Proposed Placing

Oxford Pharmascience Group plc

(the "Company")

Proposed £20 million Placing and Notice of General Meeting

Oxford Pharmascience Group Plc (AIM: OXP), the specialty pharmaceutical company that redevelops medicines to make them better, safer and easier to take, today announces that it has successfully raised £20 million (before expenses) through the conditional placing of up to 200,000,000 new ordinary shares (the "Placing Shares"), at a placing price of 10 pence per share with certain new and existing institutional and other investors (the "Placing"). N+1 Singer acted as broker to the Placing.

The Placing was initially targeted to raise a minimum of £5 million as sufficient funds to allocate greater resource to the Company's OXPzeroTM Aspirin programme, thereby enabling the Company to address the significant opportunity it has identified in cardiovascular disease (CVD) applications. Aspirin is favourably positioned in primary and secondary prevention of CVD but its use is limited because of the gastric side effects. The Directors believe there is a very substantial opportunity to replace current aspirin and significantly increase usage if a GI-safe (gastro-intestinally safe) OXPzeroTM Aspirin derivative can be developed.

Having approached investors through its broker, the Company has been able to attract a level of funding which is significantly higher than originally anticipated. This enlarged fundraising will enable the Company to pursue a wider range of opportunities across its portfolio and will provide the potential to advance its development programmes further towards product registration before agreeing licensing deals, if the board determines at the appropriate time that such a move would be likely to deliver better value for shareholders.

Summary of the Placing and Notice of General Meeting

· £20 million gross proceeds (approximately £19.45 million after expenses) at a price of 10 pence per Placing Share (the "Placing Price").

· Net proceeds of the Placing will enable the Company to:

o further develop OXPzero™ Aspirin for cardiovascular use, including /allowing:

§ completion of development of the active pharmaceutical ingredient

§ scale-up of the manufacturing process to establish a source of GMP* supply

§ a more comprehensive set of preclinical and clinical proof of concept ("PoC") studies

§ further clinical studies (potentially towards /into phase III if deemed likely to deliver greater value than an earlier partnership deal)

o advance a selected OXPzeroTM NSAID** molecule further through phase III evaluation and towards registration (if deemed likely to deliver greater value for shareholders than an earlier partnership deal)

o advance work involving its OXPzeroTM Aspirin and OXPtargetTM platforms

§ potential to move its statin product, SafestatTM, through PoC and investigate a combined OXPzeroTM Aspirin/SafestatTM formulation

§ investigate the potential application of OXPzeroTM and OXPtargetTM technologies to other therapeutic areas

· The Placing is conditional, inter alia, upon approval by OXP shareholders of resolutions necessary to implement the Placing (the "Resolutions") at a general meeting expected to be held on 24 June 2015 at the offices of Fasken Martineau LLP, 17 Hanover Square, London W1S 1HU (the "General Meeting") which is expected to be held immediately after the Company's 2015 Annual General Meeting which is scheduled to start at 2 p.m. at the same location).

· The Company will post to Shareholders a Circular and Notice of General Meeting together with a proxy form as soon as reasonably practicable and will also notify its posting and availability on the Company's website at www.oxfordpharmascience.com.

· The Placing Price represents a discount of approximately 15.8 per cent. to the price of 11.875 pence per ordinary share, being the closing mid-market price of the Company's ordinary shares on 1 June 2015.

· The Placing is being structured as two tranches and is expected to comprise placings at the Placing Price of:

(1) up to 42,915,000 Placing Shares (the "First Placing Shares"); and

(2) the balancing number of Placing Shares not included in the First Placing, currently expected to be 157,085,000 Placing Shares (the "Second Placing Shares").

· The Placing is subject to customary conditionality as described below. In addition, the issue of both the First Placing Shares and the Second Placing Shares is subject to further conditions as described below. Certain conditions may be waived by the Company's broker in whole or in part.

· Admission to trading on AIM and commencement of dealings is expected to take place on 25 June 2015 in respect of the First Placing Shares and on 26 June 2015 in respect of the Second Placing Shares.

Marcelo Bravo, Chief Executive Officer, commented:

"We are delighted with the level of support shown by both new and existing investors for the Placing. This additional capital enables the Company to further expand our pipeline by addressing a different therapeutic area, cardiovascular disease, with OXPzeroTM Aspirin.

 "The additional capital also allows us to establish more robust clinical data for OXPzero™ Naproxen and OXPzero™ Ibuprofen. While we anticipate being in a position to start partnering discussions on these products from the second half of 2015, we will now have greater flexibility in our commercial strategy and have sufficient funds to take a selected NSAID molecule further through development, if we consider it will enhance value compared to an earlier stage licensing deal.

"With additional funding we are now also in a position to explore the potential of our statin product, SafestatTM, through proof of concept studies and to investigate its potential use in combination with OXPzeroTM Aspirin, as well as exploring the possible application of our technology platforms to other therapeutic areas.

"We look forward to reporting on further progress and our development plans from a position of financial strength, as we seek to unlock significant value for OXP shareholders."

