Abzena plc

Half year results: Integrated service offering driving revenue growth

Cambridge, UK, 30 November 2016 - Abzena plc (AIM: ABZA, ‘Abzena’ or the ‘Group’), a life sciences group providing services and technologies enabling the development and manufacture of biopharmaceutical products, publishes its half year results for the six months to 30 September 2016.

Highlights

Group revenue up 157% to £9.0 million (H1 2016: £3.5 million) driven by the acquisitions, significant repeat business and multiple projects utilising a broader range of services

Underlying revenue growth of 46% (Proforma revenue H1 2016: £6.1 million)

Gross profit up 133% to £3.8 million (H1 2016: £1.6 million), with underlying gross profit increasing 31%

Positive response from biopharmaceutical customer base including 11 (H1 2016: 7) of the top 25 biopharmaceutical companies to the Group’s enlarged service offering

Successful integration of two US businesses acquired in late 2015 leading to expansion of several customer relationships and further repeat work from major customers

11 “Abzena inside” portfolio products in clinical development (H1 2016: 11 products)

New manufacturing agreements secured for “Abzena inside” product, Faron Pharmaceuticals’ Clevegen , and a further multi-product repeat customer programme

Adjusted EBITDA loss of £3.0m (H1 2016: £2.9m) down £0.4 million on H2 2016

Reported loss of £4.0 million (H1 2016: £3.5 million) reflecting increased share-based payment charges , depreciation & amortisation and reduced provision for R&D tax credit income

Cash and cash equivalents at 30 September 2016 of £9.4 million (31 March 2016: £13.7 million)

Post period end

Appointed Sven Lee as Chief Business Officer and John Manzello as President, Abzena US – experienced industry leaders driving Abzena’s integrated service offering and delivery in the US, respectively

Dr John Burt, CEO of Abzena, commented:

“This half has seen strong revenue growth driven by our expanded capabilities, providing services across the broader spectrum of biopharmaceutical development, as well as the positive uptake and cross buying

of services from new and existing customers. “We intend to capitalise on the opportunities that exist in the fast-growing biopharmaceutical outsourcing

space where there is increasing demand from our partners for seamless services. We will continue our strategy of investing in service innovation and technology development, and are confident in the prospects for the Group.”

Enquiries:

Abzena plc John Burt, Chief Executive Officer Julian Smith, Chief Financial Officer

+44 1223 903498

Numis (Nominated Adviser and Broker) Clare Terlouw / James Black / Paul Gillam

+44 20 7260 1000

N+1 Singer (Joint Broker) Aubrey Powell / Liz Yong

+44 20 7496 3000

Instinctif Partners Melanie-Toyne Sewell / Rozi Morris

+44 20 7457 2020 abzena@instinctif.com

About Abzena

Abzena (AIM: ABZA) provides proprietary technologies and complementary services to enable the development and manufacture of biopharmaceutical products.

The term "Abzena inside" is used by Abzena to describe products that have been created using its proprietary technologies and are being developed by its partners, and include Composite Human Antibodies™ and

ThioBridge™ Antibody Drug Conjugates (ADCs). Abzena has the potential to earn future licence fees, milestone payments and/or royalties on "Abzena inside" products.

Abzena offers the following services and technologies across its principal sites in Cambridge (UK), San Diego, California (US) and Bristol, Pennsylvania (US).

Immunogenicity assessment, protein engineering to create humanized antibodies and deimmunised therapeutic proteins, and cell line development for manufacture.

Contract process development and manufacture of biopharmaceuticals, including monoclonal antibodies, recombinant proteins, vaccines, and gene therapy and cell therapy products, for preclinical and clinical

studies.

Proprietary site-specific conjugation technologies for antibody drug conjugate development and solutions for optimizing the therapeutic properties of biopharmaceuticals.

Custom synthetic chemistry and bioconjugation business focused on ADCs.

For more information, please see www.abzena.com

Half year review

Overview Abzena operates in the fast-growing biopharmaceutical outsourcing market, driven by significant global investment

in the development of antibodies, antibody drug conjugates (“ADCs”) and other complex biopharmaceutical products. The Group is already well-positioned to capture a larger share of this multi-billion dollar market following the broadening of its offering to include manufacture of therapeutic proteins for Phase I and II clinical studies and

its increased capabilities in the chemistry research and ADC fields. Having expanded the Group through two US acquisitions in the second half of fiscal year 2016, Abzena is

experiencing the benefits of the integration of the Group’s offerings in biology and chemistry research services and contract development and manufacturing, with all of the Group’s businesses now trading under the Abzena name.

