N4 Pharma Plc Regulatory News (N4P)

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement via Regulatory Information Service, this inside information is now considered to be in the public domain

20 September 2018

N4 Pharma Plc

("N4 Pharma" or the "Company")

Strategic Review

N4 Pharma Plc (AIM: N4P), the specialist pharmaceutical company, today announces that, following the receipt of the final report of the clinical trial for its reformulation of sildenafil, the Board has undertaken a strategic review of the business. The findings and implications are as follows:

Results of the full clinical data:

As announced on 9 July 2018, the Company received the preliminary results of the pharmacokinetic ("PK") data from its clinical trial for the reformulation of sildenafil, which showed that the formulation had not met the key target endpoints of the trial.

The Board has since received the full clinical data report, analysis of which shows that the technical difficulty in achieving the required fast onset product profile for sildenafil as set out in our patent application is much higher than originally anticipated and, therefore, there can be no guarantee that any subsequent new reformulation would be covered by the patent application. Having considered the options to address the PK profile the directors have concluded that the cost and time for subsequent reformulation and clinical work on this product will be much higher than previously anticipated and the chances of success considerably lower. The Board considers that this also has similar implications for other patents within the Company's generics portfolio, namely aprepitant and duloxetine, which are based on a similar PK approach to sildenafil and so, it is likely that their cost and risk will also increase.

Nuvec® opportunity:

Nuvec®, as a delivery system, gives N4 Pharma many opportunities to explore in what is a highly attractive market, with many major pharmaceutical companies seeking delivery system solutions for projects in which they are investing significant sums of money.

Since admission to trading on AIM, N4 Pharma has undertaken and continues to undertake research to identify the exciting potential for Nuvec® and has already secured a collaboration with a major player, MedImmune UK, to evaluate its potential applications. N4 Pharma is now beginning the relevant Chemisty Manufacturing and Controls ("CMC") work needed, including technology transfer, scale up and Good Manufacturing Practice ("GMP") in order to be well placed to work with partners to undertake clinical trials as and when needed. The Company has also recently recruited Dr Allan Hey former Vice President of Pharmaceutical services at Circassia Ltd as the new Head of CMC Development to lead this work. Allan brings considerable expertise in the field of CMC Biologics having also held senior CMC posts at Takeda and Lundbeck.

Result of Strategic Review:

In light of the results of the full sildenafil clinical data report, the Board has given careful consideration to the chances of success for sildenafil and consequently aprepitant and duloxetine. The Board has concluded that the increased risk and much higher costs of undertaking any further clinical trials has significantly altered the risk reward profile and that pursuing these opportunities would not be a good use of the funds available to the Company and, therefore, not in the long-term interest of shareholders. In light of this, the Company will discontinue further development of these assets and will not continue with the patent applications for these generic reformulations.

This therefore leaves the generic division with valsartan as the only opportunity with the potential risk reward ratio sought by the Company. Keeping this opportunity active due to patent obligations would still involve significant investment and therefore the Board has taken the difficult decision to close the generics division and focus management's time and Company funds on Nuvec®.

By making the decision to stop further investment into the generics division, the Company maintains sufficient funds to continue to invest in undertaking the required work on Nuvec® well into 2019. As announced on 18 June 2018 the first results of the existing research will be available in Q4 2018, which the Board believes will provide further compelling data to present to other collaborators as well as MedImmune UK and identify specific opportunities for the Nuvec® system.

Nigel Theobald, CEO of N4 Pharma commented: "Whilst the decision to close the generic division is clearly disappointing, it has not been taken lightly and the Board remains very optimistic about the potential for Nuvec® and believes it is right to focus on this, as we increasingly believe, bigger opportunity. The Board believes this will deliver the exciting opportunities that the Company was set up to achieve and the Company should not chase opportunities where the risk profile has changed for the negative.

"Rather than narrowing our approach, I firmly believe that by focusing our resources on Nuvec® we are in fact giving N4 Pharma the greatest chance to achieve multiple commercial opportunities given the revised risk profile we faced with our generics division following the data obtained from our clinical trial.

"On behalf of the Board, I would like to thank all of our shareholders for their continued support and look forward to providing further updates on Nuvec® in the near future."

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