Acquisition

RNS Number:9888Q
Maelor PLC
28 March 2008

28 March 2008





                     Maelor plc ('Maelor' or the 'Company')

           Acquisition of Speciality European Pharma International AG


The Board of Maelor plc (AIM:MLR), the specialist hospital medicines group, is
pleased to announce the acquisition of Speciality European Pharma International
AG ('SEPI AG'), a wholly owned subsidiary of Speciality European Pharma Limited
('SEP'). SEPI AG, a Swiss-based pharmaceutical company with a profitable
portfolio of specialist hospital pharmaceutical products, is being acquired for
an initial cash consideration of £9.25 million and up to a further £5 million in
deferred consideration, conditional on SEPI AG meeting certain regulatory
criteria and sales targets.


Highlights

*   An acquisition fully aligned with Maelor's stated strategy of building a 
    focused late-stage pharmaceutical and medical devices business in the
    specialist hospital medicine sector.

*   A further step in the transformation of the business creating a growing 
    and significantly profitable enlarged group, driven in particular by
    existing and significant potential sales from the critical care drug,
    Haemopressin(R).

*   Consolidates a presence in the major European markets through a distributor 
    network outside the UK and enables a low-risk step into the US
    market through a licensee.

*   As a virtual business it can be readily integrated into Maelor's
    existing infrastructure with minimal cost and distraction.

*   A catalyst for further change across the Company including adoption
    of the name IS Pharma - "International Speciality Pharmaceuticals" to more
    closely reflect the nature of the business.

*   Consolidation of the Company's existing shares on a 1 for 7 basis
    and restructuring of the Company's balance sheet.

*   Strong trading continues to period end, results for the year ending
    31 March 2008 anticipated to be ahead of expectations.

The acquisition of SEPI AG represents the next step in the implementation of the
Board's strategy and is undertaken in the context of strong trading for the year
and results which are anticipated to be ahead of expectations. SEPI AG is a
virtual and profitable specialist hospital business with a pro forma EBITDA of
c. £0.9 million to the year ended December 2007. The primary asset in the
portfolio is Haemopressin. This product is generating the majority of revenue
and offers strong growth potential both in existing markets and through its
anticipated regulatory approvals across Europe and the US. Maelor is the
existing distributor for Haemopressin in the UK and Ireland, so the product is
well known to the Company.

Following on from the successful German launch of its prostate cancer drug,
Plenaxis(R), SEP, have taken a strategic decision to focus on expanding its
franchise in urology. As a result, SEPI AG's portfolio of hospital specialist
products is no longer considered core to SEP's business. The divestment of SEPI
AG will provide SEP with the capital required to launch Plenaxis throughout
Europe and to invest in new late stage product opportunities in the urology
field.

A conditional placing of 13,000,000 Consolidated Ordinary Shares at 77 pence
(after taking into account the 1 for 7 share consolidation and being 11 pence at
the existing unconsolidated basis), which has been arranged by Noble & Company
Limited, will raise £10.0 million (before expenses). Completion of the
acquisition of SEPI AG is expected to take place (subject, inter alia, to
shareholder approval) on 25 April 2008.


Commenting on the acquisition Tim Wright, CEO of Maelor, said:

"We are very pleased to announce the acquisition of Speciality European Pharma
International and our recent successful fund raising against a backdrop of
strong trading. It represents the next step in our strategy of creating a
profitable specialist hospital medicines business, growing organically and by
targeted acquisition.

With further planned regulatory approvals, the acquisition enables us to
consolidate our presence in Europe and take a low risk step into the US. Given
the virtual nature of SEPI and our familiarity with the key product
Haemopressin, the acquisition is aligned with our focused approach.  We are
confident that we will be able to rapidly integrate and grow the business so as
to maximise earnings and shareholder value."