The enlarged Group has delivered revenue of £9.0 million for the six months to September 2016, representing an underlying growth rate of 46%, as it continues to work with a broad range of customers, including many of the leading biopharmaceutical companies.

Increasingly, Abzena’s customers are utilising more of the Group’s extended suite of services as they progress development programmes through protein engineering, cell line development and biomanufacturing and, for ADCs,

through synthetic chemistry services for linkers and payloads to conjugation. In the first half of the year, Abzena worked on 185 projects for 92 different customers, with a significant proportion of the Group’s business being repeat business or customers cross-buying multiple aspects of the Group’s service offering.

Abzena’s top 10 customers generated 47% of the Group’s revenue, with all of them engaged on multiple or repeat projects across the Group’s biology, chemistry or manufacturing services.

Manufacturing

Following the acquisition of PacificGMP in September 2015, manufacturing service revenues in the six months to September 2016 increased 332% to £2.0 million (H1 2016: £0.5 million), representing 23% of the Group’s service revenues. Taking account of the timing of the acquisition of PacificGMP, manufacturing service revenues grew 61%

(Proforma aggregate revenue H1 2016: £1.2 million).

Revenue for manufacturing process development and GMP1 production from Abzena’s San Diego business has grown 47% from the equivalent period last year to £1.4 million and is benefitting from capital investment since acquisition. Further growth is expected through the rest of the year.

Abzena has the capability to support development of partners’ products beyond antibody engineering as they progress towards clinical development, as demonstrated by the manufacturing contract for Faron Pharmaceuticals ’

Clevegen®, an “Abzena inside” therapeutic antibody. In addition, a multi-product reagent manufacturing agreement with a repeat customer has also been secured which is expected to extend to up to six products.

Cell line development revenue has more than doubled in this latest period to £0.6 million (H1 2016: £0.3 million), and has already exceeded the revenue generated by cell line development in the year to March 2016 (FY 2016: £0.5 million).

Two partners have committed to cell line development projects following protein engineering, providing visibility on future potential projects coming through Abzena’s service pipeline.

The strong customer response to Abzena’s enlarged offering validates the Group’s strategy to expand its services along the continuum of the drug development process as The Group aims to provide partners with the products to

enable clinical studies to establish the safety and efficacy of their novel biopharmaceuticals. As well as many leading biotechnology companies, the Group provides several prestigious academic research groups with development and manufacturing services, such as the eminent Memorial Sloan Kettering Cancer Center in New York, whose

programmes included a bispecific antibody compound now being developed by Y-mabs Therapeutics Inc. Chemistry research services

Chemistry research services revenues increased 66%, on an underlying basis, to £3.5 million (Proforma H1 2016: £2.1 million), and represent 40% of Abzena’s service revenues. More than half of the 27 customers for the Group’s chemistry research services have pursued programmes related to the Group’s proprietary

technologies, including the ThioBridge™ ADC technology. In addition, long-term custom synthesis relationships for a number of customers established by TCRS prior to the acquisition in December 2015 have continued through the period, generating revenues of £1.3 million. Programmes related to the utilisation of the Group’s technologies or

long-term service relationships provide the opportunity to expand the partner’s engagement into larger programmes and/or other areas of the Group’s business.

Operating from the Group’s facilities in Bristol, PA , US, and Cambridge, UK, Abzena’s chemistry services business provides a broad and integrated offering for customers. This includes small molecule custom synthesis, provision of linkers, payloads and linker-payloads for ADCs, and conjugation with standard and proprietary ThioBridge ™

chemistries. Through the manufacturing investment programme, the Group is expanding the support it can provide to partners pursuing development of ADCs towards clinical evaluation.

In April 2016, Halozyme presented data at the American Association for Cancer Research meeting for its HTI-1511 ThioBridge™ ADC, being developed under the collaboration and licence agreement signed in January 2016. The agreement provides Halozyme with the option to utilise the ThioBridge™ ADC technology for up to three targets in

return for licence fees and milestone payments of up to $150 million as well as royalties on the sale of ThioBridge™ ADC products developed under this agreement. HTI-1511 is an anti-EGFR ADC, with preferential properties for binding in the tumour micro-environment. TI-1511 is enhanced by the homogeneity, stability, efficacy and tolerability

benefits of Abzena’s ThioBridge™ technology. A significant proportion of Abzena’s chemistry R&D investment has been in ADC technologies, including

improvements to its ThioBridge™ ADC linkers, synthesis and evaluation of novel proprietary cytotoxic payloads , and development of a novel synthetic route for a clinically validated linker-payload.

