LONDON, 4 January 2018:

As 2018 gets underway, I would like to reflect on Arix Bioscience plc’s (LSE: ARIX) (“Arix Bioscience” or “Arix”) first year as a public company and offer some thoughts on the year ahead. We started 2017 with the ambition of building a business with the capital, the skills and the experience to take breakthroughs in life sciences and accelerate their development into important new medical treatments. We enter 2018 having floated Arix on the London Main Market, built an experienced team based in London and New York and directed a substantive amount of the capital we have raised into 13 promising young life science companies.

To date, we have committed around $105 million into these companies. In addition, these companies have raised another c.$400 million through syndication with expert global investor groups in life sciences. We are now working closely with all of these companies, with Arix team members taking Board seats or observer positions in all of the private companies. It is early days, and the development of important new medicines is not a quick business, but already we have achieved significant progress across the group. Two of the companies in which Arix holds interests – Autolus and Harpoon – have already seen increases in their valuations through a follow-on financing and an industry collaboration, respectively. Moreover, we have seen meaningful scientific and technical developments in many of our other companies, and I believe the value that is being developed here will become increasingly apparent to shareholders in 2018 with the release of clinical data and business updates.

Unprecedented market opportunity

We are in a golden age of scientific development. Seventeen years ago the human genome was first sequenced, a project which took over a decade and almost $3 billion to complete. These days, it takes about a day and roughly $1,000 to sequence a human genome. More broadly, we are seeing unprecedented advances in life science discoveries, such as human cell therapy, cures for diseases like hepatitis C, gene therapy and gene editing, and a host of other innovative treatments that are helping to improve and save patients’ lives.

As a result, life sciences as an industry has the potential to create high growth companies, which over the past few years have generated billions of dollars of value for investors in an era of low economic growth. Small, development stage companies are the bedrock of much invention and discovery in medicine, but these companies are not readily accessible to most investors, and Arix Bioscience aims to bridge that gap, bringing the opportunity to a broader investor base.

We are well positioned to access the market opportunity with an experienced team providing expertise and a permanent capital model for innovative life science companies – whatever their size or development stage. We hunt for the best ideas globally, and are as committed to helping companies get started as we are to backing late stage companies with proven teams going into pivotal clinical trials. We believe our approach has the potential to generate significant value for patients and investors, and we are very grateful to our shareholders for helping us get started on this mission.

Rich, renewable pipeline of opportunities

Arix has extensive personal networks with leading global venture capital groups, and has privileged relationships with universities and research accelerators throughout Europe and the US. In addition, we have valuable strategic partnerships with global pharmaceutical companies, UCB and Takeda – both of which are also shareholders in Arix – giving us access to deep scientific knowledge and R&D capabilities, market intelligence and commercial due diligence. These networks have enabled Arix to source hundreds of life science opportunities to date, and we see a strong, continuing flow of new ideas.

Early focus on important areas of human disease

In this early stage of Arix’s development, we have focused on three key therapeutic areas: Oncology, Infectious Diseases and Genetic / Orphan diseases, providing funding and expertise to 13 promising Group Businesses across development stages and geographies:

Oncology

• Autolus: Developing next-generation dual-targeted CAR-T therapies for blood cancer and solid cancerous tumours, engineering the patients’ own immune system to tackle disease
• Artios: Developing next generation DNA Damage Response (DDR) inhibition treatments for cancer, with the team that successfully invented this approach with olaparib (Lynparza™) for ovarian cancer
• Harpoon Therapeutics: Developing tri-specific T-cell engagers to fight cancer, with the team behind blinatumomab (Blincyto®), the first approved bispecific T-cell engager immunotherapy to demonstrate superior overall survival versus standard of care chemotherapy
• Aura Biosciences: Using a targeted pharmaceutical agent that is selectively taken up by cancer cells and activated by laser to destroy tumours. The company is currently advancing trials in ocular melanoma, a condition that urgently needs improved treatments

