Placing to raise £20 million and acquisition

NOT FOR RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF IRELAND, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD BE UNLAWFUL.

Abzena plc

Placing to raise £20 million and acquisition

Cambridge, UK, 24 November 2015 - Abzena plc (AIM:ABZA, 'Abzena' or the 'Group'), a life sciences group providing services and technologies enabling the development and manufacture of biopharmaceutical products, has conditionally raised £20 million (net of expenses) by way of a placing of 35,004,972 new Ordinary Shares at 60 pence each with certain existing and new shareholders, and has agreed to acquire The Chemistry Research Solution LLC ("TCRS"), subject to certain closing conditions including completion of the placing. The Placing Price represents a 7.7 per cent discount to the closing mid-market price of an existing ordinary share on 23 November 2015, being the last business day prior to this announcement.

TCRS is a specialist contract chemistry and bioconjugation company based near Philadelphia, Pennsylvania, USA, with expertise in producing and analysing antibody drug conjugates (ADCs). Abzena will pay $15 million (£10 million) to acquire the entire ownership interests in TCRS. The consideration will be paid as $8.8 million in cash (subject to adjustment for net current assets and retained indebtedness of TCRS at completion of the Acquisition), the issue of 3,609,978 Ordinary Shares and $0.9 million in restricted stock units over 901,697 Ordinary Shares and assumed long term debt of $1.5 million.

Rationale for acquisition of TCRS and use of proceeds

· Will broaden Abzena's service capability and, with further investment, provide GMP manufacturing capability for ADCs

· Enables 'Abzena inside' ADC partner projects to be progressed further through the R&D process by the Group

· Creates new cross-selling opportunities for Abzena's antibody engineering and biopharmaceutical manufacturing services

· Well established and profitable company; expected to make immediate positive contribution to the Group's EBITDA

· Establishes another operating presence in the USA, in a key East coast life sciences hub, complementing the West coast location of Abzena company, PacificGMP

· Placing proceeds to be used for:

- Acquisition of TCRS & biomanufacturing capital expenditure 

- Further research and development in existing Abzena technologies & investment in 'Abzena inside' product development

- Additional working capital

Abzena has also today reported its half year results for the six months to 30 September 2015 (please see separate announcement).

Dr John Burt, CEO of Abzena said:

"The acquisition of TCRS is an important strategic step in our ambition to build Abzena into a self-sustaining business and 'partner of choice' for R&D organisations developing biopharmaceutical drugs."

"TCRS is an established, profitable company providing chemistry and conjugation services that complement our own. Bringing TCRS into the Abzena Group will enable wider access to Abzena's proprietary ADC technologies and, in time, TCRS will be able to provide our partners with larger scale and GMP manufacture."

"By broadening our service and technology offering with the addition of TCRS to the Group, we are better placed to help our partners develop the next generation of cancer therapies, a fast growing market requiring specialist innovation and differentiation."

Dr Naresh Jain, Managing Director of TCRS added:

"Joining forces with Abzena has been an easy decision to make. The two companies are very complementary in customer base and the services we offer.

"Adding TCRS and its ADC capabilities to Abzena's already established offering, puts the enlarged Group in a strong position to meet partners' needs and, through them, the needs of patients seeking innovative medicines."

Following the completion of the planned acquisition of TCRS, Dr Naresh Jain will become Senior Vice President (ADC Biomanufacturing) & Global Head of Chemistry for Abzena, reporting to John Burt, Abzena's CEO.

Shareholder Approval and General Meeting

The Placing and the Acquisition are subject to the passing of Resolutions at a General Meeting to be held at the offices of Pinsent Masons LLP, 30 Crown Place, London EC2A 4ES at 10.00 a.m. on 10 December 2015. A notice convening the General Meeting is set out at the end of a Circular dated 24 November 2015 and available on the Company's website at www.abzena.com and expected to be posted to Shareholders later today along with a form of proxy.

Application will be made to the London Stock Exchange for the admission of the Placing Shares and the Consideration Shares to trading on AIM. It is expected that Admission will occur and that dealings will commence at 8.00 am on 11 December 2015.

Defined terms used in this announcement not otherwise defined shall have the same meanings as those terms defined and used in the Circular.

The text of the Chairman's letter to shareholders contained within the Circular is reproduced in full below, without material adjustment.