Biology research services Revenues from Abzena’s biology research services increased 16% to £3.2 million (H1 2016: £2.7 million) and

represent 36% of Abzena’s service revenues, through 62 immunology projects for 37 different customers and 28 protein engineering projects for 16 customers. Nine of the protein engineering projects have utilised “Abzena inside” Composite Human Antibody technology and two of the customers have so far carried programmes through to cell

line development.

1 Good Manufacturing Practice (“GMP”)

The Group is investing to enhance its analytical capabilities in biology research, including product quality attribute analysis for biosimilars - biopharmaceutical drugs with active properties similar to ones that have already been

licensed. This analysis can now be included as part of a biosimilar cell line development programme, and to extend Abzena’s immunology research services capability.

“Abzena inside” There are 11 “Abzena inside” products currently in clinical development. Abzena is not yet receiving royalty revenues

from its “Abzena inside” portfolio; however, application of these technologies can provide the opportunity to generate licence revenues from signing fees, technology access fees, annual licence fees and milestone payments earlier in the development process for certain “Abzena inside” products.

During the period, licence revenues at £0.31 million were more than four times the revenue reported for the equivalent period last year (H1 2016: £0.07 million), and in line with the total licence revenue for last year

(FY 2016: £0.3 million). Potential partners are constantly evaluating Abzena’s technology and good progress continues to be made towards further licence agreements, including for ThioBridge™ ADC linker technology, as well as for Composite Human Antibodies.

The progress of “Abzena inside” products being developed by Abzena’s partners has been mixed. Opsona Therapeutics (“Opsona”) announced that preliminary results from an ongoing Phase I/II trial of OPN-305 in lower

risk myelodysplastic syndrome (“MDS”) patients will be presented at the American Society of Haematology meeting on 3 December 2016. The conclusion of the interim analysis of the study was that treatment with OPN-305 in patients with previously treated lower-risk MDS was well tolerated with no significant toxicities and a 50% overall response

rate. In October 2016, Opsona announced that Orphan Drug Designation had been received from US Food and Drug Administration (“FDA”) for OPN-305 for the MDS indication. Also in October 2016, True North Therapeutics announced that the US FDA had granted Orphan Drug Designation

for Composite Human Antibody TNT009 for the treatment of autoimmune haemolytic anaemia, including cold agglutinin disease. True North Therapeutics had previously announced encouraging initial results for TNT009 in a Phase 1b study in CAD patients in June 2016. True North Therapeutics also announced a $45 million Series D

financing to accelerate the further development of TNT009 in October 2016. Within the portfolio a further “Abzena inside” product for neurodegenerative conditions with an undisclosed partner

is moving into Phase II development. Progression of another “Abzena inside” product with another undisclosed partner into multiple Phase Ib/IIa studies is anticipated in the first half of 2017.

However, Gilead Sciences Inc. has discontinued the development of simtuzumab and also GS-5745 in ulcerative colitis and Crohn’s disease patients. Development of GS-5745 in other indications continues, with an interim analysis of data from a Phase III gastric cancer study anticipated in Q3 2017.

This mix of events is to be expected in drug development, and reaffirms Abzena’s strategy to provide services and technologies to its partners to develop better biopharmaceuticals, rather than pursuing development of its own

biopharmaceutical products. Denceptor Therapeutics

In July 2016, Abzena and Baylor Scott & White Research Institute launched Denceptor Therapeutics Limited (“Denceptor”) as a joint venture company developing novel immunotherapeutic products using “Abzena inside”

technology to treat cancer and autoimmune diseases. Denceptor’s programmes are focused on dendritic cell receptor-targeting antibodies humanized using Abzena’s

Composite Human Antibody™ technology to reduce unwanted drug immunogenicity. Denceptor will operate as a virtual business and will utilise Abzena as one of its service providers for further antibody engineering, cell line development and/or manufacturing.

Denceptor is pursuing third party funding to support the clinical development of the lead product, an HPV E6/E7 immunotherapy for head and neck cancer and other HPV-associated malignancies. Such funding is intended to also

be used to progress other preclinical stage programmes into clinical development. Denceptor’s management team includes Dr Matthew Baker (co-founder of Antitope) as Chief Scientific Officer

(CSO). Dr Baker has now stepped down from his position as CSO with Abzena to enable him to pursue the

opportunity to establish Denceptor and leverage his immunology expertise and close relationship with the team at Baylor Scott & White Research Institute.

