Posting of Circular

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO THE SAME WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

Renovo Group plc

("Renovo" or the "Company")

Following the announcement on 17 June 2011, Renovo is pleased to announce the publication today of a circular to shareholders regarding the Company's proposed restructuring plans (the "Circular").

On 3 March 2011, the Board announced that following the Phase III trial for Juvista(R) failing to meet its primary or secondary end points the Board was actively exploring all options to maximise shareholder value of the Company's cash and assets, including the possible sale of its clinical and preclinical programmes.

In light of the above strategy, the Board is asking that shareholders vote on the resolutions set out in the Notice of General Meeting contained in the Circular to:

-- cancel the listing of the Ordinary Shares on the Official List of the UKLA and to cancel trading on the London Stock Exchange's Main Market for listed securities (the "Delisting") and to seek admission to trading on AIM;

-- adopt New Articles of Association that are more appropriate for a company admitted to trading on AIM;

-- reduce the Company's capital by cancelling the amount standing to the credit of the share premium account and capitalising the amount standing to the credit of the merger reserve account by way of the issue of Capital Reduction Shares, and to cancel the Capital Reduction Shares, so as to create distributable reserves ("Capital Reduction"); and

-- approve the buyback of Ordinary Shares by the Company in the market ("Share Buy Back") and waive the requirement that Henderson Global Investors, as a result of the Share Buy Back, be obliged to make an offer for the Company pursuant to Rules 9 and 37 of the Takeover Code ("Rule 9 Waiver").

The circular will shortly be made available on the Company's website at http://www.renovo.com/circular. The circular has also been submitted to the National Storage Mechanism and will shortly be available for inspection at www.hemscott.com/nsm.do.

For further information:

Renovo

Investors should email plc@renovo.com

Additionally, investors may contact the company via:

Panmure Gordon

Andrew Burnett/ Aubrey Powell / Grishma Patel +44 (0)207 459 3600

Buchanan Communications

Tim Anderson/ Lisa Baderoon/ Catherine Breen +44 (0)20 7466 5000

A copy of this announcement will be published, subject to certain restrictions relating to persons resident in restricted jurisdictions, on Renovo's website at www.renovo.com. For the avoidance of doubt, the contents of this website are not incorporated into and do not form part of this announcement.

Expected Timetable of Principal Events

Latest time and date for receipt of Forms of Proxy or submission of proxy votes electronically - 10.00 a.m. on 8 September 2011

General Meeting - 10.00 a.m. on 12 September 2011
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Last day of dealings in Ordinary Shares on the Main Market and cancellation of listing of Ordinary Shares on the Official List - 8.00 a.m. on 24 October 2011
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Admission and commencement of dealings in Ordinary Shares on AIM - 8 a.m. 24 October 2011
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Expected date for confirmation of the Capital Reduction by the Court* - 19 October 2011
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Expected Effective Date of the Capital Reduction* - 1 December 2011
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Earliest possible date for commencement of the Share Buy Back by the Company - 2 December 2011
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* These times and dates are indicative only and will depend, amongst other things, on the date upon which the Court confirms the Capital Reduction

All references to time in this document are to London time.

Panmure Gordon (UK) Limited ("Panmure Gordon"), which is regulated in the United Kingdom by the Financial Services Authority, is acting solely for the Company in relation to the Delisting, Capital Reduction, Share BuyBack and Rule 9 Waiver and nobody else and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Panmure Gordon nor for providing advice in relation to the Delisting, Capital Reduction, Share BuyBack and Rule 9 Waiver or any other matter referred to in this announcement or the Circular.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO THE SAME WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

Proposed Delisting and Admission to AIM, adoption of New Articles of Association, Capital Reduction and cancellation of certain reserves, Share Buy Back by the Company and Rule 9 Waiver

1. Introduction

In light of the above strategy, the Board is proposing to:

-- adopt New Articles of Association that are more appropriate for a company admitted to trading on AIM;

-- approve the buyback of Ordinary Shares by the Company in the market ("Share Buy Back").

