Sinclair IS Pharma plc Acquisition of Advanced Bio-Technologies Inc.

Sinclair IS Pharma plc (AIM:SPH.L) ("Sinclair IS" or "the Company"), the international specialty pharmaceutical company, announces that it has entered into an agreement to acquire Advanced Bio-Technologies, Inc. ("ABT"), a dermatological products company focused on scar treatment and prevention from HealthEdge Investment Partners, LLC and certain other shareholders (the "Vendors") for a total consideration of £21.0m.  The acquisition gives Sinclair IS ownership of ABT's flagship scar prevention and treatment product Kelo-cote® in all the remaining markets not already licenced by Sinclair IS outside the US, with the most important markets being Brazil, Korea and China. Sinclair IS previously licenced the rights to Kelo-cote® in its core European markets, the UK, France, Germany, Italy and Spain.

The acquisition has been structured to exclude ABT's existing US business and infrastructure and its subsidiaries (SOS Brands, Inc. and ABT-Belli Materna, Inc.). ABT's international division generated revenues of $6.1 million in its last full financial year to 31 December 2010, representing growth of 19% over the prior year, and delivered EBITDA of $3.9 million. Based on the results in the first ten months of the current financial year to 30 October 2011, ABT's international revenues are expected to grow by approximately 40% by the end of 2011, including revenues from Sinclair IS in Europe.

The total consideration is valued at £21.0 million (based on the closing price on 7 December 2011 of 21.38p per share) and includes inventory and debtors of c£0.9 million. The consideration comprises £16.7 million in cash payable on completion plus the issue of 19,990,000 ordinary shares of 1p each in the Company ("Consideration Shares") to the Vendors.  The acquisition of ABT is expected to complete within 5 days ("Completion").  Following Completion, application will be made for the Consideration Shares to be admitted to trading on AIM. The Consideration Shares will be subject to a lock-up arrangement (see below). The Company is using the cash generated from the recent £11.1 million disposal of Mysoline, as announced by the Company on 15 November 2011, with the balance being drawn down from the Company's existing debt facility with Clydesdale Bank Plc.

The acquisition will be earnings accretive to Sinclair IS in the first full financial year, following a period of marketing investment.  Kelo-cote® will immediately become Sinclair IS's second most important product/brand after Flammazine in terms of contribution. The acquisition is in line with the Company's strategy to commercialise fewer, bigger assets while using just one brand name globally. Sinclair IS now has a portfolio with four key products that in aggregate deliver over 40% of operations EBITDA before central overheads.

Scar reduction is a large and rapidly growing market. Silicone is recommended as the first‐line treatment for scar management in the most recognised international guidelines. Kelo-cote® is a patented topical silicone gel range available both in prescribed and over the counter formats for the prevention and management of abnormal scars. The product is the most researched and published silicone technology available, which is widelyrecognized amongst physicians worldwide.

 Kelo-cote® fits into two of the Company's core markets, straddling dermatology and wound care. Sinclair IS has identified a number of opportunities to grow the brand through entry into new territories and by developing line-extensions to augment growth. With revenues of approximately $2m in Brazil, Kelo-cote® is already well established and is expected to serve as a platform for the Company's Latin American ambitions. In Asia, Kelo-cote® is also well established, generating revenues of $1.1m in South Korea and is also sold in several other countries in the region including China, Japan and Australia. In Europe, where Sinclair IS already licences Kelo-cote® rights for the UK, Germany, France, Italy and Spain, the acquisition will significantly enhance margins in these territories.

Historically, ABT has intensively marketed Kelo-cote®, strengthening key opinion leaders' product endorsement and hosting several annual distributor roundtables worldwide. Sinclair IS expects to increase overall marketing spend and to leverage Kelo-cote® brand equity, but will only require two additional members of staff, with existing country operations and business development infrastructure positioned to grow the franchise.

Chris Spooner, CEO, commented: "This accretive deal is a clear demonstration of the value Sinclair IS can create through leveraging our existing platform with targeted product acquisitions, as well as highlighting the Company's commitment to simplifying the business model with fewer, larger brands with international potential. We believe there is clear scope to augment the franchise with new launches, while substantial existing revenues from Brazil, South Korea and other key countries will further our ambitions in emerging markets".