Management changes To facilitate the continued growth of the business and to ensure effective management across the two US business

units, two new executive positions have been created - Chief Business Officer (CBO) and President, Abzena US. Sven Lee and John Manzello, respectively, were appointed to these positions in October 2016. Both Sven and John each bring over 20 years’ biopharmaceutical industry experience in strategy and business development, particularly

within the US market. These appointments strengthen the executive management team for the next phase of Abzena’s growth as its

operating subsidiaries integrate as a business with a unified brand and international leadership team. Operations

Laboratory and office space have been expanded in both Bristol, PA. and San Diego to facilitate the growth of the chemistry research and manufacturing services, and the creation of two new biomanufacturing cleanroom suites in

San Diego has just been completed. Whilst establishment of the GMP capability for manufacture of ADC linker-payloads nears completion, work has not yet been initiated to establish the GMP conjugation fac ility, which is expected to form part of the next phase of the Group’s investment and growth plans.

During the period, the Group’s facility in Coventry has been closed and the chemistry team relocated from there to Cambridge UK. Relocation of Abzena’s UK operations at Babraham Research Campus into a new building within

the campus, developed by Imperial College, has been delayed while Imperial College confirms their constructed design meets current health and safety standards. This delay has had no impact on current operations which continue to occupy two buildings on the Babraham Research Campus.

Current trading and outlook Abzena’s operations have enjoyed high levels of utilisation during the first half of the year, which is expected to

continue through the second half, as Abzena’s partners progress programmes through to GMP manufacturing, and the Group sees strong demand for its services from new and existing customers.

As mentioned at the full year results presented in June 2016, the Group continues its R&D investment in biology to provide new and enhanced solutions for partners. It is also investing in novel ADC payload development as well as expanding capacity at its manufacturing facilities, completing the establishment of GMP manufacturing capability for

cytotoxic payloads and linker-payloads for ADCs alongside the current expansion of the capacity for GMP manufacture of antibodies and other proteins.

In view of the potential further demand from Abzena’s partners for manufacturing services, the Group is investigating funding options to accelerate the growth of the manufacturing business through a significant expansion programme that would include upgrading the GMP manufacturing platform and increasing capacity for process development

and manufacturing. Abzena continues to make good progress in establishing itself as an international services and technology business

to enable the development of better biopharmaceuticals, in a market where demand is growing rapidly , and the Board is confident that there is substantial further growth potential for the business.

Financial review

Revenue Group revenues for the six months to 30 September 2016 increased by 156% to £9.0 million (H1 2016: £3.5 million)

providing a 133% increase in gross profit to £3.8 million (H1 2016: £1.6 million). On a proforma aggregated basis as if the Group had existed in its current form for the comparative periods revenues for the six months to 30 September 2015 would have been £6.1 million a 46% growth.

The periods under review have seen unprecedented movements in exchange rates with the Group’s business becoming more concentrated in USD over the last year. The average daily GBP / USD exchange rate for the six

months to September 2016 was £:$ 1.375 reflecting an 11% decline from the comparative period (H1 2016: £:$1.538), continuing the initial 6.8% decline in the second half of the year (H2 2016: £:$1.475).

The Group’s revenue has always been concentrated in USD with £5.3 million (59%) for the half year (Proforma aggregated FY 2016 £8.6 million (65%)) and this trend is expected to continue. The impact of this exchange rate movement has been to increase the revenues of the Group on a proforma aggregated like for like basis by £0.6m

for the half year. The Group’s revenue is split over 92 customers (H1 2016: 71 and FY 2016: 111). The top 10 customers represent

47% of the total revenue. Of total revenue £7.3 million is repeat or ongoing contracts (H1 2016: £2.9 million and FY 2016: £7.6 million).

Gross profit Group gross profit has increased by 133% to £3.8 million (H1 2016: £1.6 million) representing 42% of total sales

(H1 2016: 46%). This percentage reduction primarily reflects the reduced margin earned on the manufacturing contracts given their higher materials content.

On a proforma aggregated basis the gross profit increased by 31% £0.9 million (Proforma aggregated gross profit H1 2016: £2.9 million). On a constant currency basis, the gross profit has increased by 94% to £3.4 million (constant currency proforma H1 2016: £1.7 million).

Research and Development

Research & development expenditure during the period has remained relatively stable at £1.9 million (H1 2016: £1.9 million) with ongoing investment on the ThioBridge™ ADC technology, enhancement of the immunology service offering and investment in the GMP chemistry facility in Bristol PA. All R&D expenditure has been expensed during the period in which it was incurred.

