C4XD.L Regulatory News (C4XD)

This announcement contains inside information

 C4X Discovery Holdings plc

("C4XD" or the "Company")

£5.0 Million Fundraise through the conditional Placing of 4,901,961 new Ordinary Shares at a price of 102 pence per Ordinary Share and Notice of General Meeting

Calculus Capital Limited and Polar Capital LLP to join share register

C4X Discovery Holdings plc (AIM: C4XD), an innovative drug discovery engine, today announces that it has raised £5.0 million before expenses (the "Placing") via a conditional placing of 4,901,961 new ordinary shares (the "Placing Shares") to current and new investors, through Zeus Capital as nominated adviser and broker to the Company, at a placing price of 102p (the "Placing Price") per ordinary share.

Highlights of the Placing:

· £5.0 million raised, before expenses, at a Placing Price of 102 pence per ordinary share

· Proceeds will be used to:

o Progress the Group's existing pre-clinical pipeline towards clinical development and a commercially attractive partnering point

o Invest in developing new lead compounds against highly valuable drug targets including those identified by Taxonomy3®

o Provide sufficient working capital to fund the Group's operations

· Calculus Capital Limited ("Calculus"), a leading EIS and VCT investor, with a strong track record in the healthcare sector, has agreed to invest £3.0 million as cornerstone investor in the Placing subscribing for 2,941,176 Placing Shares, and on Admission will be interested in 7.9 per cent. of the enlarged Share Capital.

· Polar Capital LLP, another new investor, and a number of existing shareholders have also agreed to support the fundraising. Clive Dix, CEO, has agreed to invest £475,000 in the Placing.

The Placing Price represents a discount of approximately 4.2 per cent. to the closing mid-market price of the Ordinary Shares of 106.5 pence on 5 September 2016 (being the last practicable dealing day prior to the date of this announcement). The Company's nominated adviser and broker is Zeus Capital Limited.

Commenting on the Placing, Clive Dix, CEO of C4X Discovery, commented: "The completion of this fundraise will allow C4XD to continue on its path to becoming the world's most productive drug discovery engine. We are already exploiting cutting edge-technologies to design and create best-in-class small molecule candidates. The additional funds will allow us to progress our existing innovative pipeline towards the clinic and draw on the strengths of our discovery engine to start the development of four new medicines for diseases with a high unmet medical need.

"I am delighted to welcome Calculus and Polar Capital as new shareholders and would like to thank our existing investors that also took part in the Placing. We are extremely excited about the future at C4X Discovery."

PLACING

The Placing requires the Company to obtain additional authorities to allot ordinary shares in the capital of the Company ("Ordinary Shares") and is therefore conditional on requisite shareholder approval being obtained as well as admission of those Placing Shares to trading on AIM ("Admission").

A general meeting of shareholders of the Company is to be convened for the purpose of considering the relevant resolutions (the "Resolutions") at 10:00 a.m. on 26 September 2016 at The Podium, 1 Eversholt Street, Kings Cross, London NW1 2DN and, assuming the Resolutions are passed and the Placing has otherwise become unconditional, completion of the Placing is expected to take place on 27 September 2016. A circular to shareholders convening the requisite general meeting is expected to be posted later today. Assuming that the requisite shareholder approvals are obtained and Admission occurs, the Company will issue pursuant to the Placing 4,901,961 new Ordinary Shares in the Company which will represent approximately 13.1% of the issued share capital as enlarged by the Placing.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of 1 pence each in the capital of the Company then in issue, including the right to receive all dividends and other distributions declared, made or paid in respect of such shares after the date of issue of the Placing Shares.

The Placing Shares will represent approximately 13.1 per cent. of the ordinary share capital as enlarged by the Placing and will, when issued, rank pari passu in all respects with the other Ordinary Shares then in issue, including all rights to all dividends and other distributions declared, made or paid following Admission.

Related Party Transaction

Clive Dix, CEO, will subscribe for 465,686 Placing Shares pursuant to the Placing and will enter into a placing letter with Zeus Capital. Clive Dix's participation in the Placing will constitute a "related party transaction" for the purpose of AIM Rule 13.