                                    - ENDS -


Enquiries:

Maelor plc                                           Tel: [phone]
Tim Wright - CEO
www.maelor.plc.uk

Noble & Company Limited                              Tel: [phone]
Nick Naylor / Matthew Hall / Sam Reynolds

Financial Dynamics Limited                           Tel: [phone]
Billy Clegg / Edward Westropp




Introduction

The Board of Maelor is pleased to announce that the Company has conditionally
agreed to acquire Speciality European Pharma International AG (''SEPI AG''), a
wholly-owned subsidiary of Speciality European Pharma Limited. SEPI AG is a
Swiss-based pharmaceutical company with a profitable portfolio of specialist
hospital pharmaceutical products. The consideration for the Acquisition is to be
satisfied by an initial cash payment of £9.25 million and up to a further £5
million in deferred consideration, conditional on SEPI AG meeting certain
regulatory criteria and sales targets.

In addition, Maelor announces a proposed 1 for 7 Share Consolidation, to become
effective on 22 April 2008.

In order to satisfy the cash component of the Acquisition and to enable the
Company to implement its strategy, the Board is also proposing to raise £10.0
million (£9.2 million after estimated expenses) by way of a Placing of
13,000,000 Consolidated Ordinary Shares at 77 pence per Placing Share
(equivalent to 11 pence on an unconsolidated basis). The Placing has been
arranged by Noble. The Placing is conditional upon, inter alia, the passing of
the Resolutions by the Shareholders at a general meeting of the Company. If the
Resolutions are duly passed at the General Meeting, and the other conditions set
out in the Placing Agreement are met, the Placing Shares will be admitted to
trading on AIM.

The Company is also proposing to: change its name to IS Pharma; adopt New
Articles; and reduce its capital, all of which require approval from
Shareholders at a general meeting.

Notice of the General Meeting, which is to be held at 11:00 a.m. on 21 April
2008 at Morrison & Foerster MNP, 7th Floor, CityPoint, One Ropemaker Street,
London EC2Y 9AW, is set out in a circular to be posted to shareholders today
(the "Circular").


Background to and reasons for Acquisition

Following the strategic review conducted by the new management team in early
2006, the Board has focused on delivering its vision of establishing a
significant specialist hospital medicines business. This is being delivered
through the acquisition and development of synergistic late-stage and launched
products which can be rapidly grown to increase turnover and profit.

The acquisition of SEPI AG represents the next step in the implementation of the
Board's strategy. SEPI AG is a virtual and profitable specialist hospital
business with a pro forma EBITDA of c. £0.9 million for the year ended December
2007. The primary asset in the portfolio is Haemopressin. This product is
generating the majority of revenue and offers strong growth potential both in
existing markets and through its anticipated regulatory approvals across Europe
and the US. Maelor is the existing distributor for Haemopressin in the UK and
Ireland, so the product is well known to the Company.



Summary of key advantages of Acquisition

*   An acquisition fully aligned with Maelor's stated strategy of building 
    a focused late-stage pharmaceutical and medical devices business in the
    specialist hospital medicine sector.

*   A further step in the transformation of the business creating a growing 
    and significantly profitable Enlarged Group, driven in particular by
    existing and significant potential sales from the critical care drug,
    Haemopressin.

*   Consolidates a presence in the major European markets through a distributor 
    network outside the UK and enables a low-risk step into the US
    market through a licensee.

*   As a virtual business it can be readily integrated into Maelor's existing 
    infrastructure with minimal cost and distraction.

*   A catalyst for further change across the Company including adoption of the 
    name IS Pharma - ''International Speciality Pharmaceuticals'' to more
    closely reflect the nature of the business.

*   Consolidation of the Company's existing shares on a 1 for 7 basis and
    restructuring of the balance sheet.

Assuming the initial consideration of £9.25 million, the Company will pay c.10
times pro forma EBITDA, for the year ended December 2007, for the business. This
is considered by the Board to be consistent with comparable transactions that
involve the purchase of commercialised speciality Pharma products. Given the
synergy of the acquired portfolio the Board considers the Acquisition to be in
the best interest of the shareholders.


