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13/08/2014

IP Group plc - Portfolio company Diurnal announces £6m funding round

IP Group plc (LSE: IPO) (“IP Group” or “the Company” or “the Group”), the developer of intellectual property based businesses, is pleased to note that portfolio company Diurnal Limited ("Diurnal") has today announced a fundraising of up to £6 million.

Diurnal is a spin-out company from the University of Sheffield developing products for the treatment of hormone deficiency. Its lead product Chronocort® was recently the subject of a positive Phase 2 trial in the treatment of Congenital Adrenal Hyperplasia (“CAH”). Chronocort® is due to enter pivotal Phase 3 studies in the first half of 2015.

IP Group has committed up to £4.1m of the £6m round which, if invested in full, would give the Group an undiluted beneficial interest of 51.7%. The full £6m fundraising is subject to certain regulatory milestones being met and will enable Diurnal to complete the Phase 3 programme for Chronocort® as well as advance certain other pipeline programmes.

Alan Aubrey, Chief Executive of IP Group, said: “This funding is intended to support Diurnal through its Phase 3 trial as it seeks to bring Chronocort® to market. Diurnal has made impressive progress this year and is a great example both of the latent value in IP Group’s Biotech division and of IP Group’s commitment to supporting later-stage portfolio companies.”

Chronocort® is a patented, modified-release, oral formulation of hydrocortisone that allows for release of the hormone in a manner that mimics the natural circadian rhythm. This approach has the potential to help patients suffering from diseases caused by cortisol deficiency, which include Congenital Adrenal Hyperplasia and Adrenal Insufficiency. Each of these diseases requires life-long treatment and Diurnal’s novel approach to drug delivery has the potential to significantly improve patients’ lives. Chronocort® has already received two related Orphan Drug designations from the European Medicines Agency, which afford ten years of market exclusivity after the grant of marketing authorisation in Europe.

CAH is a condition characterised by deficiency in cortisol, an essential hormone in regulating metabolism and the response to stress. CAH has been identified as an orphan disease in Europe where there are estimated to be approximately 30,000 sufferers, with a further 21,000 sufferers in the US. Current therapy for CAH - replacement of cortisol with synthetic steroids - is unable to simulate the natural circadian (24-hour) profile of cortisol release. Poor control of disease can result in precocious puberty in infants, virilisation and infertility, combined with fatigue and a poor quality of life, while overuse of steroid therapy can result in obesity, hypertension, diabetes, and osteoporosis.

Dr Melanie Goward, Deputy Fund Manager in Finance Wales’ Technology Venture Investments team said:

“Diurnal has made some significant achievements since receiving Finance Wales’ first investment in 2009.  With IP Group as its lead investor, it can now build on these achievements and forge ahead with Chronocort’s Phase three trials.

“Finance Wales was a cornerstone investor in Diurnal and our investment attracted Diurnal to Wales.  We have previously invested £1.7 million in the company in addition to our £1.76 million commitment in this latest round.

“Diurnal continues to be one of our leading portfolio companies and with our backing it has subsequently expanded its facilities at the Medicentre in Cardiff and recruited additional staff to support these latest trials.  These are exciting times for Diurnal as it has a number of products in development and we look forward to Chronocort’s successful launch.”