The independent Directors, being Sam Williams, Alex Stevenson and Harry Finch, consider, having consulted with the Company's nominated adviser, Zeus Capital Limited, that the terms of Clive Dix's participation in the Placing are fair and reasonable insofar as the Company's shareholders are concerned.

The level of participation in the Placing by Clive Dix, and his resulting interest in the Company is shown below:

*In addition, Clive Dix has options over 520,000 Ordinary Shares

Following Admission, the Company's issued share capital will consist of 37,398,718 ordinary shares. There are no ordinary shares held in treasury. Therefore, in accordance with the FCA's Disclosure and Transparency Rule 5.6.1, the Company confirms that following Admission, the total number of voting rights in the Company will be 37,398,718.

For further information, please contact:

C4X Discovery Holdings plc

Clive Dix, Chief Executive Officer 07801 865803

Zeus Capital Limited

Dan Bate 0161 393 1973

Dominic Wilson/Phil Walker 0203 829 5000

Consilium Strategic Communications

Mary-Jane Elliott, Chris Gardner, Matthew Neal, Melissa Gardiner 0203 709 5700 

PLACING STATISTICS

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

BACKGROUND TO, AND REASONS FOR THE PLACING

C4XD aims to become the world's most productive drug discovery engine by exploiting cutting edge-technologies to design and create best-in-class small-molecule candidates targeting a range of high value therapeutic areas.

Since the Company's successful AIM IPO in October 2014, C4XD has made considerable progress across its in-house pipeline in addiction, diabetes and inflammation, with a number of new drug candidates identified and further progress made towards the clinic for the Company's lead programme. C4XD now has six therapeutic projects underway. On 1 March 2016, the Company made the strategically important acquisition of Adorial Limited ("Adorial") and its Taxonomy3® target-discovery technology which complements and further strengthens the C4XD platform and its ability to initiate drug discovery and development programmes. The acquisition of a suite of drug discovery technologies from Molplex Ltd, in July 2016, has added additional strength to the CXD drug discovery engine including a software-based system which combines chemoinformatics, computational chemistry and artificial intelligence to optimise the drug discovery process.

Management

On 4 May 2016, the Company announced the appointment of Dr Clive Dix as Chief Executive Officer. At that time, Sam Williams, a Non-Executive Director, became Interim Chairman whilst a search for a new Chairman is undertaken. Dr Dix was previously Executive Chairman of C4XD's Board of Directors having assumed day-to-day operational responsibilities from Piers Morgan who stepped down as CEO in November 2015 to pursue opportunities outside C4XD.

Dr Dix is widely recognised as one of the leading figures in the UK biotechnology sector, with an established reputation as a serially successful entrepreneur and an experienced pharmaceutical R&D executive. Most recently, Dr Dix was CEO of Convergence Pharmaceuticals, which was sold to Biogen in January 2015 for $675m. Prior to that, Dr Dix enjoyed successful exits with PowderMed Limited, Auralis Limited and PowderJect Pharmaceuticals plc, where he held the roles of CEO, Chairman and Head of R&D, respectively. Before his move into biotechnology, Dr Dix was UK Research Director for GlaxoWellcome. He currently serves as Chairman of Touchlight Genetics Ltd and Centauri Therapeutics Ltd, and was Chairman of the UK BioIndustry Association (BIA) from 2008 to 2010.

Drug Discovery Engine

C4XD conducts rational, accelerated drug design using experimental data to identify the important molecular shapes from which to design and develop safer and better drugs across a wide range of indications.

The Company's Conformetrix patented technology platform allows the dynamic 3D-shapes of free drug molecules to be precisely measured from experimental data, giving medicinal chemists new and unprecedented insights into the behaviour and physical properties of drug molecules.

The measurement, analysis and use of dynamic 3D-shapes is at the heart of C4XD's drug discovery engine. The focus and clarity that these data provide allows the Company to make rapid progress in developing new and better drugs at a fraction of the cost, compared to best industry practice.

The acquisition of Adorial and the Taxonomy3® technology adds a new ability to identify highly relevant and unique targets which C4XD can use alongside industry standard methods as the starting point of programmes to expand the Company's pipeline. Adorial's key genetic technology, Taxonomy3®, is a revolutionary and highly sensitive mathematical tool that has the potential to increase the probability of small molecule drug-development success.

