4 May 2016
Proposed acquisition of Haemostatix Limited

London, UK 04 May 2016:  Ergomed plc, (“Ergomed” or the “Company”, AIM: ERGO) a profitable UK-based group dedicated to the provision of specialised services to the pharmaceutical industry and the development of new drugs, today announces the proposed acquisition of Haemostatix Limited (“Acquisition”), a company focused on developing a pipeline of topical products to treat surgical bleeding (coagulants or ‘haemostats’).

Ergomed is acquiring 100 per cent. of the issued share capital of Haemostatix for an initial consideration of £8.0 million, with further success and sales based payments of up to £20.0 million.

The  Company also  announces  a  conditional  placing  of  6,433,350  Initial  Placing  Shares  at  a  price  of  140 pence per share to raise £9.0 million, before expenses and has also granted the Option to each of the Joint Bookrunners under the Placing Agreement in order to enable them to deal with additional demand under the Placing. The maximum number of Option Shares that may be issued pursuant to the exercise of the Option is 2,875,000. Including the Option, the Placing will consist of up to 9,308,350 Placing Shares at a price of 140 pence per share to raise up to £13.0 million, before expenses.

The net proceeds of the Placing will be used to fund the initial cash consideration and debt repayments as part of the Acquisition, to advance Haemostatix’s two lead products and to provide capital for further bolt on acquisitions of services businesses.

A General Meeting, to approve the necessary resolutions for the issue and allotment of the Placing Shares and to permit disapplication of pre-emption rights is to be convened for 11.00 a.m. on Monday 23 May 2016 at the offices of Covington & Burling LLP, 265 Strand, London WC2R 1BH.

Miroslav Reljanovic MD, Chief Executive Officer of Ergomed plc, said:

“The  Haemostatix  acquisition  provides  an  opportunity  to  advance  the  Co-development  part  of  our  growth strategy through the development of our first wholly-owned development programme.   We have confidence from  the  current  pre-clinical  and  clinical  data  that  the  Haemostatix  technology  works  as  an  effective haemostat.  This,  combined  with  the  rapid  development  and  attractive  market  size,  means  the  acquisition offers great upside potential for Ergomed.”

“Ergomed intends to continue building a sustainable and profitable hybrid  business model through bolt on acquisitions  and  growth  opportunities  in  its  Services  business  as  well  as  progressing  its  Co-development pipeline.”

Ben Nichols, Chief Executive Officer of Haemostatix, commented:

“I  am  delighted  to  be  working  with  Ergomed.  With  the  deep  expertise  of  Ergomed’s  clinical  development team and its global infrastructure, I believe we can accelerate Haemostatix’s development programmes for the  benefit  of  all  stakeholders.  PeproStatTM  and  ReadyFlowTM  are  both  innovative  products  that  have  the potential to capture a meaningful share of a $2 billion-plus global market.”

Highlights of the Acquisition of Haemostatix and Placing:

Proprietary platform focused on synthetic peptide-based haemostats for use in surgical applications.

Targeted at the global surgical bleeding market of more than $2.5 billion.

Rapid and relatively low cost development programme; market launch expected 2020.

Overcomes disadvantages of current blood products which require preparation prior to use, are derived from blood and can take several minutes to act.

Two lead products:

PeproStatTM  – Phase IIb ready  – a blood-free, ready-to-use topical liquid haemostat which is applied to wounds to control bleeding during surgery.

ReadyFlowTM  – late pre-clinical – a blood-free, ready to use, transparent and flowable haemostatic gel packaged in a pre-filled syringe that can be applied to irregular bleeding sites or where observation of the closure or wound is advantageous.

Up to £28.0 million total consideration:

£8.0 million at close; of which £6.2 million paid through Consideration Shares at the Issue Price.

Milestones of up to £4.0 million at start of Phase III (provided the Company’s market capitalisation exceeds £100.0 million); plus £16.0 million sales-based milestone payments.

An additional sum in the event that the Enlarged Group is able to utilise certain existing tax losses that are currently available to Haemostatix.

Placing of the Initial Placing Shares to raise £8.4 million (net of expenses):

£1.8 million for the initial cash component of the Acquisition consideration (which includes the Haemostatix Loan of £1.0 million) and £5.0 million for the future development of Haemostatix products.

Balance of proceeds (up to £5.6 million if the maximum number of Option Shares are issued) earmarked for acquisition of complementary services businesses to supplement the Company’s own cash resources.

Intention for Ergomed to remain profitable at the EBITDA level.

The Company  has  also  granted  the  Option  to  each  of  the  Joint  Bookrunners  under  the  Placing Agreement in order to enable them to deal with additional demand under the Placing in the event that requests to participate in the Placing from institutional and certain other investors are received during the period  from  the  date  of  this  announcement  to  5.00  p.m.  on  Friday 13  May  2016.  Any  Option  Shares issued pursuant to the exercise of the Option will be issued on the same terms and conditions as the Initial  Placing  Shares.  The  maximum  number  of  Option  Shares  that  may  be  issued  pursuant  to  the exercise of the Option is 2,875,000.

Definitions

The  capitalised  terms  used  in  this  Announcement  have  the  meaning  set  out  in  the  Appendix  2  to  this Announcement.