Administrative expenses

Administrative expenses have increased significantly to £6.4 million (H1 2016: £3.4 million) reflecting the Group’s expanded operations, particularly the effect of the US acquisitions, and the share based payment charge.

Compared to the proforma aggregated basis for H1 2016 of £5.5 million administrative expenses have increased by £0.9 million. The cost base increase has also been adversely affected by the foreign exchange movements representing £0.2 million of the increase over the proforma aggregated basis for H1 2016.

Adjusted net earnings for the period

The adjusted EBITDA loss from the ongoing business at £3.0 million is £0.1 million down on the same period as last year, but reflects a £0.4 million improvement on the second half of last year (six months to 31 March 2016).

Unaudited Unaudited Audited 6 months to 6 months to 12 months to 30 September 30 September 31 March

2016 2015 2016 £’000 £’000 £’000

Loss for the period (4,030) (3,532) (9,698)

Adjust for exceptional items Impairment charge for intangibles – – 1,007

Acquisition costs 500 1,535 –––––– –––––– –––––– Total comprehensive loss on an ongoing basis (4,030) (3,032) (7,156)

Adjust for depreciation, amortisation and share based payment charges Depreciation of property, plant and equipment 655 234 801

Amortisation of intangible assets 374 268 588 Share based payments 193 – 155

Taxation (242) (408) (961) Net finance income 46 24 244 –––––– –––––– ––––––

Adjusted EBITDA (3,004) (2,914) (6,329) –––––– –––––– ––––––

Taxation

The taxation receivable reflects the estimate of the R&D tax credit repayable from HMRC of £0.2 million (H1 2016: £0.4 million).

Reported loss for the period The reported loss of £4.0 million for the half year (H1 2016: £3.5 million) results from an operating loss for the period

of £4.3 million (H1 2016: £4.0 million). Capital expenditure

The Group has invested to enhance the capacity and to support further growth in terms of costs directly expensed and £1.5 million (H1 2016: £0.6 million) on additional capital equipment and leasehold improvements. Of this total £0.5 million was financed through vendor supported finance leases (H1 2016: £nil) taking the benefit of the relatively

favourable interest rates currently achievable for capital purchases. Cash and Cash equivalents

Cash and cash equivalents at 30 September 2016 were £9.4 million down from £13.7 million at the start of the period.

Independent review report to Abzena plc

Introduction

We have reviewed the accompanying consolidated balance sheet of Abzena plc as at 30 September 2016 and the related consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated cash flow statement for the six-month period then ended. Management is

responsible for the preparation and presentation of this interim financial information in accordanc e with International Financial Reporting Standards adopted in the European Union. Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope of the Review We conducted our review in accordance with International Standard on Review Engagements 2410, “Review of

Interim Financial Information Performed by the Independent Auditor of the Entity”, issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with International Financial Reporting Standards adopted in the European Union.

James Cowper Kreston 2 Chawley Park

Cumnor Hill Oxford OX2 9GG

29 November 2016

Consolidated Income Statement Unaudited Unaudited Audited

6 months to 6 months to 12 months to 30 September 30 September 31 March 2016 2015 2016

Note £’000 £’000 £’000

Revenue 3 8,960 3,501 9,854 Cost of sales (5,179) (1,881) (5,319) –––––– –––––– ––––––

Gross profit 3,781 1,620 4,535 Other operating income 236 166 367

Research and development costs (1,950) (1,857) (4,216) Administrative expenses - other (6,385) (3,393) (9,047) Exceptional items - impairment of intangibles 5 – – (1,007)

Exceptional items - acquisition costs 5 – (500) (1,535) –––––– –––––– –––––– Operating loss (4,318) (3,964) (10,903)

Finance income 4 108 29 263 Finance expense 4 (62) (5) (19)

–––––– –––––– –––––– Loss before income tax (4,272) (3,940) (10,659) Income tax 6 242 408 961

–––––– –––––– –––––– Loss for the period (4,030) (3,532) (9,698)

–––––– –––––– ––––––

Basic and diluted losses per Ordinary Share 7 (3p) (4p) (9p)

Consolidated Statement of Comprehensive Income

Unaudited Unaudited Audited 6 months to 6 months to 12 months to

30 September 30 September 31 March 2016 2015 2016 £’000 £’000 £’000

Loss for the period (4,030) (3,532) (9,698)

Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operations 2,094 – (216) –––––– –––––– ––––––

Other comprehensive loss for the period net of tax 2,094 – (216)

–––––– –––––– ––––––

Total comprehensive loss for the period (1,936) (3,532) (9,914) –––––– –––––– ––––––

The accompanying notes are an integral part of these interim financial statements.