The board intends to propose the Resolutions, set out in the Notice of General Meeting attached to this document, to give effect to the above, and asks you to vote in favour of such Resolutions for the following reasons:

Resolution 1 - Delisting Resolution

The Directors believe that there will be significant benefits to the Company Delisting and seeking admission to trading on AIM as set out in further detail in Section 2 below. The Listing Rules require that if a Company wishes to cancel its listing on the Official List then it must seek the approval of not less than 75% of its shareholders in a general meeting (Listing Rule 5.2.5(2)). Accordingly, this special resolution is being sought to authorise the Board to cancel the Company's listing of Ordinary Shares on the Official List of the UKLA, remove such Ordinary Shares from trading on the London Stock Exchange's Main Market and to apply for admission of the Company's issued share capital to trading on AIM.

Resolution 2 - Capital Reduction Resolution

In order to facilitate the Share Buy Back by the Company, the Board is proposing that the Company create sufficient distributable reserves by means of the Capital Reduction. Chapter 10 of the Companies Act 2006 deals with reductions of share capital, and provides that a company that wishes to reduce its share capital, may do so if it obtains a special resolution of its shareholders, confirmed by the court (S.641(1)(b) Companies Act 2006). Accordingly, this special resolution seeks the approval of the Company's Shareholders to capitalise the amount standing to the credit of the merger reserve account by way of the issue of Capital Reduction Shares, and to cancel and reduce the amount standing to the credit of the share premium account and the Capital Reduction Shares to create distributable reserves. The Capital Reduction must take place in a series of sequential steps (and court hearings) in order to enable the Company to successfully eliminate its profit and loss deficit and create the necessary distributable reserves. This resolution is conditional upon the passing of Resolution 1 upon the Company being admitted to trading on AIM.

Resolution 3 - New Articles of Association

The Board is proposing to adopt New Articles of Association to take account the amendments allowed by the Companies Act 2006 and the Company's move to AIM. Section 21 of the Companies Act 2006, provides that a company may amend its articles of association by way of special resolution. Accordingly, this special resolution will adopt the New Articles of Association and replace the Current Articles of Association. This resolution is conditional upon the passing of Resolution 1 and Resolution 2 and upon the Company being admitted to trading on AIM.

Resolution 4 - BuyBack Resolution

The Company is proposing to seek Shareholders' authority for the Company to purchase up to 25 per cent. of the Ordinary Shares in issue as at the date of this document. Section 701 of the Companies Act 2006 requires that the approval of a company's shareholders is required in order for a company to be able to buy back its shares. At the time the Share Buy Back is conducted the Company will have its Ordinary Shares admitted to trading on AIM rather than the Official List and so the Listing Rules will not apply. The ABI Guidelines titled "Own Share Purchase" request that companies pose this resolution as a special resolution. Accordingly, this special resolution will permit the Company to purchase up to 25 per cent. of the Ordinary Shares in the market. This resolution is conditional upon the passing of Resolutions 1, 2, 3 and 5 and upon the Company being admitted to trading on AIM.

Resolution 5 - Whitewash Resolution

The buyback of Ordinary Shares pursuant to the authority being sought in the BuyBack Resolution, may result in Henderson's shareholding increasing above 30 per cent. which would result in Henderson being obliged to make an offer for the Company, pursuant to Rules 9 and 37 of the Takeover Code unless the Independent Shareholders vote in favour of waiving this requirement (the "Rule 9 Waiver"). This ordinary resolution is to approve the Rule 9 Waiver, which will be taken on a poll and in respect of which only Independent Shareholders will be entitled to vote.

As at the date of this document, Henderson Global Investors holds 53,414,860 Ordinary Shares representing approximately 28.05 per cent of the existing issued share capital of the Company.

Following completion of the proposed Share Buy Back, Henderson Global Investors interest in the issued share capital of the Company may increase to above 30 per cent. Accordingly, the Directors have sought and obtained from the Takeover Panel, subject to Shareholder approval, a dispensation from the obligation arising under Rule 9 of the Takeover Code ("Rule 9 Waiver") described in more detail in paragraph 8 below.