Secondary sale of existing shares

On or shortly after Admission, certain secondary trades of, in aggregate, 7,412,359 Ordinary Shares will also complete, reflecting additional institutional demand generated for Ordinary Shares and the wishes of certain existing Shareholders to realise value from some or all of their holdings of Ordinary Shares through the market. In total, 7,412,359 Existing Ordinary Shares (representing approximately 7.6 per cent. of the current issued share capital) will be sold at the Placing Price. Subsequent announcements will be made in accordance with the AIM Rules where the sale of Ordinary Shares in the secondary market by the Selling Shareholders, or the issue of the New Ordinary Shares to Placees, as applicable, has given rise to a change in a Shareholder's notifiable interest in the Company's share capital.

All Selling Shareholders have agreed to enter into extended lock-in and orderly market arrangements with each of the Company, Cenkos and N+1 Singer for the balance of their shareholdings in the Company for a total period of 24 months. Orderly market arrangements implemented at the time of the IPO continue to apply to certain other shareholders not selling shares at this time.

- Ends -

An analyst briefing will be held at 9:30am on 24 November 2015 at the offices of Instinctif Partners. To attend, please email [email protected].

Enquiries:

About Abzena

Abzena provides proprietary technologies and complementary services in the UK and USA to enable the development and manufacture of biopharmaceutical products. The development of biopharmaceuticals is a growing area and requires specialist technology.

The Group comprises Antitope, PacificGMP and PolyTherics, which between them have built a global customer base including the majority of the top 20 biopharmaceutical companies as well as large and small biotech companies and academic groups.

Antitope provides immunogenicity assessment, protein engineering to create humanized antibodies and deimmunised therapeutic proteins, and cell line development for manufacture.

PacificGMP provides contract process development and manufacture of biopharmaceuticals, including monoclonal antibodies, recombinant proteins, vaccines, and gene therapy and cell therapy products, for preclinical and clinical studies.

PolyTherics specializes in proprietary site-specific conjugation technologies for antibody drug conjugate development and solutions for optimizing the therapeutic properties of biopharmaceuticals.

Abzena (AIM: ABZA) has its main operations in Cambridge, UK and in San Diego, CA, USA. For more information, please see www.abzena.com.

Note: The term "Abzena inside" is applied to cover products that have been created using or incorporate Abzena's proprietary technologies, and include Composite Human Antibodies™ and ThioBridge™ antibody drug conjugates. These products are being developed by Abzena's partners and Abzena has the potential to earn future licence fees, milestone payments and/or royalties.

Chairman's letter to Shareholders

Placing of 35,004,972 New Ordinary Shares at 60 pence per share, Acquisitionand Notice of General Meeting

Introduction

The Company announced today a conditional placing of 35,004,972 New Ordinary Shares at 60 pence each to raise £21.0 million before expenses for the Company. The Placing has been arranged by Cenkos and N+1 Singer and the Placing Shares have been placed with certain new and existing investors in the UK. At the same time, the Company also announced the proposed Acquisition of The Chemistry Research Solution LLC ("TCRS"), a specialist contract chemistry and bioconjugation company based in Bristol near Philadelphia (Pennsylvania, USA). Further details of the Placing and the Acquisition are set out below.

The Placing Price represents a discount of approximately 7.7 per cent. to the mid-market closing price of the Company's Ordinary Shares on 23 November 2015, being the last practicable date prior to the date of this announcement.

The Placing and the Acquisition are both conditional on, amongst other things, the passing of the Resolutions by Shareholders at the General Meeting, notice of which is set out in the circular which is available on the Company's website at www.abzena.com and shall be posted to shareholders later today (the "Circular") along with a form of proxy. If the Resolutions are passed, the New Ordinary Shares will be allotted after the General Meeting. Admission is expected to occur no later than 8.00 am on 11 December 2015 or such later time and/or dates as Cenkos, N+1 Singer and the Company may agree. The Placing is not being underwritten.

In addition to providing you with information about the Placing and the Acquisition, this announcement and the Circular explain:

• why the Board considers that the Placing and the Acquisition are in the best interests of the Company's Shareholders;

• why the Board is seeking authority to allot and issue the Placing Shares and the Consideration Shares; and

• why the Board unanimously recommends that you vote in favour of the Resolutions to be proposed at the General Meeting, as the Directors intend to do in respect of their own holdings of Ordinary Shares.

Information on Abzena, TCRS and reasons for the Placing

Overview of Abzena

Abzena has three trading subsidiaries, Antitope, PacificGMP and PolyTherics, which together provide proprietary technologies and complementary services to support the selection, development and manufacture of biopharmaceutical drugs. The Group provides its technologies and services to organisations involved in the research and development of biopharmaceutical products, including biotech and pharmaceutical companies, research institutes and universities.

