ORPH.L Regulatory News (ORPH)

Venn Life Sciences Holdings Plc

("Venn" the "Company" or the "Group")

Proposed acquisition of Kinesis Pharma BV for up to €6.5m

Placing to raise £3.57m at 22p

& Notice of General Meeting

Venn Life Sciences (AIM: VENN), a growing Clinical Research Organisation (CRO) providing clinical trial management and resourcing solutions to pharmaceutical, biotechnology and medical device clients, has entered into an agreement to acquire the entire issued share capital of Kinesis Pharma BV, a provider of specialist consultancy services around the chemical-pharmaceutical, non-clinical and early clinical development of drug products, for a total maximum consideration of up to €6.5m.

The Acquisition is in line with the Company's strategy of making targeted, complementary acquisitions that improve the Group's geographical coverage and deepen its service capability, to create a highly differentiated European Contract Research Organisation.

Key highlights:

· Conditional agreement to acquire the entire issued share capital of Kinesis Pharma BV

· Total maximum consideration of €6.5m to be satisfied by:

§ €3.6m on completion - €2.0m in cash and €1.6m in Consideration Shares

§ €2.9m maximum contingent consideration based on future performance - 50:50 in cash/shares

§ Contingent consideration payable in four instalments over the four year period following completion

· Oversubscribed Placing to raise c. £3.57m (gross) through the issue of 16,231,311 new Ordinary shares at 22p

· Allotment of 5,103,722 new Ordinary Shares at 23p as Consideration Shares

· The Acquisition and Placing are conditional on Shareholder approval

· General Meeting to be held at 11.00 a.m. on 9 October 2015

· Trading on track to deliver profitability and significant revenue growth in the current year

· Half Yearly Report to be announced separately today

About Kinesis Pharma

Kinesis Pharma provides specialist consultancy services around chemical-pharmaceutical, non-clinical and early clinical development of drug products. Specifically, it is involved in the regulatory aspects of drug substance and drug product development, lead optimisation, non-clinical and early clinical evaluation. Kinesis Pharma's clients operate predominantly within the pharmaceutical industry (which accounted for over 60 per cent. of total revenues in the last financial year) and it enjoys repeat business with the majority of its customer base with the top 5 clients having been customers for a number of years.

Kinesis Pharma has approximately 60 employees in the Netherlands and a presence in Singapore. In the year ended 31 December 2014, it reported revenues of €5.9 million and EBITDA (adjusted for excess management fees) of €0.6 million.

Commenting on the Acquisition, Venn CEO, Tony Richardson said: "The drug development industry is now addressing potential efficacy and safety issues much earlier in the development cycle as a means to save cost and time. The acquisition of Kinesis Pharma enhances our offering in this early stage development arena, allowing us to establish relationships earlier and enabling enhanced cross selling of downstream services. This deal with allow us to provide a highly specialised more complete service offering, establishing Venn as a highly differentiated European Contract Research Organisation."

Enquiries:

About Venn Life Sciences Limited:

Venn is a full service European Clinical Research Organisation providing clinical trial management and resourcing solutions to pharmaceutical, biotechnology and medical device organisations. With dedicated operations in France, Germany, the Netherlands, the UK, Ireland and Europe wide representation, Venn specialises in both national and European-wide Phase II-Phase IV multi-site trials with extensive expertise in EU regulations, therapeutic areas and local languages. Over a 25 year history, Venn has built up substantial study experience, contributing to the efficient management of sites, budgets and communication channels with all parties involved. Venn also has an innovation division - Innovenn - focused primarily on breakthrough development opportunities in Skin Science.

The Circular, extracts of which are set out below, is expected to be posted to Shareholders today. Copies of the Circular will be available shortly on the Company's website (www.vennlifesciences.com).

Unless otherwise defined in this announcement, all defined terms used in this announcement shall have the meaning ascribed to them in the Circular.

1. Introduction

The Company earlier today announced that it had entered into an agreement to acquire the entire issued share capital of Kinesis Pharma for a total consideration of up to €6.5 million (part of the consideration for which will be satisfied by the allotment of 5,103,722 new Ordinary Shares at a price of 23 pence per share) and the terms of a placing, to raise approximately £3.57m million (before expenses), by the allotment by the Company of 16,231,311 new Ordinary Shares at a price of 22 pence per share. The Acquisition and the Placing are conditional on Shareholder's approval of the resolutions contained in the Notice at the end of this document.

