Further investment in portfolio company

7 September 2011

Imperial Innovations Group plc

Imperial Innovations leads £2.15m investment in PolyTherics

Imperial Innovations Group plc (AIM: IVO, "Innovations", or "the Group), the UK's leading technology commercialisation and investment company, has led a £2.15 million funding round alongside ProVen Health VCT Plc. and YFM Equity Partner's The Capital Fund, for one of its portfolio companies, PolyTherics Ltd, a solution provider to biopharmaceutical companies for the improvement of protein and peptide based drugs.

Innovations has committed £1.2 million in the round. New investor ProVen Health VCT, an international venture capital firm, has invested £0.75 million and existing investor, The Capital Fund, which is managed by YFM Equity Partners, has committed £0.2 million. Following the investment, Innovations will hold a 38.6% stake in the Company. This investment follows a £3 million financing in February 2010 and a £2.3 million financing in June 2007, both backed by Innovations, Longbow Capital and The Capital Fund.

PolyTherics has developed three proprietary technologies for attaching the polymer Polyethylene Glycol (PEG) to therapeutic peptides and proteins in a targeted fashion. This process, known as PEGylation, slows the elimination of drugs from the body, thereby improving their duration of action and allowing them to be dosed less frequently, which can decrease side effects and improve patient compliance.

PolyTherics has successfully applied its PEGylation technology to a range of existing proteins and peptides, as well as novel protein scaffolds, avoiding the need to reengineer the protein sequence and achieving site-specific conjugation with a highly efficient process.

The funds will be used to apply the company's proprietary technologies to an expanding range of proteins and peptides and to pursue new applications of these technologies, such as providing a more stable linker for antibody and protein drug conjugates.

Susan Searle, Imperial Innovations' CEO, said:

"PolyTherics is a great example of the further funding and support we are providing to our existing portfolio companies. The PEGylation technology has great potential within drug therapy and we are pleased to back this experienced management team as PolyTherics expands its unique offering."

John Burt,PolyTherics' CEO, said:

"This successful fundraising will enable us to expand the application of our PEGylation technologies to novel biomolecules and to use our linker chemistry in new ways and we look forward to forging new collaborations to develop improved therapeutic molecules."

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Notes to editorsInnovations

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 announced its intention 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

Following Innovations announcement in December 2010 of the Group's broader remit to work with Cambridge Enterprise, Oxford Spin-out Equity Management and UCL Business, Innovations has recently made investments in Stanmore and Autifony both of which are linked to University College London and in MISSION, a Cambridge linked company.

PolyTherics

PolyTherics is a private UK biotech company with technologies that enable the development of better biopharmaceuticals.

PolyTherics has developed three proprietary technologies for attaching the polymer poly(ethylene glycol) (PEG) to any therapeutic peptide or protein in a targeted fashion. PEGylation slows elimination from the body, thereby improving half-life and potentially reducing drug treatment frequency, decreasing side effects and improving patient compliance.

PEGylated products derived from PolyTherics' technologies are more homogeneous than those derived from traditional methods, resulting in reduced complexity of downstream processing, more consistent product quality and cost-effective manufacture. PEGylation is an established method for improving drugs and ten PEGylated products are already approved for therapeutic use worldwide.

PolyTherics commercial relationships include an option and licence agreement concluded in May 2011 with Nuron Biotech Inc. (USA) for the development of a long-acting interferon beta for the treatment of multiple sclerosis utilising PolyTherics' TheraPEG™ technology.

For more information, please visit: www.polytherics.co.uk.