Allergy Thera. Regulatory News (AGY)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION (IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY) IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

THIS IS AN ANNOUNCEMENT FALLING UNDER RULE 2.4 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND DOES NOT CONSTITUTE AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CODE. THERE CAN BE NO CERTAINTY THAT ANY OFFER WILL BE MADE.

6 April 2023

FOR IMMEDIATE RELEASE

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

STATEMENT REGARDING POSSIBLE MANDATORY CASH OFFER

for

ALLERGY THERAPEUTICS PLC("ALLERGY THERAPEUTICS" or the "Company")

by

SKYGEM ACQUISITION LIMITED ("SKYGEM") which is an indirect wholly-owned subsidiary of funds managed byZQ Capital Management Limited (collectively, "ZQ")

1. Introduction

Further to the announcement by Allergy Therapeutics on 6 April 2023, Skygem announces that it has entered into an equity commitment agreement (the "Equity Commitment Agreement"), pursuant to which Skygem and Southern Fox Investments Limited ("Southern Fox") (another shareholder of Allergy Therapeutics) have each agreed to conditionally subscribe for new ordinary shares of 0.1 pence each in the capital of the Company ("Allergy Therapeutics Shares") (the "New Shares") at an issue price of 1 pence per New Share (the "Issue Price") to raise gross proceeds of £40.75 million (the "Equity Financing").

The Equity Financing will be comprised of a conditional subscription for New Shares by each of Skygem and Southern Fox, and an open offer expected to be made to all Qualifying Shareholders (which will exclude Allergy Therapeutics' three largest shareholders Skygem, Southern Fox and Abbott Laboratories, as well as any shareholders in a restricted jurisdiction), and which will be underwritten by Skygem by way of a conditional subscription for any New Shares not taken up by Qualifying Shareholders under the open offer (the "Open Offer").

Skygem, and persons acting in concert with it, currently holds 173,740,037 Allergy Therapeutics Shares (representing approximately 25.58 per cent. of the existing issued ordinary share capital of Allergy Therapeutics). Should the Equity Financing complete, Skygem, and persons acting in concert with it, would, in aggregate, hold Allergy Therapeutics Shares representing at least 30 per cent. of Allergy Therapeutics' enlarged issued ordinary share capital.

The Code applies to Allergy Therapeutics. Under Rule 9 of the Code, any person who acquires an interest in shares which, taken together with shares in which that person or any person acting in concert with that person is interested, carry 30 per cent. or more of the voting rights of a company, which is subject to the Code, is normally required to make an offer to all the remaining shareholders to acquire their shares.

Similarly, when any person, together with persons acting in concert with that person, is interested in shares which in the aggregate carry not less than 30 per cent. of the voting rights of such a company but does not hold shares carrying more than 50 per cent. of the voting rights of the company, an offer will normally be required if such person or any person acting in concert with that person acquires a further interest in shares which increases the percentage of shares carrying voting rights in which that person is interested.

If the conditions of the Equity Financing, in accordance with the terms of the Equity Commitment Agreement (the "Equity Conditions"), are satisfied (or waived , if capable of waiver) and the Equity Financing completes, Skygem will be required, under Rule 9 of the Takeover Code, to make a mandatory cash offer for the Allergy Therapeutics Shares not already held by Skygem (or any persons acting in concert with it), at a price of 1 pence per Allergy Therapeutics Share (such price also being the Issue Price) (the "Possible Mandatory Offer"). Southern Fox and Skygem are not acting in concert with each other in connection with the Possible Mandatory Offer.

For the avoidance of doubt, this does not constitute an announcement of a firm intention to make an offer under Rule 2.7 of the Code. A firm offer announcement will be made immediately if and when the Equity Conditions are satisfied (or waived, if capable of waiver) and the Equity Financing, including the Open Offer, has completed. There can accordingly be no certainty that the Possible Mandatory Offer will be made.

The Equity Conditions are more fully described in paragraph 6 below, "Equity Conditions", and the Financing Announcement. The timing for the satisfaction of certain of these conditions is currently highly uncertain, and it is possible that the FDI Clearance Conditions necessary for the Equity Financing to proceed may not be received for several months or at all. The Panel has confirmed with the agreement of Allergy Therapeutics, that in the circumstances the 28 day deadline referred to in Rule 2.6(a) of the Code will not apply to Skygem or ZQ.