Biopharmaceutical products created using the Group's proprietary technologies and developed by the Group's partners under licences to these technologies ("Abzena inside" products) have the potential to generate significant future revenues for the Group in the form of licence fees, development, regulatory and/or commercial milestone payments and/or royalties. The Group has entered into more than 40 licence or option agreements for its proprietary technologies. There are currently 10 products incorporating the Group's proprietary technology in clinical trials for a variety of diseases as well as many further products at earlier stages of development. The Directors believe that the potential longer-term revenue stream from such licences could be substantial and estimate that up to 25 products could be in the clinic in the next five years with up to three approved products. Over the course of the next two years, the Directors believe the Group's pipeline of products incorporating Abzena inside technology has the potential to see up to five further products enter clinical development; four clinical programmes progress from Phase I to Phase II; and up to six programmes progress to Phase III.

Since Abzena was admitted to AIM in July 2014, it has grown its service business with total revenues up 43 per cent. in the half year to September 2015 compared to the same period the previous year. The Group has continued to invest in its own research and development to expand its technology offering at the same time as a number of its customers are progressing with their evaluation of Abzena's proprietary technologies to chemically link highly potent cytotoxic drugs to antibodies to create ADCs that can kill cancer cells.

In September 2015, Abzena acquired PacificGMP, a contract development and manufacturing organisation based in San Diego (California, USA) to broaden its service offering to include manufacturing of biopharmaceuticals and establish Abzena's initial operating footprint in the USA, where the majority of its customers are based. Abzena is already seeing the benefits of its broader offering as customers engage with Antitope, PacificGMP and PolyTherics to access an integrated provision of the Group's biopharmaceutical services and technologies. The Directors believe that PacificGMP's business has the potential to grow significantly with investment in adjacent leased facilities and acquisition of additional manufacturing equipment to increase capacity.

Abzena's service business should lead to further licence opportunities as customers see the benefits of the improvements made to their products by the application of the Enlarged Group's technologies. The addition of manufacturing capability will enable the Enlarged Group to support its customers further along the biopharmaceutical development process to include the supply to its customers of material for preclinical and clinical studies. Abzena plans to further enhance the synergies between its service and technology offerings by acquiring TCRS, a contract chemistry and bioconjugation business focused on ADCs, and establishing the capability to manufacture ADCs to GMP standards. The Directors believe the Acquisition will enable the Enlarged Group to secure further licence agreements for its ADC bioconjugation technology.

ADC manufacture requires a carefully controlled working environment as the cytotoxic drugs that are attached to the antibody are highly potent. Abzena identified this as an area into which to expand to support its ADC partners and benefit from the growth in the number of ADCs in development. The acquisition of TCRS will provide Abzena with the opportunity to provide this support by expanding its service offering.

The Acquisition

Abzena today announced that it had agreed to acquire TCRS on the terms of the Acquisition Agreement for $15 million (£10 million), subject to adjustment, for net current assets and retained indebtedness. $8.8 million of the consideration will be paid in cash (subject to adjustment for net current assets and retained indebtedness of TCRS at completion of the Acquisition), the Group will assume $1.5 million of long term debt, Abzena will issue 3,609,978 Ordinary Shares to the Vendors, and the balance of $0.9 million will be satisfied through an allocation of restricted stock units over 901,697 Ordinary Shares to 5 employees of TCRS. Such restricted stock units vest on the relevant employee remaining in employment with TCRS for 12 months post-acquisition. If an employee who has been granted restricted stock units leaves TCRS in the 12 month period following completion of the Acquisition, the Ordinary Shares that are the subject of his restricted stock units, will instead be allotted to the Vendors. The number of Consideration Shares and restricted stock units has been determined based upon the average of the middle market price of an Ordinary Share on each of the 20 business days up to and including 6 November 2015, being 66.325p.

$1 million of the cash consideration payable at completion of the Acquisition will be placed into an escrow account and will be released, subject to deductions in respect of any claims under the indemnity provisions in the Acquisition Agreement, to the Vendors 18 months following completion of the Acquisition, with the exception of a portion (up to $270,000) which will be released 6 months following completion of the Acquisition.

Completion of the Acquisition is conditional on, amongst other things, the passing of the Resolutions at the General Meeting. As described further below, the Company has obtained irrevocable undertakings from certain Shareholders, including all Directors holding shares in the Company, to vote in favour of the Resolutions in respect of the Existing Ordinary Shares held by them which represent, in aggregate, approximately 80.6 per cent. of the Company's current issued share capital.

