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.

16 October 2023

FOR IMMEDIATE RELEASE

UNCONDITIONAL 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")

· The Equity Conditions referred to in SkyGem's announcement on 6 April 2023 of a possible mandatory offer (the "Prior Announcement") have been satisfied.

· The Equity Financing referred to in the Prior Announcement has now completed.

· SkyGem has now acquired more than 30 per cent. of the Allergy Therapeutics Shares.

· SkyGem announces its firm intention to make a mandatory offer for all outstanding Allergy Therapeutics Shares, as required under the Code as a result of completion of the Equity Financing.

· SkyGem has received from Southern Fox an irrevocable undertaking not to accept the Offer. Southern Fox holds 27.50 per cent. of the Company's issued share capital.

1. Introduction

Following completion of the Equity Financing referred to in the Prior Announcement, SkyGem has today acquired 2,676,556,439 Allergy Therapeutics Shares at a price of 1 pence in cash per Allergy Therapeutics Share. SkyGem, and persons acting in concert with it, now holds 2,850,296,476 Allergy Therapeutics Shares, representing 59.96 per cent. of the Allergy Therapeutics Shares and voting rights of Allergy Therapeutics.

As a consequence of SkyGem's interest in Allergy Therapeutics Shares exceeding 30 per cent. of the issued share capital of Allergy Therapeutics following completion of the Equity Financing, SkyGem is required, pursuant to Rule 9 of the Takeover Code, to make a mandatory cash offer (the "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. As SkyGem's holding of Allergy Therapeutics Shares already carries more than 50 per cent. of the voting rights of Allergy Therapeutics, the Offer is unconditional from the outset.

SkyGem will make the Offer through the dispatch of the Offer Document and Form of Acceptance, both of which will be posted to Allergy Therapeutics Shareholders (or made available electronically in accordance with the Takeover Code). The Offer Document will contain the formal terms of the Offer and the views of the Allergy Therapeutics Independent Directors on the Offer. With the consent of the Panel and the Allergy Therapeutics Board, the Offer Document is expected to be posted to Allergy Therapeutics Shareholders shortly and in any event no later than 28 days from the date of this announcement (or made available electronically in accordance with the Takeover Code).

2. The Offer

Under the terms of the Offer, which will be subject to the further terms set out in Appendix 1 to this Announcement and to the full terms to be set out in the Offer Document and, in respect of Allergy Therapeutics Shares held in certificated form, the related Form of Acceptance, Allergy Therapeutics Shareholders shall be entitled to receive:

1 pence in cash for each Allergy Therapeutics Share

The cash consideration implies a value of approximately £47.91 million for the issued and to be issued share capital (excluding warrants) of Allergy Therapeutics. The Offer represents:

· a discount of 26 per cent. to the closing price of 1.35 pence per Allergy Therapeutics Share on 13 October 2023 (being the latest practicable date before the publication of this Announcement); and

· a discount of 84 per cent. to the closing price of 6.25 pence per Allergy Therapeutics Share on 5 April 2023 (being the last Business Day prior to the commencement of the Offer Period).

Allergy Therapeutics Shares acquired from Allergy Therapeutics Shareholders who accept the Offer will be acquired fully paid and free from all liens, charges, equities, encumbrances, rights of pre-emption and any other third party rights or interest of any nature whatsoever and together with all rights attaching thereto, including without limitation voting rights and the rights to receive and retain in full all dividends and distributions (if any) announced, declared, made or paid with a record date on or after the date of this Announcement.

If, on or after the date of this Announcement, any dividend and/or other distribution and/or other return of capital is declared, made or paid or becomes payable in respect of Allergy Therapeutics Shares, SkyGem reserves the right to reduce the consideration payable under the terms of the Offer by an amount up to the amount of such dividend and/or distribution and/or return of capital, in which case any reference in this Announcement to the consideration payable under the Offer will be deemed to be a reference to the consideration as so reduced. Any exercise by SkyGem of its rights referred to in this paragraph shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the terms of the Offer. In such circumstances, Allergy Therapeutics Shareholders would be entitled to retain any such dividend, distribution or other return of capital declared, made or paid or which becomes payable.