Consolidated Balance Sheet

Unaudited Unaudited Audited as at as at as at 30 September 30 September 31 March

2016 2015 2016 Note £’000 £’000 £’000

Assets Non-Current Assets

Goodwill 17,112 8,009 15,060 Other intangible assets 7,939 6,572 8,117 Property, plant and equipment 5,033 1,875 4,170

–––––– –––––– –––––– Total Non-Current Assets 30,084 16,456 27,347

Current Assets Inventories 1,579 933 1,379 Trade and other receivables 5,758 4,070 5,436

Current income tax assets 1,130 1,104 1,569 Cash and cash equivalents 9,379 7,415 13,724 –––––– –––––– ––––––

Total Current Assets 17,846 13,522 22,108 –––––– –––––– –––––– Total Assets 47,930 29,978 49,455

–––––– –––––– –––––– Equity and Liabilities Equity Issued share capital 274 195 272

Share premium 41,307 18,982 41,263 Retained earnings (5,114) 5,163 (1,026) Share based payment reserve 389 – 155

Contingent consideration reserve 608 – 608 Foreign exchange reserve 1,878 – (216) –––––– –––––– ––––––

Total Equity 39,342 24,340 41,056 –––––– –––––– –––––– Liabilities

Non-current Liabilities 414 – 518 Deferred tax 6 2,006 1,088 2,031 –––––– –––––– ––––––

Total Non- Current Liabilities 2,420 1,088 2,549 –––––– –––––– –––––– Current Liabilities

Trade and other payables 5,870 3,976 5,488 Provisions 298 574 362 –––––– –––––– ––––––

Total Current Liabilities 6,168 4,550 5,850 Total Liabilities 8,588 5,638 8,399

–––––– –––––– –––––– Total Equity and Liabilities 47,930 29,978 49,455 –––––– –––––– ––––––

The accompanying notes are an integral part of these interim financial statements.

The interim financial statements were approved by the Board of Directors on 29 November 2016 and were signed

on its behalf by John Burt (Chief Executive Officer) and Julian Smith (Chief Financial Officer).

Consolidated Cash Flow Statement Unaudited Unaudited Audited

6 months to 6 months to 12 months to 30 September 30 September 31 March 2016 2015 2016

£’000 £’000 £’000

Cash flows from operating activities: Loss before income tax (4,272) (3,940) (10,659)

Depreciation of property, plant and equipment 655 234 801 Amortisation of intangible assets 374 268 588 Impairment charge for intangibles – – 1,007

Share based payments 193 – 155 (Decrease)/ Increase in provisions (64) – 362 Adjustment for foreign exchange gain (51) – (216)

Net finance income / (expense) 2 (24) (244) –––––– –––––– ––––––

(3,163) (3,462) (8,206) Working capital adjustments:

(Increase)in trade and other receivables (442) (308) (1,203) (Increase) in inventories (202) (116) (562) Increase / (Decrease) in trade and other payables (284) (996) (1,115)

–––––– –––––– –––––– Net working capital movements (928) (1,420) (2,880) –––––– –––––– –––––– Cash (used in) operations (4,091) (4,882) (11,086)

Taxation received 701 484 371 –––––– –––––– ––––––

Net cash (used in) operating activities (3,390) (4,398) (10,499)

Cash flows from investing activities:

Acquisitions (net of cash acquired) – (3,452) (9,357) Purchase of intangible assets – – (14)

Purchase of property, plant and equipment (983) (558) (2,033) Interest received 7 29 50 –––––– –––––– ––––––

Net cash used in investing activities (976) (3,981) (11,354) Cash flows from financing activities:

Cash proceeds from share issues 30 – 20,924 Issue costs – – (911) Interest paid (9) (5) (19)

–––––– –––––– –––––– Net cash generated (used in)/ from financing activities 21 (5) 19,994

Net (decrease) in cash and cash equivalents (4,345) (8,384) (2,075) –––––– –––––– –––––– Cash and cash equivalents at beginning of the period 13,724 15,799 15,799

Cash and cash equivalents at end of the period 9,379 7,415 13,724 –––––– –––––– ––––––

The accompanying notes are an integral part of these interim financial statements.