2. Background to and reasons for the Equity Financing and Possible Mandatory Offer

On 4 October 2022, Allergy Therapeutics announced a pause in production at its Freeman facility, part of its Worthing manufacturing site located in the UK. This followed an internal review of Allergy Therapeutics' current operating processes to improve the robustness of its quality systems and build capacity across its manufacturing facilities. As a result of the manufacturing pause occurring during a period of peak production prior to the start of the pollen season, Allergy Therapeutics' revenue for the year ending 30 June 2023 is expected to be significantly below previous market expectations and there is a need for significant additional near-term funding for Allergy Therapeutics.

Following a thorough internal review of the Allergy Therapeutics business by Allergy Therapeutics' management, and careful consideration of the potential funding options and other strategic alternatives that are available to the Allergy Therapeutics Board, the Allergy Therapeutics Board believes that Allergy Therapeutics' portfolio of products and clinical pipeline remains highly valuable and that, accordingly, it is in the best interests of Allergy Therapeutics and its shareholders to continue to fund the ongoing operations of the business. Skygem is fully supportive of the Allergy Therapeutics Board's conclusion and is willing to fund the Company's short term cash needs through a loan facility, pending Skygem obtaining relevant clearances from foreign direct investment authorities necessary for it to be able to subscribe for additional Allergy Therapeutics Shares through the Equity Financing.

Allergy Therapeutics announced today that it had secured a debt financing package of £40.75 million from Skygem and Southern Fox (the "Loan Facility") alongside the Equity Financing (the "Financing Announcement") (the Loan Facility and the Equity Financing together being the "Financing"). The Equity Financing is conditional upon the Equity Conditions. Should the Equity Conditions be satisfied (or waived, if capable of waiver), the proceeds of the Equity Financing will be used principally to repay the principal amounts outstanding and any accrued interest under the Loan Facility. Given the difficulty Allergy Therapeutics currently finds itself in, the Financing is the only realistic source of significant near-term funding that the Allergy Therapeutics Board has been able to identify through this process. For full details of the Financing please refer to the Financing Announcement.

The Loan Facility and the subsequent Equity Financing will provide Allergy Therapeutics with on-going working capital into H2 2023. The Financing also provides immediate financing certainty which Allergy Therapeutics expects to allow the Allergy Therapeutics Board to apply the going concern principle in finalising and publishing Allergy Therapeutics' annual report and audited accounts for the year ended 30 June 2022, as well as the unaudited interim accounts for the six-month period ended 31 December 2022, by 30 June 2023, which will facilitate restoration of trading in Allergy Therapeutics Shares on AIM.

Skygem has been a shareholder in Allergy Therapeutics since 2019, having made regular acquisitions of Allergy Therapeutics Shares and supporting Allergy Therapeutics' fundraising in October 2022, such that Skygem now is interested in shares representing approximately 25.58 percent of Allergy Therapeutics' issued voting rights. Throughout its tenure as a shareholder, Skygem has, and still holds the belief that Allergy Therapeutics has the potential to become one of the most prominent allergy immunotherapy companies globally, and accordingly, has sought to be supportive towards management in the strategic ambitions of Allergy Therapeutics, including advancing Allergy Therapeutics' products into the US market.

In addition, Skygem acknowledges the fact that any risk to adequate funding being secured over the medium term will likely present extreme challenges to the viability and future prospects of Allergy Therapeutics' business and may result in a material loss of shareholder value. Consequently, Skygem has agreed to participate in the Financing to provide the necessary capital Allergy Therapeutics needs to endure this period of financial difficulty and to continue Allergy Therapeutics' clinical trials programme (in particular, the pivotal G306 Trial). A pause, or a negative outcome, in these trials would have both direct and indirect adverse impacts on the Company and its future commercial prospects.

Subject to satisfaction (or waiver, if capable of being waived) of the Equity Conditions, completion of the Equity Financing would result in Skygem and any parties acting in concert with it being interested in Allergy Therapeutics shares Allergy Therapeutics carrying 30 per cent. or more of the total voting rights of Allergy Therapeutics. Consequently, Skygem would then be required to make a mandatory offer for Allergy Therapeutics at a price of 1 pence per share.