The Offer will extend to all issued Allergy Therapeutics Shares which are unconditionally allotted and/or issued and fully paid (or credited as fully paid) before the Offer closes other than the Allergy Therapeutics Shares held by ZQ. This will include any Allergy Therapeutics Shares arising pursuant to the exercise of options under the Allergy Therapeutics Long Term Share Incentive Plan 2013.

The Offer is subject to valid acceptances being received from Allergy Therapeutics Shareholders but is not subject to any minimum level of acceptance and is therefore unconditional. Certain further terms of the Offer are set out in Appendix 1 of this Announcement.

Holders of options pursuant to the Allergy Therapeutics Long Term Share Incentive Plan 2013 will be contacted regarding the effect of the mandatory offer on their rights under the Allergy Therapeutics Long Term Share Incentive Plan 2013. Holders of outstanding options under the Allergy Therapeutics Long Term Share Incentive Plan 2013 (the "Options") may exercise their Options until 16 November 2023, following which they will lapse and shall no longer be capable of being exercised and the holders of such Options shall have no further rights to the underlying Allergy Therapeutics Shares. Holders of the Options may participate in the Offer by exercising their Options before the date on which the Offer closes. Holders of the Options may exercise their Options after the date on which the Offer closes but before 16 November 2023, but may not participate in the Offer and will continue to hold the Allergy Therapeutics Shares.

3. Background to and reasons for the Offer

On 4 October 2022, Allergy Therapeutics announced a pause in production at its Freeman facility, part of its Worthing, UK manufacturing site. 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' sales for the financial year ended 30 June 2023 were £61.0 million, a 16 per cent. reduction compared to £72.8 million in 2022. The pause in manufacturing caused a material gap in funding which resulted in Allergy Therapeutics entering into the Loan Facility with SkyGem (acting via SkyGem International Holdings Limited) and Southern Fox.

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 announced that it believes Allergy Therapeutics' portfolio of products and clinical pipeline remain highly valuable and that, accordingly, it was in the best interests of Allergy Therapeutics and Allergy Therapeutics Shareholders to continue to fund the ongoing operations of the business via the Loan Facility. SkyGem was (and remains) fully supportive of the Allergy Therapeutics Board's conclusion and was willing to fund Allergy Therapeutics' short term cash needs through the Loan Facility and subsequent Equity Financing.

Details of the Loan Facility and the Equity Financing were contained in the Financing Announcement announced by Allergy Therapeutics on 6 April 2023. The Equity Financing was completed and announced by Allergy Therapeutics in the Equity Announcement on 13 October 2023. The proceeds of the Equity Financing have been used to repay the amounts owed under the Loan Facility Agreement (including principal amounts drawn and accrued interest and fees) and Equity Commitment Agreement. The Loan Facility was used to refinance £10 million of loan notes issued to ZQ and Southern Fox on 28 February 2023, to facilitate the continuation of the Allergy Therapeutics Group's G306 Trial, to continue other key clinical trial activities including the Peanut Phase I PROTECT Trial and to finance trading and provide working capital.

