Press Releases

Intercytex announces AIM flotation and placing

Not for release or distribution or publication in whole or part in or into the United States, Canada, Japan, Republic of Ireland or Australia

Intercytex Group plc, a UK-based emerging healthcare company, today announces its proposed application for admission to trading on AIM, a market of the London Stock Exchange. The Company will raise £15.0 million, conditional on the admission of the new ordinary shares to trading on AIM, through a subscription of approximately £4.2 million by existing shareholders and a placing of approximately £10.8 million with new shareholders. The shares being issued in the subscription and the placing have been priced at 108 pence per share (the "Placing Price"), at which price the Company will have a market capitalisation on admission of approximately £60.2 million. Piper Jaffray Ltd is acting as nominated adviser and sole broker to the Company.

Details of the Subscription and the Placing

• An aggregate of 13,888,889 shares will be issued at the Placing Price in connection with the admission to AIM, corresponding to a total fundraising of approximately £15.0 million, approximately £4.2 million of which will be taken up by existing shareholders. No existing shares are being sold as part of the Placing.
• Based on the Placing Price and a total number of 55,713,874 shares in issue, the market capitalisation of the Company on completion of the admission and subscription will be approximately £60.2 million.
• The Placing generated a broad base of institutional investor interest.
• Admission will take place in two stages. It is expected that dealings in the existing ordinary shares, the shares issued in the subscription, and the 1,064,814 ordinary shares that are being placed with certain VCTs will commence on AIM at 08:00 on 1 February 2006 (“First Admission”) under the ticker symbol ICX.L. It is expected that dealings in the remaining ordinary shares to be issued will commence on AIM at 08:00 on 2 February 2006 (“Second Admission”).

The Company

Intercytex is an emerging healthcare company developing cell therapy products for the woundcare and aesthetic medicine markets. The Company has proprietary expertise in cell therapy, which is being applied to create products that harness the innate ability of human cells to regenerate and repair the body.

The Company is applying its expertise in this area to develop innovative cell therapy products that address the key weaknesses of the existing, first generation products on the market today, which include cost, ease of manufacture and storage, and ease of use in the hands of clinicians. The Directors believe that there is a significant opportunity for new products that address these key issues.

Intercytex has three products in clinical development, and a fourth product in pre-clinical studies. These products are:

• ICX-PRO, the lead product for the treatment of leg ulcers, currently in a multi-centre Phase III trial in the US, UK and Canada, having successfully completed a Phase IIb trial for venous leg ulcers in 2005. The results of the Phase II trial indicated good efficacy and beneficial performance characteristics. The Phase III trial is expected to be completed in the first half of 2007.
• ICX-TRC, for hair regeneration in male-pattern baldness, has completed a Phase I safety trial and applications are being prepared to commence a Phase II efficacy trial in mid-2006.
• ICX-RHY, for the treatment of wrinkles, is currently in a Phase I trial in the UK and it is expected that a Phase II trial will commence in the UK in mid-2006.
• ICX-SKN, in development as a living skin substitute, is expected to commence a Phase I trial in the second half of 2006.

Commenting on the announcement, Nick Higgins, Chief Executive of Intercytex, said:

“We are pleased by the demonstration of strong support for the company by both existing and new investors. The woundcare and aesthetic medicine markets are underserved and there is a real need for new products with high levels of efficacy which are simple to manufacture and store, and easy to use. We believe that the products being developed within Intercytex can satisfy these market needs and we plan to use the funds raised in the IPO to develop and commercialise our pipeline products, to create a broad-based, novel woundcare and aesthetic medicine business.”

In connection with the Placing, Piper Jaffray Ltd has been granted an option by the Company to purchase up to an additional 1,500,000 shares at the Placing Price to cover over-allotments, if any, and to cover short positions arising from stabilisation transactions (if any). The over-allotment option will be exercisable for a period of 30 days from First Admission.

Stabilisation/FSA

Enquiries at:

These written materials are not for distribution in the United States, Canada, Japan, the Republic of Ireland or Australia or any jurisdiction where such announcement would be unlawful.

The information contained herein does not constitute an offer of securities for sale or subscription in the United States, Canada, Japan, the Republic of Ireland or Australia or any jurisdiction where such offer would be unlawful.

Securities may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended, or an exemption therefrom. Intercytex has not and does not intend to register any of its securities under US securities law. Accordingly, the securities may not be offered or sold in the United States unless they are registered or exempt from registration under applicable law or in transactions that are exempt from registration. The securities will not be offered or sold to the public in the United States.

This announcement has been issued by Intercytex and is the sole responsibility of Intercytex and has been approved solely for the purposes of Section 21 of the Financial Services and Markets Act 2000 by Piper Jaffray of 18 King William Street, London EC4N 7US. Piper Jaffray Ltd, which is regulated in the United Kingdom by the Financial Services Authority, is acting for Intercytex and no-one else in connection with the matters described in this announcement and will not be responsible to any other person for providing the protections afforded to clients of Piper Jaffray Ltd or for providing advice in relation to the matters described in this announcement.

This announcement does not constitute or form part of an offer for sale or subscription of securities, or any solicitation of any such offer or subscription. This announcement shall not, nor shall any part of it, form the basis of or be relied upon in connection with any contract or commitment whatsoever. Any eventual acquisition of, or application for, securities in Intercytex should be made solely on the basis of the information contained in the admission document relating to Intercytex as issued in connection with the admission (“Admission”) to trading of its shares (issued and to be issued) (“Shares”) to AIM, a market of the London Stock Exchange plc.

In connection with the proposed Admission, the Company has authorised Piper Jaffray Ltd for a limited period after Admission to over-allocate and effect transactions which stabilise, support or maintain the market price of the Shares at a level higher than that which might otherwise prevail in the open market and has granted Piper Jaffray Ltd an over-allocation option in respect of new Shares. Further information concerning the fact that stabilisation transactions may take place and such over-allocation option are described in the admission document published in connection with the Admission.

There is no obligation on Piper Jaffray, or any agent of Piper Jaffray, to carry out stabilisation transactions and no certainty that the over-allocation option will be exercised in whole or in part.

The price and value of, and income from, Shares may go down as well as up.

Persons needing advice in relation to any of the matters referred to herein should consult a professional adviser.