3. Irrevocable undertaking

Skygem has received from Southern Fox an irrevocable undertaking not to accept the Possible Mandatory Offer which would be extended to Southern Fox should it be made, in respect of the 149,871,529 Allergy Therapeutics Shares it currently owns, plus any shares subscribed for pursuant to the Equity Financing. In any event, following the Equity Financing, Southern Fox will be interested in shares in Allergy Therapeutics not exceeding 27.5 percent of the enlarged share capital of Allergy Therapeutics (excluding treasury shares) as at the Last Practicable Date.

The irrevocable undertaking will lapse (i) if the Possible Mandatory Offer is made at a price per share greater than the Issue Price and/or (ii) on the earlier of (x) the date falling nine (9) months following the date hereof and (y) the date of G306 Trial Failure (as such term is defined in the Equity Commitment Agreement) or such other date as SAL and Southern Fox may agree in writing.

4. Information about Skygem

Skygem is a private company limited by shares incorporated in England and Wales and was established for the purposes of ZQ acquiring an interest in Allergy Therapeutics Shares. It is not a trading company and since incorporation has not engaged in any activities save for transactions relating to a Possible Mandatory Offer or Allergy Therapeutics Shares. Skygem is an indirect wholly-owned subsidiary of funds managed by ZQ.

5. Information about ZQ

ZQ is a fast-growing private equity investment firm in Asia. Since its inception in 2016, ZQ has sourced, executed and exited over US$500 million of investments with a strong track record of more than 30 per cent. IRR for its investors to date. With seven investment professionals based in Hong Kong, Shanghai and Singapore, ZQ focusses on long-term investment and partnering with mature global businesses with promising growth potential and capable of delivering steady cashflow in less volatile markets, such as healthcare and consumer products. 

ZQ's founder, Mr. Zheqing (Simon) Shen, has over a decade of professional experience in investment banking and private equity investment. Prior to founding ZQ, he was Managing Director and Head of China Financial Institutions Group at Barclays. Mr Shen's previous experience also includes working as an investment banker for Goldman Sachs in both its New York and Hong Kong offices, having advised many corporations globally in connection with their capital markets and M&A activities. Mr. Shen has extensive knowledge of capital markets and wide connections with entrepreneurs and corporations in Asia and serves as a director on the boards of several public companies in the US, Europe and Asia.

ZQ's team of investment professionals have decades of combined investment and deal-making experience in Europe, the US and Asia, across a range of sectors including healthcare, consumer, TMT and environmental-related services.

6. Intentions of Skygem

Intentions for the future business of Allergy Therapeutics

Skygem intends to continue to support Allergy Therapeutics' existing business plan and foresee no significant changes to it. In addition, Skygem intends to continue to be financially supportive such that Allergy Therapeutics' growth and earning potential is optimized going forward.

Furthermore, Skygem believes its key relationships and capabilities within Asia can unlock additional value for Allergy Therapeutics due to the access it provides to key markets for Allergy Therapeutics' products.

Intentions for headquarters, locations, fixed assets and research and development

Skygem does not intend to make any changes to Allergy Therapeutics' business (including its research and development function) or broader strategic plans, or locations and places of business (including its headquarters and headquarters functions) and does not intend to redeploy any of Allergy Therapeutics' fixed assets.

Intentions for management and employees

Skygem attaches great importance to the skills and experience of the employees and management team of Allergy Therapeutics and its subsidiaries and consequently Skygem does not intend to cause Allergy Therapeutics or its subsidiaries to effect any material change with regard to: (i) the continued employment of its employees and managers and (ii) the conditions of employment or balance of skills and functions of the management of Allergy Therapeutics or its subsidiaries.

Intentions for existing rights and end of service benefits

Allergy Therapeutics intends that, following completion of the Possible Mandatory Offer, the existing contractual and employment rights (including Allergy Therapeutics' pension schemes) of Allergy Therapeutics' management and employees will be respected in accordance with applicable law. Skygem does not intend to make any material changes to the terms and conditions of Allergy Therapeutics' pension schemes, including the employer contributions, accrual of benefits for existing members or the rights of admission of new members.