* Good Manufacturing Practice

** Non Steroidal Anti-Inflammatory Drug (see below for more information on the Company's NSAID programmes)

Additional Important Information

· Woodford Investment Management LLP ("Woodford") is currently a beneficial holder of approximately 29.99 per cent. of the Company's current issued share capital. Woodford has agreed to subscribe for 100,000,000 Placing Shares, being an amount that would increase its percentage holding of the Company following the Placing to over 30 per cent. which, without a waiver of the obligations under Rule 9 of the Takeover Code, would oblige Woodford (and any persons acting in concert with it) to make a general offer to OXP shareholders under Rule 9 of the Code (a "Rule 9 Offer").

· The Company intends to apply for a waiver of the requirement for Woodford to make a Rule 9 Offer under Note 1 to the Notes on Dispensations from Rule 9 of the Code, which states that when the issue of new securities in consideration for an acquisition or a cash subscription would otherwise result in an obligation to make a Rule 9 Offer, the Takeover Panel (the "Panel") will normally grant a waiver if, inter alia, the shareholders of a company who are independent of the person who would otherwise be required to make an offer and any person acting in concert with him or her (the "Independent Shareholders") pass an ordinary resolution on a poll at a general meeting (a "Whitewash Resolution") approving the proposals giving rise to the obligation to make a Rule 9 Offer and the Panel has agreed to such a waiver being sought.

· The Panel may waive the requirement for a Whitewash Resolution to be considered at a general meeting (and for a circular to be prepared in accordance with Section 4 of Appendix 1 to the Code) if Independent Shareholders holding more than 50 per cent. of the company's shares capable of being voted on such a resolution confirm in writing that they would vote in favour of the Whitewash Resolution were such a resolution to be put to the shareholders of the company at a general meeting.

· Accordingly the Company will seek the Panel's approval to approach certain of the Company's Independent Shareholders to obtain written consent in an agreed form to the granting of a waiver from the requirement for Woodford to make a Rule 9 Offer in respect of such number of Placing Shares to be subscribed for by Woodford as would result in Woodford's holding following Admission exceeding the 30% threshold set out in the Code and that otherwise would trigger a Rule 9 offer (the "Whitewash Shares"), The Company will update shareholders on developments in this regard.

· The Circular convening the General Meeting will contain additional information on the Code matters relevant to the Placing as well as giving further background to and reasons for the Placing.

Mr. Richard Griffiths, a holder of approximately 16.17 per cent. of the Company's current issued share capital, has agreed to subscribe for 5,000,000 Placing Shares. As Woodford and Mr. Griffiths are both substantial shareholders under the AIM Rules, the participation of these parties in the Placing therefore constitutes a related party transaction under Rule 13 of the AIM Rules. The Directors consider that, having consulted with N+1 Singer as the Company's nominated adviser, that the terms of Woodford's and Mr. Griffiths' participation in the Placing are fair and reasonable in so far as Shareholders are concerned.

Information on the Placing

In connection with the Placing, the Company has entered into the Placing Agreement pursuant to which N+1 Singer has agreed, in accordance with the terms of the Placing Agreement, to use reasonable endeavours to place the Placing Shares with existing and new institutional investors.

The Placing is conditional, inter alia, on:

· the passing of the Resolutions;

· the conditions in the Placing Agreement being satisfied or (if applicable) waived and the Placing Agreement not having been terminated in accordance with its terms prior to Admission; and

· Admission (which will take place in two stages) becoming effective by no later than 8.00 a.m. on 25 and 26 June 2015 for admission of the First and Second Placing Shares respectively (or such later times and/or dates, being no later than 8.00 a.m. on 31 July 2015, as the Company and N+1 Singer may agree).

The issue of the First Placing Shares is further conditional upon provisional clearance being given by HM Revenue and Customs in relation to the continuing eligibility of shares in the Company for VCT and/or EIS purposes, or N+1 Singer otherwise having reallocated the First Placing Shares to other placees or having otherwise scaled back the Placing.

The issue of the Second Placing Shares is not conditional upon the issue of the First Placing Shares but is conditional, in respect of the purchase of such number of the 100,000,000 Placing Shares to be acquired by Woodford as would result in Woodford holding shares in excess of the mandatory bid threshold set out in the Code (the "Whitewash Shares"), upon the Panel granting a waiver from the requirement for Woodford to make a Rule 9 Offer in respect of its purchase of the Whitewash Shares in the Placing, or N+1 Singer having otherwise reallocated the Whitewash Shares to other investors or having otherwise scaled back the Placing.

The Placing Agreement contains customary warranties given by the Company to N+1 Singer as to matters relating to the Group and its business and a customary indemnity given by the Company to N+1 Singer in respect of liabilities arising out of or in connection with the Placing. N+1 Singer is entitled to terminate the Placing Agreement in certain circumstances prior to Admission including circumstances where the warranties are found not to be true or accurate or are misleading in any material respect or the occurrence of certain force majeure events.

In respect of each Admission, if any of the conditions are not satisfied or waived (where capable of waiver), the Placing Shares will not be issued and all monies received from investors in respect of the Placing Shares will be returned to them (at the investors' risk and without interest) as soon as possible thereafter.

