Ark Therapeutics: Interim Management Statement

18 May 2010 - Ark Therapeutics Group plc (‘Ark’ or the ‘Company’) today publishes its interim management statement for the period from 1 January 2010 to date. The Company intends to report its results for the six months to 30 June 2010 on 25 August 2010.

Highlights

• Cerepro® Marketing Approval Application (MAA) withdrawn from EMA after committee advises additional trial needed

• Strategic review completed following implementation of restructuring and cost reduction measures

• First of Ark’s novel Neuropilin 1 antagonists shows efficacy in cancer model

• First patients treated with VEGF-D shortform in refractory angina (EG011) and high dose VEGF-D in peripheral vascular disease (EG016) Phase I/IIa trials with AIV Institute

• Martyn Williams appointed CEO following Dr Nigel Parker’s resignation as CEO on conclusion of strategic review

Strategic Review

Following the withdrawal of the Cerepro® MAA in March the Company announced the initiation of a strategic review of its operations and disclosed that it had received a number of approaches from third parties. As announced earlier this month, the Board has concluded that approaches for the whole business do not adequately reflect the value of the Company’s assets and that shareholders’ interests are best served by a change of strategy to one of selective partnering of programmes. The Board also stated it would continue discussions with those parties that have expressed an interest in discrete parts of the business. Until such time as discussions with the companies which have made approaches are formally terminated, however, the Company remains in an offer period for the purposes of the Takeover Code.

The Company also announced earlier this month, following the strategic review, that Nigel Parker had agreed to step down from the Board and as CEO and that Martyn Williams, previously CFO, has accepted the Board’s invitation to take over the role.

Key Programmes

The Company continues to believe that Cerepro® can provide a clinical benefit to patients. Work is underway to identify a suitable partner to complete the clinical development for Cerepro® now that the adenoviral platform has been established as an approvable platform by the EMA. A response from the FDA is expected in June 2010 following their review of the Cerepro® data package submitted by the Company in advance of a possible BLA filing.

Work has begun to modify the existing Trinam® Phase III trial to a Phase IIb trial as announced following the strategic review. Recruitment into the revised trial is being driven hard and the results from the trial are expected in mid 2011. On conclusion of the Phase IIb trial, Ark will seek a partner for a final Phase III trial.

The Company announced in January that as part of the restructuring development of the Vitor™ programme had been put on hold.

Patient enrolment continues into the phase I/IIa clinical trials underway in refractory angina (EG011) and peripheral vascular disease (EG016) both in collaboration with the AIV Institute in Finland. Interim results in both trials are expected in H2 2010.

Very good progress has been achieved in our pre-clinical programmes with the announcement in April 2010 that in-vivo results have shown Ark’s small molecule antagonists to the Neuropilin-1 receptor significantly reduce tumour growth in a cancer model. Work continues in completing confirmatory cancer model work and in advancing discussions with parties interested in partnering the NRP-1 programme for clinical development. Pre-clinical toxicology work is ongoing in the foetal growth restriction (EG013), another programme that leverages Ark’s approvable adenoviral gene therapy platform.

Manufacturing

Ark’s world leading cGMP Biosafety level 2 certified manufacturing facility in Finland continues to generate contract manufacturing revenues and the Company announced in February that it had signed a non-binding Preferred Supplier Memorandum with Merck Sharpe & Dohme. As reported earlier this month following the strategic review the Company is reviewing a number of options to optimise the facility’s use and value including increasing the scale of contract manufacturing capacity and more formal collaborative partnerships.

Woundcare

In the year to date sales of woundcare products have continued to show the strong sales growth reported in 2009 and with the two further products scheduled to be launched during H2 2010 we look forward to maintaining this growth. As previously reported Ark remains in discussions with interested parties about a potential disposal of its woundcare business.

Intellectual Property Portfolio

Following the announcement earlier this month that the Opposition Division of the European Patent Office upheld the opposition to the Company’s European stroke patent, on advice from the Company’s legal advisors that the decision is contrary to existing case law of the EPO boards of appeal, the Company intends to file an appeal against the decision. In the USA, the Company believes it is in the final stages of patent prosecution with the US Patent Office. Grant of the patent in the USA will trigger a further milestone payment to the Company under its agreement with Boehringer Ingleheim and also enable further exploitation of this intellectual property.

Cash

We reported in our full-year results announcement on 10 March 2010 that the Company had £21.5m in cash and money market investments at 31 December 2009. The Board reviews detailed cash forecasts on a regular basis, which take into account a number of scenarios associated with product development and commercialisation. Following a series of cost cutting initiatives imposed by management the Company believes it has adequate cash to service its cost base until H2 2011 excluding monetisation of any of its portfolio assets or the introduction of partnering deals which would extend its cash runway. There have been no other significant changes in the position of the Company over the period since publication of the results for the year ended 31 December 2009.

Martyn Williams, CEO of Ark, commented: “With the Company repositioned to generate value from its attractive portfolio of assets, management is focused on delivering tangible value for our shareholders in the near term.”