The Vendors who will, on Admission, hold in aggregate 3,609,978 Ordinary Shares (representing 2.7 per cent of the Enlarged Share Capital), have undertaken to the Company, Cenkos and N+1 Singer that they will not (without the prior written consent of each of the Company, Cenkos and N+1 Singer) dispose of any interest in the Consideration Shares for the period of 12 months following completion of the Acquisition, except in certain limited circumstances. Such persons have also agreed that, for a further twelve months following the expiry of the initial 12 month period, they will only dispose of an interest in Ordinary Shares through Cenkos or N+1 Singer (or the broker for the time being of the Company, if it is not Cenkos or N+1 Singer, as the case may be) and in such manner as Cenkos or N+1 Singer (or such other broker(s)) may reasonably require with a view to the maintenance of an orderly market in the Ordinary Shares.

On completion of the Acquisition, TCRS will grant further restricted stock units over 601,131 Ordinary Shares to key employees of TCRS as part of an employee incentive plan. These grants are in addition to the grant of $0.9 million of restricted stock units issued as part of the consideration for the Acquisition. Such restricted stock units vest on the achievement of pre-agreed business targets and the relevant employee remaining in employment.

The Group has been granted an option, exercisable at any time before the first anniversary of the Acquisition, to take a lease of, or acquire (directly or indirectly) a 28,000 square feet property adjacent to TCRS's existing facilities in Bristol, near Philadelphia. Abzena has taken an option for this property so that it can complete environmental due diligence and determine if the expected operational needs of the Enlarged Group warrant acquisition of the property. This property was formerly a pilot plant facility for Rohm & Haas (now part of Dow Chemical Company) and is owned by a group of companies controlled by the Vendors. If Abzena was to exercise the option and acquire, directly or indirectly, the property, $180,000 (£118,800) of the $15 million consideration would be allocated to the property and payable as its purchase price, which then would be applied to satisfy the existing mortgage on the property. $180,000 will be held in an escrow account by an independent escrow agent until Abzena has determined whether it wishes to acquire or lease the property or the option period has expired. If Abzena does not acquire the property, $180,000 will be released from the escrow account to the Vendors.

The Chemistry Research Solution LLC ("TCRS")

TCRS will provide the Group with a presence on the East coast of the USA to complement the West coast presence established by the acquisition of PacificGMP in September 2015.

TCRS was founded in 2009 and is a profitable chemistry services business, with a focus on ADCs, providing the reagents for synthesis of ADCs as well as the conjugation of these reagents, with cytotoxic drugs attached, to antibodies for the creation of ADCs. It has 27 employees, mainly chemists, and occupies more than 25,000 square feet of leased offices and laboratories, equipped with state of the art analytical equipment for the characterisation of the complex ADC products. TCRS's customers include many leading biotech and pharmaceutical companies active in the field of ADC research.

TCRS's business has grown rapidly as the number of biopharmaceutical companies pursuing development of ADCs to treat cancer has grown following the approval of the first two ADC products in the USA, Adcetris in 2011 and Kadcyla in 2013.

TCRS's current business model is to develop a novel linker and/or conjugation process for its customers and to apply its customers' conjugation methods or generally available, non-proprietary, methods. Following the Acquisition, TCRS will be able to offer its customers Abzena's proprietary ADC technologies, so helping to increase the potential to create further opportunities to add to the Enlarged Group's portfolio of licence agreements for Abzena inside products to be developed by its partners. There are already a number of common customers between Abzena and TCRS.

TCRS generated unaudited revenues of $4.0m (£2.6m) for the 9 months to September 2015. In the years ended 31 December 2013 and 2014, TCRS generated unaudited revenues of $2.7m (£1.7m) and $4.2m (£2.7m) respectively. TCRS, as a limited liability company, has historically produced unaudited numbers according to principles of US GAAP modified to recognise revenues and expenses based on the date invoices are sent to customers or received from vendors. TCRS's unaudited profit before depreciation, amortisation and tax for the 9 months to 30 September 2015 was $0.9m (£0.6m) and $0.7m for the 12 months ended 31 December 2014. The Acquisition is expected to make a positive contribution to the Enlarged Group's EBITDA in the current financial year.

The Acquisition will broaden the ADC service capability of the Enlarged Group and, with further capital investment, will add GMP manufacture of ADCs, which will enable Abzena to take its existing customers' projects further through the biopharmaceutical development process. With the combination of PacificGMP and TCRS, the Enlarged Group will be able to optimise the design and selection of ADC development candidates and, following the planned capital investment, will be able to produce the main components of an ADC to GMP quality standards.

