Proximagen Neuroscience plc
(the "Company")
 

PROXIMAGEN HITS MILESTONE AND TRIGGERS $6 MILLION EQUITY INVESTMENT FROM UPSHER-SMITH

~ Positive pre-clinical results achieved ahead of schedule on PRX 1 programme ~

London, UK - Proximagen Neuroscience plc (AIM: PRX), the drug discovery and development company focused on neurodegenerative diseases, is pleased to announce that it has hit its first milestone under the terms of the worldwide licensing agreement (the "Agreement") signed with Upsher-Smith Laboratories Inc ("Upsher-Smith") on 14 July 2008. This milestone triggers a $6 million (£3.5m*) equity investment in Proximagen at c.£2.27* per share, a premium of approximately 90% to the closing share price of Proximagen on Monday 13 October 2008.

The milestone was triggered ahead of schedule as Proximagen reported positive pre-clinical results on the PRX1 programme. Following this first equity investment, Upsher-Smith will hold 7.1% of the enlarged share capital of Proximagen.

The Agreement of 14 July 2008 covers the development and commercialisation of Proximagen's proprietary PRX1 programme for the symptomatic treatment of Parkinson's disease. As part of the Agreement, Proximagen has already received an upfront payment and over the course of the Agreement will receive milestone payments making the total deal worth up to $232 million (£134.1 million*), plus up to double-digit royalties on global product sales. Upsher-Smith will be responsible for the worldwide development and commercialisation of PRX1 under the direction of a joint steering committee on which there is representation from Proximagen.

Proximagen will issue 1,522,843 ordinary 1p shares of Proximagen Neuroscience plc ("Ordinary Shares") to Upsher-Smith. Application will be made to admit the Ordinary Shares to AIM with trading anticipated to start on or before 31 October 2008. Following the above issue, the Company's issued share capital will be 21,581,715 Ordinary Shares.

Commenting on the milestone, Mark Evenstad, President of Upsher-Smith Laboratories Inc, said: 

"Upsher-Smith is very pleased with the results of the pre-clinical studies undertaken as the milestone event triggering this equity investment. The results for the pre-clinical studies support going forward with worldwide development and commercialisation of the PRX1 programme. Upsher-Smith is committed to advancing pharmacotherapy and improving patients lives. The PRX1 programme will allow us to make great strides in this direction. 

"In addition, our work with Proximagen in conjunction with the activities undertaken since signing the agreement, including the management and conduct of the pre-clinical studies undertaken during that period, has further enhanced our high regard for Proximagen. They have exhibited rigor and discipline in the utilisation and management of financial and human resources with regard to these activities. We are very enthusiastic about this venture with Proximagen and our substantial equity investment in Proximagen. Based on our experience to date, Proximagen management appears singularly committed to its stewardship of Proximagen's resources to create value for its shareholders."

Commenting on the milestone, Kenneth Mulvany, CEO of Proximagen Neuroscience plc, said: 

"We are delighted to have reached this milestone and to be receiving a significant equity investment from our partner Upsher-Smith, ahead of schedule. Our PRX1 programme has shown strong results to date and we look forward to working with Upsher-Smith to progress this compound for Parkinson's disease into the clinic.  

"Proximagen has a very strong cash balance which positions it competitively amongst its peer group. With multiple strategic partnerships in place, I am pleased to report that Proximagen is now very well positioned for corporate growth. We will also continue to invest in our other programmes and exploit further commercial opportunities."

* Exchange rate used: £1=$1.73 (13 October 2008) 

For further information, please contact:  

Proximagen Neuroscience plc

Tel: 020 7848 6938

Kenneth Mulvany, Chief Executive    

James Hunter, Finance Director

Buchanan Communications

Tel: 020 7466 5000

Mary-Jane Johnson, Tim Anderson, Catherine Breen

Canaccord Adams Limited (NOMAD)

Tel: 020 7050 6500

Mark Williams, Adria Da Breo