2 July 2015 – Proposed placing to raise approximately £8 million

Not for publication, distribution or release directly or indirectly, in whole or in part, in or into the United States, Canada, Australia, New Zealand, Japan, the Republic of Ireland or the Republic of South Africa or in any other jurisdiction in which offers or sales would be prohibited by applicable law. This announcement is not an offer to sell or a solicitation to buy securities in any jurisdiction, including the United States, Canada, Australia, New Zealand, Japan, the Republic of Ireland and the Republic of South Africa. Neither this announcement nor anything contained herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction.

Issued on behalf of Premaitha Health plc

7:00am 2 July 2015
Premaitha Health plc
(“Premaitha” or the “Company”)

Proposed placing to raise approximately £8 million

Premaitha (AIM: NIPT) is pleased to announce a placing of approximately 40,000,000 new ordinary shares (the “New Shares”), at a price of 20 pence per share (“Placing Price”) representing approximately 21.3 per cent. of the Company’s existing ordinary share capital to raise approximately £8 million (the “Placing”).

The Placing is being conducted through an accelerated bookbuilding process (the “Bookbuild”) which will commence immediately following this announcement in accordance with the terms and conditions set out in Appendix 2 to this announcement.

• The Placing builds on the Company’s significant progress since its AIM admission in July 2014, including:
   o The launch of the first and only CE-marked in-vitro diagnostic non-invasive prenatal test (“NIPT”) product with excellent clinical performance data;
   o Four NIPT contracts announced to date throughout Europe providing pregnant women with access to the IONA® test both privately and, in the UK, on the National Health Service (NHS).
• The net proceeds of the Placing will allow the Company to:
   o Accelerate the commercialisation of the IONA® test by increasing levels of customer support by:
       Build out of additional in-house capability;
       Offering a reagent rental model to selected customers where there are opportunities for commercial leverage; and
       Increasing working capital associated with revenue growth;
   o Fund further product development for example to enhance sample throughput and add additional clinical content;
   o Respond to distracting litigation.
• £0.8m to be committed to the Placing by certain Directors of the Company.  

Dr Stephen Little, Chief Executive Officer of Premaitha, said:

“There has been growing interest from the international fetal and maternal medicine community for a lower risk, non-invasive prenatal screening solution. Premaitha’s IONA® test meets this need directly providing more convenient, accurate and faster results for pregnant women thereby reducing the need for unnecessary invasive follow-up procedures. The test has been received well by healthcare providers as evidenced by contract wins from both the private and NHS sectors across Europe.

“By raising money now, we are capitalising on our first mover advantage from having the first CE-marked NIPT in vitro diagnostic product on the market. The proceeds of the placing will further strengthen our position, enabling us to develop our product and enhance our customer service offering.

“Our intention is for the IONA® test to become part of the standard of care for all pregnant women, not just those at high risk. This is a very exciting time to be in the NIPT space.”

Cairn Financial Advisers LLP (“Cairn“) is acting as Nominated Adviser in respect of the Placing. Panmure Gordon (UK) Limited (“Panmure Gordon“) is acting as Broker in respect of the Placing.

Details of the Placing
The New Shares are to be issued by the Company pursuant to the Directors’ existing authority to allot Ordinary Shares for cash on a non pre-emptive basis. The Placing will be effected by way of a bookbuilding process to be managed by Panmure Gordon and will be conducted in accordance with the terms and conditions set out in Appendix 2. The Bookbuild will commence with immediate effect and the book is expected to close no later than 4.30 p.m. on 3 July 2015, but Panmure Gordon reserves the right to close the book earlier, without further notice.

Certain of the Directors of the Company intend to subscribe for £0.8 million in the Placing. In addition, certain of the members of the Concert Party, as defined in the Company’s admission document dated 13 June 2014, intend to subscribe for shares in the Placing.

The timing of the closing of the book and allocations are at the absolute discretion of Panmure Gordon. The Placing will be for approximately 40,000,000 New Shares, representing approximately 21.3 per cent. of the Company’s existing ordinary share capital. The number of New Shares will be agreed by the Company with Panmure Gordon at the close of the Bookbuild. Details of the number of New Shares will be announced as soon as practicable after the close of the Bookbuild.

