Taste Masking

News

12 February 2010

Admission to AIM - First Day of Dealings

Highlights:

• Oxford Nutrascience Group plc is pleased to announce that admission to trading on AIM of its ordinary shares commenced this morning.
• The Company has raised £1.1 million, before expenses, via a placing of 62,857,148 ordinary shares of 0.1p each at a price of 1.75p per share. Following admission, the Company will have 464,023,798 ordinary shares in issue. ZAI Corporate Finance is the nominated adviser and Zimmerman Adams International the broker to the Company.
• Oxford Nutrascience Group plc is the holding company of Oxford Nutrascience Limited ("Oxford Nutrascience"), a UK consumer healthcare company that commercialises proprietary delivery systems for medicines and supplements.
• These delivery systems are focused on making medicines and supplements more pleasant and convenient to take and are currently offered as chewy confectionery, chewable tablets and liquid suspensions.
• The global market for vitamins and minerals, the directors' target market for the chewy confectionery delivery system, totalled £13bn in 2008*. Oxford Nutrascience currently produces Ellactiva®, a calcium chewy supplement sold in the UK and in the Middle East, and plans to launch new chews to complement this existing product.
• The target market for Oxford Nutrasciences' Chewitabs™ and liquid suspension delivery systems are over-the-counter ("OTC") pain relieving drugs, indigestion preparations and cough and cold medicines. The global market for these totalled approximately $38bn in 2008*. Oxford Nutrascience's medicine development work is currently focused on ibuprofen suspension and chewable allergy tablets incorporating loratadine. (*Datamonitor 2008 Global OTC report)
• Oxford Nutrascience was founded by two entrepreneurs. Nigel Theobald, Chief Executive Officer, who previously worked for Boots (now Alliance Boots) where he held senior commercial roles in OTC medicines and healthcare product development. Marcelo Bravo, Non-Executive Chairman, previously worked in research and development at Procter & Gamble, in new business development at Boots (now Alliance Boots) and was until recently CEO of Oxford Advanced Surfaces Group Plc.
• Oxford Nutrascience has developed technology for the use of prebiotic soluble fibres in medicine delivery systems that:
  1. Disperse and solubilise medicines
  2. Improve taste and mouth feel
  3. Simplify processing and eliminate additives
  4. Incorporate prebiotic health benefits
• Oxford Nutrascience intends to continue its strategy of making self medication easier and more pleasant by increasing its product range and by the licensing of its intellectual property to major brand owners in the OTC and prescription pharmaceutical sectors.
• The net proceeds of the Placing will be used primarily to provide funds needed by the Group to develop and grow the existing business and to provide funding for future research and development.

Placing and Subscription statistics

Nigel Theobald, Chief Executive Officer of Oxford Nutrascience Group Plc said:

"The successful IPO of Oxford Nutrascience Group plc will allow the Company to capitalise on the growing market for more convenient and pleasant tasting medicines and supplements. Anyone with young children will know how much easier it is to get kids to take supplements if they enjoy them.

"Our chewy confectionery is a great format for vitamins and supplements and our Chewitabs™ and liquid suspensions are suitable for OTC medicines that can benefit people with swallowing difficulties, which is a common problem among the elderly and children, but also all age groups who are ill, in bed or on the go.

"We have a pipeline of new convenient and pleasant to take products that combined with a rising trend towards self-medication makes us confident of our ability to attract the attention of major brand owners in the OTC and prescription pharmaceutical sectors."

For further information:

The Admission Document in relation to the Company's Admission is available on the Company's website at www.oxfordnutrascience.com

Additional information: the growing OTC market

The Group's delivery systems are intended for use in the growing global OTC market. The total OTC self medicinal market is growing, particularly in the developed economies due to an ageing population. The Directors believe that as their patent protection expires or is about to expire, OTC brands are looking to differentiate their products on the basis of convenience, portability and ease of use. Furthermore, dysphagia, particularly amongst children and the elderly, may, in the opinion of the Directors, drive the need for more pleasant and easier-to-take formats of OTC medicine and food supplements.

According to the Datamonitor 2008 Global OTC report, the global OTC pharmaceuticals market generated total revenues of US $104.2 billion in 2008, representing a compound annual growth rate of 4% for the period spanning 2004-2008. The market is forecast to grow to a value of US $124 billion in 2013, an increase of 19% from 2008.

The OTC medicinal market consists of the following: traditional medicines (20%), cough and cold preparations (15.5%), vitamins and minerals (12.5%), indigestion preparations (10.4%), analgesics (10.2%) and other OTC healthcare products including medicated skin products and topical OTC medicines.

