Allergy Therapeutics announces proposals to raise up to £22.4 million before expenses by means of a placing, subscription and offer of new ordinary Shares (the “Fundraising”).  Allergy Therapeutics has a successful pharmaceutical business with the only ultra short course allergy vaccine, a growing sales base, a substantial manufacturing facility and a European sales and marketing infrastructure. The cornerstone investor for the Fundraising is Azure Ventures Limited (“Azure Ventures”), an investment vehicle of the Weinstein family of Chile, whose interests include a group of pharmaceutical companies across South America, known as the Recalcine Group. The Placing, Subscription and Offer are all subject, inter alia, to the approval of Shareholders at the General Meeting scheduled for 30 June 2009. The Placing has been fully underwritten by Nomura Code Securities Limited.

Highlights

The proposals are intended to:

• Place Allergy Therapeutics on a sound financial footing by deleveraging the Company and providing financial headroom
  • Revised credit arrangements with Royal Bank of Scotland PLC have been agreed as part of this refinancing
• Strengthen the Board with additional pharmaceutical sales and marketing expertise
• Enable investment in sales and marketing in European territories to accelerate growth

Summary

Azure Ventures has conditionally agreed to invest £12.5 million in the Company by way of a subscription for 104,166,666 New Ordinary Shares at a price of 12 pence per share. In addition, Azure Ventures will receive Warrants to subscribe for additional Ordinary Shares up to the value of £4 million (at a discount of 25% to the market price on exercise with a minimum exercise price of 12 pence per share) payable in cash.

In addition to the Subscription, Nomura Code has, on behalf of the Company, conditionally placed 59,424,896 New Ordinary Shares, with institutional investors at a price of 12 pence per New Ordinary Share, to raise a further £7.1 million (the ‘Placing’).  The Placing has been underwritten by Nomura Code.  A Proposed and an existing Director will be investing £615,000 in the Fundraising.

In conjunction with this Placing and Subscription, the Board also announces details of an Offer to Qualifying Shareholders and Qualifying Employees that may raise up to a further €2.5 million (approximately £2.1 million) through the issue of New Ordinary Shares.

It is proposed that Alejandro Weinstein Jr. be appointed as a Non-Executive Director of the Company and Manuel Llobet as Chief Executive Officer of the Company.  Keith Carter will be stepping down as Chief Executive Officer on 1 September 2009, conditional on completion of the Fundraising. Keith Carter will stay on to provide consultancy services to the Company for a minimum of three months and take up a position as Non- Executive Director.

The board of Allergy Therapeutics considers these proposals to be in the best interests of the Company and unanimously recommends Shareholders to vote in favour, as they intend to do with respect to their own holdings.

Ignace Goethals, Chairman of Allergy Therapeutics, said:

“This is a significant development for Allergy Therapeutics. After a period of substantial investment in product development and manufacturing, this transaction will enable us to invest in European sales and marketing in order to accelerate growth and fully benefit from the work undertaken to date.

“I would like to thank Keith Carter for his multiple contributions to the Company over the full ten years of its existence and for agreeing to continue to work with Allergy Therapeutics in the future. His knowledge of the business and the products will be invaluable as we seek to continue to grow the business.”

Manuel Llobet, proposed Chief Executive of Allergy Therapeutics, added:

“We will look to build on the successes from the investments in R&D and manufacturing to accelerate sales growth and leverage the Company’s cost base, and are aiming to become cash flow positive as soon as possible.”

Nomura Code Securities Limited is acting as financial advisor to Allergy Therapeutics.

A briefing for analysts will be held at 9.30am today at the offices of Financial Dynamics, Holborn Gate, 26 Southampton Buildings, London WC2A 1PB.  Please call Mo Noonan for further details on 020 7269 7116.  In addition, the presentation will be made available on the Company’s website at www.allergytherapeutics.com.

A circular, providing Shareholders with information about the background to and reasons for the Fundraising and containing a notice of General Meeting of the Company convened for 11.00 a.m. on 30 June 2009, will be sent to Shareholders today. Defined terms in this announcement have the same meaning as in the Circular posted to Shareholders today.

Enquiries

Allergy Therapeutics +44 (0) 1903 844 7200
Ignace Goethals, Chairman
Keith Carter, Chief Executive
Ian Postlethwaite, Finance Director

Nomura Code Securities +44 (0) 207 7761 200
Juliet Thompson
Clare Terlouw

Financial Dynamics +44 (0) 207 8313 113
Ben Brewerton

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