The purpose of this document is to provide further information on the Acquisition, the Placing and current trading together with an explanation of the resolutions to be proposed at the General Meeting. This letter also contains a recommendation from the Board to vote in favour of those resolutions as the Board intends to do in respect of its aggregate shareholding of 1,663,993 Existing Ordinary Shares, representing 4.24 per cent. of the Existing Ordinary Shares.

2. Information on Kinesis Pharma and terms of the Acquisition

Kinesis Pharma provides specialist consultancy services around the non-clinical and early clinical development of drug products. Specifically, it is involved in the regulatory aspects of formulation, optimisation, early clinical/non-clinical evaluation and manufacturing. Kinesis Pharma's clients operate predominantly within the pharmaceutical industry (which accounted for over 60 per cent. of total revenues in the last financial year) and it enjoys repeat business with the majority of its customer base with the top 5 clients having been customers for a number of years.

Kinesis Pharma has approximately 60 employees in the Netherlands and a presence in Singapore. In the year ended 31 December 2014, it reported revenues of €5.9 million and EBITDA (adjusted for excess management fees) of €0.6 million.

The total consideration of up to €6.5 million will be payable as to €3.6 million on completion (adjusted to reflect the working capital position of Kinesis Pharma at Admission) and up to €2.9 million dependent on achievement of revenue and EBITDA targets by Kinesis Pharma in the four financial years ending 31 December 2018.

The consideration is payable as follows:

· Of the €3.6 million payable on completion, €2.0 million will be settled in cash and €1.6 million will be settled by the allotment of the Consideration Shares to the shareholders of Kinesis Pharma.

· Of the €2.9 million maximum consideration payable based on future performance, 50 per cent. will be settled by cash and 50 per cent. will be settled by the issue of shares in the Company. The deferred consideration is payable in four instalments over the four year period following completion.

The Directors believe the Acquisition will create a business providing services which span the late stages of the non-clinical drug approval process through to the approval part of the drug development pathway. Further, they believe operating within a wider cross section of the drug approval process will allow diversification of revenues, access to new customers, potential for cross selling services and the addition of new business areas.

The drug industry has moved towards addressing potential efficacy and safety issues earlier in the development cycle to save costs and time. The Directors believe that, by acquiring Kinesis Pharma, and enhancing the Company's services in the early stage development arena, Venn will have access to a growing market and the ability to establish relationships earlier with clients, allowing enhanced cross selling of downstream services, such as Clinical Operations. Providing services across a wider proportion of the drug development spectrum will allow the Company to provide a start to finish offering, which the Directors believe will appeal to Venn's target Biotech clients. Biotech companies rely heavily on outsourcing and can be cost conscious, typically using smaller providers. The Directors intend to leverage the size of the business and breadth of offering post Acquisition to drive sales with such Biotech clients.

The Directors believe that, following the Acquisition, the Company will be a highly differentiated European Clinical Research Organisation.

3. Information on the Placing

Zeus Capital, Hybridan and the Company have entered into a Placing Agreement under which Zeus Capital and Hybridan, as agents of the Company, have placed the Placing Shares with institutional and other investors conditional, on other matters, upon Shareholder approval and Admission. The Placing is expected to raise £3.57 million, before expenses (which are estimated to be £300,000 (excluding VAT) in total), which will be used to part fund the Acquisition and to provide working capital to the Company. €1.6 million of the consideration due in respect of the Acquisition will be settled through the issue of the Consideration Shares although further new Ordinary Shares may be allotted depending on the level of working capital held by Kinesis Pharma at Admission.

The Placing Agreement contains customary warranties given by the Company in favour of Zeus Capital and Hybridan in relation to, inter alia, the accuracy of the information in this document and other matters relating to the Group and its business. In addition, the Company has agreed to indemnify Zeus Capital and Hybridan in relation to certain liabilities which they may incur in respect of the Placing.

Zeus Capital and Hybridan have the right to terminate the Placing Agreement in certain circumstances prior to Admission, in particular, in the event of a breach of the warranties or a material adverse change or if the Placing Agreement does not become unconditional.

