year to 30 June 2005 with sales up 58% on the previous year. This was in part due to a large order for a new product which has been successfully launched by a major customer in Europe. The volumes forecast are to set to increase substantially on the launch of the product in the US. FDA approval for this product range is not now due until mid to late 2006.

As our customer has stocks which have been built up in advance of the US launch current trading at Eurocut is being affected and will have a detrimental effect on the results for The Medical House in the financial year 2005/6.

While it is disappointing to report a setback, shareholders should be reassured that the orders have been delayed rather than lost and the long term prospects for this division remain excellent. The order book for Eurocut Ltd at 31 July stood at over £3m confirmed orders, the majority of which does not relate to the delayed contract.

With regard to the drug delivery division of The Medical House, this continues to attract a great deal of interest from global pharmaceutical companies, who are particularly interested in the ASI disposable autoinjector for which the company recently announced its first license and supply deal.

In addition, the contract to develop and supply Serono with a new needle-free injector for their Human Growth Hormone is on schedule and the sales of this system are expected to commence in the second half of the 2006 financial year.

The effect of these developments on the overall Group trading position is that in the year to 30 June 2005, the Group is likely to report a small loss, against a small first half profit of £46,000.

The first half of the 2006 financial year is now expected to make a loss but it is anticipated that the performance will improve in the second half on the back of improving Eurocut sales together with increased sales of our drug delivery devices.

TMH expects to report its preliminary results for year to 30 June 2005, in late September 2005.

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For further information

The Medical House PLC
Ian Townsend, Executive Chairman Tel: 0114 261 9011
www.themedicalhouse.com

Buchanan Communications
Tim Anderson/Lisa Baderoon/Rebecca Skye Dietrich Tel: 0207 7466 5000

Notes to Editors:

About The Medical House (TMH)

Historically the majority of the Group’s turnover has come from its orthopaedic company, Eurocut Limited. It designs and manufactures instruments and systems used in orthopaedic procedures for many of the world’s leading orthopaedic companies. Eurocut was established in 1988 and now has a reputation as one of Europe’s leading orthopaedic instrument businesses. In January 2004, the company moved into enlarged premises enabling it to expand sales significantly. This enables Eurocut to take advantage of a growing orthopaedic market which has an increasing demand for ever more complex instrumentation to carry out minimally invasive and image guided procedures.

TMH has progressively been developing needle-free devices which are already successfully used in the market. TMH's own proprietary next generation device, the SQ-Pen, its latest spring powered re-usable system, has great potential in drug delivery worldwide. TMH also has several distribution agreements in place for the insulin market for its range of reusable needle-free insulin injectors.

TMH announced in November 2002 that it had received approval from the PPA (Prescription Pricing Authority) for the admission of the mhi-500 device to the NHS Drug Tariff, to be effective from 1 January 2003. This has enabled the device and the related consumables to be prescribed on a free-of-charge basis to the more than 500,000 people with diabetes in the UK who inject insulin daily. This makes the mhi-500 the first needle-free injection system for liquid pharmaceuticals to be available on the UK NHS Drug Tariff.

In September 2004 TMH signed an agreement with Serono to develop and supply with a new needle free system for use with their human growth hormone. The market for human growth hormone drugs is expected to reach $2.2 billion by 2006 according to AS Insights.

In February 2005 TMH announced a 10-year agreement which it has signed with BioPartners GmbH, to supply its GH1 needle-free system for the delivery of BioPartners’ Human Growth Hormone products.

In June 2005, TMH announced that it had signed a binding term sheet with an undisclosed pharmaceutical company for the license and supply of its ASI disposable autoinjector system.