Intentions for management incentivisation arrangements

Skygem has not entered into, and has not discussed, any form of incentivisation arrangements with members of Allergy Therapeutics' management. Skygem intends to put in place incentive arrangements for certain members of the Allergy Therapeutics management team following completion of the Possible Mandatory Offer.

Intentions for trading facilities

Skygem recognises the benefits to Allergy Therapeutics and its shareholders of a public market listing and supports Allergy Therapeutics' continuing admission to AIM. Therefore, should the Equity Financing complete, and the potential subsequent Possible Mandatory Offer become unconditional, Skygem does not intend to procure that Allergy Therapeutics makes an application to cancel trading in Allergy Therapeutics Shares on AIM.

Post-offer undertakings

No statements in this paragraph 6 are "post-offer undertakings" for the purposes of Rule 19.5 of the Code.

7. Equity Conditions

The Equity Conditions are more fully set out in Equity Commitment Agreement and summarised in this Announcement, and comprise broadly:

(a) the passing by shareholders of (i) an ordinary resolution (which requires a majority of the votes cast by those entitled to vote) to authorise the Directors to allot new Ordinary Shares pursuant to the Subscription and Open Offer and (ii) a special resolution (which requires not less than 75 per cent. of the votes cast by those entitled to vote) to disapply the statutory pre-emption rights in connection with the Subscription and the Open Offer ;

(b) receipt by ZQ, on terms reasonably satisfactory to ZQ, of certain foreign direct investment/national security clearances in Austria, Italy, Germany and Spain (the "ZQ FDI Clearance Condition");

(c)  receipt by Southern Fox, on terms reasonably satisfactory to Southern Fox, of certain foreign direct investment/national security clearances in Austria, Italy and Germany (the "SF FDI Clearance Condition" and together with the ZQ FDI Clearance Condition the "FDI Clearance Conditions");

(d)  since the date of the Equity Commitment Agreement and in the opinion of both Skygem and Southern Fox, no events or facts have occurred or conditions or circumstances have arisen which are reasonably likely to result in:

(i) a Manufacturing Plant Shutdown (as such term is defined in the Equity Commitment Agreement); or

(ii) G306 Trial Failure (as such term is defined in the Equity Commitment Agreement); and

(e) admission of the New Shares to trading on AIM ("Admission"),

in each case on or before the earlier of (i) 6 January 2024, being the date that is nine months from the date of the Financing Announcement or (ii) the date of failure of the G306 Trial, or such later date Skygem, Southern Fox and Allergy Therapeutics may agree in writing prior to the earlier of (i) or (ii).

The Equity Conditions (save for (d)) cannot be waived by either of ZQ or by Southern Fox.

The timing for the satisfaction of the FDI Clearance Conditions is currently highly uncertain. FDI submissions will be made shortly after this announcement. It is possible that clearances may not be received for several months or at all. If the ZQ FDI Clearance Condition is satisfied, but the SF FDI Clearance Condition is not satisfied, ZQ shall have the option (but not the obligation) to assume the obligations of Southern Fox (subject to Southern Fox's consent) and vice versa, such that if the SF FDI Clearance Condition is satisfied, but the ZQ FDI Clearance Condition is not satisfied, Southern Fox shall have the option (but not the obligation) to assume the obligations of ZQ (subject to ZQ Capital's consent). In any event, given that under the terms of the Equity Financing Southern Fox's interest in the voting rights of Allergy Therapeutics is to be restricted to 27.5 per cent. of Allergy Therapeutics' enlarged share capital, there is no circumstance arising under the Equity Financing where Southern Fox will have an obligation to make a mandatory offer for the entire issued and to be issued share capital of Allergy Therapeutics pursuant to Rule 9.

Additionally, pursuant to the terms of the Equity Commitment Agreement, each of ZQ and Southern Fox may, in its absolute discretion, at any time before Admission terminate the Equity Commitment Agreement if (a) an Equity Condition has not been satisfied or (b) the application for Admission has been withdrawn or rejected.

A firm intention to make a mandatory offer setting out its full terms and conditions will be made immediately following satisfaction of the Equity Conditions and completion of the Equity Financing and an offer document with respect to such mandatory offer will be posted to Allergy Therapeutics Shareholders as soon as practicable thereafter.

