Announcement of Open Offer

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, SOUTH AFRICA OR ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO SELL OR ISSUE, OR ANY SOLICITATION OF ANY OFFER TO PURCHASE OR SUBSCRIBE FOR, ANY NEW ORDINARY SHARES, NOR SHALL IT (OR ANY PART OF IT), OR THE FACT OF ITS DISTRIBUTION, FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, OR ACT AS ANY INDUCEMENT TO ENTER INTO, ANY CONTRACT OR COMMITMENT WHATSOEVER WITH RESPECT TO THE PROPOSED FIRM PLACING, ACQUISITION AND OPEN OFFER. THIS ANNOUNCEMENT IS NOT A PROSPECTUS AND INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY NEW ORDINARY SHARES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT SOLELY ON THE BASIS OF INFORMATION IN THE PROSPECTUS. COPIES OF THE PROSPECTUS WILL, FOLLOWING PUBLICATION, BE AVAILABLE FROM THE REGISTERED OFFICE OF SOURCE BIOSCIENCE PLC AT 1 ORCHARD PLACE, NOTTINGHAM BUSINESS PARK, NOTTINGHAM NG8 6PX.

FOR IMMEDIATE RELEASE  

Source BioScience plc

("Source BioScience" or the "Company")

7 August 2013

Announcement of Open Offer to raise up to approximately £1 million before expenses through the issue of up to 10,778,066 New Ordinary Shares

The Board announces an open offer (the "Open Offer") of up to 10,778,066 ordinary shares of 2 pence each (the "New Ordinary Shares") at an issue price of 9.5 pence (the "Issue Price") per New Ordinary Share to all eligible shareholders to subscribe for new shares in Source BioScience. The Open Offer is to raise up to approximately £1.02m before expenses and to the extent that the Open Offer is not taken up by Qualifying Shareholders, the Board intends to seek subscribers for such shares on substantially the same terms as the Open Offer.

The Open Offer provides Source BioScience Shareholders with the opportunity to mitigate, in part, the dilutive effects of the Firm Placing announced on 24 July 2013, in connection with the offer to acquire the issued and to be issued share capital of Vindon Healthcare plc (the "Acquisition"), announced separately today.

The net proceeds of the Open Offer will be applied as growth capital in the business, including as funding for organic growth initiatives and selected acquisitions, or in the event that no suitably attractive growth opportunities are identified, the Board may at its discretion use the proceeds to repay debt.

Further details of the Open Offer are set out in the Prospectus which has been posted today to all Qualifying Shareholders to provide them with, inter alia, details of the Open Offer, the use of proceeds and the rationale as to why the Board considers the Fundraising (being the Firm Placing and the Open Offer) to be beneficial to shareholders as a whole.

Extracts from the Prospectus have been included below. Defined terms in this announcement have the meaning given to them in the Prospectus and the Prospectus should be read in full with regard to the Open Offer and in relation to other matters announced separately today.

A copy of the Prospectus will be available for inspection at the National Storage Mechanism which is located at www.morningstar.co.uk/uk/NSM. Copies of the Prospectus are also available on the Company's website at www.sourcebioscience.com and for collection, free of charge during normal business hours from the Company's registered office up to and including the date of Admission.

Enquiries

Source BioScience plc

Dr Nick Ash, CEO

Tel: +44 (0) 115 973 9010

Email: [email protected]

www.sourcebioscience.com

For investor and media enquiries:

N+1 Singer (Financial Adviser, Sponsor and Broker to Source BioScience)

Aubrey Powell/ Joseph Stroud/ Laura White

Tel: +44 (0)20 7496 3000

www.n1singer.com

College Hill (PR Agency to Source BioScience)

Melanie Toyne-Sewell/ Stefanie Bacher/ Claire Dickinson

Tel: +44 (0)20 7457 2020

Email: [email protected]

N+1 Singer, which is a member of the London Stock Exchange, is authorised and regulated in the UK by the Financial Conduct Authority, and is acting as sponsor, financial adviser and broker to Source BioScience plc in connection with the proposed Fundraising and Admission. Persons receiving this document should note that, in connection with the Fundraising and Admission, N+1 Singer is acting exclusively for Source BioScience plc and no one else. N+1 Singer will not be responsible to anyone other than Source BioScience plc for providing the protections afforded to clients of N+1 Singer nor for advising any other person on the transactions and arrangements described in this document. No representation or warranty, express or implied, is made by N+1 Singer as to any of the contents of this document. Apart from the liabilities and responsibilities, if any, which may be imposed on N+1 Singer by the Financial Services and Markets Act 2000 or the regulatory regime established under it, N+1 Singer accepts no responsibility whatsoever for the contents of this document or for any other statement made or purported to be made by it or on its behalf in connection with Source BioScience plc, the Existing Ordinary Shares, the New Ordinary Shares, the Fundraising or Admission. N+1 Singer accordingly disclaims all and any liability whatsoever whether arising in tort or contract or otherwise (save as referred to above) which it might otherwise have in respect of this document or any such statement.