Consolidated Statement of Changes in Equity

For the six month period to 30 September 2016 - unaudited

Share based

payment reserve

Contingent

consideration reserve

Foreign

exchange reserve

Issued

Share Capital

Share Premium

Retained Earnings

Total

£’000 £’000 £’000 £’000 £’000 £’000 £’000

Balance at 1 April 2016 155 608 (216) 272 41,263 (1,026) 41,056

Comprehensive income

Loss for the year – – – – – (4,030) (4,030)

Other comprehensive loss – – 2,094 – – – 2,094

Transactions with owners – – – – – – –

Share-based payments 234 – – – 17 (58) 193

Share capital issued – – – 2 27 – 29

–––––– –––––– –––––– –––––– –––––– –––––– ––––––

Balance at 30 September 2016 389 608 1,878 274 41,307 (5,114) 39,342

–––––– –––––– –––––– –––––– –––––– –––––– ––––––

For the six month period to 30 September 2015 - unaudited

Issued share

capital

Share

premium

Retained

earnings

Total

£’000 £’000 £’000 £’000

Balance at 1 April 2015 195 18,982 8,672 27,849

Comprehensive income

Total comprehensive loss for the period – – (3,532) (3,532)

Deferred Consideration – – 23 23

–––––– –––––– –––––– ––––––

Balance at 30 September 2015 195 18,982 5,163 24,340

–––––– –––––– –––––– ––––––

Consolidated Statement of Changes in Equity continued: For the year ended 31 March 2016 – audited

Share based

payment

reserve

Contingent consideration

reserve

Foreign exchange

reserve

Issued share

capital

Share

premium

Retained

earnings

Total £’000 £’000 £’000 £’000 £’000 £’000 £’000

Balance at 1 April 2015 – – – 195 18,982 8,672 27,849

Comprehensive income Loss for the year – – – – – (9,698) (9,698)

Other comprehensive loss – – (216) – – – (216) Transactions with owners

Share-based payments 155 – – – – – 155

Contingent shares – 608 – – – – 608

Share capital issued (i) – – – 77 23,192 – 23,269

Issue costs – – – – (911) – (911)

–––––– –––––– –––––– –––––– –––––– –––––– ––––––

Balance at 31 March 2016 155 608 (216) 272 41,263 (1,026) 41,056

–––––– –––––– –––––– –––––– –––––– –––––– ––––––

(i) £20.9 million of this amount was issued for cash with a further £2.4 million issued to acquire The Chemistry

Research Solution LLC.

The accompanying notes are an integral part of these interim financial statements.

Notes to the interim financial information 1. Basis of preparation These unaudited condensed consolidated interim financial statements have been prepared in accordance with the

AIM Rules and European Union endorsed International Financial Reporting Standards. These comprise the consolidated statement of comprehensive income, the consolidated interim balance sheet, the consolidated cash flow statement, the consolidated statement of changes in equity and the related notes (“the condensed consolidated

interim financial statements”). The Group has chosen not to adopt IAS 34, “Interim Financial Reporting”, in the preparation of these condensed consolidated interim financial statements.

These condensed consolidated interim financial statements have been prepared on a going concern basis under the historical cost convention, as modified by the revaluation of certain financial assets at fair value, as required by IAS 39, “Financial instruments: Recognition and Measurement”. The accounting policies adopted are consistent

with those of the annual financial statements for the year ended 31 March 2016. These condensed consolidated interim financial statements do not comprise statutory accounts within the meaning

of Section 434 of the Companies Act 2006. Statutory accounts for Abzena plc for the year ended 31 March 2016 were approved by the Board of Directors on 13 June 2016 and have been delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and

did not contain any statement under Section 498 of the Companies Act 2006. These Group financial statements include the results for Abzena plc, its operating subsidiary companies PolyTherics

Limited, Antitope Limited, Warwick Effect Polymers Limited, Denceptor Therapeutics Ltd, PacificGMP and The Chemistry Research Solution LLC; together with its intermediate holding companies as listed in full in note 1 of the 2016 annual report.

The results of The Chemistry Research Solution LLC and PacificGMP have been included from the date of acquisition.

2. General information Abzena plc is a public limited company incorporated and domiciled in England and Wales with registered number 08957107. The Company’s registered office is Babraham Research Campus, Babraham, Cambridge, CB22 3AT.

The principal activity of the Group is that of life science research and development and the provision of services and technology licensing to the biopharmaceutical industry.

3. Segmental reporting The Directors are of the opinion that under IFRS 8 the Group has only one operating segment, being the

commercialisation of intellectual property through short-term service contracts and long-term licensing income. The Board of Directors assess the performance of the operating segment using financial information which is measured and presented in a manner consistent with that in the financial information.