The Delisting and approval of the New Articles, Capital Reduction, Share Buy Back and the Rule 9 Waiver are conditional, inter alia, on the passing by Shareholders of the Resolutions at the General Meeting, which is being convened for 10.00 a.m. on 12 September 2011.

The purpose of this document is to:

(a) provide you with information about the Delisting and approval of New Articles, Capital Reduction, Share Buy Back and the Rule 9 Waiver;
(b) explain why the Board considers that the Delisting and approval of New Articles, Capital Reduction, Share Buy Back, the Rule 9 Waiver and the Resolutions are fair and reasonable and are in the best interests of the Company, the Independent Shareholders and the Shareholders as a whole; and
(c) explain why the Board unanimously recommends that Shareholders vote in favour of Resolutions 1 to 4 and that the Independent Shareholders vote in favour of Resolution 5 to be proposed at the General Meeting, as they intend to do in respect of their own beneficial holdings.

All of the Resolutions are inter-conditional so that if any of the Resolutions are not passed, the Delisting and adoption of New Articles, Capital Reduction, Share Buy Back and Rule 9 Waiver will not proceed. The Capital Reduction is conditional on the Order of the High Court confirming the Capital Reduction and a statement of capital approved by the High Court having been registered with the Registrar of Companies. The Rule 9 Waiver is conditional on the prior approval of the Independent Shareholders. In the event that the Resolutions relating to the Capital Reduction, Share Buy Back and Rule 9 Waiver are not passed, then the Delisting Resolution will not be effective and the Delisting will not occur.

The Board does not envisage that there will be any significant alteration to the standards of reporting and governance which the Company currently maintains. The Company will maintain its Audit Committee and the Nominations and Remuneration Committee which will be subject to the same terms and conditions, although the membership of those committees is now comprised of Mark Ferguson, Max Royde and Jamie Brooke.

2. Background to and reasons for the move to AIM

The Directors believe that there will be significant benefits to the Company Delisting and seeking admission to trading on AIM. The Board appreciates that AIM has the benefit of lower transactional costs, similar ongoing costs and simpler administration and regulatory requirements more appropriate to the Company's size.

Admission to AIM will not affect the way in which Shareholders buy or sell Ordinary Shares and, following Admission to AIM, existing share certificates in issue in respect of Ordinary Shares will remain valid.

The AIM Rules require that AIM companies retain a nominated adviser and broker at all times. Panmure Gordon has agreed to act as nominated adviser and broker to the Company, conditional on Admission to AIM being effected.

Because the Company's shares are currently listed on the premium segment of the Official List, the AIM Rules do not require an admission document to be published by the Company in connection with the Company's Admission to AIM. However, subject to the passing of the Resolutions, the Company will publish an announcement which complies with the requirements of Schedule One of the AIM Rules comprising information required to be disclosed by companies transferring their securities from the Official List to AIM.

Following the Delisting and subsequent Admission to AIM, Ordinary Shares that are held in uncertificated form will continue to be held and dealt through CREST. Share certificates representing those Ordinary Shares held in certificated form will continue to be valid and no new share certificates will be issued.

It is emphasised that the Delisting and subsequent Admission to AIM will have no impact on the assets and liabilities of the Company, and it will continue to have the same business and operations following Admission to AIM.

Obligations of an AIM company and key differences to those of Official List companies

Following Admission to AIM, the Company will be subject to the regulatory and disciplinary controls of the AIM Rules. Shareholders should note that the protections afforded to investors in AIM companies are less rigorous than those afforded to investors in companies listed on the premium segment of the Official List. AIM has less stringent rules than the Official List and is self regulated.

While for the most part the obligations of a company whose shares are traded on AIM are similar to those of companies whose shares are listed on the premium segment of the Official List, there are certain exceptions, including those referred to below:

-- under the AIM Rules, prior shareholder approval is required only for (i) reverse takeovers (being an acquisition or acquisitions in a twelve month period which either (a) exceed 100 per cent. on various class tests; or (b) result in a fundamental change of business (being disposals that exceed 75 per cent. of various class tests). Under the Listing Rules, a more extensive range of transactions are conditional on shareholder approval and require a detailed circular.