Following completion of the Acquisition, the Enlarged Group plans to lease additional space in the building that TCRS currently occupies and spend up to $4m (£2.6m) over the next 24 months to enable it to provide larger scale manufacturing services to its customers and establish the capability to manufacture ADC reagents and ADC products to GMP standards of the US Food & Drug Administration. The Directors believe this proposed investment will have the potential to quadruple revenues at TCRS over the next three years. TCRS is undertaking its own research to identify novel potent drugs which complement the novel payload research programmes being undertaken by the Group in the UK.

As TCRS's customers are mainly biopharmaceutical companies undertaking research and development, there will be a further opportunity to cross-sell the services of the Enlarged Group.

Details of the Placing

The Company has conditionally raised £21.0 million before expenses by the placing of 35,004,972 Placing Shares at the Placing Price to the Placees.

The Placing is conditional, amongst other things, upon:

• the passing of all of the Resolutions;

• the Acquisition Agreement not having been terminated or rescinded before Admission, having become unconditional in all respects (save for Admission), and having been completed (save for the payment of the consideration due on completion of the Acquisition Agreement);

• the Placing Agreement becoming or being declared unconditional in all respects and not having been terminated in accordance with its terms prior to Admission; and

• Admission becoming effective by no later than 8.00 am on 11 December 2015 or such later time and/or date (being no later than 8.00 am on 31 December 2015) as Cenkos, N+1 Singer and the Company may agree.

If any of the conditions are not satisfied, the Placing Shares will not be issued and all monies received from the Placees will be returned to them.

The Placing Shares are not subject to clawback in favour of Shareholders. The Placing is not underwritten.

The Placing Shares will be issued free of all liens, charges and encumbrances and will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue.

Application will be made to the London Stock Exchange for the admission of the Placing Shares (and the Consideration Shares) to trading on AIM. It is expected that Admission will occur and that dealings will commence at 8.00 am on 11 December 2015, at which time it is also expected that the Placing Shares will be enabled for settlement in CREST.

Details of the Placing Agreement

Pursuant to the Placing Agreement, Cenkos and N+1 Singer have severally agreed to use their respective reasonable endeavours, as agents of the Company, to procure subscribers for the Placing Shares at the Placing Price.

The Placing Agreement provides, amongst other things, for payment by the Company to each of Cenkos and N+1 Singer of certain commissions.

The Company will bear all other expenses of and incidental to the Placing, including the fees of the London Stock Exchange, printing costs, registrar's fees, all legal and accounting fees of the Company, Cenkos and of N+1 Singer and any other taxes and duties payable.

The Placing Agreement contains certain warranties and indemnities from the Company in favour of Cenkos and N+1 Singer and is conditional upon, amongst other things, the passing of all of the Resolutions and Admission.

Either Cenkos or N+1 Singer may terminate the Placing Agreement in certain circumstances, if, amongst other things, the Company is in breach of any of its obligations under the Placing Agreement, if there is a material adverse change in the condition, earnings, business, operations or solvency of the Group or if there is a material adverse change in the financial, political, economic or stock market conditions, which in their respective reasonable opinion makes it impractical or inadvisable to proceed with the Placing.

Use of Proceeds

The net proceeds of the Placing receivable by the Company of £20.0 million will be applied to:

Acquisition of TCRS and biomanufacturing capital expenditure £10 million

Technology development and investment in Abzena inside product development £5 million

Additional working capital £5 million

The net proceeds of the Placing receivable by the Company together with the Company's existing cash resources will, in the opinion of the Directors, provide the Enlarged Group with sufficient working capital for its present requirements, that is, for at least 12 months from Admission.

Related Party transaction

At the close of business on 23 November 2015 (the latest practicable date prior to the issue of this Document), Invesco was interested in 25,901,279 Ordinary Shares (representing 26.6 per cent. of the issued share capital of the Company), Imperial Innovations was interested in 22,953,452 Ordinary Shares (representing 23.5 per cent. of the issued share capital of the Company) and Woodford was interested in 10,552,956 Ordinary Shares (representing 10.8 per cent. of the issued share capital of the Company).

Invesco, Imperial Innovations and Woodford have each subscribed for 10,270,000, 4,166,650 and 20,000,000 Placing Shares and/or Existing Ordinary Shares (see paragraph "Secondary sale of Existing Shares" below) respectively. These subscriptions constitute related party transactions under the AIM Rules by virtue of each of Invesco, Imperial Innovations and Woodford being substantial shareholders in the Company. The Directors consider, having consulted with Cenkos, its nominated adviser, that the terms of the transaction are fair and reasonable in so far as its Shareholders are concerned.