On 26 September 2023, Allergy Therapeutics entered into an amendment to the Loan Facility Agreement with SkyGem and Southern Fox (the "Extension Facility") pursuant to which, subject to completion of the Equity Financing, the repayment of all amounts due under the Loan Facility in full and the grant of the Additional Security, SkyGem and Southern Fox have agreed, on an uncommitted basis, to make available to Allergy Therapeutics an additional total principal sum of up to £15 million (the "Additional Facility Amount"). Under the Extension Facility, the Additional Facility Amount may be drawn by Allergy Therapeutics during the period to 31 January 2024 with a minimum drawdown amount of £3 million per utilisation and interest of 18 per cent. per annum shall be payable on any such amounts drawn. A drawdown under the Extension Facility shall require the consent of SkyGem and Southern Fox and as such the Additional Facility Amount does not represent committed funding. The Extension Facility must be repaid in full by 31 December 2025. To provide security for any amounts drawn under the Extension Facility, the existing security package under the Loan Facility Agreement will remain in place following repayment of the Loan Facility on or around completion of the Equity Financing and the Additional Security will be granted. Allergy Therapeutics is responsible for the fees, costs and expenses of SkyGem and Southern Fox in connection with the Extension Facility up to a cap of £50,000, but otherwise there are no associated commitment, underwriting or other fees payable by Allergy Therapeutics.

Notwithstanding the Equity Financing, the Allergy Therapeutics Board anticipates that additional funding will be required during November 2023 onwards for trading, working capital, capital expenditure and continuing R&D programmes including the G306 Trial which is currently scheduled for interim data read out in or around November 2023. This requirement may be extended into early 2024 subject to further cost control initiatives, working capital management and timing and volume of sales in the quarter to 31 December 2023. Discussions with certain shareholders are ongoing regarding the size and source of future funding. These discussions continue to be positive. Whilst there are no binding arrangements at this stage, Allergy Therapeutics has entered into the Extension Facility, although this does not represent committed funding.

SkyGem has been a shareholder in Allergy Therapeutics since 2019, having made regular acquisitions of Allergy Therapeutics Shares. 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.

Notwithstanding the Extension Facility, SkyGem acknowledges the fact that any risk to adequate funding being secured over the near-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 agreed to participate in the Equity Financing (and the Extension Facility) 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 Allergy Therapeutics and its future commercial prospects.

As a result of the completion of the Equity Financing, SkyGem is required to make a mandatory 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 share.

4. Irrevocable undertaking

SkyGem has received an irrevocable undertaking from Southern Fox not to accept the Offer in respect of its holding of 1,307,377,398 Allergy Therapeutics Shares, representing 27.50 per cent. of the Allergy Therapeutics Shares and voting rights. As a result of this, SkyGem will not be able to reach the 90 per cent. threshold of acceptances in relation to the Offer that would enable it to 'squeeze out' minority shareholders in accordance with section 979 of the Companies Act.

The irrevocable undertaking will lapse (i) on the earlier of (x) 6 January 2024 and (y) the date of G306 Trial Failure (as such term is defined in the Equity Commitment Agreement) or (ii) such other date as SkyGem and Southern Fox may agree in writing.

5. Information about SkyGem

SkyGem, a private company limited by shares incorporated in England and Wales in 2018, was established for the purposes of ZQ acquiring an interest in Allergy Therapeutics Shares. SkyGem is not a trading company and since incorporation has not engaged in any activities save for transactions relating to the Offer for Allergy Therapeutics Shares. SkyGem is an indirect wholly-owned subsidiary of funds managed by ZQ.

6. 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. 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.

Mr. Shen is also a non-executive director of Allergy Therapeutics, having been appointed to the board on 6 December 2022.

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.

7. Intentions of SkyGem

Intentions for the future business of Allergy Therapeutics

SkyGem intends to continue to support Allergy Therapeutics' existing business plan and foresees 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

SkyGem intends that, following completion of the 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 Offer.

Intentions for trading facilities

SkyGem recognises the benefits to Allergy Therapeutics and Allergy Therapeutics Shareholders of a public market listing and supports Allergy Therapeutics' continuing admission to AIM. Therefore, 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 7 are "post-offer undertakings" for the purposes of Rule 19.5 of the Code.

8. Financing of the Offer and cash confirmation

The cash consideration payable by SkyGem pursuant to the Offer will be financed by existing cash resources available to entities under common control with ZQ which have been transferred to SkyGem.

Cavendish as 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 Offer.