The New Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of the Company, including the right to receive all dividends or other distributions made, paid or declared in respect of such shares after the date of issue of the New Shares.

The Placing is conditional upon, inter alia, admission of the New Shares to trading on AIM becoming effective (“Admission“) and the placing agreement between the Company, Cairn and Panmure Gordon not being terminated prior to Admission.

Application will be made to the London Stock Exchange for the New Shares to be admitted to trading on AIM and it is expected that Admission will become effective and that dealings in the New Shares will commence on or around 7 July 2015.

This announcement should be read in its entirety. In particular, your attention is drawn to the Important Notices section of this announcement, as well as the Risk Factors and the detailed Terms and Conditions of the Placing set out in the Appendices. By choosing to participate in the Placing and by making an oral and legally binding offer to acquire New Shares, investors will be deemed to have read and understood this announcement in its entirety and to be making such offer on the terms and subject to the conditions in it, and to be providing the representations, warranties, acknowledgements and undertakings contained in the Appendices.

Unless otherwise stated, defined terms used in this announcement have the meaning set out in Appendix 3.

EIS and VCT status
The Directors believe that up to £5 million worth of New Shares should be qualifying for EIS purposes and should be eligible shares under the VCT provisions.

However, the Company has not obtained advance assurance from HMRC and the Directors cannot guarantee that the New Shares or the Company will satisfy, and will continue to satisfy, the requirements for tax relief under EIS and VCT rules. The continuing status of the New Shares as qualifying for EIS purposes will be conditional on the qualifying conditions being satisfied throughout the relevant period of ownership.
Neither the Company nor the Directors give any warranty, representation or undertaking that any investment in the Company by way of New Shares will be or will continue to be a qualifying investment for EIS or VCT purposes. EIS eligibility is also dependent on a Shareholder’s own position and not just that of the Group. Accordingly, investors should take their own advice in this regard, investors are also referred to the Risk Factors set out in Appendix 1 of this announcement.

Business summary
Non-invasive prenatal testing is a multi-billion dollar in vitro diagnostic market which has emerged as new molecular technologies displace established methods for prenatal screening.

The Directors believe the laboratory developed test model, which has been deployed in the USA and China, whereby testing is sold as a service, is not suitable for Europe and other territories as these central laboratories have to compete with the current providers of prenatal testing and displace them. Premaitha looks to supply a CE-marked in vitro diagnostic product to enable clinical laboratories to be able to offer their own local in-house NIPT service.

As noted in the Company’s trading update on 18 June 2015, Premaitha’s marketing and sales teams have been working across multiple business areas to raise awareness of the IONA® test and attract new partners, with an aim to drive sales and levels of testing. The sales team currently have over 300 active conversations with potential customers.

The Company’s commercialisation efforts are supported by some platform providers, in particular sales of the IONA® test have generated platform placements and revenue streams for ThermoFisher, QIAGEN and Perkin Elmer. The IONA® test is very scalable and would benefit from a global distribution partner. There are a number of discussions ongoing with global diagnostic companies and the obvious distribution partner would be one of the work flow technology providers.

Financial performance update
The Company had approximately £8.5 million of cash following the fundraising in July 2014. A large proportion of this has been deployed in activities surrounding the IONA® test development and launch, acquiring fixed assets to support development and in-house clinical processing, working capital, establishing a strong commercial team and other operating expenditure. Currently the Company has approximately £1.2 million of cash remaining.

Use of proceeds
The net proceeds of the Placing will be used:
• to expand the reference laboratory service in Manchester to support existing customers and allow rapid access to market for new customers;
• to allow the Company a reagent rental model whereby the equipment needed for the test can be provided at reduced cost and this can be recouped through the supply of consumables;
• to meet the cost of litigation;
• to fund further product development for example to enhance sample throughput and add additional clinical content; and
• for general working capital purposes.