On Admission, Invesco, Imperial Innovations and Woodford respectively will be interested in 36,171,279, 27,120,102 and 30,552,956 Ordinary Shares respectively (representing 26.6 per cent., 19.9 per cent. and 22.4 per cent. of the Enlarged Share Capital respectively).

Enterprise Investment Scheme and Venture Capital Trusts

On issue, the New Ordinary Shares will not be treated as either "listed" or "quoted" securities for relevant tax purposes. The following information is based upon the laws and practice currently in force in the UK and may not apply to persons who do not hold their Ordinary Shares as investments.

The Directors believe that the VCT/EIS Placing Shares should be eligible (subject to the circumstances of investors) for tax reliefs under EIS and for investment by VCTs.

The Company has applied for, but not yet received, advance assurance from HM Revenue & Customs, based on information provided, that: (i) following receipt of a properly completed form EIS 1, they will be able to authorise the Company to issue certificates under section 204(1) Income Tax Act 2007 in respect of the VCT/EIS Placing Shares and (ii) the VCT/EIS Placing Shares will be eligible shares for the purpose of section 285(3A) of the Income Tax Act 2007 and may be part of a qualifying holding for the purposes of Chapter 4 of Part 6 of the Income Tax Act 2007.

Although the Company currently expects to satisfy the relevant conditions for EIS and VCT investment, and the Directors are not aware of any subsequent change in the qualifying conditions or the Company's circumstances that would prevent the VCT/EIS Placing Shares from being eligible EIS and VCT investments on this occasion, neither the Directors nor the Company give any warranty or undertaking that relief will be available in respect of any investment in the VCT/EIS Placing Shares pursuant to this Document, nor do they warrant or undertake that the Company will conduct its activities in a way that qualifies for or preserves its status.

Companies can raise up to £5 million from State Aid investment sources, including under the combined EIS and from VCTs, in any 12 month period. There is also a cap of £12 million on the total amount of State Aid investment sources a company and its subsidiaries may receive, unless the company is a knowledge-intensive company, in which case the limit is £20 million. As the rules governing EIS and VCT reliefs are complex and interrelated with other legislation, if Shareholders or any potential investors are in any doubt as to their tax position, require more detailed information than the general outline above, or are subject to tax in a jurisdiction other than the United Kingdom, they should consult their professional adviser.

US Securities Laws

The New Ordinary Shares have not been and will not be registered under the Securities Act, or under the securities laws of any state or other jurisdiction of the United States and, unless so registered, may not be offered, sold, resold, taken up, delivered or distributed, directly or indirectly, within, into or in the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States.

Outside the United States, the New Ordinary Shares may not be offered, taken up, delivered or transferred, except in an "offshore transaction" (as defined in Rule 902(h) under the Securities Act) in accordance with Rule 903 or Rule 904 of Regulation S. There will be no public offer in the United States.

This Document 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 securities, or any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, such securities in the United States.

Current trading for Abzena and prospects for the Group

On 24 November 2015, Abzena published its interim results for the six months ended 30 September 2015, a summary of which is set out below.

• Revenues for the six month period to 30 September 2015, H1:2016, amounted to £3.5 million (H1:2015 £2.4 million);

• The total comprehensive loss increased to £3.5 million (H1:2015: £2.7 million) and included research and development costs of £1.9 million (H1:2015: £1.7 million) and general and administrative (G&A) expenses of £3.9 million (H1:2015: £2.6 million);

• Cash outflow from operating activities was £4.4 million (H1:2015: £3.0 million). Capital expenditure was £0.6 million (H1:2015: £0.2 million); and

• Cash, cash equivalents and bank deposits totalled £7.4 million as at 30 September 2015 (30 September 2014: £18.7 million).

Revenue contribution to the Group's reported revenue for H1:2016 by PacificGMP since its acquisition on 11 September 2015 was £0.2 million, gross margin of £0.1 million and administration and laboratory expenses of £0.1 million. A copy of the Company's interim results for the 6 months ended 30 September 2015 are available on the Group's website at www.abzena.com/results-and-presentations.

