ORPH.L Regulatory News (ORPH)

Venn Life Sciences Holdings Plc

("Venn Life Sciences" or the "Company")

Admission to trading on AIM

Placing of 8,333,333 new Ordinary Shares at 30p per share to raise £2.50m

Vendor Placing of 1,534,084 Ordinary Shares at 30p per Ordinary Shares

Venn Life Sciences Holdings Plc, (AIM: VENN), a growing Clinical Research Organisation, announces that Admission will become effective and dealings in the Ordinary Shares on AIM will commence today at 8.00am under the trading symbol VENN.

This follows the announcement on 6 November of, amongst other things, a placing by Zeus Capital to raise approximately £2.5 million by means of the issue of 8,333,333 new Ordinary Shares at 30 pence per share to provide working capital and a Vendor Placing of 1,534,084 Ordinary Shares at 30 pence per Ordinary Share.

About Venn Life Sciences

Venn Life Sciences is a Clinical Research Organisation ("CRO") providing a suite of consulting and clinical trial services to pharmaceutical, biotechnology and medical device organisations and having operations in France, the Netherlands and Ireland, with a branch office in Switzerland. The Venn Group also includes a Clinical Resourcing business based in France. The Company's near term objective is the expansion of its coverage to other European countries through strategic acquisitions thus combining a number of small European CROs to build a mid-sized CRO focused on the European market, offering clients a full service, multi-centred capability in Phase II-IV trials and across a range of principal disease areas.

Commenting, Tony Richardson, Proposed CEO of Venn Life Sciences Holdings Plc, said: "Moving to AIM is the first step in our strategy to build a mid-sized pan-European CRO. We expect to achieve this through organic growth but also by targeting the acquisition of smaller, profitable regional European CRO's to complement our existing geographies."

The proposed Directors

The Board of Venn Life Sciences brings together a number of Directors with a track record of acquiring, integrating and growing businesses in the Life Sciences sector. Tony Richardson, CEO, co-founded Alltracel Pharmaceuticals where he was CEO when it listed on AIM in 2001 and was sold in 2008 for over $40m. David Evans, Chairman, was Chairman of AIM listed BBI Holdings which grew from a value of £4m to a value of £84m in 2007, when BBI was sold to Inverness Medical Innovations Inc. He is also Chairman of successful listed diagnostic companies Epistem Holdings plc and EKF Diagnostics Holdings plc. Paul Foulger, Finance Director, was Finance Director of EKF Diagnostics Holdings plc until September 2011 and remains in an active role as Company Secretary. Michael Ryan, Non-Executive Director, spent 7 years working with major OEMs in Ireland and has 4 years' experience with the Irish Trade Board. Mike was a founding partner and major shareholder in Excal AB and headed a group of investors who bought Artema Medical AB.

On 6 November, Armscote Investment Company Plc, an ISDX listed investment vehicle, announced:

·; a share capital reorganisation the effect of which is that shareholders will receive 1 new Ordinary Share and 29 Deferred Shares for every 30 Existing Ordinary Shares;

·; an agreement to acquire Venn Life Sciences Limited ("Venn"), a Clinical Research Organisation ("CRO") for a total consideration of £2.88m to be satisfied by the issue of 9,600,000 Ordinary Shares at 30 pence per share;

·; a placing by Zeus Capital to raise approximately £2.5 million by means of the issue of 8,333,333 new Ordinary Shares at 30 pence per share to provide working capital;

·; a Vendor Placing of 1,534,084 Ordinary Shares at 30 pence per Ordinary Share;

·; a change of name of the Company to Venn Life Sciences Holdings plc;

·; the appointment of David Evans, Anthony Richardson and Michael Ryan to the Board;

·; the withdrawal of the existing Ordinary Shares from trading on ISDX; and

·; that application had been made for admission of the Enlarged Share Capital to AIM.