Information on SEP International AG

SEPI AG is engaged in the commercialisation of its portfolio of hospital
specialist products. The current owners of SEPI AG, Speciality European Pharma
Limited, have taken a strategic decision to focus on expanding their franchise
in urology. As a result, SEPI AG's portfolio of hospital specialist products is
no longer considered core to its business and the divestment will provide an
opportunity to further invest in the development of their retained portfolio.
Maelor has been actively monitoring the progress of SEPI AG for some time most
notably due to the specialist nature and complementary fit of Haemopressin with
existing Maelor products. This is particularly relevant given Maelor's
distribution rights for Haemopressin in the UK and Irish market.


Assets within the SEPI AG portfolio include:

*   Haemopressin
*   Cortirel(R)
*   Distribution rights in France for Cryogesic

SEPI AG is an entirely virtual business with no infrastructure or employees,
thus making it easy to integrate into Maelor's existing business.


Haemopressin

The main product of SEPI AG's portfolio is Haemopressin, a rapidly acting
vasoconstrictor. This specialist injectable is used to manage complications
associated with liver disease due to cirrhosis. While liver cirrhosis is
commonly associated with alcoholism, it is increasingly being diagnosed as a
result of hepatitis and obesity. Haemopressin is used to treat bleeding
oesophageal varices, essentially varicose veins in the gullet which burst and
without intervention are life threatening. The product has important expanded
use potential in the treatment of hepatorenal syndrome, a serious condition
affecting critically ill patients with chronic liver disease. The Board projects
that the worldwide market for Haemopressin is in the range of £50 million to £70
million.

Haemopressin is used in the hospital specialist sector, specifically in critical
care, A&E, gastroenterology and hepatology. Maelor currently has UK/Ireland
distribution rights for Haemopressin (which was previously acquired through the
Acorus transaction) and is therefore very familiar with the product. The
acquisition of Haemopressin will also create immediate margin improvement on
forecasted sales of Haemopressin into UK/Ireland.

Haemopressin is currently sold through distributors in, Germany, Switzerland,
Austria, Hungary, Korea, Pakistan and Taiwan. Furthermore, the product is
progressing through the regulatory process in Europe, where the Board expects to
obtain regulatory approval in the UK, Ireland, France, Scandinavia, Italy,
Benelux, Portugal and Spain. In the US the licensee has been granted orphan drug
designation and fast track status for the product and the regulatory file for
Haemopressin will be submitted as a rolling NDA for the indication of
hepatorenal syndrome.

In addition, the Board believes there are further potential international
markets for this product which can be accessed through distributor
relationships. The Board understands that currently there is only one other
direct competitor product to Haemopressin in the EU (Glypressin) and currently
no competing product of this kind in the US. The Board believes that further
barriers to entry of competitors have been established through an exclusive
manufacturing agreement with its suppliers. Once approved in the US for the
treatment of hepatorenal syndrome, Haemopressin will enjoy seven years
exclusivity in that market prior to the approval by the US regulatory
authorities of any direct competitor.


Global platform for growth

The Board believes that Haemopressin will provide a low risk presence for the
Company in the US and major EU markets giving the Company the potential to
create a global business.


Further SEPI AG products

Further products within SEPI AG's portfolio include Cortirel and the return of
the French distribution rights of Cryogesic, an existing rapidly growing Maelor
brand. The Board is taking a conservative approach and is not making additional
revenue forecasts for Cortirel and Cryogesic at the moment.


Cortirel

Cortirel(R) has been developed for the diagnosis of pituitary-adrenal function
(e.g. Cushing's disease). Cortirel works by stimulating the release of ACTH
(adrenocorticotrophic hormone; corticotrophin) from the pituitary gland. ACTH
then stimulates the release of cortisol from the adrenal glands. Thus, Cortirel
can test the corticotropic function of the pituitary and the adrenal glands and
can differentiate between hypothalamic, pituitary and adrenal defects of
inappropriate cortisol release. Cortirel is used predominantly by
Endocrinologists. Cortirel obtained marketing approval in Germany in August
2002.