Secondary sale of existing shares

On or shortly after Admission, certain secondary trades of, in aggregate, 7,412,359 Ordinary Shares will also complete, reflecting additional institutional demand generated for Ordinary Shares and the wishes of certain existing Shareholders to realise value from some or all of their holdings of Ordinary Shares through the market. In total, 7,412,359 Existing Ordinary Shares (representing approximately 7.6 per cent. of the current issued share capital) will be sold at the Placing Price. Subsequent announcements will be made in accordance with the AIM Rules where the sale of Ordinary Shares in the secondary market by the selling Shareholders, or the issue of the New Ordinary Shares to Placees, as applicable, has given rise to a change in a Shareholder's notifiable interest in the Company's share capital.

To the extent that Selling Shareholders continue to hold any Ordinary Shares after the completion of the sale of their Existing Ordinary Shares on or shortly after Admission, they have undertaken to the Company, Cenkos and N+1 Singer that they will not (without the prior written consent of each of the Company, Cenkos or N+1 Singer) dispose of any interest in such retained Ordinary Shares for the period of 12 months following such completion, except in certain limited circumstances. Such lock-in undertakings have been given in respect of 9,367,964 Ordinary Shares (respectively 6.9 per cent. of the Enlarged Share Capital). Such persons have also agreed that, for a further twelve month period, they will only dispose of an interest in Ordinary Shares through Cenkos or N+1 Singer (or the broker of the Company at the time being, if it is not Cenkos or N+1 Singer (as applicable)) and in such manner as Cenkos or N+1 Singer (as applicable) (or such other broker) may reasonably require with a view to the maintenance of an orderly market in Ordinary Shares.

The City Code

The Company is subject to the City Code. Imperial Innovations and Invesco (who are presumed to be acting in concert for the purposes of the City Code) currently own 50.1 per cent. of the existing issued share capital of the Company. Following completion of the Placing and the Acquisition, the Concert Party will own 46.5 per cent. of the Enlarged Share Capital with Imperial Innovations owning 27,120,102 Ordinary Shares (19.9 per cent. of the Enlarged Share Capital) and Invesco owning 36,171,279 (26.6 per cent. of the Enlarged Share Capital). The Directors believe that the Concert Party is supportive of the Placing, the Acquisition and the Group's strategy. However, the interests of the Concert Party may be different from the interests of the Group or other Shareholders.

The subscription of Placing Shares in the Placing by the Concert Party gives rise to certain considerations and consequences under the City Code. Brief details of the Panel, the City Code and the protections they afford to Shareholders are described below.

The City Code is issued and enforced by the Panel. The Panel has been designated as the supervisory authority to carry out certain regulatory functions in relation to takeovers pursuant to the Takeover Directive (2004/25/EC). Its statutory functions are set out in Chapter 1 of Part 28 of the Act.

Under Rule 9 of the City Code, any person who acquires an interest (as defined under the City Code) in shares which, taken together with shares in which he is already interested and in which persons acting in concert with him are interested, carry 30 per cent. or more of the voting rights of a company, is normally required by the Panel to make a general offer in cash to the shareholders of that company to acquire the balance of the shares not held by such person or group of persons acting in concert at not less than the highest price paid by him or any persons acting in concert with him for any such shares within the 12 months prior to the announcement of the offer.

In addition, Rule 9 provides that when any person, together with any persons acting in concert with him, is interested in shares which in aggregate carry 30 per cent. or more of the voting rights of a company, but does not hold shares carrying more than 50 per cent. of such voting rights, and such person, or any such person acting in concert with him, acquires an interest in any other shares which increases the percentage of shares carrying voting rights, that person, together with any persons acting in concert with him, is normally required by the Panel to make a general offer in cash to the shareholders of that company to acquire the balance of the shares not held by such person or group of persons acting in concert at not less than the highest price paid by him or any persons acting in concert with him for any such shares within the 12 months prior to the announcement of the offer.

The City Code also provides that where any person, together with persons acting in concert with him, holds more than 50 per cent. of a company's voting rights, no obligation will normally arise under Rule 9 to make a general offer in cash to all shareholders of that company, save as described below, as a result of any acquisition by such person or any person acting in concert with him of any further shares carrying voting rights in the company. However, the Panel will regard as giving rise to an obligation to make an offer, the acquisition by a single member of a concert party of shares sufficient to increase his individual holding to 30 per cent. or more of a company's voting rights, or, if he already holds more than 30 per cent. but less than 50 per cent., an acquisition which increases his shareholding in that company.

For the purposes of the City Code, a concert party arises where persons acting in concert pursuant to an agreement or understanding (whether formal or informal) co-operate to obtain or consolidate control of a company or to frustrate the successful outcome of an offer for a company. Control means an interest, or interests, in shares carrying in aggregate 30 per cent. or more of the voting rights of the company, irrespective of whether such interest or interests give de facto control.