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

The Offer is being made in accordance with Rule 9 of the Code as a consequence of SkyGem's subscription for 2,676,556,439 shares pursuant to the Equity Financing.

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 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 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 and the circumstances set out above. This price is the same as the Issue Price of the Equity Financing.

10. Publication on website and requesting hard copies of documents

Copies of the following documents will be made available in accordance with Rule 26 of the Takeover Code 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:

· this Announcement;

· the irrevocable undertaking referred to in paragraph 4 above;

· the intra-group loan agreement between SkyGem and Tahiti Wealth Holdings Limited dated 6 April 2023 relating to the financing of the Offer;

· the consent letter of Cavendish; and

· the consent letter of Panmure Gordon.

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 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. Overseas Shareholders

The availability of the Offer to Allergy Therapeutics Shareholders who are not resident in the UK may be affected by the laws and/or regulations of their relevant jurisdiction. Therefore, such persons should inform themselves about and observe any applicable legal or regulatory requirements in their jurisdiction. Further details in relation to Overseas Shareholders will be set out in the Offer Document. If you are in any doubt regarding such matters, you should consult your professional adviser in the relevant jurisdiction without delay.

This Announcement does not constitute an offer for sale for any securities or an offer or an invitation to purchase any securities.

12. Disclosure of interests

SkyGem, its directors and any persons acting in concert with SkyGem hold 2,850,296,476 Allergy Therapeutics Shares, representing 59.96 per cent. of the Enlarged Share Capital and 16,666,666 warrants (with an exercise price of 30 pence per warrant) to convert into 16,666,666 Allergy Therapeutics Shares, representing approximately 0.35 per cent. of the fully diluted issued share capital of Allergy Therapeutics.

Except for the interests referred to above, as at the Last Practicable Date, neither SkyGem, nor any of its directors nor any person acting in concert with SkyGem, had:

· any interest in, or right to subscribe for any Allergy Therapeutics Share;

· any short position in Allergy Therapeutics Shares, including any short position under a derivative, any agreement to sell, any delivery obligation or right to require another person to purchase or take delivery of Allergy Therapeutics Shares;

· borrowed or lent any Allergy Therapeutics Shares or entered into any financial collateral arrangements relating to Allergy Therapeutics Shares;

· entered any dealing arrangement of the kind referred to in Note 11 on the definition of acting in concert in the Code in relation to relevant securities of Allergy Therapeutics.

13. Consents

Cavendish has given and not withdrawn its consent to the publication of this Announcement with the inclusion herein of the references to its name in the form and context in which such references appear.

Panmure Gordon has given and not withdrawn its consent to the publication of this Announcement with the inclusion herein of the references to its name in the form and context in which such references appear.

14. Enquiries

SkyGem Acquisition Limited

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

E. contact@zqcap.com

Cavendish Capital Markets Limited (Financial Adviser to ZQ Capital Management Limited and SkyGem Acquisition Limited)

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

Seamus Fricker

Allergy Therapeutics

Manuel Llobet, Chief Executive Officer T. +44 (0)1903 845 820

Shaun Furlong, Chief Financial Officer

Panmure Gordon (UK) Limited (Rule 3 Adviser, Financial Adviser, Nominated Adviser and Broker to Allergy Therapeutics)

Emma Earl, Mark Rogers, Freddy Crossley, Corporate Finance T. +44 (0)20 7886 2500

Rupert Dearden, Corporate Broking

Goodwin Proctor (UK) LLP is providing legal advice to SkyGem and ZQ. Cooley (UK) LLP is providing legal advice to Allergy Therapeutics.

Important Notes

Cavendish Capital Markets Limited ("Cavendish"), which is authorised 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 Cavendish or for providing advice in connection with any matter referred to in this Announcement. Neither Cavendish 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 Cavendish in connection with this Announcement, any statement contained herein, the Offer or otherwise. No representation or warranty, express or implied, is made by Cavendish as to the contents of this Announcement.