Cryogesic

Following the Acquisition, the French distribution rights of Cryogesic will
return to Maelor. Cryogesic is a growing brand in Maelor's portfolio that
provides a fast-acting cryo-analgesic used in a number of specialist clinical
settings, particularly by anaesthetists, to numb the skin before minor
procedures. Registered as a medical device across Europe, the product is
available in the UK and Ireland in a range of presentations and has seen steady
growth since introduction. Recently conducted market research suggests further
growth potential from active promotion and expansion into new specialist niches.


Related party transaction

Under AIM Rule 13, the Acquisition is considered to be a related party
transaction by reason of the fact that Geoff McMillan, non-executive Chairman of
Maelor, is also Chief Executive Officer of Speciality European Pharma Limited.

The Independent Directors, who have been so advised by Noble, consider the
Acquisition to be fair and reasonable so far as the Shareholders of Maelor are
concerned. In providing advice to the Independent Directors, Noble has taken
into account the Directors' commercial assessment of the Acquisition.

The Independent Directors consider the Acquisition to be in the best interests
of the Shareholders of Maelor as a whole and recommend that the Shareholders of
Maelor vote in favour of the Acquisition, as they intend to do so in respect of
their own beneficial shareholdings amounting in aggregate to 7,324,211 Ordinary
Shares, representing approximately 5.9 per cent. of the current issued share
capital of Maelor (excluding treasury shares).


Reasons for the Placing and use of proceeds

The net proceeds of the Placing receivable by the Company will be approximately
£9.2 million (after estimated expenses). These proceeds will be used to part
finance the acquisition of SEPI AG.

The Placing Shares will represent 42.3 per cent. of the enlarged issued share
capital of the Company immediately following Fourth Admission.

The Placing Shares will, on the relevant Admission, rank pari passu in all
respects with the Existing Consolidated Ordinary Shares and will have the right
to receive all dividends and other distributions thereafter declared, made or
paid in respect of the issued ordinary share capital of the Company.

In order for Maelor to comply with the requirements of the Income Taxes Act 2007
and for the Placing Shares to be eligible for the purposes of EIS and qualifying
holdings for the purposes VCTs, the Placing Shares will be separately issued and
admitted to trading on AIM on four separate consecutive days:


(i)    First Admission and commencement of dealings in the First
       EIS/VCT Shares on AIM 8:00 a.m. on 22 April 2008;

(ii)   Second Admission and commencement of dealings in the Second
       VCT Shares on AIM 8:00 a.m. on 23 April 2008;

(iii)  Third Admission and commencement of dealings in the Third VCT
       Shares on AIM 8:00 a.m. on 24 April 2008; and

(iv)   Fourth Admission and commencement of dealings in the Non-EIS/
       VCT Shares on AIM 8:00 a.m. on 25 April 2008.


In the event that:

(i)    First Admission becomes effective by 8.00 a.m. on the Long
       Stop Date but Second Admission does not,

(ii)   (ii) or that First Admission and Second Admission become
       effective by 8.00 a.m. on the Long Stop Date but the Third Admission 
       does not,

(iii)  or that First Admission, Second Admission and Third Admission become 
       effective by 8.00 a.m. on the Long Stop Date but the Acquisition fails to
       complete (whether by reason of the Fourth Admission failing to become 
       effective or otherwise) by 5.00 p.m. on the Long Stop Date,

the proceeds relating to First Admission and/or Second Admission and/or Third
Admission, as the case may be, will be invested on a short term basis while the
Board considers how best to return such proceeds to the relevant Placees.

Further details of the Placing Agreement are set out in paragraph 3 of Part II
of the Circular.


Principal terms of proposed Acquisition

The Company has agreed to acquire the entire issued share capital of SEPI AG.
SEPI AG is a privately owned Swiss-based company. The consideration for the
Acquisition is to be satisfied by a cash payment of £9.25 million on completion
and additional deferred cash consideration of up to £5 million subject to
meeting certain regulatory criteria and sales targets.

The milestones include a £2 million payment on first regulatory approval of
certain products in the United Kingdom, France and Italy. Furthermore five
milestone payments of £0.6 million each (totalling £3 million) are linked to
certain sales targets. However no two of such payments may be within 12 months
of each other.