The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be affected by the laws or regulations of any such jurisdictions. Accordingly, any persons who are subject to the laws or regulations of any jurisdiction other than the United Kingdom should inform themselves of, and observe, any applicable requirements.

This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and business of Source BioScience and its subsidiaries and certain plans and objectives of the Board of Source BioScience. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words of similar meaning. These statements are based on assumptions and assessments made by the Board in light of its experience and perception of historical trends, current conditions, expected future developments and other factors it believes appropriate. By their nature, forward-looking statements involve risk and uncertainty, and the factors described in the context of such forward-looking statements in this announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements. Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this announcement. Source BioScience assumes no obligation to update or correct the information contained in this announcement, whether as a result of new information, future events or otherwise, except to the extent legally required.

The statements contained in this announcement are made as at the date of this announcement, unless some other time is specified in relation to them, and service of this announcement shall not give rise to any implication that there has been no change in the facts set out in this announcement since such date. Nothing contained in this announcement shall be deemed to be a forecast, projection or estimate of the future financial performance of Source BioScience except where expressly stated.

The contents of this announcement are not to be construed as legal, financial or tax advice. If necessary, each recipient of this announcement should consult his, her or its own legal adviser, financial adviser or tax adviser for legal, financial or tax advice.

Extracts from the Prospectus

Information on the Open Offer

The Company invites Qualifying Shareholders to apply for Open Offer Shares pro rata to their existing shareholdings at a price of 9.5 pence per Ordinary Share, payable in full in cash on application, free of all expenses, on the basis of:

1 Open Offer Share for every 19 Existing Ordinary Shares

held by Qualifying Shareholders at the Record Date rounded down to the nearest whole number of Open Offer Shares.

The issue price of 9.5 pence per Ordinary Share represents a 6.1 per cent. discount to the Closing Price on 23 July 2013, being the last practicable date before announcement of the Firm Placing and the intention to raise additional funds at the same issue price through an Open Offer. The issue price represents a premium of 1.3 per cent. to the Closing Price of 9.4 pence per Ordinary Share on 6 August 2013, being the last practicable date before the announcement confirming the details of the Open Offer. The Directors believe that the discount to the Closing Price on 23 July 2013 was necessary to enable the Company to successfully complete the Placing at a level which will enable it to continue to pursue the strategy described in this document and, accordingly, believe that such discount is in the best interests of Shareholders.

Following the issue of New Ordinary Shares to be allotted pursuant to the Firm Placing and the Open Offer (together, the "Fundraising"), Qualifying Shareholders who take up their full Open Offer Entitlements will suffer a dilution of up to 31.7 per cent. to their interests in the Company.

Qualifying Shareholders who do not take up any of their Open Offer Entitlements and do not participate in the Firm Placing will suffer a dilution of up to 35.1 per cent. to their interests in the Company.

Completion of the Acquisition and the Fundraising is considered by the Directors to be in the best interests of Shareholders as a whole, as the Acquisition is expected to be accretive to earnings per share in 2014, being the first full financial year following completion of the Acquisition, and potentially expected to result in EBITDA 1 margin enhancement in the Enlarged Group 2.

If the Acquisition fails to complete, and therefore the Firm Placing does not proceed, Shareholders who do not participate in the Open Offer will suffer dilution of up to 5.0 per cent.

The Open Offer will proceed, subject to Shareholder approval of resolutions to grant authority to issue the Open Offer Shares and to disapply statutory pre-emption rights in relation to the allotment of the Open Offer Shares, and the other conditions of the Open Offer being satisfied.

The Open Offer is not conditional on the Acquisition or Firm Placing proceeding and may proceed even if the Acquisition and Firm Placing do not.

Notes

1 Earnings before interest, tax, depreciation and amortisation.

2 This should not be construed as a profit forecast or interpreted to mean that the earnings per share, profits, margins or cash flows of the Enlarged Group will necessarily be greater than the historic published figures.

Application procedure

Qualifying Shareholders have the opportunity on, and subject to, the terms and conditions of the Open Offer to subscribe for Open Offer Shares at the Issue Price pro rata to their holdings of Existing Ordinary Shares as at the Record Date, on the following basis:

1 Open Offer Share for every 19 Existing Ordinary Shares

held by them and registered in their names on the Record Date rounded down to the nearest whole number of Open Offer Shares. Qualifying Shareholders may apply for any whole number of Open Offer Shares up to their Open Offer Entitlement.

Provided that they take up their Open Offer Entitlements in full, Qualifying Shareholders may also make applications in excess of their Open Offer Entitlements. To the extent that Open Offer Entitlements are not subscribed for by Qualifying Shareholders, Open Offer Shares will be available to satisfy such Excess Applications. The Excess Application Facility enables Qualifying Shareholders to apply for Excess Shares above that Open Offer Entitlement held in such Qualifying Shareholders' name as at 6.00 p.m. on the Record Date. To the extent that Basic Entitlements are not taken up by Qualifying Shareholders, the Directors intend to allocate the balance to Qualifying Shareholders having made Excess Applications or otherwise to seek subscribers for such shares on substantially the same terms as the Open Offer.