-- there is no requirement under the AIM Rules for a prospectus or an admission document to be published for further issues of securities to institutional investors, except when seeking admission for a new class of securities or as otherwise required by law.

-- unlike the Listing Rules, the AIM Rules do not specify any required structures or discount limits in relation to further issues of securities.

-- the Corporate Governance Code does not apply directly to companies who are admitted to trading on AIM. The Directors recognise, however, the importance of high standards of corporate governance and intend that the Company should observe the requirements of the QCA Corporate Governance Guidelines for AIM companies and the Corporate Governance Code to the extent Directors consider appropriate having regard to the size, nature and resources of the Company.

-- the ABI Guidelines, which give guidance on issues such as executive compensation and share based remuneration, corporate governance, share capital management and the issue and allotment of shares on a pre-emptive or non pre-emptive basis, do not apply directly to companies whose shares are traded on AIM. The Directors recognise, however, the importance of high standards of corporate governance and intend that the Company should observe the requirements of the ABI Guidelines to the extent the Directors consider appropriate having regard to the size, nature and resources of the Company.

-- under the Listing Rules, a company is required to appoint a 'sponsor' for the purposes of certain corporate transactions, such as when undertaking a large transaction or capital raising. The responsibilities of the sponsor include providing assurance to the FSA when required that the responsibilities of the listed company have been met. Corporate transactions on the Official List often require approval of shareholders and the engagement of a sponsor to oversee the process and liaise with the UK Listing Authority. In particular, on a proposed acquisition, where the size of the target represents 25 per cent. or greater of the listed company as determined by the class tests set out in Annex 1 of Chapter 10 of the Listing Rules a circular to shareholders is required explaining the transaction and seeking the consent of shareholders. As a result, a transaction of this nature may incur higher transaction costs to meet the requirements of the Listing Rules and, therefore, prove prohibitive.

Under the AIM Rules a 'nominated adviser' is required to be engaged by an AIM listed company at all times and has ongoing obligations to the company and responsibilities to the London Stock Exchange. On Admission to AIM, the Company has agreed to appoint Panmure Gordon as its nominated adviser.

-- there is a lower requirement for the minimum number of shares in an AIM quoted company to be held in public hands, where on the Official List, a minimum of 25 per cent. of a company's issued ordinary share capital normally has to be maintained in public hands at all times under the Listing Rules.

-- certain securities laws will no longer apply to the Company following Admission to AIM, for example, the Disclosure and Transparency Rules ("DTR") (save that DTR Chapter 5 in respect of significant shareholder notifications will continue to apply to the Company) and the Prospectus Rules. This is because AIM is not a regulated market for the purposes of the European Union's directives relating to securities. Additionally, the Listing Rules for premium listed companies, the Corporate Governance Code and the ABI Guidelines do not apply directly to companies whose shares are admitted to trading on AIM.

Risks associated with trading on AIM

Subject to (i) the Resolutions being passed; and (ii) Admission to AIM, the Company's shares will be traded on AIM rather than on the Official List. By virtue of AIM being less regulated than the Official List, an investment in securities traded on AIM carries a higher risk than those listed on the Official List. AIM is a market for emerging or smaller growing companies and may not provide the liquidity normally associated with the Official List or other exchanges. Further, it may be more difficult for an investor to realise its investment in an AIM-traded company than a company whose securities are listed on the Official List.

The future success of AIM and liquidity in the market for the Company's shares cannot be guaranteed. In particular, the market for the Company's shares may be, or may become, relatively illiquid and therefore the Company's shares may be or may become more difficult to sell. Potential investors and Shareholders should be aware that the value and any income from the Ordinary Shares can go down as well as up and that investment in securities which are traded on AIM might be less realisable and might carry a higher risk than a security listed on the Official List. Liquidity on AIM is currently provided by market makers who are member firms of the London Stock Exchange and are obliged to quote a share price for each company for which they make a market between 8.00am and 4.30pm on business days. The Directors believe that AIM has demonstrated that it can provide a liquid trading platform for shares.