To fund the Acquisition, the Board is proposing to raise £10.0 million (£9.2
million after estimated expenses) by way of a Placing of 13,000,000 Consolidated
Ordinary Shares at 77 pence per Placing Share (equivalent to 11 pence on an
unconsolidated basis). The balance is to be funded through debt by way of an
approved bank facility with a drawdown limit of £8.0 million.


The Acquisition Agreement is conditional, inter alia, upon:

(a) First Admission, Second Admission, Third Admission and Fourth Admission
    occurring on or before 30 June 2008;

(b) no fact or circumstance having occurred which would amount to there having
    been a material adverse change in the business carried on by SEPI AG; and

(c) approval of the Acquisition by the Shareholders at the General Meeting.


It is expected that completion of the Acquisition and Fourth Admission will take
place on 25 April 2008.


Maelor unaudited results for the six months ended 30 September 2007

The Company announced its unaudited results for the six months ended 30
September 2007 on 6 November 2007. During this period Maelor generated a
turnover of £3.1 million (six months ended 30 September 2006: £1.3 million) and
profit before tax of £0.7 million (six months ended 30 September 2006: loss
£0.07 million). The Company also announced interim earnings per share of 0.48
pence (six months ended 30 September 2006: loss 0.22p) and the net cash balance
increased to £1.7 million (six months ended 30 September 2006: £1.1 million).


Recent developments and current trading

The Directors are confident that Maelor continues to deliver against its clear
objectives and that its business is exceeding the Board's expectations for the
financial year 2008. The Board looks into the future with confidence.

The acquisition of Acorus, the successful specialist pharmaceuticals and medical
devices company, which was finalised in May 2007 is now fully integrated and
continues to perform above expectations.

Acorus brought a portfolio of revenue generating assets primarily focused on
critical care and neurology, which Maelor identified as having high potential
for organic growth.

Maelor announced in February 2008, ahead of schedule, the UK launch of Aloxi(R),
a new generation treatment for chemotherapy induced nausea and vomiting. Aloxi,
which is licensed for the UK from HELSINN HEALTHCARE SA, a Swiss pharmaceutical
group, is a patented second generation 5-HT3 antagonist, differentiated by its
strength on initiation and the duration of its activity. It obtained a
centralised registration in Europe in 2005, with an indication for the
prevention of acute nausea and vomiting associated with highly emetogenic cancer
chemotherapy and the prevention of nausea and vomiting associated with
moderately emetogenic cancer chemotherapy. Aloxi is being successfully marketed
in 40 countries, with annual sales in 2006 of $323 million worldwide, according
to IMS figures. The UK 5-HT3 market is worth £50 million according to IMS
figures at September 2007.

At the same time Maelor announced the completion of a new five year agreement
with Bard Limited (Bard) for distribution of OptiFlo catheter maintenance
solutions (OptiFlo is a trademark of C.R. Bard, Inc. or an affiliate). The
agreement which covers the UK and Ireland continues the relationship between
Bard and Maelor that has driven the growth of the brand to become the market
leading urinary catheter maintenance solutions in the UK.

The Board considers the completion of the acquisition of Speciality European
Pharma International as an appropriate time to change the name of the Company to
IS Pharma, which stands for International Speciality Pharmaceuticals and more
accurately represents the transformed business. Similarly the Board intends to
consolidate the currently issued shares on a 1 for 7 basis and to undertake a
balance sheet restructuring.

Following the acquisition of SEPI AG, IS Pharma will have evolved to having a
presence in all key European markets, a first step into the US market which has
been risk-reduced through a licensing relationship and distributorships in a
number of key developing markets.

The business will be well positioned to drive organic growth through its six
launched brands, including Haemopressin. In addition, there are a further five
product launches scheduled over the next two years.

The Board considers the growing launched portfolio, increased geographical reach
and rich pipeline will position the business strongly for growth.

The Enlarged Group will also continue to actively seek additional synergistic
specialist products and portfolios to further accelerate its growth.


