Imperial Innovations Group Regulatory News (IVO)

22 August 2011

Imperial Innovations Group plc

Imperial Innovations commits £5m to Autifony

Imperial Innovations Group plc (AIM: IVO, 'Innovations', or 'the Group'), the UK's leading technology commercialisation and investment company, has committed to invest £5m in Autifony Therapeutics Ltd. ('Autifony') in a £10m funding round alongside £5m from SV Life Sciences. Following the investment Innovations will hold a 33.6% stake in the business.

Autifony is a spin-out from GlaxoSmithKline (GSK) with preclinical assets targeting voltage-gated ion channels, the modulation of which is thought to have potential in the treatment of hearing disorders, including noise-induced hearing loss and tinnitus. Following the funding round GSK will own 13.2% of Autifony.

The founding team of Charles Large, Chief Scientific Officer (CSO), previously Director of Molecular and Cellular Biology at GSK, and Giuseppe Alvaro, Head of Preclinical Drug Discovery, previously Chemistry Leader within GSK's Neuroscience division will be joined by an experienced and entrepreneurial board. This will include non-executive Chairman John Berriman, formerly a director of Abingworth Management Ltd. and Celltech Group plc, and independent non-executive director Allan Baxter, former Senior Vice-President of Medicines Development at GSK.

Autifony's team will be working in collaboration with Professor David McAlpine and Jennifer Linden, leading experts in auditory neuroscience at University College London's (UCL) Ear Institute. UCL is a founding shareholder in Autifony.

Proceeds from the funding will be used to accelerate preclinical development with the objective of commencing human trials in early 2013.

Maina Bhaman, Director of Healthcare Investments at Imperial Innovations, will join the board of Autifony.

Susan Searle, Imperial Innovations' CEO, said:

"We have worked closely with Autifony, SV Life Sciences and GSK to successfully transfer the great potential of these pre-clinical assets to Autifony.

"This is a creative approach to building new companies, leveraging established pharmaceutical assets together with the world class scientific expertise that exists at the UCL Ear Institute."

Charles Large, Autifony's co-Founder and CSO, said:

"There are currently no pharmacological treatments available for hearing loss or tinnitus despite the increasingly large number of patients, both old and young, that suffer from these conditions. Autifony represents an important opportunity to bring together our drug-discovery experience with the expertise of academic groups in this field, in particular the Ear Institute. Autifony's goal will be to find effective new medicines that can reduce the burden of suffering for this poorly served patient group."

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Notes to editors

Innovations creates, builds and invests in pioneering technologies addressing global problems in healthcare, energy, engineering and the environment. It combines deep understanding of science and technology with commercial acumen and strong investment expertise.

·; Innovations supports scientist-entrepreneurs in the commercialisation of their ideas by:

·; leading the formation of new companies and providing facilities in the early stages;

·; providing significant investment and encouraging co-investment to accelerate the transition from R&D to products;

·; providing operational expertise; and

·; helping to recruit high-calibre industry figures and experienced entrepreneurs as executive management and Board members.

In December 2010 Innovations raised £140m to accelerate the making of, and increase the size of, investments in companies established under its existing intellectual property pipeline agreement with Imperial College London. The Group also intends to invest in companies founded by or based on technology from the University of Oxford, the University of Cambridge and University College London.

Innovations has already achieved significant success with its early investments; for example its £1.5m investment in obesity drug developer Thiakis could return up to £22m, following its sale for £100m in 2008, while the sale of Respivert, a small molecule drug discovery company, resulted in Innovations realising £9.5m, a 4.7x return on investment.

·; In the year to 31 July 2010, Innovations invested £14.0m in 20 ventures, helping to launch three new companies. With a technology portfolio of more than 80 companies, Innovations' most advanced assets include:Circassia: Innovative vaccines for the treatment of a wide range of allergies

·; Nexeon: Advanced materials that extend the cycle life and significantly increase capacity of rechargeable batteries

·; Veryan: Stents inspired by the human vascular system

·; PsiOxus Therapeutics: Developing a pipeline of small molecule therapeutics for the treatment of wasting diseases and cancer.

·; Polytherics: Biotechnology company that applies precision chemistry to develop protein and peptide-based drugs

·; Cellmedica: Cell therapy company working on new techniques to cure human diseases based on cellular immunotherapy

·; Evo Electric: Develops and manufactures advanced electric machines, hybrid drive trains and generator sets for a wide range of transportation and mobile power applications

Autifony

Autifony Therapeutics Limited is a newly created UK biotech company dedicated to discovering new medicines to treat hearing disorders, such as hearing loss and tinnitus. Given the novelty of this therapeutic area, Autifony is taking a novel approach, uniting in-house 'big pharma' experience of discovering drugs for CNS (central nervous system) indications with an efficient, virtual network of discovery services provided by preferred contract research organisations, and coupling this to expertise in hearing within top academic institutions, including UCL's Ear Institute. Autifony has also forged strong links with the UK charity, Action on Hearing Loss (formerly RNID) who provide an important insight into the needs of people with hearing disorders, and thus help us to ensure that the new medicines that we discover will meet their needs.