The Placing Shares will be issued credited as fully paid and will rank in full for all dividends and other distributions declared, made or paid after Admission in respect of Ordinary Shares and will otherwise rank pari passu in all respects with the existing Ordinary Shares on Admission. The Placing Shares are not being made available to the public and are not being offered or sold in any jurisdiction where it would be unlawful to do so.

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on LSE AIM. On the assumption that, inter alia, the Resolutions are passed, it is expected that admission of the Placing Shares to AIM will become effective on or around the dates indicated above.

Effect of the Placing

Upon Admission, the Enlarged Share Capital is expected to be 1,205,661,619 Ordinary Shares. On this basis, the New Ordinary Shares will represent approximately 16.59 per cent. of the Company's Enlarged Issued Share Capital.

Recommendation by the Directors

The Directors believe that the proposed Placing is in the best interests of the Company and its shareholders, and will therefore be unanimously recommending, in the Circular to be published in connection with the Placing, that shareholders vote in favour of the Resolutions.

For further information:

About Oxford Pharmascience Group Plc

Oxford Pharmascience Group Plc uses a range of proprietary technology platforms to re-develop existing medicines to make them better, safer or easier to take. The Company does not manufacture or sell its own pharmaceutical products direct to consumers but instead seeks to license its technologies and dossiers to a network of partners, mainly leading pharmaceutical companies with Rx (prescription) and OTC (Over the Counter) branded portfolios.

Oxford Pharmascience Group Plc focuses on existing medicines that are proven to be safe and effective but nevertheless still have associated issues and side effects often affecting compliance. By working with such medicines the Company is able to develop new innovative products for a fraction of the cost, in much quicker timescales and without the high risk of failure associated with developing new drugs. 

NSAIDs are one of the most widely used classes of drugs, with combined annual sales in excess of $12bn1 and more than 30 million users worldwide consuming NSAIDs each day2. Chronic use of NSAIDs causes well-documented GI side effects, including ulcers and bleeding, and leads to significant morbidity and mortality in a substantial number of patients, with significant associated healthcare costs. The OXPzero™ platform technology reduces these risks and is being selectively applied to the most commonly used NSAID molecules, namely ibuprofen, naproxen and diclofenac for pain and inflammation and aspirin for primary and secondary prevention of cardiovascular (CVD) disease.

Global sales of Ibupofen, Naproxen and Dicloflenac NSAIDs on an OTC basis are $2.9bn p.a. growing at 4%5. In that market, the top six players sell over 50% of all drugs worldwide5. The Company believes that its OXPzeroTM variants of these drugs offer significant opportunity for global brand owners to gain competitive advantage and to increase or defend market share. Accordingly the Company is seeking to build robust data packages to support partnering discussions for the OTC market, from the second half of 2015.

Global prescription (Rx) sales of the same drugs amount to $4bn p.a.1 with c. 28m patients requiring NSAID treatment in US & the top 5 European markets.6 Company-commissioned research in the US market indicated a robust business case for OXPzeroTM NSAIDs to be prescribed, with reimbursement acceptance at a significant premium to generic NSAIDs for high risk patients. 7 The OXP Directors believe that OXPzeroTM compounds will, following further development, represent a significant opportunity for commercial partners to derive strong gross profit margin and increase market share; commercialisation of the NSAID pain portfolio for Rx use is expected to follow conclusion of OTC partnering discussions.

Aspirin currently achieves global OTC sales of $1.6 billion p.a., growing at a rate of 1%5, with a significant proportion (65%) of prescriptions written in the US for primary and secondary prevention of CVD are purchased over the counter.8 Global prescription sales of aspirin amount to $1.8bn p.a. growing at 1%1. Aspirin is taken daily by more than half of older U.S. Adults.9

With GI damage the main deterrent to the use of aspirin in primary prevention of CVD, the Directors believe there is a very substantial opportunity to replace current aspirin and significantly increase usage if a GI-safe (gastro-intestinally safe) OXPzeroTM Aspirin derivative can be developed. The Directors further believe that there a highly competitive pricing model is available for OXPzeroTM Aspirin in a prescription setting, and research commissioned by the Company in the US and the UK showed significant interest from clinicians to switch patients to OXPzeroTM aspirin. 8

Sources

1. Evaluate Pharma

2. Black Swan Analysis Ltd - Market Evaluation for OXPZero™ technology to improve compliance with leading NSAID brands, November 2013 (commissioned by OXP)

3. Lancet. 2013 Aug 31; 382(9894): 769-779.doi: 10.1016/S0140-6736(13)60900-9

4. American College of Gastroenterology - Ulcers and Gastrointestinal Bleeding: Protecting Your Health

5. Euromonitor International - Consumer Health 2014

6. Black Swan Analysis Ltd - Market Evaluation for OXPZero™ technology to improve compliance with leading NSAID brands, November 2013 (commissioned by OXP)

7. Vitaccess (commissioned by OXP)

8. Black Swan Analysis Ltd - Market Evaluation & Research results for Aspirin OXPzeroTM utility in CVD prevention, April 2015 (commissioned by OXP)

9. Drugs.com - Daily Aspirin Taken by More Than Half of Older US Adults