Panmure Gordon (UK) Limited ("Panmure Gordon"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as financial adviser to Allergy Therapeutics and no one else in connection with the matters described in this Announcement and will not be responsible to anyone other than Allergy Therapeutics for providing the protections offered to clients of Panmure Gordon or for providing advice in connection with any matter referred to in this Announcement. Neither Panmure Gordon 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 Panmure Gordon in connection with this Announcement, any statement contained herein, the Offer or otherwise. No representation or warranty, express or implied, is made by Panmure Gordon as to the contents of this Announcement.

The SkyGem Directors accept responsibility for the information contained in this Announcement relating to SkyGem. To the best of the knowledge and belief of the SkyGem Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this Announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.

No offer or solicitation

This Announcement is for information purposes only. It 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 Offer or otherwise. The Offer will be made solely by the Offer Document (together with, in the case of Allergy Therapeutics Shares in certificated form, the Form of Acceptance), which will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted. Allergy Therapeutics Shareholders should carefully read the Offer Document (and, if they hold their Allergy Therapeutics Shares in certificated form, the Form of Acceptance) in its entirety before making a decision with respect to the Offer. Any decision in respect of, or other response to, the Offer should be made only on the basis of the information in the Offer Document and Form of Acceptance as applicable.

The full terms and conditions of the Offer (including details of how the Offer may be accepted) will be set out in the Offer Document and, in the case of certificated Allergy Therapeutics Shares, the related Form of Acceptance. The Offer will be made solely through the Offer Document and, in the case of certificated Allergy Therapeutics Shares, the Form of Acceptance, and any acceptance of the Offer should be made only on the basis of the information contained in the Offer Document and, in the case of certificated Allergy Therapeutics Shares, the Form of Acceptance.

It is intended that the Offer Document and Form of Acceptance containing further details of the Offer will be despatched to Allergy Therapeutics Shareholders (other than to persons in a Restricted Jurisdiction) no later than 28 days after the date of this Announcement (unless agreed otherwise with the Panel).

This Announcement does not constitute a prospectus or prospectus equivalent document.

Overseas jurisdictions

The availability of the 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 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 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 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 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 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 Offer is made. All information documents disseminated by SkyGem regarding the Offer will be disseminated to US shareholders of Allergy Therapeutics 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 Offer by a US shareholder as consideration for the transfer of its Allergy Therapeutics Shares pursuant to the 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 Offer.

Neither the 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 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 Offer on SkyGem and the Allergy Therapeutics Group, strategic options, the expected timing and scope of the 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 Takeover Code, the Allergy Therapeutics confirms that, as at 16 October 2023, it has 4,753,717,153 Ordinary Shares of 0.1 pence each in issue and admitted to trading on the London Stock Exchange. Allergy Therapeutics currently does not hold any Ordinary Shares in treasury. Allergy Therapeutics' International Securities Identification Number ("ISIN") is 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 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 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.

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.

Purchases outside the Offer

SkyGem or its nominees or brokers (acting as agents) may purchase Allergy Therapeutics Shares otherwise than under the 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.

Electronic Communication

Please be aware that addresses, electronic addresses and certain information provided by Allergy Therapeutics Shareholders, persons with information rights and other relevant persons for the receipt of communications from Allergy Therapeutics may be provided to SkyGem during the Offer Period as requested under Section 4 of Appendix 4 of the Code to comply with Rule 2.11(c) of the Code.

Announcement not a prospectus

This Announcement does not constitute a prospectus or prospectus equivalent document.

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 1

FURTHER TERMS OF THE OFFER

1. The Offer is unconditional from the outset and is therefore not subject to the satisfaction of any condition.

2. The Offer will be governed by English law and be subject to the further terms set out in this Appendix 1 and to be set out in the Offer Document and the Form of Acceptance. The Offer will be subject to the applicable rules, regulations and requirements of the Financial Conduct Authority, the Panel, the AIM Rules for Companies and the Code. This Announcement does not constitute, or form part of, an offer or invitation to purchase Allergy Therapeutics Shares or any other securities.

