Mercia EIS Funds

Abzena raises £20 million in connection with forthcoming admission to AIM

NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE IN OR INTO THE UNITED STATES OF AMERICA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR THE COMMONWEALTH OF AUSTRALIA

7 July 2014

London, UK – Abzena plc (“Abzena”, the “Group” or the “Company”), a revenue-generating life sciences company providing services and technologies that enable the development of better biopharmaceutical products, has conditionally raised £20 million (before expenses) by way of a placing of 25,000,000 new ordinary shares at 80 pence per share (the “Placing Price”) in conjunction with the forthcoming admission of its ordinary shares to trading on the AIM market of the London Stock Exchange (“Admission”). 3,398,750 existing ordinary shares are also being sold at the Placing Price.

Application has been made for the Company’s entire issued share capital of 97,428,858 ordinary shares of £0.002 each (as enlarged by the placing of new ordinary shares) to be admitted to trading on AIM. It is expected that dealings in the ordinary shares will commence on AIM on 10 July 2014 under the ticker ABZA (ISIN number GB00BN65QN46). At the Placing Price, the market capitalisation of Abzena on Admission would be approximately £77.9 million.

Cenkos Securities plc is acting as nominated adviser and broker to the Company.

John Burt, CEO of Abzena said: “The proceeds from the Placing and our forthcoming admission to AIM mark important milestones in Abzena’s development and provides a platform for us to grow our existing business and expand our offering as we enable our customers and partners to translate research into better biopharmaceutical products that benefit patients.

“Abzena combines a growing, high-margin service business with the potential for substantial longer term revenue streams from licences to our proprietary technologies.”

For more information, please contact:

John Burt (Chief Executive Officer; john.burt@abzena.com) Julian Smith (Chief Financial Officer; julian.smith@abzena.com) Abzena plc Tel: +44 (0)1223 903351

Christopher Golden and Bobbie Hilliam, Cenkos Securities plc Tel: +44 (0) 20 7397 8900

Mark Swallow, Sita Shah or Chris Gardner, Citigate Dewe Rogerson Tel: +44 (0) 20 7638 9571 Email: abzena@citigatedr.co.uk

Background to the Company

 Abzena’s mission is to enable R&D companies to develop better biopharmaceutical products – e.g. therapeutic antibodies and proteins – with one or more of the following attributes: better efficacy, fewer side effects, more predictable quality and/or improved patient compliance

 Over 70 per cent. of the revenue of the world’s top ten selling medicines is derived from biopharmaceuticals including the world’s largest selling drug, HUMIRA®. Worldwide revenue from biopharmaceutical products was $169 billion in 2012 and this figure is forecast to exceed $220 billion in 2017

 Abzena is a revenue-generating life sciences company (FY2014: £5.8 million)1 with a range of complementary services and technologies (covering biopharmaceutical immunogenicity assessment, antibody and protein engineering, manufacturing cell line development and bioconjugation), which provide two sources of income:

High-margin fee-for-service income from a broad customer base which includes the majority of the top 20 bio pharmaceutical companies2
Milestone payments and/or future potential royalties from the development and commercialisation of products created with the Group’s technologies with more than 30 licence and option agreements currently in place and five customers’ products undergoing clinical development for a wide range of diseases, including cancer, autoimmune and inflammatory diseases
 The market which Abzena serves is growing, driven by an increase in outsourcing of R&D by major biopharmaceutical companies, as well as by biotechnology companies looking externally to access expertise and skills. The US market for applied research and preclinical drug development, the areas in which Abzena operates, is estimated at $9.6–$11.5 billion; the majority of Abzena’s revenues are derived from providing services and access to its technologies to US customers

Strategy and Use of Proceeds

Abzena’s strategy is to continue its growth as a provider of services and technologies to address critical R&D issues to enable the development of better biopharmaceuticals. Organic growth of the service business will be driven through leveraging of the Group’s brands and cross-selling to the Group’s existing and new customers. Further revenue growth will be driven by progression of customer products, being developed under licences granted by the Group, thereby leading to receipt by the Group of milestone payments and royalties.

1 The Group’s aggregated revenue for FY2014 of £5.8 million is calculated as if Antitope Limited had been acquired on 1 April 2013. Abzena’s consolidated revenue for FY2014 was £3.8 million.

2 Genetic Engineering and Biotechnology News, Top R&D Spenders of 2013 (March 2014) were Roche, Novartis, J&J, Merck, Pfizer, Sanofi, GSK, Lilly, AstraZeneca, Amgen, BMS, Takeda, Abbvie, Bayer, Celgene, Novo Nordisk, Gilead Sciences, Daiichi Sankyo, Astellas and Merck KGaA.