The Directors' target market for the Chewitabs™ and liquid suspension delivery systems are OTC analgesics, indigestion preparations and cough and cold medicines. The global market for these totalled approximately $38bn in 2008. The global market for vitamins and minerals, the Directors' target market for the chewy confectionery delivery system, totalled £13bn in 2008.

There is evidence to suggest that consumers are increasingly willing to self-medicate, both for convenience and the cost savings associated with self-medication. New regulations are changing OTC retail channels and sales processes, including the range of products on offer. Also, governments and healthcare providers are promoting self-medication, viewing the process as a tool to help contain healthcare expenditure. Therefore, the Directors believe that the OTC medicinal market holds potential for continued growth in both developed and emerging markets.

Market Needs

As evidenced by activity in the patent space, OTC medicine companies are engaging in the development of new medicine delivery systems including gels, emulsions and mouth soluble tablets. Importantly, many patients and consumers find it difficult to swallow tablets and hard gelatin capsules, which can lead to them not taking their medicines as prescribed.

Dysphagia is not only a common problem among the elderly and children, but with all age groups who are ill, in bed or on the go. For this reason, tablets that can dissolve or disintegrate in the mouth have attracted a great deal of attention and are an important and attractive alternative to liquid dosage forms. Mouth dissolving tablets are not only suitable for people who have difficulty in swallowing, but also for conditions of administration where water is not available.

For children, syrups that have a nice taste are more appropriate, however, they can be difficult to formulate and stabilise as some medicinal actives are not as stable in liquid form as they are in solid form.

Additional information: Directors

The Board comprises 1 Executive Director, 1 Non-Executive Chairman, 1 Non-Independent Non-Executive Director and 1 Independent Non-Executive Director whose details are as follows:

Marcelo Bravo, Non Executive Chairman, Age 50
Marcelo Bravo is a founder of Oxford NutraScience Limited and an entrepreneur with a background in chemistry and chemical engineering and international experience with blue-chip companies. Marcelo spent 16 years in R&D with The Procter & Gamble Company and subsequently spent 3 years in corporate development with Boots (now Boots Alliance Plc). After this he became an entrepreneur and most recently was CEO and Board director of Oxford Advanced Surfaces Group Plc, a company he led from inception as a spin-out from Oxford University which is now quoted on the AIM market. Marcelo has extensive experience in developing, launching and growing new products and businesses across a range of both geographic and product markets. Marcelo holds a B.A. in Chemistry from the College of Wooster, USA and a B.Sc. in Chemical Engineering from Case Western Reserve University, USA and an M.Sc in Management from the London Business School.

Nigel Theobald, Chief Executive Officer, Age 45
Nigel Theobald has a background in marketing and product development in the OTC consumer healthcare market as well as considerable business development experience with blue chip companies. Nigel worked for Boots (now Boots Alliance Plc) for 13 years in a number of commercial and strategic roles including Category Manager for OTC Medicines and Head of Healthcare Brand Development. Nigel set up a consultancy to advise ingredient technology firm Alltracel to launch new products and establish commercial partnerships and worked closely with established health care brands prior to setting up Omscan Ltd, a consumer healthcare production distribution business in the UK, which he sold in 2008. Nigel holds a B.Sc in Economics from Southampton University.

Mike Bretherton, Finance Director, age 54
Michael Bretherton graduated in Economics from University of Leeds in 1978. He worked as an accountant and manager with PriceWaterhouse for seven years in both London and the Middle East . He subsequently worked for The Plessey Company Plc before being appointed finance director of the fully listed Bridgend Group Plc in 1988 where he was involved in the strategic evaluation and commercial implementation of a broad range of business initiatives over a twelve year period. More recently he has worked at the property and services company, Mapeley Limited as financial operations director and then at the entertainment software games developer, Lionhead Studios Limited, in 2002 where he helped to complete a Venture Capital syndicate funding and also a trade sale of the business to Microsoft in 2006. Michael is currently an executive director of ORA Capital Partners Limited and is also a director for a number of other AIM quoted companies.

James White, Non Executive Director, Aged 39
James White has extensive experience in operations, product development, regulatory, sales and marketing and general management. James worked for Osmetech Plc for 11 years in a number of senior positions including as Chief Executive for the period 2000 to 2009. Osmetech has operations in the UK and USA and is focused on providing molecular diagnostic technologies through a global sales distribution network. James has a track record of mergers and acquisitions, disposals and fundraising in the UK, USA and Europe and was previously a senior consultant in Arthur D Little's corporate finance practice where he specialised in advising on investments in small and medium sized companies.