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28 January 2013
Angel Biotechnology Holdings plc
("Angel" or "the Company")
General Meeting Statement
At the general meeting to be held today at 10.30 am, Mr Nick Smith, Chairman of the Company will make the following statement to shareholders:
"I would like to provide shareholders with an update on the joint venture negotiations with OOO "NPF Materia Medica Holding" ("MMH") and other activities of the Company. As announced on 28 December 2012, AB Biotechnology Ltd has been formed as the company through which our proposed joint venture with MMH will be conducted. At the time, it was expected that the agreements would be signed in mid-January when the directors of both partners would be on-site at Pentlands Science Park and a more detailed announcement of the terms of the joint venture would be released at that time.
I am pleased to state that key terms have been agreed in principle and we are now expecting the visit from MMH to take place in early February, subject to visa confirmation. However, the Company has not progressed documentation as quickly as anticipated, owing to a decision by the Angel Board to review its options in light of the trading difficulties and the loss of capital which has occasioned today's general meeting.
This review is now complete and has shown that the future of the Company is dependent on not only delivering the proposed joint venture with MMH but also on the delivery of a second arrangement, outlined below, concurrent with the proposed MMH transaction. It is the Directors' view that both transactions are necessary to effectively address the trading difficulties experienced by the Company to date, and that without both, the cash resources of the Company are at risk of exhaustion by the end of March 2013. The Directors anticipate that the proposed agreement described below should be ready for signature before the end of March 2013.
Whilst Angel's business development team is progressing a number of sales opportunities, securing Angel's first orders for Cramlington are taking longer than the Board had anticipated. The Board also accepts that raising funds through the market will be extremely difficult at this time.
Accordingly, in order to secure the future of the Company, the Board has agreed that the Company needs to enter into a strategic relationship with another party to develop more effectively its contract manufacturing ("CMO") business. The Company has for some time been in discussions with a consortium of overseas organisations active in developing and marketing products which match our core manufacturing competences. Following a meeting with a representative of the consortium at Cramlington on Friday 25 January 2013, matters have now progressed sufficiently to satisfy the Board that there are reasonable grounds for the Board to expect a strategic partnership agreement with that consortium will be concluded before the end of March 2013. The arrangement's objective is to create a joint venture between Angel and the strategic partner for the CMO business and will likely involve the creation of an operating subsidiary of Angel through which the contract manufacturing business will be conducted. The benefits of this arrangement will include bringing Cramlington into a state of readiness to conduct the general CMO business. It is also proposed to channel significant new orders through the CMO business relating to products in development by the strategic partner's consortium. Such an arrangement is anticipated to involve the strategic partner investing up to £1 million in the operating subsidiary.
In order to protect the interests of creditors from a further deterioration of the Company's financial position, the Board is in negotiation with MMH for an arrangement to allow ongoing payment of direct and indirect costs relating to the MMH contracts and, in the case of the CMO business, for the strategic partner consortium to provide funding in advance to cover the costs associated with delivering the transaction and the net costs of the CMO business until delivery of the transaction. The Board anticipates it is likely to be in a position shortly to announce the terms of such arrangements, but the Board will monitor their progress on a daily basis to ensure that it continues to act in the interest of creditors.
Your Board believes that both agreements and the arrangements for pre-funding are essential to the ongoing viability of the Company. The pre-funding arrangements need to be concluded rapidly and the agreements for both the MMH joint venture and the CMO business strategic partnership need to be concluded before the end of March 2013 given the cash currently available to the Company. In the absence of other developments, failure to conclude either agreement or their respective pre-funding arrangements will make it impossible for the Company to continue trading.
Whilst the discussions so far have given the Board confidence in the enthusiasm of all parties to conclude these two sets of agreements, there can be no assurance that either or both will be concluded.
Developments, which we hope will include positive progress on both sets of pre-funding arrangements, and the respective final agreements, will be announced as appropriate."
For further information:
Angel Biotechnology Holdings plc
Nicholas Smith, Non-Executive Chairman +44 (0) 131 445 6077
Grant Thornton, Corporate Finance
Colin Aaronson / Melanie Frean +44 (0) 20 7383 5100
Hybridan LLP (Broker)
Claire Noyce, Deepak Reddy +44 (0) 20 7947 4350
The Communications Portfolio Ltd
Philip Ranger / Caolan Mahon +44 (0) 20 7536 2028 / 2029
Notes to Editors:
Angel Biotechnology Holdings plc is a full service contract bio-manufacturing partner to biotechnology and pharmaceutical companies worldwide. Angel specialises in advanced biologics including biopharmaceutical proteins and cell therapies, such as cellular vaccines and stem cells. At present, Angel's products are principally used in pre-clinical studies and clinical trials with a view to becoming the contract manufacturer of choice on a continuing basis.
Drug development companies outsource their biopharmaceutical manufacturing requirements to Angel to reduce their own capital requirements and enable them to develop products more rapidly. In addition, Angel provides complete regulatory services and documentation to its customers while its manufacturing processes adhere to the most stringent regulatory requirements. Products are produced to current Good Manufacturing Practice (cGMP) standards as required by the US Food and Drug Administration (FDA) and in facilities that are certified to European standards by the Medicines and Healthcare products Regulatory Agency (MHRA).
Its customers range from pioneering biotechnology companies such as ReNeuron Group plc to established pharmaceutical companies such as Russian-based OOO "NPF Materia Medica Holding".
Angel has three facilities: Pentlands Science Park near Edinburgh, a site in Cramlington, near Newcastle-upon-Tyne and the Angel Biomedical Ltd facility in Glasgow.
More information is available at www.angelbio.com .
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