8. Financing of the Possible Mandatory Offer and cash confirmation

The cash consideration payable by Skygem pursuant to the Possible Mandatory Offer (should it be required to be made) for the entire issued and to be issued share capital of Allergy Therapeutics it does not already own (including any New Shares issued pursuant to the Equity Financing) would be financed by existing cash resources available to entities under common control with ZQ which have been transferred to Skygem.

finnCap, the financial adviser to Skygem, confirms that it is satisfied that sufficient resources are available to Skygem to enable it to satisfy in full the cash consideration payable to Allergy Therapeutics Shareholders in the event of full acceptance of the Possible Mandatory Offer.

9. Rule 9.5 dispensation and Rule 2.4(c)(iii) clarification

ZQ (acting through Skygem) subscribed for 30,000,000 new Allergy Therapeutics Shares at a price of 20 pence per share on 19 October 2022, as set out in Allergy Therapeutics' announcement of 29 September 2022 entitled "Subscription and Debt Financing". This subscription was made prior to any consideration of the Possible Mandatory Offer and prior to Allergy Therapeutics' voluntary pause in production and the consequent deterioration in Allergy Therapeutics' financial position and prospects.

An offer under Rule 9 must be made in cash at the highest price paid by the person required to make the offer, or any person acting in concert with such person, for any interest in shares of the company during the 12 months prior to the announcement of the offer. With the agreement of Allergy Therapeutics, Skygem has received a dispensation from the Panel Executive in respect of the minimum price of the Possible Mandatory Offer and pursuant to Note 3 to Rule 9.5, such that it may be made at the price of 1 pence per Allergy Therapeutics Share in the circumstances set out above.

10. Publication on website and requesting hard copies of documents

A copy of this Announcement, the Equity Commitment Agreement and any other documents required to be published by Rule 26 of the Takeover Code shall be made available subject to certain restrictions relating to persons resident in Restricted Jurisdictions on ZQ's website at www.zqcap.com/microsite/agy_announcement.php by no later than 12 noon (London time) on the business day following the date of this announcement. For the avoidance of doubt, the contents of the websites referred to in this announcement are not incorporated into and do not form part of this announcement.

Pursuant to Rule 30.3 of the Code, a person so entitled may request a copy of this Announcement and any information incorporated into it by reference to another source in hard copy form. A person may also request that all future documents, announcements and information to be sent to that person in relation to the Possible Offer should be in hard copy form. For persons who receive a copy of this Announcement in electronic form or via a website notification, a hard copy of this Announcement will not be sent unless so requested from Zheqing (Simon) Shen at ZQ (contact details of whom are set out in the above Enquiries section), or Allergy Therapeutics' registrar, Link Group at 10th Floor, Central Square, 29 Wellington Street, Leeds, LS1 4DL or by calling Link Group on +44 (0) 371 664 0300. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open between 9.00 a.m. and 5.30 p.m. (London time), Monday to Friday (excluding public holidays in England and Wales). Please note that Link Group cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

11. Disclosure requirements of the Takeover Code

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th Business Day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th Business Day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the Business Day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Enquiries

ZQ Capital Management Limited

Zheqing (Simon) Shen, Managing Partner and Founder T. +852 3890 6566

E. contact@zqcap.com

finnCap (Financial Adviser to ZQ Capital Management Limited)

Henrik Persson T. +44 (0) 20 7220 0500

Seamus Fricker

Goodwin Proctor (UK) LLP is providing legal advice to Skygem and ZQ. Covington & Burling LLP is providing legal advice to Allergy Therapeutics.

Important Notes

finnCap Ltd ("finnCap"), which is authorized and regulated in the United Kingdom by the Financial Conduct Authority, is acting as financial adviser to Skygem and ZQ and no one else in connection with the matters described in this Announcement and will not be responsible to anyone other than Skygem and ZQ for providing the protections offered to clients of finnCap or for providing advice in connection with any matter referred to in this Announcement. Neither finnCap nor any of its affiliates (nor their respective directors, officers, employees or agents) owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of finnCap in connection with this Announcement, any statement contained herein, the Possible Mandatory Offer or otherwise. No representation or warranty, express or implied, is made by finnCap as to the contents of this Announcement.