3. Any Allergy Therapeutics Shares acquired by SkyGem in connection with the Offer will be acquired fully paid and free from all liens, equitable interests, charges, encumbrances, options, rights of pre-emption and any other third party rights and interests of any nature whatsoever and together with all rights now or hereafter attaching or accruing to them, including voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid on or after the date of this Announcement.

4. If, on or after the date of this Announcement any dividend and/or other distribution and/or other return of capital is declared, made or paid or becomes payable in respect of the Allergy Therapeutics Shares, SkyGem reserves the right to reduce the consideration payable under the terms of the Offer for the Allergy Therapeutics Shares by an amount up to the amount of such dividend and/or distribution and/or return of capital, in which case any reference in this Announcement or in the Offer Document to the consideration payable under the terms of the Offer will be deemed to be a reference to the consideration as so reduced. To the extent that any such dividend and/or distribution and/or other return of capital is declared, made or paid or is payable and it is: (i) transferred pursuant to the Offer on a basis which entitles SkyGem to receive the dividend or distribution and to retain it; or (ii) cancelled, the consideration payable under the terms of the Offer will not be subject to change in accordance with this paragraph. Any exercise by SkyGem of its rights referred to in this paragraph shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the Offer.

5. The Offer will not be made, directly or indirectly, in or into, or by use of the mails of, or by any means or instrumentality (including, without limitation, facsimile transmission, telex, telephone, internet or e-mail) of interstate or foreign commerce of, or of any facility of a national securities exchange of, any Restricted Jurisdiction and the Offer will not be capable of acceptance by any such use, means, instrumentality or facility or from within, any Restricted Jurisdiction.

6. In deciding whether or not to accept the Offer in respect of their Allergy Therapeutics Shares, Allergy Therapeutics Shareholders should rely on the information contained in, and follow the procedures described in, the Offer Document and (if they hold their Allergy Therapeutics Shares in certificated form) the Form of Acceptance which will be posted to Allergy Therapeutics Shareholders (other than to any Allergy Therapeutics Shareholders with addresses in any Restricted Jurisdiction) as soon as reasonably practicable and in any event within 28 days of the date of this Announcement. SkyGem may seek the consent of Allergy Therapeutics to despatch the Offer Document and Form of Acceptance to Allergy Therapeutics Shareholders within 14 days of this Announcement.

7. The Offer will be made on the further terms and will be subject to the further terms which are set out in this Appendix 1, those terms which will be set out in the Offer Document and (in respect of Allergy Therapeutics Shares in certificated form) the Form of Acceptance and such further terms as may be required to comply with the Takeover Code and applicable law.

APPENDIX 2

SOURCES OF INFORMATION AND BASES OF CALCULATION

In this Announcement, unless otherwise stated or the context otherwise requires, the bases of calculation and sources of information are used as described below:

1. Unless otherwise stated, all financial information relating to Allergy Therapeutics has been extracted or derived (without any adjustment) from the annual report and accounts of Allergy Therapeutics for the year ended 30 June 2022, the Company's interim results for the six months ended 31 December 2022 and the Company's open offer circular published on 27 September 2023.

2. The value attributable to the fully diluted issued share capital of Allergy Therapeutics is based on the Enlarged Share Capital and 37,486,748 Allergy Therapeutics Shares subject to options under the Allergy Therapeutics Long Term Share Incentive Plan 2013 and the 33,333,332 warrants to subscribe for 33,333,332 Allergy Therapeutics Shares.

3. The international securities identification number for Allergy Therapeutics Shares is GB00B02LCQ05.

4. Unless otherwise stated, all closing prices have been derived from Factset

5. Unless otherwise stated, all volume weighted average prices have been derived from Factset.

APPENDIX 3DEFINITIONS

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 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.