Enquiries:

Stifel Nicolaus Europe Limited

Jonathan Senior / Stewart Wallace

Tel:  +44 (0) 20 7710 7600 (Nominated Adviser and Joint Broker)

Numis

(Joint Broker)

Michael Meade / James Black

Tel: +44 (0) 20 7260 1000

FTI Consulting                                                                          

Simon Conway / Mo Noonan / Natalie Garland-Collins

Tel:  +44 (0) 20 3727 1000

About Ergomed

Ergomed plc is a profitable UK-based business providing drug development services to the pharmaceutical industry and has a growing portfolio of co-development partnerships. It operates in over 50 countries.

Ergomed provides clinical development, trial management and pharmacovigilance services to over 80 clients ranging  from  top  10  pharmaceutical  companies  to  small  and  mid-sized  drug  development  companies. Ergomed successfully manages clinical development from Phase I through to late phase programmes.

Ergomed has a wide therapeutic focus, with a particular expertise in oncology, neurology and immunology and the development of orphan drugs. Ergomed believes its approach to clinical trials is differentiated from that  of  other  providers  by  its  innovative  Study  Site  Management  model  and  the  use  of  Study  Physician Teams, resulting in a close relationship between Ergomed and the physicians involved in clinical trials.

As  well  as  providing  high  quality  clinical  development  services,  Ergomed  is  building  a  portfolio  of  co- development partnerships with pharma and biotech companies which share the risks and rewards of drug development. Ergomed leverages its expertise and services in return for carried interest in the drugs under development.  For further information, visit: http://www.ergomedplc.com

About Haemostatix

Haemostatix has pioneered a new approach to controlling bleeding that is based on a peptide that binds to the protein fibrinogen thereby inducing rapid blood clotting. This innovative technology platform is being used to develop a pipeline of topical products to treat surgical bleeding with further applications in trauma, tissue repair and regenerative medicine.

Haemostatix  was  originally  a  spin-out  from  the University of  Leicester  founded  by industry veteran  Sarah Middleton  and  Professor  Alison  Goodall.  The  Company  has  been  funded  by  Albion  Ventures,  Catapult Ventures,  NESTA,  Lachesis,  Esperante  and  the  Wellcome  Trust.  The  business  has  been  managed  by industry veterans Dr Ben Nichols, CEO and Dr Robert Burns, Chairman. The lead products were invented by Haemostatix’s scientists Dr Greg Walker and Dr Renata Zbozien.

IMPORTANT NOTICES

Stifel Nicolaus Europe Limited (“Stifel”), which is authorised and regulated by the UK Financial Conduct Authority, is acting as nominated adviser and joint bookrunner exclusively to the Company and will not be responsible to any person other than the Company for providing the protections afforded to its customers or for advising any other person on the contents of this Announcement or any transaction or arrangement referred to herein. Stifel has not authorised the contents of any part of this Announcement for the purposes of the AIM Rules. The responsibilities of Stifel as the Company’s nominated adviser and joint bookrunner under the AIM Rules are owed solely to the London Stock Exchange and are not owed to the Company or any Director, Shareholder or any other person in respect of a decision to subscribe for Shares in the Company. Stifel is not making any representation or warranty, express or implied, as to the contents of this document.

Numis  Securities  Limited  (“Numis”),  which  is  authorised  and  regulated  by  the  UK  Financial  Conduct Authority, is acting as joint bookrunner to the Company and will not be responsible to any person other than the Company for providing the protections afforded to its customers or for advising any other person on the contents of this Announcement or any transaction or arrangement referred to herein. Numis has not authorised the contents of any part of this Announcement for the purposes of the AIM Rules.

Forward Looking Statements

Certain  statements  contained within  the  announcement  are  forward  looking  statements  and  are  based on current expectations, estimates and projections about the potential returns of Ergomed plc (“Ergomed”) and industry  and  markets  in  which  Ergomed  operates,  the  Directors’  beliefs  and  assumptions  made  by  the Directors.   Words   such   as   “expects”,   “anticipates”,   “should”,   “intends”,   “plans”,   “believes”,   “seeks”, “estimates”,  “projects”,  “pipeline”  and  variations  of  such  words  and  similar  expressions  are  intended  to identify such forward looking statements and expectations. These statements are not guarantees of future performance or the ability to identify and consummate investments and involve certain risks, uncertainties, outcomes of negotiations and due diligence and assumptions that are difficult to predict, qualify or quantify. Therefore, actual outcomes and results may differ materially from what is expressed in such forward looking statements or  expectations. Among  the factors that  could cause  actual results to differ  materially are: the general  economic  climate,  competition,  interest  rate  levels,  loss  of  key  personnel,  the  result  of  legal  and commercial  due  diligence,  the  availability  of  financing  on  acceptable  terms  and  changes  in  the  legal  or regulatory environment.

These  forward-looking  statements  speak  only  as  of  the  date  of  this  announcement.  Ergomed  expressly disclaims  any  obligation  or  undertaking  to  disseminate  any  updates  or  revisions  to  any  forward-looking statements contained herein to reflect any change in Ergomed’s expectations with regard thereto, any new information or any change in events, conditions or circumstances on which any such statements are based, unless required to do so by law or any appropriate regulatory authority.