Investment in Circassia Pharmaceuticals plc

10 January 2020

CIP MERCHANT CAPITAL LIMITED

("CIP Merchant Capital", "CIP" or the "Company")

Investment in Circassia Pharmaceuticals plc

CIP Merchant Capital is pleased to announce its investment in Circassia Pharmaceuticals plc ("Circassia"), a specialty biopharmaceutical company focused on allergy and respiratory diseases quoted on AIM. The Company has acquired, in aggregate, 12,800,000 ordinary shares in Circassia, representing approximately 3.4% of Circassia issued share capital, for a total consideration of approximately £2.8 million.

In the year ended 31 December 2018, Circassia had revenue of £48.3 million, a gross profit of £39.4 million and a net loss attributable to its shareholders of £25.9 million from underlying operations and a total loss of £117.1 million, which includes losses of £20.7 million from non-underlying operations (non-recurring/irregular expenditure) and loss of £70.5 million from discontinued operations. In the six months ended 30 June 2019, Circassia reported revenue of £27.9 million, a gross profit of £20.3 million and a total loss of £19.0 million, and, as at 30 June 2019, had net assets of £103.2 million.

The Board of CIP believes Circassia has a clear route to profitability, having recently announced that the revenues for the 2019 year are expected to fall in the mid-range of its previously issued guidance of £60-£65 million. In April 2019, Circassia announced the US Food and Drug Administration approval of Duaklir, a drug for maintenance treatment of chronic obstructive pulmonary disease, which was later launched in October 2019. Circassia has also recently made what the Board believes to be positive changes to its leadership team, hiring executives with a proven track record.

Circassia now constitutes the Company's seventh portfolio company.

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The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.