PROXIMAGEN RAISES £50M THROUGH PLACING TO ACQUIRE AND DEVELOP DRUG PROGRAMMES

PROXIMAGEN RAISES £50M THROUGH PLACING TO ACQUIRE AND DEVELOP DRUG PROGRAMMES

~ One of the largest biotech fundraisings in the UK in the past 10 years ~

Proximagen Neuroscience plc (AIM: PRX), the biopharmaceutical company focused on neurodegenerative diseases, is pleased to announce that it has conditionally placed 35,714,286 new ordinary shares of 1p each ("Ordinary Shares") at a price of 140 pence per share (the "Placing shares"), to raise gross proceeds of £50 million (the "Placing"). The net proceeds of the Placing will provide the Company with capital to acquire and in-licence drug development programmes and to further develop these programmes to commercialisation. The Placing has been fully underwritten by Evolution Securities.

Highlights of the Placing

  • £50 million (before expenses, £49 million net) raised from new and existing shareholders, including participation from licensing partner Upsher-Smith Laboratories, Inc (Upsher-Smith);
  • One of the largest biotech fundraisings in the UK in the past 10 years;
  • The Placing price of 140 pence per Placing Share represents no discount to the

Company's closing bid price of 140 pence per Ordinary Share on 4 June 2009;

  • The proceeds will be used to acquire and in-licence drug development programmes;
  • A number of drug development programmes presenting acquisition and licensing opportunities have already been identified and are under negotiation;
  • The proceeds of the Placing will be utilised over a two to three year period; and
  • The funds further strengthen the Company's existing cash balance, bringing it to more than £57 million.

A circular, providing Shareholders with information about the background to and the reasons for the Placing and containing a notice of General Meeting of the Company convened for 11.00 a.m. on 23 June 2009, will be sent to shareholders of the Company today. Defined terms in this announcement are to have the same meaning as in the circular posted today.

Commenting on the successful fundraising, Kenneth Mulvany, Chief Executive of Proximagen, said: "We are very pleased with the support from our current and new investors for the fundraising. We intend to use the proceeds of this fundraising to build on our competency in diseases of
the central nervous system by acquiring, developing and commercialising innovative drug candidate programmes in clinical stages of development. There is an opportunity to consolidate a select group of high quality assets into one strong biopharma company capable of developing drug candidates to commercialisation. I am pleased that so many blue-chip investors have backed our proposed business strategy and recognise this opportunity.

"The fundraising and business strategy will transform Proximagen into one of the UK's best capitalised biopharmaceutical companies. By adopting a flexible investment strategy and working in alliance with companies via a number of different approaches, we intend to build a
strong pipeline of assets, some of which we hope will be launched on the market in the near future. Proximagen looks forward to becoming a dominant CNS player in what is currently a highly fragmented sector. Most importantly, we look forward to leveraging our expertise and
building a sustainable business which will return value to our shareholders."

For more information please contact:
Proximagen Neuroscience plc Tel: 020 7848 6938
Kenneth Mulvany, James Hunter
Buchanan Communications Tel: 020 7466 5000
Mary-Jane Elliott, Tim Anderson, Catherine Breen
Evolution Securities Limited (NOMAD) Tel: 020 7071 4300
Stuart Andrews, Bobbie Hilliam

About Proximagen
Proximagen is a drug discovery and development company that is focused on the development and commercialisation of novel therapeutics for diseases of the central nervous system. Its current lead programmes aim to improve the quality of life for patients suffering from neurodegenerative diseases such as Parkinson's disease and Alzheimer's disease. Proximagen has developed a broad pipeline of partnered and unpartnered drug candidate programmes to address the significant unmet medical needs of patients with neurodegenerative disease. The Company recognises that exciting programmes and commercial prospects in its preferred therapeutic area of the central nervous system may
become available at attractive valuations. The Company intends to pursue a strategy of acquiring such drug programmes and further developing them to commercialisation. Proximagen, a spin-out from King's College London, joined the AIM market of the London
Stock Exchange in March 2005. For more information please visit the Company's web site: www.proximagen.com.

Disclaimer
Evolution Securities Limited, which is authorised and regulated by the Financial Services Authority, is acting as nominated and financial adviser to the Company in connection with the matters described in this announcement. Evolution Securities Limited will not be responsible to anyone other than the Company for providing the protections afforded to clients of Evolution Securities Limited or for advising any other person on the Placing and any other arrangements described in this announcement. Evolution Securities Limited has not authorised the contents of, or any part of, this announcement and no liability whatsoever is accepted by Evolution Securities Limited for the accuracy of any information or opinions contained in this announcement or for the omission of any information.

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