The Company was served with proceedings on 16 March 2015 issued in the English courts by Illumina, Inc., Verinata Health, Inc., Sequenom, Inc. and The Board of Trustees of the Leland Stanford Junior University (“the Claimants”) alleging that the Company’s IONA® test infringes European Patent (UK) 0994963 B2 (“‘963”) and European Patent (UK) 1981995 B1 (“‘995”) owned by, or licensed to, one or more of the Claimants. The Company was aware of the existence of the patents at the time it developed the IONA® test and had engaged specialist patent attorneys to ensure it respected third party patent rights. The Company is satisfied, based on that advice, that the IONA® test does not infringe them.

The Company filed a Defence and Counterclaim on 29 April 2015 denying that the IONA® test infringes the patents and seeking a declaration that the patents should be revoked on the basis that they are invalid. A number of specific bases in support of this attack are set out in the Grounds of Invalidity served with the Defence and Counterclaim.

‘995 is also the subject of Opposition proceedings before the European Patent Office brought by third parties in which its validity is being contested. An intervention in those proceedings was filed by the Company on 12 June 2015. In other words, the validity of ‘995 (which is the more recent patent) is under attack in both the Patents Court and at the European Patent Office. Moreover, the US equivalent of ‘963 has recently been declared invalid in the US, although the specific grounds for that decision are unlikely to be applicable in the UK.

The Claimants served a brief Reply and Defence to Counterclaim on 12 May 2015. Save for that, there have been no indications given by the Claimants’ lawyers (as at 1 July 2015) that they have taken any steps to progress the action. Moreover, the delay by the Claimants in asserting their rights since the details of the IONA® test became known means that it is almost certainly too late for them to apply for any pre-trial injunction against Premaitha, nor indeed have the Claimants or their advisors suggested at any point that they would try to do so.

The Company and its legal advisers have looked in detail at the Claim. Their view, on the basis of the information presently available, is that the IONA® test is likely to be found not to infringe the patents and/or the patents will be found to be invalid and revoked. Note that for the purpose of resolving questions relating to the various attacks on the validity of the patents, the court will rely heavily on expert evidence. Until that evidence has been obtained, any views on validity or infringement are necessarily preliminary. Investors should also note that defence and settlement costs can be substantial and absorb significant management time, even with respect to claims that have no merit. Due to the inherent uncertainty of the litigation process, there can be no guarantee that the Company will be successful in defending the above claims or that resolution of such claims will not have a material adverse effect on the Company’s financial position or results of operations.

For more information, please contact:

Premaitha Health plc
Dr Stephen Little, Chief Executive Officer
Joanne Cross, Head of Marketing

Tel: +44 (0) 161 667 6865
+44 (0) 7736 843052
Email: investors@premaitha.com

Cairn Financial Advisers LLP (NOMAD)
Liam Murray / Avi Robinson

Tel: +44 (0) 20 7148 7900

Panmure Gordon (UK) Limited (Broker)
Robert Naylor / Erik Anderson / Maisie Rose Atkinson

Tel: +44 (0) 20 7886 2500

Instinctif Partners (Media)
Melanie Toyne Sewell / Jayne Crook / Emma Barlow

Tel: +44 (0) 207 457 2020
Email: premaitha@instinctif.com

About Premaitha Health plc

Premaitha Health (AIM: NIPT) is an innovative molecular diagnostics company that has developed and launched the IONA® prenatal screening test to take advantage of an emerging multi-billion dollar market. Premaitha’s flagship product, the IONA® test, is the first CE marked product for NIPT.
The IONA® test estimates the risk of a fetus having Down’s syndrome or other serious genetic diseases. The IONA® test has a higher detection rate and lower false positive rate than existing non-NIPT screening tests, giving pregnant women, their families and their doctors greater confidence in the result and reducing the need for unnecessary invasive follow-up tests and the associated anxiety and stress.
The IONA® test is a complete diagnostic product that is simple and standardised, enabling Premaitha’s clinical laboratory customers to perform the test in their own facilities. This supports Premaitha’s strategy of accelerating the broad dissemination of NIPT tests to ensure that their benefits are available to pregnant women everywhere.
Premaitha is listed on the AIM market of the London Stock Exchange. Premaitha is ISO 13485 certified and its R&D, manufacturing and commercial operation is located at Manchester Science Park, UK.
For further information please visit www.premaitha.com or email iona@premaitha.com.