An analysis of the Group’s Revenue is as follows: Unaudited Unaudited Audited 6 months to 6 months to 12 months to

30 September 30 September 31 March 2016 2015 2016 £’000 £’000 £’000

Biology research services

Immunology 2,381 2,038 3,978 Protein engineering 774 690 1,321 –––––– –––––– ––––––

3,155 2,728 5,299 Chemistry research services 3,501 239 2,174

GMP manufacturing Cell line development 569 271 525 Contract GMP manufacturing 1,428 191 1,571

–––––– –––––– –––––– 1,997 462 2,096 –––––– –––––– ––––––

Total service revenue 8,653 3,429 9,569 Licence revenue 307 72 285

–––––– –––––– –––––– Total group revenue 8,960 3,501 9,854 –––––– –––––– ––––––

4. Finance income and expenses Unaudited Unaudited Audited

6 months to 6 months to 12 months to 30 September 30 September 31 March 2016 2015 2016

£’000 £’000 £’000

Finance income Unrealised currency gains – other 101 – –

Interest received 7 29 50 Net gains on financial instruments – – 213 –––––– –––––– ––––––

Finance Income 108 29 263 –––––– –––––– –––––– Finance expenses

Bank interest & charges (9) (5) (19) Net loss on financial instruments (53) – – –––––– –––––– ––––––

Finance Expenses (62) (5) (19) –––––– –––––– ––––––

5. Exceptional items Unaudited Unaudited Audited

6 months to 6 months to 12 months to 30 September 30 September 31 March 2016 2015 2016

£’000 £’000 £’000

Exceptional items, impairment of intangibles – – 1,007 Exceptional items, acquisition costs – 500 1,535

–––––– –––––– –––––– – 500 2,542 –––––– –––––– ––––––

Exceptional items have been expensed to the Statement of Comprehensive Income. The charge for the year ended 31 March 2016 principally arose on the legal and professional fess pursuant to the PacificGMP and The Chemical

Research Solution LLC acquisitions (6 months ended 30 September 2015: £0.5m). In addition, there was an impairment of the intangible assets and goodwill in respect of Warwick Effect Polymers and Antitope Limited.

6. Taxation Analysis of taxation (credit) in the period

The Group is entitled to claim tax credits in the United Kingdom for certain research and development expenditure. The amount included in the financial information represents the credit receivable by the Group for the period.

Analysis of taxation credit in the period: Unaudited Unaudited Audited 6 months to 6 months to 12 months to 30 September 30 September 31 March

2016 2015 2016 £’000 £’000 £’000

United Kingdom corporation tax (138) (307) (718)

Adjustment in respect of prior period – (36) (36) –––––– –––––– –––––– Total Current Tax (138) (343) (754)

Deferred Tax (104) (65) (257) Origination and reversal or temporary differences – 50 –––––– –––––– ––––––

Total Tax in the Consolidated Statement of Comprehensive Income (242) (408) (961) –––––– –––––– ––––––

There is no current tax charge in the period as the Group has utilised losses brought forward and is entitled to a cash tax credit in the United Kingdom for certain research and development expenditure.

Deferred tax liability Unaudited Unaudited Audited 6 months to 6 months to 12 months to

30 September 30 September 31 March 2016 2015 2016 £’000 £’000 £’000

Balance at 1 April 2,031 1,153 1,153 Deferred tax liability acquired with subsidiary undertakings – – 2

Deferred tax arising on intangible fixed assets recognised in business combination

– – 1,112

Unwinding of deferred tax during the year (109) (33) (257)

Movement in fixed asset temporary differences 15 (32) 50 Movement in short term temporary differences (7) – (29) Foreign exchange translation of deferred tax arising on intangible

fixed assets recognised in business combination

76 – –

–––––– –––––– –––––– Total deferred tax liability 2,006 1,088 2,031

–––––– –––––– –––––– 7. Losses per share

Basic losses per share is calculated by dividing the loss for the financial period by the weighted average number of Ordinary Shares in issue during the year. The losses and weighted average number of shares used in the

calculations are set out below: Unaudited Unaudited Audited 6 months to 6 months to 12 months to

30 September 30 September 31 March 2016 2015 2016

Losses per Ordinary Share Loss for the financial year (£000) (4,030) (3,532) (9,698)

Weighted average number of Ordinary Shares (basic)(thousands) 136,977 97,476 109,397 Losses per Ordinary Share basic (pence) (3p) (4p) (9p)

As net losses were recorded in the 6 months ended 30 September 2016, 30 September 2015 and the year ended 31 March 2016, the potentially dilutive share options are anti-dilutive for the purposes of the losses per share calculation and their effect is therefore not reflected.