Below are extracts from the Admission Document which was sent to shareholders on 6 November 2012 and supplementary admission document dated 29 November 2012. The full Admission Document is available on the Company's website: www.vennlifesciences.com

Key Statistics

Introduction

Armscote was established in February 2011 and was admitted to trading on ISDX, as an investment vehicle, in July 2011 having raised £600,000 by way of a placing. The Company's investment policy is to acquire controlling interests in small to medium sized private companies which have strong management and significant growth opportunities and are focused on the service sector in the UK. As at 30 June 2012, the date to which the last interim results were prepared, the Company had made two small investments, at an aggregate cost of £50,000, and had retained cash of approximately £400,000. At the same date, the Directors stated that they were continuing discussions with a business within the health sector and expected to be able to fully update shareholders in due course.

These discussions have concluded and on 6 November 2012 the proposals detailed above were announced.

Enlarged Group

The Acquisition will provide the Company with a Clinical Research Organisation ("CRO") providing a suite of consulting and clinical trial services to pharmaceutical, biotechnology and medical device organisations with operations in France, the Netherlands, and Ireland, with a branch office in Switzerland. The Venn Group also includes a Clinical Resourcing business based in France. The Company's near term objective is the expansion of its coverage to other European countries through strategic acquisitions.

The Directors and Proposed Directors believe that there is an opportunity to combine a number of small European CROs to build a mid-sized CRO focused on the European market, offering clients a full service, multi-centred capability in Phase II-IV trials and across a range of principal disease areas. Market drivers, such as increased life expectancy, pipeline pressure for drug companies, increasing numbers of disease indicators and health economics, would suggest that the research environment will remain active.

Europe remains an essential but challenging location for sponsors to conduct trials. Although there has been a significant harmonisation of regulation in recent years, many linguistic, cultural, logistical and regulatory challenges remain when conducting trials across Europe. Venn is well positioned to deal with these challenges. The Board believe that the strategy to build Venn's European footprint through acquisition will make Venn attractive not only to US and Asian companies looking to trial their products in Europe, but also to US and Asian Clinical Research Organisations looking to gain a foothold in the European market.

History and Operations of Venn

The Venn business was originally established in Canada and Switzerland. Tony Richardson joined the Group as Chief Executive in early 2010, and has subsequently led the management team in completing the acquisition and integration of two small European CROs, in addition to managing Venn's withdrawal from non-European markets. These actions were the result of a wider strategy to grow via acquisition and focus on European markets, where Venn has existing operational resources and a strong base of core skills.

The Group has principally evolved through the acquisition and integration of small European based CROs. In March 2010, Venn acquired a Netherlands-based CRO, providing a range of services to biotechnology and pharmaceutical clients. In September 2010 Venn completed the acquisition of a Paris-based CRO, including a resourcing and staffing operation. These acquisitions provided the platform for further growth, both organic and through acquisition.

Immediately before Admission Venn will become the holding company for four entities:

·; Venn Life Sciences (Ireland) Limited, located in Dublin, which provides management services to the Venn Group and manages corporate activity;

·; Venn Life Sciences B.V., located outside Amsterdam and including a branch office in Switzerland, which provides clinical trial services; and

·; Venn Synergie S.A.S., based in Paris, which provides both clinical trial services and resourcing services.

The business now has a team of approximately 40 people across four locations comprising employees and contractors.

Market

The global contract research market is currently valued at approximately €20 billion. The market evolved from the need of pharmaceutical companies to drive greater efficiency in the research and development process. Recently the market has seen considerable consolidation at the upper end and analysts suggest this trend is set to continue as more sponsors require multi-centred, multi-lingual and multi-cultural capability from service providers. The Directors and Proposed Directors believe that there exists an opportunity to aggregate a number of small CROs to create a business capable of offering full service, multi-jurisdictional capability, and yet retain the high quality, consistency of service and depth of relationship that is common to smaller CROs but typically evades the larger industry players.

Acquisition Strategy

Smaller CROs attempt to offer a more complete and credible capability to clients through the formation of partnerships and master service arrangements with other CROs. The Directors and Proposed Directors believe that this approach will enjoy limited success as sponsors are frequently uncomfortable with loose partnerships where there may be many differences between the partnering CROs such as non-standardised operating procedures, inconsistent quality and differences in culture. Whilst the Directors and Proposed Directors believe that the partnership model has a role to play, it is in the context of a strong central entity partnering with niche service providers, either in terms of geography or service type. It is intended that Venn becomes this strong central entity.

