Mercia Asset Regulatory News (MERC)

Mercia Technologies PLC

("Mercia" or "the Group")

New Direct Investment in Oxford Genetics

Investment will enable the company to strengthen product line and increase market reach

Mercia Technologies, a Midlands-based investment group building, funding and commercialising technology businesses in the UK, is pleased to announce a new direct investment of up to £2.0 million in Oxford Genetics Ltd. Through its expertise in DNA design, Oxford Genetics' focus is on protein expression optimisation and cell line development to provide bespoke solutions for research, therapeutic and clinical needs within the pharmaceutical industry.

The direct investment will be phased, with the initial tranche of £1.0 million taking Mercia's direct holding to 36%. Total holdings across the Mercia Group will be 69%, when including equity held by Mercia's third party funds under management. The second tranche of up to a further £1.0 million is expected to be invested within the next eight months, dependent on the completion of performance related milestones. The investment will enable Oxford Genetics to accelerate both its research and market penetration through the development of significant commercial partnerships.

Oxford Genetics was identified as a Mercia "Emerging Star" thanks to the successful development of its proprietary technology, SnapFast™, which makes DNA assembly significantly more efficient for research and production purposes. Since receiving its first seed investment from Mercia's third party funds in 2013, Oxford Genetics has built one of the world's largest libraries of plasmid DNA "building blocks" for simplified genetic engineering, using SnapFast™. Oxford Genetics also provides custom virus production and cell line development services. These systems are used extensively by researchers in industry and academic environments for applications such as immunotherapies, gene therapies and the development of genetic vaccines.

This is the 16th company in Mercia's current financial year (ending 31 March 2016) to receive direct investment which has originated from Mercia's funnel of potential "Emerging Stars" via its third party funds under management. Following the recent acquisition of Enterprise Ventures, a leading provider of early stage and growth finance through third party managed funds in the North of England, Mercia has significantly increased the pipeline of potential future direct investment opportunities. As a result, Mercia expects to accelerate the rate of direct investment in innovative "Emerging Stars" such as Oxford Genetics, where it sees the opportunity to create significant future value for shareholders.

Dr. Mark Payton, CEO of Mercia Technologies PLC, commented:

"Having worked closely with Oxford Genetics since the original investment by our third party funds in 2013, I have seen the business grow into a bespoke online service for the biopharma research and development industries.

"Oxford Genetics is an exemplar of our Complete Capital Solution. We invested at seed level via our third party funds, working with Oxford Genetics' founder to establish and develop the business. We then completed a number of further early stage funding rounds before now bringing the company across as a direct investment, as it establishes commercial traction in its target markets.

"We look forward to supporting Oxford Genetics as it enters its next growth phase and taps into the wealth of potential commercial partnerships currently in the pipeline, which will drive revenue growth."

Commenting on the investment, CEO and Founder of Oxford Genetics, Dr. Ryan Cawood, said:

"We have developed a strong relationship with the team at Mercia. Being able to access deep sector knowledge and business model development alongside seed and early stage finance via their third party funds has allowed us to focus on developing the business through our initial growth phase. I am delighted that we have now secured a direct investment from the Group, recognising the exciting opportunities available to us.

"This follow-on capital from Mercia will enable us to strengthen our DNA design and cell line engineering capabilities for our biopharma clients, whilst maximising market reach with our existing products and services through state-of-the-art e-commerce and industry partnership channels.

"We are very excited about the future for Oxford Genetics and are very pleased to continue alongside Mercia through the next phase of our growth."

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About Mercia

Mercia is a technology focused investment group which has developed its hybrid investment model to help fund, support and create value from some of the UK's most innovative technology ventures. Mercia invests across a range of sectors to which it can apply its deep expertise, with a particular emphasis on the Midlands, the North of England and Scotland. Across these regions, one important source of early stage deal flow for Mercia derives from its 14 university partners (www.merciatechnologies.com/university-partners/). Mercia Technologies PLC is quoted on AIM with the epic "MERC".

Mercia's "complete capital solution" investment model initially nurtures businesses via its FCA-authorised fund management business, Mercia Fund Management, using third party funds under management, coupled with its team of highly experienced sector specialists who provide hands-on support and guidance. As these early stage ventures develop into Emerging Stars, Mercia provides further funding thanks to its ability to deploy direct investment follow-on capital from its own balance sheet.

In a recent report (Source: Beauhurst, The Deal, 2015/16), Mercia was found to be the fifth most active investor in the UK and the fourth most active in technology. Since its IPO in December 2014, the Company has invested over £20.0 million directly across its portfolio of Emerging Stars and continues to seek both early stage investment opportunities (via Mercia Fund Management) as well as providing its Emerging Stars with the required capital and management support to build towards exits that will realise incremental value for Mercia shareholders.

About Oxford Genetics

Oxford Genetics is a synthetic biology company specialising in DNA design, protein expression optimization, and cell line development technologies and services. The business was founded by two Oxford academics, Dr Ryan Cawood and Professor Len Seymour, in 2011 to try and simplify genetic engineering by providing an industry standard "Lego-Like", DNA system (SnapFast™). Since incorporation the business has substantially expanded its product and service offerings, which now includes cell line and virus production systems. These services include working closely with biopharma clients to help maximize their therapeutic protein and virus yields.