In order to effect the move to AIM, the Company will require the approval of Shareholders at the General Meeting. The Delisting Resolution, Resolution 1 in the Notice of General Meeting, will authorise the Board to cancel the listing of Ordinary Shares on the Official List, remove such Ordinary Shares from trading on the London Stock Exchange's Main Market for listed securities and facilitate the admission of the Company's issued share capital to trading on AIM.

Following passing of the Resolutions, the Company will inform the FSA and give 20 business days' notice of its intention to seek admission on AIM under AIM's streamlined process for companies that have had their securities traded on an AIM Designated Market. It is the Company's understanding that the FSA would not seek to suspend or cancel the listing of the Company's shares on the Official List during the period of approximately 20 business days, unless there exists a disorderly market in the Ordinary Shares.

It is anticipated that the last day of dealings of the Ordinary Shares on the Main Market will be 23 October 2011. Cancellation of the listing of Ordinary Shares on the Official List will take effect at 8.00am on 24 October 2011, being not less than 20 business days from the passing of the Resolutions. Admission to AIM is expected to take place and dealings in Ordinary Shares are expected to commence on AIM at 8.00am on 24 October 2011.

There is no guarantee that the Directors will be successful in achieving admission on AIM or that there will not be a period during which the Company's Ordinary Shares will not be admitted to trading on an exchange. If the Company's issued Ordinary Shares are not admitted to trading on an exchange, the ability to buy and sell shares in the Company could be materially restricted.

Shareholders should consult their own tax advisers in relation to the implications of the Delisting and the Admission of the Company's shares to AIM.

3. Adoption of New Articles of Association

The Board is proposing to adopt New Articles of Association to take account of the Company's move to AIM. The content of the New Articles of Association are summarised in Part III of the Circular together with a summary of the main differences between the Current Articles of Association and the New Articles of Association. The New Articles of Association are available for inspection, as noted in paragraph 5 of Part IV of the Circular. The New Articles of Association also reflect changes introduced by the Act. The principal changes are as follows:

(A) The Company's objects

The provisions regulating the operations of the Company are currently set out in the Company's Memorandum and Current Articles of Association. The Company's Memorandum contains, among other things, the objects clause which sets out the scope of the activities the Company is authorised to undertake.

The Act has reduced the constitutional significance of a company's Memorandum. The Memorandum will now only record the names of, subscribers and the number of shares each subscriber has agreed to take in the Company. The objects clause and all other provisions which are currently contained in the Company's Memorandum are deemed to be contained in the Company's Articles of Association but the Company can remove these provisions by special resolution.

Further, the Act states that unless a company's Articles provide otherwise, a company's objects are unrestricted. This abolishes the need for companies to have objects clauses. For this reason the Company is proposing to remove its objects clause together with all other provisions of its Memorandum which, by virtue of the Act, are treated as forming part of the Company's Articles of Association as of 1 October 2009. As the effect of this resolution will be to remove the statement currently in the Company's Memorandum regarding limited liability, the new Articles of Association also contain an express statement regarding the limited liability of Shareholders.

(B) Authorised share capital and unissued shares

The Act has abolished the requirement for a company to have an authorised share capital. The proposed New Articles of Association reflect this by having no reference to an authorised share capital. Authority to allot shares continues to be required and as such the Directors will be limited as to the number of shares they can allot at any time.

The Act removes any requirement to have specific enabling provisions in a company's articles relating to the purchase of its own shares, the consolidation and sub-division of shares or the reduction in share capital. Only shareholder approval is now required. The proposed New Articles of Association reflect this, as the enabling provisions have been removed.

(D) Voting by proxies on a show of hands

The Companies (Shareholder Rights) Regulations 2009 (the "Regulations") have amended the Act so that it now provides that each proxy appointed by a member has one vote on a show of hands unless the proxy has been instructed by one or more members to vote for the resolution and by one or more members to vote against the resolution. The New Articles of Association have been amended to reflect these changes.

(E) Electronic conduct of meetings

Amendments made to the Act by the Regulations specifically provide for the holding and conducting of electronic meetings. The proposed New Articles of Association have been amended to reflect more closely the relevant provisions.

