Circassia raises £60m

19 April 2011

Imperial Innovations Group plc

Circassia raises £60m for final stage development of allergy products

Imperial Innovations Group plc (AIM: IVO, "Innovations", or "the Group), the UK's leading technology commercialisation and investment company, has led a £60m funding round for one of its accelerated growth portfolio companies, Circassia. Circassia is a speciality biopharmaceutical business focused on the development of anti-allergy products.

In addition to the £15m that Innovations has committed to investing, Invesco Perpetual and other existing shareholders are supporting the funding round which will be made in two tranches over two years. Innovations' first installment is £6.3m. The balance will be paid subject to the achievement of certain milestones.

To date, Circassia has successfully completed four investment rounds, raising £93.1m. Following the payment of the first tranche, Innovations holds 18.4% of the equity and has invested £13.8m in total to date.

The new investment will fund Circassia's:

·; Phase III development programmes for cat and ragweed allergy therapies

·; Completion of Phase II testing for house dust mite and grass allergy T-cell vaccines

·; Advancement of development programmes of three additional allergy therapies as well as Circassia's recently acquired psoriasis treatment.

Russ Cummings, Innovations' Chief Investment Officer is on Circassia's Board, which is chaired by Sir Richard Sykes. The £60m raised is the third largest financing for a private European biotech company for 15 years.

Susan Searle, Chief Executive Officer of Imperial Innovations, said,

"This funding round, our largest to date, for one of our leading portfolio companies is a clear demonstration of intent - both in terms of value creation and, as previously stated, support of our larger successful companies with substantial funds.

"Circassia has made great progress in the last five years, having completed a range of major clinical developments. Its unique ToleroMune® technology has the potential to revolutionise allergy treatment in a market that is worth approximately $12 billion per year. 

"The funding will play a key role in progressing the company's lead products to market."

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Notes to editors

Innovations creates, builds and invests in pioneering technologies addressing global problems in healthcare, energy, engineering and the environment. It combines deep understanding of science and technology with commercial acumen and strong investment expertise.

Innovations supports scientist-entrepreneurs in the commercialisation of their ideas by:

·; leading the formation of new companies and providing facilities in the early stages;

·; providing significant investment and encouraging co-investment to accelerate the transition from R&D to products;

·; providing operational expertise; and

·; helping to recruit high-calibre industry figures and experienced entrepreneurs as executive management and Board members.

In December 2010 Innovations raised £140m to accelerate the making of, and increase the size of, investments in companies established under its existing intellectual property pipeline agreement with Imperial College London. The Group also intends to invest in companies founded by or based on technology from the University of Oxford, the University of Cambridge and University College London.

Innovations has already achieved significant success with its early investments; for example its £1.5m investment in obesity drug developer Thiakis could return up to £22m, following its sale for £100m in 2008, while the sale of Respivert, a small molecule drug discovery company, resulted in Innovations realising £9.5m, a 4.7x return on investment.

In the year to 31 July 2010, Innovations invested £14.0m in 20 ventures, helping to launch three new companies. With a technology portfolio of more than 80 companies, Innovations' most advanced assets include:

·; Circassia: Innovative vaccines for the treatment of a wide range of allergies

·; Nexeon: Advanced materials that extend the cycle life and significantly increase capacity of rechargeable batteries

·; Veryan: Stents inspired by the human vascular system

·; PsiOxus Therapeutics: Developing a pipeline of small molecule therapeutics for the treatment of wasting diseases and cancer.

·; Polytherics: Biotechnology company that applies precision chemistry to develop protein and peptide-based drugs

·; Cellmedica: Cell therapy company working on new techniques to cure human diseases based on cellular immunotherapy

·; Evo Electric: Develops and manufactures advanced electric machines, hybrid drive trains and generator sets for a wide range of transportation and mobile power applications

Circassia

Circassia was founded in 2006 by a team of highly experienced biotechnology scientists and entrepreneurs, and is chaired by the former Chairman of GlaxoSmithKline, Sir Richard Sykes. The company is based in the UK on the Oxford Science Park, and in Hamilton, Canada, where its joint venture Adiga Life Sciences is located.

Its ToleroMune technology was developed originally by scientists at Imperial College, London.

Having successfully completed four fundraising rounds Circassia is backed by a syndicate of world-class venture capital and institutional investors, including Imperial Innovations and Invesco Perpetual.

Circassia is developing a range of allergy T-cell vaccines based on its proprietary ToleroMune® technology. The company has successfully completed a number of phase II studies with its cat, house dust mite and ragweed allergy products, and its grass allergy therapeutic is in clinical testing. Clinical results to date show that short treatment regimes with Circassia's T-cell vaccines can greatly reduce patients' allergic reactions, without the need for adjuvants or other immune stimulators, while proving extremely well tolerated.

As a result, the treatments offer major potential clinical benefits compared with existing therapies, and have significant market opportunities. Over 150 million people suffer from allergic rhinitis in the US and Europe, and the current treatment market is approximately $12 billion per year.