The Placing

In order to satisfy the consideration for the Acquisition and to enable the
Company to continue to implement its strategy, the Board is proposing to raise
£10.0 million (before expenses) by way of a Placing of 13,000,000 Consolidated
Ordinary Shares at 77 pence per share (equivalent to 11 pence on an
unconsolidated basis). The Placing has been arranged by Noble. The Placing
Agreement and the issue of the Placing Shares is conditional upon the passing of
the Resolutions and Fourth Admission having occurred. Further details of the
Placing Agreement are set out in Part II of the Circular.


Bank facilities

The Company has entered into a Revolving Credit Facility with the Bank of
Scotland plc for an aggregate amount of up to £8.0 million. This facility may be
used towards financing part of the acquisition and any potential future
acquisitions by the Company.


Capital Reduction and Share Consolidation

The Board believes that the Company would benefit from a re-basing of its share
price and nominal value together with a simplification of its capital structure
(by the cancellation of the Share Premium Account which will in turn
significantly reduce the deficit on its profit and loss account reserve).


This will be achieved by:

(i)   consolidating the Existing Ordinary Shares on the basis of
      1 Ordinary Share for every 7 Ordinary Shares held (the ''Share 
      Consolidation'');

(ii)  increasing the authorised share capital of the Company to
      £28,000,000 by creating an additional 11,428,572 Consolidated Ordinary 
      Shares; and

(iii) cancelling the Share Premium Account.


Further details of the 1 for 7 Share Consolidation, the cancellation of the
Share Premium Account and the proposed increase in the Company's authorised
share capital are set out in the Circular.


Proposed Name Change to IS Pharma

It is proposed that in conjunction with the Acquisition the Company change its
name to ''IS Pharma plc''. The Board believes that changing the Company's name
to IS Pharma (which expanded means ''International Speciality Pharmaceuticals'')
better reflects the positioning of the Company as a specialist pharmaceuticals
and medical devices company with an internationally marketed and distributed
portfolio of products. Authority for the change of name will be sought at the
General Meeting.


Adoption of New Articles of Association

The Board is proposing to adopt New Articles of Association in order to update
the Company's Current Articles of Association primarily to take account of
changes in English company law brought about by the Companies Act 2006.
Authority for the adoption of New Articles of Association will be sought at the
General Meeting. The principal changes introduced in the New Articles are
summarised in the Appendix to the Circular.


Definitions

The following definitions apply throughout this announcement unless the context requires
otherwise:

''Acorus''                                   Acorus Therapeutics Limited.

''Acquisition''                              the proposed acquisition, by the Company, of the
                                             entire issued share capital of SEPI AG.

''Acquisition Agreement''                    the conditional agreement, dated 28 March 2008,
                                             between SEP and the Company relating to the sale
                                             and purchase of the entire issued share capital of
                                             SEPI AG, more particularly described at Part II of
                                             the circular, dated 28 March 2008.

''Act'' or ''Companies Act''                 the Companies Act 1985, as amended by the Companies
                                             Act 1989 or repeated and replaced by the Companies
                                             Act 2006 to the extent such statute is in force at
                                             the date of the circular, dated 28 March 2008.

''Admission''                                First Admission and/or Second Admission and/or
                                             Third Admission and/or Fourth Admission, as the
                                             context may require or permit.

''AIM''                                      AIM, an exchange regulated market operated by the
                                             London Stock Exchange.

''AIM Rules''                                the AIM Rules for Companies published by the London
                                             Stock Exchange from time to time (including,
                                             without limitation, any guidance notes or
                                             statements of practice) which govern the rules and
                                             responsibilities of companies whose shares are
                                             admitted to trading to AIM, as amended from time to
                                             time.

''Board'' or ''Directors''                   the current directors of Maelor, being Geoff
                                             McMillan, Tim Wright, Nigel Goldsmith, Ann Hardy,
                                             John Gregory and Peter Murray.

"Circular"                                   the circular to shareholders dated 28 March 2008.

''Company'' or ''Maelor''                    Maelor plc, a company incorporated in England and
                                             Wales under registered number 3337415.

