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Vectura announces successful completion of IPO

Vectura Group plc (“Vectura” or the “Company”)
Vectura Announces Successful Completion of IPO
Placing raises £20 million, valuing Vectura at £60 million

Chippenham, UK, 25 June 2004: Vectura Group plc, the UK-based emerging pharmaceutical development company, today announces that it has successfully raised £20 million through the issue of new ordinary shares in relation to its proposed application for admission to trading on AIM (the “Placing”). The shares being sold in the Placing have been priced at 56 pence per share (the “Placing Price”), at which price the Company will have a market capitalisation on admission of approximately £60 million.

Details of the Placing

• An aggregate of 35,848,310 shares will be issued at the Placing Price in connection with the admission to AIM, corresponding to a total offer size of approximately £20 million. No existing shares are being sold as part of the Placing.



• Based on the Placing Price and the total number of shares in issue at admission of 107,206,037, the market capitalisation of the Company at admission will be approximately £ 60 million.



• The Placing generated a broad base of institutional investor interest and has attracted a good geographic spread of investors from the UK and Continental Europe.



• It is expected that dealings in the existing ordinary shares and 505,678 ordinary shares that are being placed with certain VCTs will commence on AIM at 08:00 on 2 July 2004 (“First Admission”) under the ticker symbol VEC.L. It is expected that dealings in the remaining ordinary shares to be issued will commence on AIM at 08:00 on 5 July 2004 (“Second Admission”).



• In connection with the Placing, Nomura International plc (“Nomura”) has been granted an option (the “Over-allotment Option”) by the Company to purchase up to an additional 3,571,428 shares at the Placing Price to cover over-allotments, if any, and to cover short positions arising from stabilisation transactions. The Over-allotment Option will be exercisable for a period of 30 days after First Admission.



• Nomura is acting as Nominated Adviser and Broker to the Company.

Commenting on the announcement, Chris Blackwell, Chief Executive of Vectura, said: “Our ability to complete the placing in such challenging market conditions is testament to the strength of our business model and a reflection of Vectura’s strong growth potential. The funds raised will place Vectura in a strong position to take our lead products through to the point where we can out-licence them to development and marketing partners, as well as helping to develop the rest of our product pipeline. We look forward with confidence to our future as a public company.”

Enquiries:

Further information

Vectura’s principal focus is the development of a range of inhaled drugs for the treatment of both lung diseases and conditions where delivery via the lungs can provide significant benefits, such as a rapid onset of action, improved efficacy and improved tolerability compared with current therapies. The Company’s strategy is to combine its proprietary pulmonary formulation and device technologies with existing, off-patent drugs either for use in new indications or where delivery via the lungs can provide significant benefits compared with current therapies, such as a rapid onset of action, improved efficacy and improved tolerability. The Company will seek to license its lead products to pharmaceutical companies with established sales and marketing infrastructures for the later stages of development and for commercialisation, typically prior to Phase III clinical development. The Company has development collaborations with a number of companies, including GSK, Chiesi, Arakis, Zambon and Ranbaxy.

Product Pipeline

Vectura has two lead products that have demonstrated proof-of-principle in clinical trials and for which preparations for Phase IIb studies are in progress:

• NVA237 is an inhaled treatment for chronic obstructive pulmonary disease (COPD), being developed jointly with the UK biotech company, Arakis Limited. The global market for the treatment of COPD, the fourth leading cause of death in the US today, is estimated at $4 billion. The results of a recent Phase IIa trial of NVA237 demonstrated that the optimised inhaled formulation of the drug offers the potential for a long-acting, once-daily product, well suited to the needs of COPD patients.



• VR004 is an inhaled therapy for the treatment of erectile dysfunction (ED), where there is a need for products with a faster onset of action and for which the global market is estimated at $2.5 billion. Clinical studies to date indicate that, with a median onset of action of 8 minutes, VR004 has a competitive profile in comparison with existing approved ED products, whose time to onset of action is longer.

The initial success of these two lead products is also of broader value, with VR004 in particular demonstrating that Vectura’s technologies improve performance when delivering a systemically-active drug through the lungs.

In addition to its lead clinical programmes, Vectura has a pipeline of products at earlier stages of development, a number of which are expected to progress into clinical development in the next 12 months.

Technology Platforms

Vectura has developed a number of inhaled drug formulation and device technologies that may be applied to a broad range of drugs to create patent-protected pharmaceutical products and which may be offered for licensing to third parties.

In addition to its own pharmaceutical products, Vectura operates a well-established, Pharmaceutical Development Services business that provides pharmaceutical contract development work for other companies.

Management Team

Vectura’s Executive management comprises Dr Chris Blackwell, Chief Executive and Anne Hyland, Chief Financial Officer, who respectively bring extensive product development and financial experience in the pharmaceutical sector.

The Company also has an experienced team of Non-Executive Directors, led by Chairman, Jack Cashman, who was previously Chairman and joint Chief Executive of R. P. Scherer. Dr Andy Richards, co-founder of Chiroscience, remains on the Board, which has recently been strengthened by the appointment of Dr John Brown, the former Chief Executive Officer of Acambis plc.

This announcement does not constitute or form part of an offer to sell or issue, or a solicitation of an offer to buy or subscribe for, any securities and any purchase of, or application for, shares to be issued or sold in connection with the placing of shares in the Company, should only be made solely on the basis of information contained in the admission document to be issued in connection with the admission to AIM and placing.

In particular this announcement does not constitute an offer to sell or the solicitation of an offer to buy shares in any jurisdiction in which such an offer or solicitation is unlawful. The ordinary shares have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), and, subject to certain exceptions, may not be offered or sold or subscribed, directly or indirectly, within the United States, Canada, Japan or Australia or to or by any US Person (as such term is defined in Regulation S promulgated under the Securities Act) or any national, resident or citizen of Canada, Japan and Australia or any corporation, partnership or other entity created or organised under the laws thereof.

This announcement has been issued by and is the sole responsibility of the Company and its directors and has been approved by Nomura International plc ("Nomura"), which is regulated in the United Kingdom by The Financial Services Authority, solely for the purposes of section 21 of the Financial Services and Markets Act 2000, in connection with the placing of shares in the Company. Nomura is acting exclusively for the Company in relation to the admission to AIM and placing and will not be responsible to anyone else for providing the protections afforded to clients of Nomura nor for providing advice in relation to the admission to AIM and placing.

Stabilisation/FSA.