Taxonomy3® is able to identify previously unknown linkages and interactions between genes and biological pathways in a broad range of diseases. This enables the discovery of targets that cause disease rather than those that are simply associated with its symptoms, thereby providing the best starting point for drug discovery, biomarker identification and patient stratification, and ultimately improving the chances of clinical success.

Business Catalysts - Pipeline

Addiction

Oral Orexin-1 Antagonist Programme

The treatment of addiction represents a substantial area of unmet medical need, forecast to be worth an estimated $13bn per annum by 2018 (Source: GBI Research 2012). C4XD's lead programme targeting Orexin-1 could represent a major new method of treating addiction by targeting the 'craving' process itself. Through the Company's Conformetrix platform, C4XD has identified novel, patentable oral antagonists of Orexin-1 providing the Company with a pre-clinical candidate and a second, differentiated follow-up molecule. Furthermore, to enable visualisation of the activity of this drug in the brain in the planned Phase I clinical study, a potential PET imaging agent has been identified and is being assessed for suitability for clinical use.

The Orexin-1 receptor is considered to be central to the brain's 'craving' and 'reward' pathways with pre-clinical efficacy observed in multiple addiction models. Recently, Actelion Pharmaceuticals Ltd ("Actelion") announced the first public disclosure of a selective Orexin-1 antagonist entering clinical development with a Phase 1 study currently in progress. Selectivity against the structurally similar Orexin-2 receptor is of critical importance and C4XD has identified compounds with more than 1,000-fold selectivity for the Orexin-1 receptor versus the Orexin-2 which has a very different biological function in mediating the sleep/wake cycle. Molecules that target the Orexin-2 receptor such as the approved drug Suvorexant have been shown to be beneficial in the treatment of insomnia and therefore this activity must be absent from a drug being developed for the treatment of addiction.

Following Actelion's lead, C4XD believes that a number of pharmaceutical companies have active pre-clinical Orexin-1 programmes for the treatment of addiction. C4XD's programme is well placed from a product development perspective and provides a licensing opportunity for pharma companies interested in the treatment of addiction seeking to acquire an Orexin-1 programme.

Diabetes

Oral GPR142 Agonist Programme Diabetes is a large and growing market, estimated to be worth $55bn per annum by 2017 (Source: Visiongain, Diabetes Treatments: World-Drug-Market-2013-2023). In September 2015, C4XD announced the identification of novel, lead molecules that target GPR142, a key factor in the production of insulin.

Activation of the GPR142 receptor stimulates insulin production in a glucose-dependent manner, avoiding the hypoglycaemia risk associated with some existing diabetes therapies. GPR142 has recently become the focus of considerable research and patent activity with the pharma industry. Using its proprietary technology, C4XD has identified critical drug design principles, enabling the Company to generate novel, potent, orally available compounds in just a few months. C4XD has recently demonstrated potent activity of the Company's proprietary molecules in isolated pancreatic islets, the region of the pancreas that produces insulin.

Oral GLP-1 Agonist Programme

GLP-1 is a clinically validated diabetes target with multiple products in late stage clinical development or approved and marketed. The market leader for GLP-1 agonists, Victoza®, achieved 2015 sales of $2.68bn in 2015 (Novo Nordisk Annual Report 2015). However, these products are peptide-based therapeutic agents which require injection and are expensive to manufacture and prescribe. C4XD believes there is significant opportunity to develop a more convenient oral therapy that would also provide the potential for once-daily fixed-dose combination products with other marketed oral diabetes products. Using its Conformetrix platform, C4XD has identified novel molecules that activate the GLP-1 receptor and studies are underway to further profile these molecules for suitability as orally delivered therapeutic agents.

Inflammation

Oral NRF-2 Activator Programme

In September 2015, C4XD announced it had designed novel activators of the NRF-2 pathway, which is important in mediating lung diseases such as Chronic Obstructive Pulmonary Disease ("COPD"), and Multiple Sclerosis ("MS"). COPD represents an area of substantial unmet medical need and a $41bn market (Source: Visiongain, Asthma and COPD Therapies: World Market 2013-2023) and, therefore, oral activators of NRF-2 are the subject of considerable interest by the pharmaceutical industry. However, novel NRF-2 activators have proved difficult to identify. Recently, C4XD's proprietary technology has enabled the discovery of some of the most potent compounds reported so far against NRF-2 and these should be more selective than previously developed agents. C4XD has recently initiated a fully integrated research programme with a UK-based CRO providing chemistry and biological services with the goal of delivering a shortlist of molecules from which C4XD would select a candidate to take into pre-clinical development.

