Genaissance Pharmaceuticals, Inc. and Lark Technologies, Inc. announced that they have signed a definitive agreement whereby Genaissance will acquire Lark in an all-stock transaction. Under the terms of the agreement, Genaissance will issue approximately 6.7 million shares of its common stock to Lark’s stockholders, who will receive 1.81 shares of Genaissance’s common stock for each share of Lark’s common stock that they own, and will assume outstanding Lark options exercisable for an aggregate of approximately 1.5 million shares of Genaissance common stock. The transaction is valued at approximately $19.9 million, based on the closing price of Genaissance’s common stock of $2.99 per share on December 18, 2003.

Following the transaction, Genaissance expects to have projected pro-forma revenues in excess of $25 million for calendar 2004, a substantially reduced operating loss, an expanded pharmacogenomic service and technology portfolio with facilities in the US and England and additional financial resources to advance the development of pharmacogenomic based proprietary products. Dr Carl Balezentis, president and CEO of Lark, will join Genaissance as senior vice president and president, Lark Technologies.

"The acquisition of Lark is an exciting next step in the execution of our strategy to build a profitable base services business while developing proprietary products based on our HAP Technology," said Kevin Rakin, president and CEO of Genaissance Pharmaceuticals. "The addition of Lark will provide us with access to a broader client base, a GLP sequencing capability that complements our existing GLP genotyping ability, a strong and growing European operation and an experienced team focused on profitable revenue generation. Most importantly, as we look forward, a profitable base services business will generate additional funds for the development of proprietary diagnostic and pharmaceutical products."

The transaction has been approved unanimously by both Boards of Directors and is subject to shareholder approval by both companies and other customary closing conditions. The transaction is expected to close in the first half of 2004.

Lark Technologies, Inc., based in Houston, Texas, offers genomic services for use in pharmaceutical, diagnostic and agricultural product research and development. These services include genomic data management, microarray support, quantitative PCR, genotyping, genetically-modified organism testing, and a battery of other molecular biology services which support researchers in the pharmaceutical, biotechnology and academic sectors in their attempt to understand the mechanisms of disease and to discover and develop new drugs.