The New Articles of Association also remove the various historic classes of share set out in the Current Articles of Association and the rights attaching to those shares. These provisions related to mechanics on the Company's listing on the Official List and, those classes of share no longer being in existence, the provisions are redundant.

4. Background to and reasons for the Capital Reduction and Share Buy Back

As at 30 June 2011, the share premium account of the Company stood in the sum of GBP79,134,198.84, the merger reserve stood in the sum of GBP34,397,888.32 and the profit and loss account of the Company stood in deficit in the sum of GBP100,365,934.82. The Company is generally precluded from the payment of any dividends or the redemption or buy back of issued shares in the absence of sufficient distributable reserves. In order to facilitate the Share Buy Back by the Company, the Board is proposing that the Company create sufficient distributable reserves by means of the proposals set out below.

The Board propose the creation of sufficient distributable reserves for the Company by cancelling certain balances standing to the credit of the share premium account and by capitalising the amount standing to the credit of the merger reserve and then cancelling the resultant Capital Redemption Shares. The realised profits so created will be applied in eliminating the accumulated deficit on the Company's profit and loss account. As a result of the capital reduction the profit arising on the elimination of the deficit and all future profits of the Company earned after the date that the Capital Reduction is filed at Companies House, will then be available for the Directors to use for the purpose of the Share Buy Back.

The Capital Reduction process and the Share Buy Back are conditional upon the passing of Resolutions 3 and 4 respectively, set out in the Notice of General Meeting (the "Capital Reduction Resolution" and "BuyBack Resolution", respectively,) and Court approval. If the Resolutions are not passed and/or the Court confirmation is not obtained, it will not be possible for the Company to effect the Capital Reduction or the Share Buy Back.

5. Capital Reduction and Bonus Issue of Capital Reduction Shares

The Company's balance sheet shows an accumulated deficit on the profit and loss account of GBP100,365,934.82 million as at 30 June 2011.

In order to eliminate this deficit it is proposed to take the following steps:

(1) to cancel the balance standing to the credit of the share premium account in the sum of GBP79,134,198.84;
(2) to capitalise the amount standing to the credit of the merger reserve in the sum of GBP13,166,152.34 by way of a bonus issue of newly created B Shares;
(3) to cancel the newly created B Shares;
(4) to capitalise the amount standing to the credit of the merger reserve in the sum of GBP13,166,152.34 by way of a bonus issue of newly created C Shares;
(5) to cancel the newly created C Shares;
(6) to capitalise the amount standing to the credit of the merger reserve in the sum of GBP8,065,583.64 by way of a bonus issue of newly created D Shares; and
(7) to cancel the newly created D Shares.

These cancellations, if approved by the Court, will create realised profits which would first be applied in eliminating the accumulated deficit on the Company's profit and loss account. The Capital Reduction itself will not involve any distribution or repayment of capital or share premium by the Company and will not reduce the underlying net assets of the Company. Its principal effect will be to create distributable reserves to facilitate any future return of value to Shareholders.

In order to effect the Capital Reduction the Company first requires the authority of its Shareholders by the passing of a special resolution of the Company at the General Meeting. The Capital Reduction Resolution, Resolution 3 in the Notice of General Meeting is proposed in this regard. Secondly, the Capital Reduction must be confirmed by the High Court, to which the Company will make an application if the Capital Reduction Resolution is passed.

The Capital Reduction must take place in a series of sequential steps (and court hearings) in order to enable the Company to successfully eliminate its profit and loss deficit and create the necessary distributable reserves. Each capital reduction will take effect when the Order of the High Court confirming the relevant capital reduction and a statement of capital approved by the High Court have been registered with the Registrar of Companies. The Effective Date of the final capital reduction is currently expected to be 1 December 2011. That is likely to be within a few working days after the hearing at which the Capital Reduction is confirmed by the High Court, which is currently expected to be on or around 30 November 2011. If the Capital Reduction becomes effective in full on the basis that the proposed return of capital is permitted by the Court, it is the Company's intention to use the distributable reserves to allow the Company to effect the Share Buy Back.