Application will be made for the Placing Shares and Consideration Shares to be admitted to trading on AIM and Admission is expected to take place on 12 October 2015. Immediately following their Admission, the Placing Shares and Consideration Shares will represent approximately 35.22 per cent. of the Enlarged Issued Share Capital.

The Placing Shares and Consideration Shares will, following Admission, rank in full for all dividends and distributions declared, made or paid in respect of the issued Ordinary Share capital of the Company and otherwise rank pari passu in all other respects with the Existing Ordinary Shares.

The Placing Price represents a discount of 13.7 per cent. to the closing mid-market price of 25.5 pence per Ordinary Share as at 21 September 2015 (being the latest practicable date prior to the date of this document).

The Placing is not underwritten.

The Placing is conditional upon the Acquisition becoming unconditional other than for Admission of the Consideration Shares.

4. Current trading and outlook

On 13 August 2015, the Company announced a strong first half performance in 2015, billing in excess of €4 million, up 170 per cent. against the same period in 2014 (H1: €1.5 million). The Company has demonstrated continued growth throughout 2015 driven by contract wins amounting to over €9 million in the period to 30 June 2015.

Since then the Company has continued to trade in line with management's expectations.

With significant secured revenue for 2015 and the expectation that the Company will secure further contracts that will contribute to 2016, the Company remains confident that it will deliver profitability and significant revenue growth in the current year.

The interim results for the year ended 30 June 2015 will be announced later today.

5. General Meeting

The General Meeting, notice of which is set out at the end of this document, is to be held at 11.00 a.m. on 9 October 2015 at the offices of Zeus Capital Limited, 41 Conduit Street, London W1S 2YQ. The General Meeting is being held for the purpose of considering and, if thought fit, passing the Resolutions.

A summary and explanation of the Resolutions is set out below. Please note that this is not the full text of the Resolutions and you should read this section in conjunction with the Resolutions contained in the Notice of General Meeting at the end of this document. The following Resolutions will be proposed at the General Meeting:

· the first resolution is to authorise the Directors, pursuant to section 551 of the Act, to allot the Placing Shares and the Consideration Shares;

· the second resolution is to dis-apply the pre-emption rights conferred by section 561 of the Act in respect of the Placing Shares.

As required by the Act when proposing a special resolution to dis-apply pre-emption rights, the Directors hereby confirm that:

· the amount to be paid to the Company in respect of each Placing Share is 22 pence and the proceeds of the Placing (at the Placing Price) are expected to be £3.57 million (before expenses);

· the number of new Ordinary Shares to be issued pursuant to the Placing is 16,231,311;

· the Placing Price represents, in the Board's view, the best price achievable by the Company given its funding requirements and the current overall market conditions for fundraisings; and

· the Directors recommend that Shareholders dis-apply pre-emption rights (in the terms set out in the second resolution) in order to permit the Placing to be effected on a timely basis and to avoid the timetabling, and uncertainty of funding, issues associated with effecting a pre-emptive offer.

6. Action to be taken

A Form of Proxy for use in relation to the General Meeting is enclosed with this document.

Whether or not you intend to be present in person at the General Meeting, you are strongly encouraged to complete, sign and return your Form of Proxy in accordance with the instructions printed thereon so as to be received by post or, during normal business hours only, by hand, at SLC Registrars at 42-50 Hersham Road, Walton-on-Thames, Surrey KT12 1RZ, as soon as possible but in any event by not later than 11.00 a.m. on 7 October 2015 (or, in the case of an adjournment of the General Meeting, not later than 48 hours before the time fixed for the holding of the adjourned meeting).

Appointing a proxy in accordance with the instructions set out above (and in the Form of Proxy) will enable your vote to be counted at the General Meeting in the event of your absence. The completion and return of a Form of Proxy will not preclude you from attending and voting in person at the General Meeting, or any adjournment thereof, should you wish to do so.

7. Recommendation

The Directors consider the Placing to be in the best interests of the Company and its Shareholders as a whole and accordingly unanimously recommend that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting as they intend to do in respect of their own beneficial holdings amounting, in aggregate, to 1,663,993 Existing Ordinary Shares, representing approximately 4.24 per cent. of the Existing Ordinary Shares.