No offer or solicitation

This Announcement is not intended to and does not constitute, or form part of, any offer or invitation or the solicitation of any offer to sell or purchase any securities or the solicitation of any offer to otherwise acquire, subscribe for, sell or otherwise dispose of any security pursuant to the Possible Mandatory Offer or otherwise.

Overseas jurisdictions

The availability of the Possible Mandatory Offer and the release and/or distribution of this Announcement in or into jurisdictions other than the United Kingdom may be restricted by the laws and regulations of those jurisdictions and, therefore, persons who are not resident in the United Kingdom into whose possession this Announcement comes should inform themselves about and observe any such restrictions. Failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction. Allergy Therapeutics Shareholders who are in any doubt regarding such matters should consult an appropriate independent financial adviser in their relevant jurisdiction without delay.

Copies of this Announcement are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction, and persons receiving this Announcement (including custodians, nominees and trustees) must not, directly or indirectly, mail or otherwise distribute or send it in, into or from such Restricted Jurisdictions as doing so may violate the securities laws of such jurisdictions and invalidate any purported acceptance of the Possible Mandatory Offer.

This Announcement has been prepared in compliance with English law and regulation (including the Takeover Code), and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws and regulations of jurisdictions outside England.

This Announcement is not an offer of securities for sale in any jurisdiction (including any Restricted Jurisdiction).

Notice to US shareholders

The Possible Mandatory Offer relates to the shares of an English company and is subject to UK procedural and disclosure requirements, which differ from those of the United States. The Possible Mandatory Offer is extended into the United States in reliance on the "Tier I" exemption pursuant to Rule 14d-1(c) under the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"), from the requirements of the Exchange Act and the rules and regulations promulgated thereunder. Accordingly, the Possible Mandatory Offer will be subject to procedural and disclosure requirements, including with respect to withdrawal rights, notices of extensions, announcements of results, settlement procedures and waivers of conditions, which differ in various respects from the requirements and customary practices followed in US domestic tender offers.

Financial information included or referred to herein has been or will be prepared in accordance with accounting standards applicable in the United Kingdom and, accordingly, may not be comparable to financial information of US companies or other companies whose financial statements are prepared in accordance with US generally accepted accounting principle" ("US GAAP"). US GAAP differs in certain significant respects from accounting standards applicable in the United Kingdom. None of the financial information included or referred to herein has been audited in accordance with auditing standards generally accepted in the United States or the auditing standards of the Public Company Accounting Oversight Board (United States).

The Possible Mandatory Offer is being made to US shareholders on the same terms and conditions as those made to all other Allergy Therapeutics Shareholders to whom the Possible Mandatory Offer is made. All information documents disseminated by Skygem regarding the Possible Mandatory Offer will be disseminated to US Allergy Therapeutics Shareholders on a basis comparable to the method pursuant to which those documents are provided to all other Allergy Therapeutics Shareholders.

The receipt of cash pursuant to the Possible Mandatory Offer by a US shareholder as consideration for the transfer of its Allergy Therapeutics Shares pursuant to the Possible Mandatory Offer will likely be a taxable transaction for United States federal income tax purposes and under applicable United States state and local, as well as foreign and other, tax laws. Each Allergy Therapeutics Shareholder is urged to consult its independent professional adviser immediately regarding the tax consequences of acceptance of the Possible Mandatory Offer.

Neither the Possible Mandatory Offer nor this announcement has been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any other US regulatory authority, nor have such authorities passed upon or determined the adequacy or accuracy of the information contained in this Announcement or the merits of the Possible Mandatory Offer. Any representation to the contrary is a criminal offence in the United States.