In order to approve the Capital Reduction, the High Court will need to be satisfied that the interests of the Company's creditors will not be prejudiced by the Capital Reduction.

In seeking this confirmation, the Company will be required to give such undertakings or other form of creditor protection as the High Court may require for the protection of the Company's creditors at the Effective Date. These may include seeking the consent of the creditors to the cancellation of share premium account and the capitalisation of the merger reserve and cancellation of the resultant Capital Reduction Shares, or the provision by the Company to the Court of an undertaking to deposit a sum of money into a blocked account created for the purpose of discharging creditors of the Company. It is the Directors' intention that the majority of the Company's creditors will have been paid by the date of the court hearing for the first capital reduction, which is currently expected to be 19 October 2011. The Directors intend to seek the consent of the remaining Company's creditors (to the extent there are any) to the Capital Reduction and the Board is confident that these consents will be obtained. This is in order that the Capital Reduction can be confirmed by the High Court on terms that will permit any part of the sum released by the Capital Reduction to be credited to the profit and loss account of the Company so as to create distributable reserves.

If the Company is unable in the timetable proposed to obtain a consent from, or is unable or unwilling to provide security (where security is required) for all such creditors, then the amount released by the Capital Reduction, when the Capital Reduction is confirmed by the High Court, will remain undistributable for the time being until any outstanding consents have been obtained, security (where security is required) has been put in place, or the relevant obligations have been discharged, and the Company may be required to give an undertaking to that effect to the High Court.

The Board reserves the right (where necessary by application to the High Court) to abandon, discontinue or adjourn any application to the High Court for confirmation of the Capital Reduction, and hence the Capital Reduction itself, if the Board believes that the terms required to obtain confirmation are unsatisfactory to the Company or if as the result of a material unforeseen event the Board considers that to continue with the Capital Reduction is inappropriate or inadvisable.

The Capital Reduction does not affect the voting or dividend rights of any Shareholder, or the rights of any Shareholder on a return of capital and following the implementation of the Capital Reduction there will be no change in the number of Ordinary Shares in issue.

It is proposed to capitalise the sum of GBP34,397,88.32 standing to the credit of the Company's merger reserve by applying that sum in paying up in full new Capital Reduction Shares immediately following the Court Hearing, allotting and issuing such shares by way of a bonus issue to the persons at that point holding Ordinary Shares on the basis of 1 Capital Reduction Share for every 1 Ordinary Share held. The Capital Reduction Shares will not be admitted to trading on the Main Market, AIM or any other market. No share certificates will be issued in respect of the Capital Reduction Shares. The Capital Reduction Shares will have extremely limited rights. In particular, the Capital Reduction Shares will carry no rights to participate in the profits of the Company and no rights to participate in the Company's assets, save on a winding up. The Capital Reduction Shares will be transferable, but no market will exist in them and it is anticipated that the High Court will confirm their cancellation immediately after they are issued.

The capitalisation of the merger reserve is needed as an additional step since the High Court only has statutory power to reduce the share premium account and capital redemption reserve. Hence, in order to utilise the merger reserve in the Capital Reduction it is necessary to convert that reserve into share capital (the new B Shares), credit the amount paid up on these Shares to the Capital Reduction Shares.

6. Share Buy Back

The Company is proposing to seek Shareholders' authority for the Company to purchase up to 25 per cent. of the Ordinary Shares in issue as at the date of this letter.

It is proposed that the maximum price (exclusive of expenses) which may be paid for an Ordinary Share is an amount equal to 105 per cent. of the average of the middle market quotations for an Ordinary Share as derived from the Daily Official List for the five business days immediately preceding the day on which the Ordinary Share is purchased. The minimum price (exclusive of expenses) which may be paid for an Ordinary Share is 10 pence (being the nominal value of an Ordinary Share). Such market purchases of Ordinary Shares by the Company would be made from the Company's distributable reserves and any Ordinary Shares purchased would be either cancelled or held by the Company in treasury as treasury shares. Such treasury shares may be subsequently sold for cash, transferred pursuant to, or for the purposes of, an employees' share scheme or cancelled. For such time that any Ordinary Shares may be held by the Company in treasury, the voting and dividend rights attaching to those Shares will be suspended.

