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Ark Therapeutics Group plc

Interim Management Statement

9 November 2011 - Ark Therapeutics Group plc ("Ark" or the "Company") today publishes its interim management statement for the period from 1 July 2011 to date.

Manufacturing

We are continuing to focus on exploiting our world leading cGMP Biosafety level 2 certified manufacturing facility in Kuopio, Finland. In September we announced that we had signed a manufacturing partnership agreement with PsiOxus Therapeutics Ltd ("PsiOxus") under which we are now providing full manufacturing and related services to support the development of PsiOxus' ColoAd1 programme for the treatment of colorectal cancer utilising Ark's suspension based single use system (ATOSUS). In November we announced that we had also signed a manufacturing agreement with University of Glasgow's Institute of Cardiovascular and Medical Sciences in respect of the Institute's gene-therapy programme for the treatment of vein graft failure associated with coronary artery bypass surgery. The contract was awarded following our success in an open competitive tender process under public body procurement rules.

We continue with detailed discussions with a number of other interested parties who wish to avail themselves of Ark's bio-manufacturing expertise and we hope to announce further partnerships in the following months.

Breakthrough work by Ark's scientists in creating a scalable platform for lentiviral vector manufacture was published in the June 2011 issue of the journal "Gene Therapy".

Grants

On 6 July we announced the securing of €0.6 million in Finnish grants, and later that month we announced that the Company is part of a consortium which had won a €5.3m EU Framework Programme 7 Grant, of which Ark would be receiving approximately €1.1m for its contribution over the term of the project.

Intellectual Property

In early July we announced that the United States Patent and Trademark Office ("USPTO") had issued Notices of Allowance in respect of two patents for which certain rights have been assigned by Ark to Boehringer Ingelheim. The patents cover the use of Boehringer Ingelheim's compound Telmisartan for the prevention and treatment of stroke and the prevention of myocardial infarction related heart damage. The patents were formally granted by the USPTO in August triggering significant milestone payments, now received, under Ark's licence agreement with Boehringer Ingelheim. This was excellent news for both Ark and Boehringer Ingelheim and a further validation of Ark's intellectual property.

Product Pipeline

Neuropilin-1 Receptor Antagonists (EG014)- Ark has developed the only known drug-like small molecule antagonists of VEGF binding to Neuropilin-1 (NRP-1). The binding to NRP-1 results in three activities of likely benefit as an anti-cancer therapy: inhibition of tumour cell proliferation, inhibition of tumour cell migration and inhibition of angiogenesis. During the current reporting period Ark's scientists have published studies on site-directed mutants of NRP-1 that specifically abolish VEGF binding and provide further validation of the potential therapeutic value of the antagonists. Ark has also continued to invest in the lead optimisation of these molecules, assisted by X-ray crystallographic structures of complexes of antagonists with NRP-1. These efforts have reinforced Ark's dominant scientific and patent positions in the field. Ark considers that the programme constitutes an attractive partnering package and is seeking companies that will be able to support its further development. In the interims announcement issued on 24 August we reported that AstraZeneca have received some of Ark's compounds to evaluate in their own assays.

Refractory Angina (EG011) -Refractory angina is a consequence of insufficient blood supply to the areas of heart muscle damaged by a heart attack. Ark's adenoviral vector carrying a transgene for expression of pro-angiogenic human VEGF-D is designed to treat the condition by stimulating new blood vessel generation at the ischemic heart muscle to which it is directly administered. An academic clinical study of this treatment is in progress in Finland to gain early insights into the safety and efficacy of the treatment. The study is progressing through an initial dose ranging phase that is on course to complete recruitment by the end of 2011 or early 2012.

Peripheral Vascular Disease (EG016) - Like refractory angina, this programme utilises the angiogenic properties of Ad.VEGF-D. The vector is delivered into the muscle of the affected limb a number of days before surgery, to promote the growth of smaller vessels needed to take blood flow from the vessel that has been unblocked by bypass or angioplasty. As with refractory angina, early insights into the safety and efficacy of the treatment are anticipated from an academic clinical study being undertaken in Finland, the results of which will be used to form the basis of formal development programmes with partners.

Foetal Growth Restriction (FGR) (EG013) -this program represents another potential therapeutic application of Ark's pro-angiogenic Ad.VEGF-D gene vector. Severe foetal growth restriction, which represents a major unmet clinical need, is a consequence of inadequate placental blood supply. By treating the maternal uterine artery with Ad.VEGF, Ark's academic collaborators have demonstrated in appropriate models that maternal blood supply to the foetus can be improved with positive outcomes for its growth. Ark is now investigating the investment required to progress this highly promising therapy into the toxicology study that has been discussed with the regulatory authorities as a pre-requisite for clinical trials.

We also continue to work very actively on partnering programmes, including Cerepro®.

Cash

As we reported in our interim results on 24 August 2011, the Company had £5.4m in cash (excluding the Finnish working capital loan of €3m in restricted cash) at 30 June 2011. The significant milestone payments received from Boehringer Ingelheim during the period, the recently announced important manufacturing contracts with PsiOxus and the University of Glasgow, the Company's success in attracting grant funding and the Company's continued focus on controlling costs, have all served to bolster the Company's cash reserves. It is expected that cash reserves will be higher at the end of the current year than they were at the end of June 2011.

The Board continues to review detailed cash forecasts on a regular basis.

Martyn Williams, CEO of Ark, commented:

"Since the announcement of our interim results on 24 August 2011, we were delighted to report that the late-stage discussions with a number of potential manufacturing partners which we reported at that time have already resulted in two important contracts which we have announced recently. With further discussions ongoing across all our activities, and the strengthened cash position, we remain confident of being able to deliver the remaining short-term objectives."

Enquiries

Ark Therapeutics Group plc

Ark Therapeutics Group plc is a specialist healthcare group (the "Group") addressing high value areas of unmet medical need within vascular disease and cancer. These are large and growing markets, where opportunities exist for effective new products to generate significant revenues.

Ark has an early stage pipeline emanating from collaborations with University College, London and the AI Virtanen Institute in Kuopio, Finland, the development of which it intends to progress in collaboration with pharmaceutical and biotech partners.

In addition Ark has the ability to off-set a proportion of its R&D costs and to generate sustainable revenues through the exploitation of its proprietary technology platform, process development, scale-up and manufacturing capabilities on behalf of third parties.

Ark has its origins in businesses established in the mid-1990s by Professor John Martin of University College London and Professor Seppo Ylä-Herttuala of the AI Virtanen Institute at the University of Kuopio, Finland, both of whom remain consultants on the Company's research and development programmes.

Ark's shares were first listed on the London Stock Exchange in March 2004 (AKT.L).

This announcement includes "forward-looking statements" which include all statements other than statements of historical facts, including, without limitation, those regarding the Group's financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Group's products and services), and any statements preceded by, followed by or that include forward-looking terminology such as the words "targets", "believes", "estimates", "expects", "aims", "intends", "will", "can", "may", "anticipates", "would", "should", "could" or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Group's control that could cause the actual results, performance or achievements of the Group to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which the Group will operate in the future. Among the important factors that could cause the Group's actual results, performance or achievements to differ materially from those in forward-looking statements include those relating to Ark's funding requirements, regulatory approvals, clinical trials, reliance on third parties, intellectual property, key personnel and other factors. These forward-looking statements speak only as at the date of this announcement. The Group expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in the Group's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. As a result of these factors, readers are cautioned not to rely on any forward-looking statement.