This changing market and the limited success of the partnership model, has resulted in a real need for small and medium sized players to formally combine forces. Venn intends to capitalise on this by deploying management's considerable experience in delivering value through mergers and acquisitions. A number of opportunities aimed at building Venn into a mid-sized, pan-European CRO have been identified but are all at an early stage, and no formal discussions have commenced.

Summary Financial Information

The following financial information has been derived from the financial information contained in Part V (A) of the Admission Document and should be read in conjunction with the full text of the Admission Document. Investors should not rely solely on the summarised information.

Notes:

1. A change in personnel in Venn's French operation in late 2010 caused a short term reduction in revenues.

2. Revenue excludes income from six contracts in Switzerland which are being assigned to the branch office in Switzerland.

3. Expenses in 2012 were abnormally high due to an aborted transaction that generated exceptional costs of €500,000, of which approximately half were incurred in Q1 2012.

4. The exceptional items relate to debtor/creditor balances that were within the Venn group, but do not form part of the acquisition.

A pro forma statement of net assets for the Enlarged Group is contained in Part V of the Admission Document. This shows that at Admission the Enlarged Group will have total assets of €4,992,000, total liabilities of €1,950,000 and net assets of €3,087,000.

Concert party

The Vendors are deemed to be a Concert Party for the purposes of the Takeover Code due to their position as the vendors of Venn. Details of each of the member of the Concert Party, and their prospective interests in the Company are set out in Part ll and in paragraph 16 of Part Vl of the Admission Document.

Share Capital Reorganisation

As at 2 November 2012 the middle market price of an Existing Ordinary Share was 1.25p. The Board considers that it is not advisable to have a share price at such a low level. The Board has therefore proposed the Share Capital Reorganisation, pursuant to which every 30 Existing Ordinary Shares will be consolidated into 1 ordinary share of 3p each and, following this consolidation, each of the resulting ordinary shares of 3p each in the capital of the Company will be sub-divided into 1 Ordinary Share and 29 Deferred Shares. The value of the Deferred Shares will effectively be zero. To the extent that the number of Existing Ordinary Shares held by a Shareholder is not a multiple of 30, each such Existing Ordinary Share will not be consolidated as set out above, but will instead be redesignated as a new Deferred Share. The maximum potential loss by each Shareholder as a result of the consolidation element of the Share Capital Reorganisation is up to 29 Existing Ordinary Shares, with an aggregate value of 36.25p, based on share price of 1.25p per share.

Placing and placing agreement

The Company is proposing to raise £2.5 million (before expenses) by way of a conditional placing by the Company with investors of the Placing Shares at the Placing Price. The Placing Shares will represent approximately 41.5 per cent. of the Enlarged Share Capital at Admission. Pursuant to the Placing Agreement, entered into between the Company, the Directors, Proposed Directors and Zeus Capital, Zeus Capital has agreed to use its reasonable endeavours to place the Placing Shares and the Company and the Directors and Proposed Directors have given certain warranties and the Company has given an indemnity to Zeus Capital, all of which are normal for this type of agreement.

The Placing Shares will rank pari passu in all respects with the Ordinary Shares and will be issued credited as fully paid.

The Placing, which is not underwritten, is conditional, inter alia, on:

·; the Placing Agreement becoming unconditional and not having been terminated in accordance with its term prior to Admission;

·; approval of the Resolutions; and

·; Admission occurring no later than 14 December 2012 (or such later date as Zeus Capital and the Company may agree, being no later than 21 December 2012).

The estimated net proceeds of the Placing are approximately £2.05 million and will be used for working capital. Further details of the Placing Agreement are set out in paragraph 10.1.8 of Part Vl of the Admission Document.

Under the Vendor Placing, certain Vendors have agreed to sell 1,534,084 Consideration Shares at the Placing Price and these have been placed with investors by Zeus Capital. The Vendors have agreed to pay Zeus Capital a commission of 5 per cent. of the value of the Vendor Placing Shares.

DEFINITIONS

The following definitions apply throughout this announcement, unless the context requires otherwise.