IL-17 Programme

In October 2015, C4XD announced it had identified highly selective small molecule leads in our programme against Interleukin-17 ("IL-17"), a critical and high-value target in inflammation and autoimmune diseases, including psoriasis. The psoriasis market is estimated to be worth $9bn per annum (Source: Visiongain, Psoriasis Treatment: World Market 2013-2023). Current attempts to target IL-17 are based on monoclonal antibodies with the identification of orally-available small molecules proving extremely challenging. C4XD's technology has enabled the identification of small molecules that can selectively block IL-17 activity offering the potential of oral or topical use with benefits over injectable antibody therapies.

2.3.4 Oncology

In October 2015, C4XD announced it had entered into a research collaboration with the University of Oxford's Structural Genomics Consortium ("SGC-Oxford"). Through the collaboration, C4XD is granted access to structural, biological and therapeutic information from SGC-Oxford. C4XD's drug discovery engine will be used to complement SGC-Oxford's expertise to identify new and improved molecules initially targeting an epigenetic target potentially useful for the treatment of cancer, such as cancers of the breast, prostate, lung and head and neck. Improvements made to SGC-Oxford's existing molecules will be the exclusive property of SGC-Oxford, who will make them freely available in line with SGC-Oxford policy, while new 'drug-like' compounds suitable for clinical development independently identified by C4XD will belong to the Company.

2.4 Collaborations

C4XD operates a hybrid business model, with a wholly owned pipeline of discovery programmes in addition to partnerships with global and international companies, from top 10 pharma companies through to biotech companies.

C4XD has collaborations with AstraZeneca, Evotec and Takeda which enable them to access our Conformetrix platform for use in their own programmes. These relationships have validated the power and efficacy of the Company's technology platform. C4XD has refined its hybrid model and its strategy going forward is for any future agreements with partners to be shared IP or milestone driven collaborative agreements as opposed to fee-for-service contracts. The Company is actively engaging with existing partners on more collaborative approaches and exploring further potential collaborations around new programmes as well as partnering discussions on C4XD's existing pipeline.

C4XD is also partnered with the SGC-Oxford to assist with the identification and validation of new drug targets and has several active research collaborations with academic institutions.

2.5 Use of Proceeds

The Directors intend to accelerate the expansion of the Company's pipeline to increase the number of

pipeline programmes more than threefold by 2019 in line with C4XD's goal of becoming the world's most productive drug discovery engine, and in particular intend to use the net proceeds of the Placing to:

· progress the development of the Group's existing pipeline through to clinical trials, towards generating Proof of Concept in man;

· invest in developing new lead compounds; and

· provide sufficient working capital to fund the Group's operations.

DETAILS OF THE PLACING

The Company proposes to raise £5.0 million, by way of a conditional, non pre-emptive placing of 4,901,961 new Ordinary Shares at the Placing Price. The Placing Shares have, pursuant to the Placing Agreement, been placed by Zeus Capital, as agent for the Company, with institutional and other professional investors. The Directors had considered whether the Company would be able to extend the offer of new Ordinary Shares to all existing Shareholders but, having discussed this with its professional advisers, decided that the expense of doing so could not be justified and would not be in the best interests of the Company at this time.

Application will be made for the Placing Shares to be admitted to trading on AIM. It is expected that

dealings in the Placing Shares will commence on 27 September 2016.

RECOMMENDATION

The Directors consider that the Placing and the Resolutions are in the best interests of the Company and its Shareholders as a whole and accordingly recommend that Shareholders vote in favour of the Resolutions, as they intend to do in respect of their own legal and/or beneficial shareholdings, amounting, in aggregate, to 2,617,703 Ordinary Shares (representing approximately 8.1 per cent. of the Existing Ordinary Shares).

The Company is in receipt of undertakings from Directors to vote in favour of the Resolutions representing not less than 8.1 per cent. of the Existing Ordinary Shares.