''Consolidated Ordinary Shares''             the ordinary shares of 70 pence each in the capital
                                             of the Company following the Placing.

''Court''                                    the High Court of Justice, Chancery Division.

 ''Current Articles'' or ''Current Articles  the current articles of association of the Company.
of Association''

''EIS''                                      the Enterprise Investment Scheme.

''Enlarged Group''                           the Group, including SEPI AG, following completion
                                             of the Acquisition.

''EU''                                       the European Union established by treaty made at
                                             Maastricht on 7 February 2007.

''Existing Ordinary Shares''                 the 124,280,833 Ordinary Shares of 10 pence each
                                             currently in issue.

 ''Existing Consolidated Ordinary Shares''   the 17,754,404 Consolidated Ordinary Shares of 70
                                             pence each in issue immediately following the
                                             completion of the Share Consolidation.

''First Admission''                          the admission of the First EIS/VCT Shares to
                                             trading on AIM becoming effective in accordance
                                             with the AIM Rules.

''First EIS/VCT Shares''                     the 2,288,918 Consolidated Ordinary Shares which
                                             are to be placed with certain qualifying investors
                                             under the EIS, and/or, if applicable, with certain
                                             VCTs (being those which are investing funds they
                                             have raised on or after 6 April 2007).

''Fourth Admission''                         the admission of the Non-EIS/VCT Shares to trading
                                             on AIM becoming effective in accordance with the
                                             AIM Rules.

''General Meeting''                          the general meeting of the Company to be held at
                                             11:00 a.m. on 21 April 2008 at the offices of
                                             Morrison & Foerster MNP, Citypoint, One Ropemaker
                                             Street, London EC2Y 9AW, notice of which is set out
                                             at the end of the circular, dated 28 March 2008.

''Group''                                    Maelor and its subsidiary undertakings at the date
                                             of the circular, dated 28 March 2008.

''Independent Directors''                    the Directors other than Geoff McMillan.

''IS Pharma''                                IS Pharma plc, the proposed new name of Maelor plc
                                             to become effective on 25 April 2008, subject to
                                             passing the resolutions 6 at the General Meeting.

''London Stock Exchange''                    London Stock Exchange plc.

''Long Stop Date''                           30 June 2008

''New Articles'' or ''New Articles of        the new articles of association to be adopted by
Association''                                the Company subject to the passing of resolution 7.

''Noble''                                    Noble & Company Limited, the Company's nominated
                                             adviser and broker, which is authorised and
                                             regulated by the FSA.

''Non-EIS/VCT Shares''                       the 1,878,000 Placing Shares other than the First
                                             EIS/VCT Shares, the Second VCT Shares and the Third
                                             VCT Shares.

''Notice of General Meeting'' or ''Notice''  the notice convening the General Meeting set out at
                                             the end of the circular, dated 28 March 2008.

''Ordinary Shares''                          ordinary shares of 10 pence each in the capital of
                                             the Company.

''Placees''                                  the subscribers of Placing Shares pursuant to the
                                             Placing.

''Placing''                                  the placing, by Noble on behalf of the Company, of
                                             the Placing Shares at the Placing Price pursuant to
                                             the Placing Agreement.

''Placing Agreement''                        the conditional agreement, dated 28 March 2008,
                                             between the Company, the Directors and Noble
                                             relating to the Placing, summary details of which
                                             are set out in paragraph Part II of the circular,
                                             dated 28 March 2008.

''Placing Price''                            77 pence per Placing Share.

''Placing Shares''                           the Consolidated Ordinary Shares to be issued by
                                             the Company at the Placing Price pursuant to the
                                             Placing.

''Resolutions''                              the resolutions set out in the Notice of General
                                             Meeting set out at the end of the circular, dated
                                             28 March 2008.

''Second Admission''                         the admission of the Second VCT Shares to trading
                                             on AIM becoming effective in accordance with the
                                             AIM Rules.

''Second VCT Shares''                        the 546,600 Consolidated Ordinary Shares which are
                                             to be placed with certain VCTs (being those which
                                             are investing funds they have raised from 6 April
                                             2006 but prior to 6 April 2007).