As a consequence of the change in the Concert Party's aggregate holding of Ordinary Shares, Imperial Innovations and Invesco will (both collectively and individually) become subject to the above-mentioned provisions of the City Code.

Shareholdings

The table below summarises the notifiable interests of Shareholders following movements in shareholdings as a result of Admission and the completion of certain secondary share sales of 7,412,359 Existing Ordinary Shares as described above in the paragraph headed "Secondary sale of existing shares."

*Notifiable interest below 3% of Enlarged Share Capital.

Resolutions

The Directors do not currently have authority to allot all of the New Ordinary Shares and, accordingly, the Board is seeking the approval of Shareholders to allot the New Ordinary Shares at the General Meeting. The Resolutions to be proposed at the General Meeting are, in summary, as follows:

1. an ordinary resolution, to grant the Directors authority to allot the New Ordinary Shares in connection with the Placing and Acquisition;

2. an ordinary resolution, to grant the Directors authority to allot new Ordinary Shares up to a maximum aggregate nominal amount of £90,773.20 (being one-third of the issued share capital of the Company following completion of the Placing and Acquisition);

3. a special resolution, to disapply pre-emption rights granted under the Act, in respect of the allotment of the New Ordinary Shares for cash in connection with the Placing; and

4. a special resolution, to disapply pre-emption rights granted under the Act, in respect of the allotment of new Ordinary Shares of £27,219.96 (being approximately 10 per cent. of the Enlarged Share Capital of the Company following completion of the Acquisition and Placing).

Action to be taken

A notice convening the General Meeting to be held at the offices of Pinsent Masons LLP, 30 Crown Place, London EC2A 4ES at 10.00 a.m. on 10 December 2015 is set out at the end of this Document. A Form of Proxy for use by Shareholders in connection with the General Meeting will be dispatched along with the Circular and is expected to be posted to Shareholders today.

Whether or not you propose to attend the General Meeting in person, you are requested to complete the Form of Proxy in accordance with the instructions printed on it and to return it to the Company's Registrar, by post or by hand (during normal business hours only) to SLC Registrars of 42-50 Hersham Road, Walton on Thames, Surrey KT12 1RZ, as soon as possible and in any event so as to arrive no later than 10.00 am on 8 December 2015. Completion and return of the Form of Proxy will not preclude you from attending the General Meeting and voting in person should you so wish.

The Company has obtained irrevocable undertakings from certain Shareholders, including all Directors holding Ordinary Shares in the Company, to vote in favour of the Resolutions in respect of the Existing Ordinary Shares held by them which represent, in aggregate, approximately 80.6 per cent. of the Company's current issued share capital.

Overseas Shareholders

The distribution of the Circular and the Form of Proxy in jurisdictions other than the UK may be restricted by law and therefore persons into whose possession the Circular and/or accompanying documents come, should inform themselves about and observe any such restrictions. Any failure to comply with any such restrictions may constitute a violation of the securities laws or regulations of such jurisdictions. Nonetheless, Shareholders who receive the Circular and a Form of Proxy may vote on the Resolutions set out in the Notice of General Meeting, attached at the end of the Circular, by returning the Form of Proxy to the Registrars, so as to be received by no later than 10.00 am on 8 December 2015.

Further information and risk factors

Prospective investors should read the whole of the Circular which provides additional information on the Company, the Placing and Acquisition. The attention of prospective investors is drawn to Part II of the Circular which contains a summary of the risk factors relating to an investment in the Company.

Recommendation

The Directors believe that the Placing and the Acquisition are in the best interests of the Company and Shareholders, taken as a whole. Accordingly the Directors unanimously recommend Shareholders vote in favour of the Resolutions, as they intend to do in respect of their own holdings of Ordinary Shares.

The Placing and the Acquisition are conditional, amongst other things, upon the passing of the Resolutions at the General Meeting. Shareholders should be aware that if the Resolutions are not approved at the General Meeting, neither the Placing nor the Acquisition will proceed and the Company will seek alternatives to continue to execute its business plan which shall require funds to be raised to finance the working capital requirements of the Group, including those of the recently acquired PacificGMP business.

Indicative Timetable

Notes:

(1) References to times in this Document are to London time (unless otherwise stated).

(2) The dates and timing of the events in the above timetable and in the rest of this Document are indicative only and may be subject to change.

(3) If any of the above times or dates should change, the revised times and/or dates will be notified by an announcement through RNS.

(4) The SEDOL of the Ordinary Shares is BN65QN4 and the ISIN is GB00BN65QN46.

Key Statistics