£4m Placing

Oxford Pharmascience Group plc

("Oxford Pharmascience" or the "Company")

£4 million Placing

Oxford Pharmascience, the specialty pharmaceutical company that uses advanced pharmaceutic technologies to reposition medicines, announces that it has conditionally raised £4 million (before expenses) through the placing of 100,000,000 New Ordinary Shares (the "Placing Shares") at a placing price of 4p per New Ordinary Share with discretionary funds managed by Invesco Asset Management Limited and certain other investors. N+1 Singer acted as broker to the Placing.

The Company has sufficient authorities in place to issue the 100,000,000 New Ordinary Shares (the "Placing") and as such, the Placing is not conditional on Shareholder approval. The net proceeds of the Placing will be used by the Group to further accelerate the development of the Group's business as described in more detail below.

The Placing Shares represent approximately 10 per cent. of the Enlarged Share Capital and the placing price represents a discount of approximately 10 per cent. to the mid-market closing price on 30 October 2013 of 4.45p.

The Placing is conditional, inter alia, upon Admission. The Placing Shares will, on Admission, be credited as fully paid and will have the same rights in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared.

Nigel Theobald, CEO, commented:

"The raising of additional funds allows us to further expand our program of pilot clinical studies demonstrating the proof of concept of our OXPzero technology when applied to other widely prescribed NSAIDs. We have already announced our program for ibuprofen and these funds allow us to simultaneously work on diclofenac and naproxen widely prescribed for more severe pain and aspirin which is widely used to help combat cardiovascular disease.

This will position the company immediately across the whole NSAIDs space, reformulating a range of products with significant reduction in the risk of adverse GI effects across a much wider range of patient indications. This increases the addressable value of the technology to reformulations of NSAIDs currently totalling £4.8bn in prescription sales "

Background to the Placing

As stated in the Company's unaudited interim results for the six months to 30 June 2013 the Group's strategy is now firmly established on re-developing already approved oral prescription and OTC products to address unmet patient needs with significant commercial potential. Focusing on off-patent drugs that have been approved and been in extensive use for a long time reduces both development and commercial risk and results in a simplified drug development regulatory pathway. This in turn allows for less expensive development programmes and faster access to market.

The Group has already announced its intention to develop ibuprofen products and its programme for new versions of the blockbuster drugs atorvastatin and simvastatin.

While the Group has sufficient cash resources for its near term needs, and retains discretion over a substantial part of its development and other expenditure, the Board believes that the Group would benefit from additional finance to enable it to accelerate its growth strategy.

Use of Proceeds

Net proceeds of the Placing are expected to be approximately £3.96m and will be used to accelerate the development of further products featuring other NSAIDs such as diclofenac and naproxen which are widely prescribed for more severe pain and aspirin which is widely used to help combat cardiovascular disease. The extra funds will allow the group to undertake further pilot clinical studies demonstrating the gastric irritation reduction for these NSAIDs in addition to the pilot studies already announced for ibuprofen and the statins atorvastatin and simvastatin.

The results of the pilot studies will be available towards the end of 2014 and will place the company in a much stronger position to negotiate commercial deals as it continues to move towards the development of dossiers for these products.

Related Party Transaction

Invesco Asset Management Limited, which is a Substantial Shareholder, has agreed to subscribe for Placing Shares at the Placing Price pursuant to the Placing as set out below. Invesco Asset Management Limited's agreement to subscribe for Placing Shares constitutes a related party transaction pursuant to the AIM Rules. The Directors, having consulted with N+1 Singer as nominated adviser to the Company, consider the terms of Invesco Asset Management Limited's participation in the Placing to be fair and reasonable insofar as Shareholders are concerned. In providing advice to the Directors, N+1 Singer has taken into account the commercial assessment of the Directors.

Admission and dealings

The Placing is to be effected on behalf of the Company by N+1 Singer, under the terms of the Engagement Letter. The Engagement Letter contains certain warranties given by the Company with respect to its business and the Group and certain matters connected with the Placing. The Placing may be terminated by N+1 Singer for, inter alia, a material breach by the Company of the terms of the Engagement Letter or the warranties contained in it or their being a material adverse change in the condition of the Group.

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM and it is expected that Admission will be effective and trading will commence at 8:00 am on 5 November 2013. 

Immediately following Admission, the Company will have 997,536,619 Ordinary Shares in issue. Since the Company currently holds no shares in treasury, the total number of voting rights in the Company is therefore 997,536,619 and this figure may therefore be used by Shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FSA's Disclosure and Transparency Rules.

For further information please contact:

Oxford Pharmascience Group plc

Nigel Theobald, Chief Executive +44 1865 854 874

Chris Hill, Finance Director +44 1865 854 874

N+1 Singer +44 20 7496 3000

Shaun Dobson / Jenny Wyllie

About Oxford Pharmascience

Oxford Pharmascience Group Plc uses a range of proprietary technology platforms to re-develop existing medicines to make them better, safer or easier to take. The Company does not manufacture or sell its own pharmaceutical products direct to consumers but instead seeks to license its technologies and dossiers to a network of partners, mainly leading pharmaceutical companies with Rx (prescription) and OTC (Over the Counter) branded portfolios.

Oxford Pharmascience Group Plc focuses on existing medicines that are proven to be safe and effective but nevertheless still have associated issues and side effects often affecting compliance. By working with such medicines the Company is able to develop new innovative products for a fraction of the cost, in much quicker timescales and without the high risk of failure associated with developing new drugs.