Abzena’s senior management has a track record in identifying, acquiring, integrating and growing businesses. The directors of Abzena believe there are opportunities for the Group to consolidate further businesses within the fragmented market in which it operates by adding complementary services and technologies to drive service revenue growth and long-term value creation through product royalties.

The net proceeds of the Placing payable to the Company will be used to:

 Invest in short- and long-term drivers of revenue:

Increase service capacity to meet growth in demand
Develop existing technologies to enhance licence revenue opportunities
Create value through co-investment in adoption of the Group’s technologies by its partners to create better biopharmaceutical products
Develop complementary new services and technologies in-house
 Acquire complementary services and technologies, through in-licensing and/or M&A

 Provide additional working capital

IMPORTANT NOTICE

This announcement does not constitute or form part of, and should not be construed as, an offer to sell or issue, or a solicitation of any offer to buy or subscribe for, any securities, nor should it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever nor should the fact of its distribution form the basis of, or be relied on in connection with, any contract.

Investors should not subscribe for or purchase any securities referred to in this announcement except on the basis of information in the Admission Document to be issued in due course by the Company in connection with the Placing of and admission of the ordinary shares in the share capital of the Company (“Ordinary Shares”) to trading on AIM (“Admission”). In the event of any discrepancy between this announcement and the Admission Document in its final form, the Admission Document will prevail. The information contained in this announcement is for background purposes only. It is not the purpose of this announcement to provide, and reliance may not be placed on this announcement as providing, a complete and comprehensive analysis of the Company’s financial or commercial position or prospects.

The date of Admission may be influenced by things such as market conditions. There is no guarantee that Admission will occur and financial decisions should not be based on the Company’s intentions in relation to Admission at this stage. Investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. Persons considering investment in such investments should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning any offer of securities. The value of securities can decrease as well as increase. Potential investors should consult a professional adviser as to the suitability of any investment for the person concerned.

No representation or warranty, express or implied, is or will be made by or on behalf of the Company, and no responsibility or liability is or will be accepted by the Company or its affiliates, as to the accuracy, completeness or verification of the information set out in this announcement, and nothing contained in this announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or the future. The Company and each of its affiliates accordingly disclaims, to the fullest extent permitted by law, all and any liability whether arising in tort, contract or otherwise which it might otherwise have in respect of this announcement or any such statement.

The distribution of this announcement outside the United Kingdom may be restricted by law and therefore any persons outside the United Kingdom into whose possession this announcement comes should inform themselves about and observe any such restrictions in connection with the Placing, the acquisition of securities and/or the distribution of this announcement. Any failure to comply with such restrictions may constitute a violation of the securities laws of any jurisdiction outside the United Kingdom. This announcement does not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction in which such offer would be unlawful. In particular, this announcement does not constitute an offer to buy securities, and it is not for distribution, directly or indirectly, in or into the United States, the Commonwealth of Australia, the Republic of Ireland, the Republic of South Africa, Canada or Japan. The Ordinary Shares have not been and will not be registered under the US Securities Act of 1933, as amended, any state securities laws in the United States or any securities laws of the Commonwealth of Australia, Canada, the Republic of Ireland, the Republic of South Africa or Japan or in any country, territory or possession where to offer them may contravene local securities laws or regulations. Accordingly, the Ordinary Shares may not, subject to certain limited exceptions, be offered or sold, directly or indirectly, in or into the United States, the Commonwealth of Australia, the Republic of Ireland, the Republic of South Africa, Canada or Japan.

This announcement includes “forward-looking statements” which include all statements other than statements of historical facts, including, without limitation, those regarding the Group’s financial position, business strategy, plans and objectives of management for future operations, or any statements preceded by, followed by or that include the words “targets”, “believes”, “expects”, “aims”, “intends”, “will”, “may”, “anticipates”, “would, “could” or similar expressions or negatives thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company’s control that could cause the actual results, performance or achievements of the Group to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Group’s present and future business strategies and the environment in which the Group will operate in the future. These forward-looking statements speak only as at the date of this document. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based unless required to do so by applicable law or the AIM Rules for Companies.

Cenkos Securities plc (“Cenkos”), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as nominated adviser for the purposes of the AIM Rules and as broker to the Company in connection with the Placing and Admission. Cenkos is not acting for, and will not be responsible to, any person other than the Company in connection with the Placing and Admission and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Cenkos nor for providing advice in connection with the Placing and Admission or any other matter referred to herein. No representation or warranty, express or implied, is made by Cenkos as to, and no liability is accepted by Cenkos in respect of, any of the contents of this document.

Neither the content of the Company’s website nor any website accessible by hyperlinks on the Company’s website is incorporated in, or forms part of, this announcement.