''SEP''                                      Speciality European Pharma Limited.

''SEPI AG''                                  Speciality European Pharma International AG.

''Share Consolidation'' or ''Consolidation'' the proposed consolidation of the share capital of
                                             the Company as described in Part I of the circular,
                                             dated 28 March 2008, and in Resolution 2 in the
                                             Notice of General Meeting.

''Share Premium Account''                    the amount standing to the credit of the Company's
                                             share premium account at the date of the circular,
                                             dated 28 March 2008.

''Shareholders''                             holders of Ordinary Shares and, following
                                             implementation of the Consolidation, holders of
                                             Consolidated Ordinary Shares.

''Third Admission''                          the admission of the Third VCT Shares to trading on
                                             AIM becoming effective in accordance with the AIM
                                             Rules.

''Third VCT Shares''                         the 8,286,482 Consolidated Ordinary Shares which
                                             are to be placed with certain VCTs (being those
                                             which are investing funds they have raised prior to
                                             6 April 2006).

''VCT''                                      Venture Capital Trust.

''$''                                        the lawful currency of the United States.

''£''                                        the lawful currency of the United Kingdom.








Glossary of scientific terms

''5-HT3 antagonist''                         a class of medications which act as receptor
                                             antagonists at the 5-hydroxytryptamine-3 receptor
                                             (5-HT3 receptor), a subtype of serotonin receptor
                                             found in terminals of the vagus nerve and in
                                             certain areas of the brain.

''cirrhosis''                                a consequence of chronic liver disease
                                             characterised by replacement of liver tissue by
                                             fibrous scar tissue as well as regenerative nodules
                                             (lumps that occur as a result of a process in which
                                             damaged tissue is regenerated), leading to
                                             progressive loss of liver function. Cirrhosis is
                                             most commonly caused by alcoholism and hepatitis C,
                                             but has many other possible causes.

''emetogenic cancer chemotherapy''           cancer chemotherapies which cause nausea and
                                             vomiting.

''endocrinologist''                          a doctor who specializes in treating disorders of
                                             the endocrine system, such as diabetes,
                                             hyperthyroidism, and many others.

''gastroenterology''                         the branch of medicine studying the digestive
                                             system and its disorders.

''hepatitis''                                injury to liver characterised by presence of
                                             inflammatory cells in the liver tissue.

''hepatology''                               the branch of medicine that incorporates study of
                                             liver, gallbladder, biliary tree and pancreas as
                                             well as management of their disorders.

''hepatorenal syndrome''                     acute renal failure that occurs in the setting of
                                             cirrhosis or fulminant liver failure associated
                                             with portal hypertension, usually in the absence of
                                             other disease of the kidney.

''NDA''                                      abbreviation for New Drug Application, the
                                             application needed to get a new drug approved in
                                             the United States by the Food and Drug
                                             Administration.

''orphan drug''                              the granting of the orphan drug status is designed
                                             to encourage the development of drugs which are
                                             necessary but would be prohibitively expensive/
                                             unprofitable to develop under normal circumstances.
                                             In the United States, an orphan drug is any drug
                                             developed under the Orphan Drug Act of January
                                             1983, a federal law concerning rare diseases,
                                             defined as diseases affecting fewer than 200,000
                                             people in the United States. In Europe qualifying
                                             low prevalence is taken as prevalence of less than
                                             5 per 10,000 in the community.

''oesophageal varices''                      extremely dilated sub-mucosal veins in the
                                             oesophagus. They are most often a consequence of
                                             portal hypertension, such as may be seen with
                                             cirrhosis; patients with oesophageal varices have a
                                             strong tendency to develop bleeding.

''oesophagus''                               the muscular tube through which food passes from
                                             the pharynx to the stomach.

''vasoconstrictor''                          a vasoconstrictor causes a narrowing of the blood
                                             vessels as a result of contraction of the muscular
                                             wall of the vessels.




                      This information is provided by RNS
            The company news service from the London Stock Exchange
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ACQUBOARWSROUUR