Forward-looking statements

This Announcement, including any information incorporated by reference in this Announcement, contains certain forward-looking statements. The forward-looking statements contained herein include statements about the expected effects of the Possible Mandatory Offer on Skygem and the Allergy Therapeutics Group, strategic options, the expected timing and scope of the Possible Mandatory Offer, and all other statements in this Announcement other than historical facts. These statements are based on the current expectations and are naturally subject to uncertainty and changes in circumstances. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "budget", "schedule", "forecast", "project", "goal", "believe", "hope", "aims", "continue", "will", "may", "should", "would", "could", "subject to", or other words of similar meaning. By their nature, forward-looking statements involve known and unknown risks and uncertainties, because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results, outcomes and developments to differ materially from those expressed in, or implied by, such forward-looking statements and such statements are, therefore, qualified in their entirety by the risks and uncertainties surrounding these future expectations. Many of these risks and uncertainties relate to factors that are beyond those making the forward-looking statements ability to control or estimate precisely, such as, but not limited to, general business and market conditions both globally and locally, political, economic and regulatory forces, industry trends and competition, future exchange and interest rates, changes in government and regulation including in relation to health and safety, the environment, labour relations and tax rates and future business combinations or dispositions. Although Skygem believes that the expectations reflected in such forward-looking statements are reasonable, Skygem cannot give any assurance, representation or guarantee that such expectations will prove to have been correct and such forward-looking statements should be construed in light of such factors and you are, therefore, cautioned not to place reliance on these forward-looking statements which speak only as at the date of this Announcement. Skygem assumes no obligation to update or correct the information contained in this Announcement (whether as a result of new information, future events or otherwise),except as required by applicable law or regulation.

No profit forecasts, estimates or quantified financial benefits statements

No statement in this Announcement is intended as a profit forecast, profit estimate or quantified financial benefits statement for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share or dividends or dividends per share for Allergy Therapeutics for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share or dividends or dividends per share for Allergy Therapeutics.

Rule 2.9 Disclosures

In accordance with Rule 2.9 of the Code, as at the date of this announcement, Allergy Therapeutics' issued share capital comprises 679,104,621 ordinary shares each of 1 pence each (ISIN:GB00B02LCQ05).

Dividends

If any dividend or other distribution is declared, made or paid in respect of Allergy Therapeutics Shares on or after the date of this announcement, Skygem reserves the right to reduce any price paid for any Allergy Therapeutics shares subject to the Possible Mandatory Offer by the amount of such dividend or other distribution in which case any reference in this announcement to the price per Allergy Therapeutics share payable under the Possible Mandatory Offer will be deemed to be a reference to that price so reduced. In such circumstances, Allergy Therapeutics Shareholders would be entitled to receive and retain any such dividend or other distribution.

Purchases outside the Possible Mandatory Offer

Skygem or its nominees or brokers (acting as agents) may purchase Allergy Therapeutics Shares otherwise than under the Possible Mandatory Offer, such as in the open market or through privately negotiated purchases. Such purchases shall comply with the Takeover Code and the rules of the London Stock Exchange.

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

General

If you are in any doubt about the contents of this Announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor or independent financial adviser duly authorised under FSMA if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

APPENDIX 1DEFINITIONS

The following definitions apply throughout this Announcement unless the context requires otherwise:

1. In this Announcement, unless the contrary is otherwise indicated:

1.1 "parent undertaking", "subsidiary", "subsidiary undertaking" and "undertaking" have the respective meanings given by the Companies Act 2006 of the United Kingdom and "associated undertaking" has the meaning given by paragraph 19 of Schedule 6 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (other than paragraph 19(1)(b) of Schedule 6 to those Regulations which shall be excluded for this purpose);

1.2 references to £, pence, penny, and p are to the lawful currency of the United Kingdom;

1.3 all times referred to are London time unless otherwise stated;

1.4 references to the singular include the plural and vice versa and words importing the masculine gender include the feminine or neutral;

1.5 all references to legislation are to English legislation; and

1.6 any reference to a provision of any legislation shall include any amendment, modification, re-enactment or extension.

2. References in this Announcement to any English legal term shall in respect of any jurisdiction other than England or in respect of any member of the Wider Skygem Group or the Wider Allergy Therapeutics Group which is incorporated or operating in a jurisdiction other than England be deemed to include what most nearly approximates in that jurisdiction to the English legal term.

3. All references to statutory provision or law or to any order or regulation shall be construed as a reference to that provision, law, order or regulation as extended, modified, replaced or re-enacted from time to time and all statutory instruments, regulations and orders from time to time made thereunder or deriving validity therefrom.