Infectious Diseases

• Iterum Therapeutics: Developing new anti-infectives combatting gram-negative drug-resistant bacteria, in both oral and IV forms, with an initial focus on urinary tract and intra-abdominal infections
• Amplyx: Developing innovative, broad-spectrum agents for potentially deadly fungal infections in patients with compromised immune systems such as those with HIV and cancer patients on chemotherapy
• Atox Bio: Developing immune modulators to treat severe infections with currently no treatments, such as necrotising soft tissue infections (“flesh eating bacteria”) and acute kidney injury

Genetic / Orphan Diseases

• LogicBio: Developing one-time, curative treatments for early-onset rare diseases using gene therapy and gene editing
• Mitoconix: Developing treatments for neurodegenerative disorders such as Huntington’s Disease by improving mitochondrial function
• PreciThera: Using precision medicine to develop treatments for rare, orphan bone diseases
• OptiKira: Developing treatments for blindness caused by retinitis pigmentosa and other disorders related to unfolded protein response

Respiratory and Technology Platforms

• Verona Pharma: Developing a novel inhaled dual PDE3 / PDE4 inhibitor for chronic obstructive pulmonary disease (COPD) and cystic fibrosis
• Depixus: Developing a completely novel approach to epigenomic sequencing and analysis, potentially unlocking a whole new field of science in how genes are turned on and off

Encouraging developments in Arix’s Group Businesses

During the year, two financial uplifts were achieved by Arix Group Businesses:

• Autolus: We led the Series B financing for Autolus in March 2016, and worked closely with the company as it successfully progressed three of its programmes into clinical trials. Within 18 months, by September 2017, this progress enabled Autolus to raise a further $80 million in a Series C financing at a ~50% uplift in valuation.
• Harpoon Therapeutics: In October 2017, just five months after we led the Series B financing, Harpoon signed a collaboration agreement with AbbVie to develop novel T-cell engager therapies, resulting in an increase in the value of our holding by approximately 25%.

In addition, our Group Businesses reached important milestones over the course of the year, including:

• Verona Pharma: Successfully raised $80 million by listing on NASDAQ, and released positive Phase 2a clinical data showing significant benefit in using RPL554 in combination with tiotropium (Spiriva®), one of the most commonly used drugs to treat COPD, versus tiotropium alone
• Artios: Hired Graeme Smith, co-inventor of olaparib (Lynparza™), from AstraZeneca, and established a Scientific Advisory Board
• Amplyx: Released clinical and non-clinical data strongly supportive of the safety and effectiveness of the medicine it is developing to treat potentially deadly fungal infections

2018: Multiple milestones and new deal opportunities

As we look ahead to 2018, we believe the market dynamics and scale of opportunity in life sciences look better than ever. Our well-resourced Group Businesses are expected to reach multiple development milestones during the course of the year, highlights of which include:

• Autolus: Data expected in the first half of the year from Phase 1 clinical trials of CAR-T cancer therapies, which could then roll over into pivotal Phase 2 clinical trials
• Amplyx: Data expected his year from Phase 2 clinical trials for the treatment of potentially deadly fungal infections
• Verona Pharma: Phase 2 clinical data expected in the first half of the year from trials for the treatment of Cystic Fibrosis and COPD
• Depixus: Progression from pilot scale development to commercial scale development of its pioneering epigenomic sequencing and analysis tool
• … plus a series of anticipated clinical trial starts and pre-clinical development milestones across other Group Businesses

Furthermore, other significant events – such as IPOs, M&A, licensing agreements and external financings – can happen at any time, and of course we will look to provide our shareholders with full transparency on any such developments.

In addition, we continue to evaluate other new, high quality science-based businesses and expect to see a rich, renewable pipeline of new deal opportunities in the year ahead.

We are encouraged with what we have been able to achieve so far, and we are hitting the ground running in 2018. It is important, as we prove our business model, for the companies we have backed to report substantive developments to which can be attached a clear uplift in value. We are working hard to achieve these goals with our Group Businesses and appreciate the support of our investors who understand that patience and diligence are needed in medical development. We continue to see significant opportunity and potential returns in this market.

Thank you for your continued support and best wishes for a successful 2018.

Joe Anderson,
CEO
Arix Bioscience plc