The Open Offer is not a rights issue. Qualifying CREST Shareholders should note that although the Open Offer Entitlements will be admitted to CREST and be enabled for settlement in CREST, the Open Offer Entitlements will not be tradable and applications in respect of the Open Offer Entitlements may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim raised by Euroclear's Claims Processing Unit. Qualifying Non-CREST Shareholders should note that the Application Form is not a negotiable document and cannot be traded. Qualifying Shareholders should be aware that in the Open Offer, unlike in a rights issue, any Open Offer Shares not applied for will not be sold in the market or placed for the benefit of Qualifying Shareholders. Qualifying Shareholders who do not apply to take up their Open Offer Entitlements will have no rights under the Open Offer or receive any proceeds from it.

The action to be taken by Qualifying Shareholders in respect of the Open Offer depends on whether at the relevant time, a Qualifying Shareholder has an Application Form in respect of their entitlement under the Open Offer or has Open Offer Entitlements credited to their CREST stock account.

Qualifying Shareholders who hold their Existing Ordinary Shares in certificated form will be allotted Open Offer Shares in certificated form. Qualifying Shareholders who hold part of their Existing Ordinary Shares in uncertificated form will be allotted Open Offer Shares in uncertificated form to the extent that their entitlement to Open Offer Shares arises as a result of holding Existing Ordinary Shares in uncertificated form. However, it will be possible for Qualifying Shareholders to deposit Open Offer Entitlements into, and withdraw them from, CREST. Further information on deposit and withdrawal from CREST is set out in paragraphs 3.1 and 3.2 of Part IX of the Prospectus.

CREST Sponsored Members should refer to their CREST Sponsor, as only their CREST Sponsor will be able to take the necessary action specified below to apply under the Open Offer in respect of the Open Offer Entitlements of such members held in CREST. CREST Members who wish to apply under the Open Offer in respect of their Open Offer Entitlements should refer to the CREST Manual for further information on the CREST procedures referred to in the Prospectus.

If for any reason it becomes necessary to adjust the expected timetable as set out in this document, the Company will make an appropriate announcement to a Regulatory Information Service giving details of the revised dates.

Application has been made for the Open Offer Entitlements of Qualifying CREST Shareholders to be admitted to CREST. It is expected that such Open Offer Entitlements will be admitted to CREST on 8 August 2013. The Open Offer Entitlements will also be enabled for settlement in CREST on 8 August 2013 to satisfy bona fide market claims only. Applications through the CREST system may only be made by the Qualifying CREST Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim.

Further details of the Open Offer and the terms and conditions on which it is being made, including the procedure for application and payment, are contained in Part IV of the Prospectus and for Qualifying Non- CREST Shareholders on the accompanying Application Form. To be valid, Application Forms or CREST instructions (duly completed) and payment in full for the Open Offer Shares applied for must be received by the Registrars by 11.00 a.m. on 22 August 2013. Application Forms should be returned to Equiniti, Corporate Actions, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA.

Qualifying Non-CREST Shareholders will have received an Application Form with this document which sets out their maximum entitlement to Open Offer Shares as shown by the number of Open Offer Entitlements allocated to them.

Conditions of the Open Offer

The Open Offer is conditional, inter alia, upon:

(i) Resolution 3 and 5 being passed by the Shareholders at the General Meeting (or any adjournment thereof); and

(ii) First Admission becoming effective on or before 8.00 a.m. on 31 October 2013 (or such later date and/or time as the Company and N+1 Singer may agree, being no later than 8.00 a.m. on 31 December 2013).

Further terms of the Open Offer are set out in the Application Form.

If all of the above conditions are not met on or before 8.00 a.m. on 31 October 2013 (or such a later date and/or time as the Company and N+1 Singer may agree, being no later than 8.00 a.m. on 31 December 2013) the Open Offer will be revoked and will not proceed.

The Open Offer will proceed, subject to Shareholder approval of a resolution to grant authority to issue the Open Offer Shares and to disapply statutory pre-emption rights in relation to the allotment of the Open Offer Shares, and the other conditions of the Open Offer being satisfied.

The Open Offer is not conditional on the Acquisition and Firm Placing proceeding and may proceed even if the Acquisition and Firm Placing do not. In this scenario the Open Offer would only relate to an investment in the Group and not an investment in the Enlarged Group.

General

The New Ordinary Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including ranking in full for all dividends and distributions declared, made or paid after Admission.

The Open Offer is not being made to Overseas Shareholders in Excluded Territories, whose attention is drawn to paragraph 5 of Part IX of the Prospectus.

General Meeting

A notice convening the General Meeting to be held at 10.00 a.m. on 23 August 2013 at the offices of Source BioScience at 1 Orchard Place, Nottingham Business Park, Nottingham NG8 6PX is set out in the Prospectus The purpose of the General Meeting is to seek Shareholder approval of the Resolutions in connection with the Firm Placing announced on 24 July 2013, the Acquisition announced earlier today and the Open Offer.

Expected timetable of principal events