NGG Nextgen

TIDMNGG

RNS Number : 7254O

NextGen Group PLC

22 September 2011

NextGen Group plc ("NextGen" or the "Company")

Business Update and Convertible Loan Agreement of EUR453,000

Business Update

NextGen currently has a revenue generating US-subsidiary called NextGen Sciences Inc, which is building a reputation for the discovery and qualification (testing) of protein biomarkers as a contract research organisation (CRO) using mass spectrometry technology. This business is primarily (although not exclusively) focused on revenue growth through biomarker discovery and qualification in the Oncology (breast, prostate and colorectal cancers) and CNS (Alzheimer's, Parkinson's, and multiple sclerosis) disease areas. The board intends to grow revenues through 'off-the-shelf' product sales and through custom services for clients. The Company's primary target clients are pharmaceutical and biotechnology companies, large and small, operating in these therapeutic areas. The Company's products (protein assays for human plasma/serum and cerebrospinal fluid (CSF) are applicable to discovery R&D supporting both pre-clinical and clinical phases of drug development for the purposes of identifying pharmacodynamic (PD), disease progression and patient stratification biomarkers.

Discovery and qualification of biomarkers for disease progression and patient stratification markers have potential further applications in yielding personalized and companion diagnostics to support the personalization of healthcare.

The company is currently expanding its Plasma/Serum and CSF assays. This will enable further therapeutically relevant assays to be marketed and provide an increasingly attractive platform for clients to discover and qualify biomarkers that address their biological/clinical questions. The business is focused on developing products that are operationally scalable i.e. amenable to high-throughput and economies of scale.

Further, the Company has begun the implementation of plans to establish GLP operational standards for its sample testing activities by the end of H1 2011.

NextGen plans to create a second US-subsidiary to exploit the technical capabilities of the NextGen Sciences Inc business. This new 'diagnostics' business will contract with NextGen Sciences Inc where the latter will perform all discovery, assay development and biomarker qualification experiments. The 'diagnostics' business will have a core commercial and scientific team that will oversee the selection, implementation and commercialisation of work programmes.

The 'diagnostics' business will focus on the discovery and qualification of protein biomarkers in the Oncology and CNS areas for the purposes of generating Intellectual property (IP) around specific biomarkers and assays derived from the biomarkers encompassed by the IP. It will undertake these discovery and development programmes as partnerships/collaborations with key scientists and clinicians and with selected pharma and biotech companies. It will provide sole or co-investment into the development of these products and will retain IP and assay usage rights dependent upon specific agreements with clients.

Revenue will be generated through the licensing and/or sale of biomarker IP and assays to pharma, biotech, diagnostic and central testing laboratory facilities. In the longer term, the 'diagnostics' business may seek to establish CLIA (Clinical Laboratory Improvements Amendments). As with the CRO business, the 'diagnostics' business will target biomarkers relevant to pharmacodynamics, disease progression and patient stratification.

Convertible Loan Agreement

NextGen announces that, in order to provide the necessary working capital to exploit the technical capabilities of NextGen Sciences Inc, it has entered into a convertible loan agreement for the provision of funding of EUR453,000. This funding will be used to provide general working capital for the Company and its subsidiaries, which the Directors believe will be sufficient for its current requirements.

The convertible loan agreement is with Alpha 4 Concepts GmbH and the terms of the loan, which is for a period ending on 30 September 2012, include a coupon of 12% pa and the loan is repayable on 7 days' notice.

The loan (plus interest) shall be convertible, at the lender's option no later than two business days following the end of the loan period, into ordinary shares in the Company at a price of 0.1p per share plus one warrant for every share issued, with the warrants being exercisable for 3 years from the date of grant.

The lender has requested that nanotecquity AG receive a monitoring fee, payable by the Company, of EUR4,500 per month during the period of the loan.

In addition, the Company is to pay placing commission of 7% to OAR GmbH for its services in connection therewith.

Klaus Rosenau is a director of both nanotecquity AG and the Company, and nanotecquity AG and the Company have 3 mutual shareholders which between them own almost 100% of nanotecquity AG and just under 20% of the Company. Accordingly, the payment of commission to nanotecquity AG comprises a related party transaction pursuant to the AIM Rules. The Directors of NextGen (other than Klaus Rosenau), having consulted with the Company's Nominated Adviser, Seymour Pierce Limited, consider that the payment of the placing commission to nanotecquity AG, is fair and reasonable insofar as the Company's shareholders are concerned.

For further details please contact:

Klaus Rosenau, Chairman +49 160 5516756

NextGen Group

Freddy Crossley/Nicola Marrin 020 7107 8000

Seymour Pierce Limited

Notes to Editors:

NextGen Group PLC (AIM: NGG) is a provider of biomarker services for pharmaceutical and biotech companies globally. Using advanced techniques, such as Multiple Reaction Monitoring (MRM) mass spectrometry analysis, the Company is developing a portfolio of robust assays for testing clinical samples for drug safety and efficacy, and the development of personalized treatment for patients.

NextGen Sciences Inc, a wholly owned subsidiary of NextGen Group PLC. NextGen Sciences is the operational part of the Group and headquartered in Ann Arbor, Michigan, NextGen Sciences' range of services, which include biomarker discovery, assay development, validation and testing are employed by its customers as a key part of the biomarker-based drug and diagnostic development process.

For more information visit www.nextgensciences.com.

This information is provided by RNS

The company news service from the London Stock Exchange

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