Any purchase of the Ordinary Shares would be made at the discretion of the Directors in the light of prevailing market conditions. However, Shareholders should not assume that any such purchases will necessarily take place.

In order to effect the Share Buy Back the Company first requires the authority of its Shareholders by the passing of a special resolution of the Company at the General Meeting. The BuyBack Resolution, Resolution 4 in the Notice of Meeting is proposed in this regard. In addition, the Share Buy Back is being effected under the AIM Rules and therefore will not be able to occur until such time as the Resolutions have been passed, the Capital Reduction is confirmed by the High Court and the Company has been admitted to trading on AIM.

7. Future Corporate Actions and Strategy

Renovo is well funded and its future strategy is aimed at maximising shareholder value. The company will consider all options available to it which may include acquisitions and mergers of external companies in addition to realising value from its current intellectual property portfolio where possible. The directors do not intend to place any restrictions on the nature of the business carried out by potential acquisition and merger targets. The company's cost base is being minimised wherever possible in order to maximise the company's available cash. The Company's continuing clinical trial programmes for Prevascar and Adaprev will be conducted on an outsourced basis, with certain former staff members administering these trials on a part-time consultancy basis.

8. Takeover Code

Under Rule 9 of the Takeover Code, any person who acquires an interest (as such term is defined in the Takeover Code) in shares which, taken together with the shares in which he and persons acting in concert with him are interested, carry 30 per cent. or more of the voting rights in a company that is subject to the Takeover Code is normally required to make a general offer to all of the remaining shareholders to acquire their shares. Similarly, when any person, together with any persons acting in concert with him, is interested in shares which in aggregate carry not less than 30 per cent. but does not hold shares carrying more than 50 per cent. of the voting rights of such a company, a general offer will normally be required if any further interests in shares are acquired by such a person. Such an offer would have to be made in cash at a price not less than the highest price paid by him, or by any member of the group of persons acting in concert with him, for any interest in shares in the Company during the 12 months prior to the announcement of the offer.

Under Rule 37 of the Takeover Code, any increase in the percentage holding of a shareholder which results from a company buying-back its own shares will also be treated as an acquisition for the purposes of Rule 9 of the Takeover Code. Henderson currently holds on behalf of various of its funds 53,414,860 Ordinary Shares representing 28.05 per cent. of the issued share capital. This means that any buyback of Ordinary Shares pursuant to the authority being sought in the BuyBack Resolution, may result in the shareholding of funds managed by Henderson increasing above 30 per cent. which would result in Henderson being obliged to make an offer for the Company, unless Henderson sells shares in the Share Buy Back to maintain its current shareholding. Henderson has signed an irrevocable undertaking stating that it will not participate in the Share Buy Back, and consequently it is likely that Henderson's interest will increase to more than 30 per cent.

If the authority conferred by the Buyback Resolution were to be implemented in full, then, assuming no increase in the current issued share capital of the Company, the voting rights attributable to the Ordinary Shares held by Henderson would constitute 37.39 per cent of all the voting rights of the Company.

Waiver of the obligation to make a mandatory offer under Rule 9 of the Takeover Code

The Panel has agreed, subject to a resolution being passed at the General Meeting ("Whitewash Resolution"), to waive the requirement under Rule 9 of the Takeover Code ("Rule 9 Waiver") for Henderson to make a mandatory offer for the Ordinary Shares not already owned by them as would otherwise arise were the Company to implement its authority to make market purchases under the Buyback Resolution. To be passed, the Whitewash Resolution will require the approval of a simple majority of votes cast on a poll. Only Independent Shareholders will be entitled to vote on the Whitewash Resolution.

For the avoidance of doubt, the Rule 9 Waiver applies only in respect of increases in the shareholdings of Henderson resulting solely from market purchases by the Company of its own Ordinary Shares, where the market purchases are made pursuant to the BuyBack Resolution. The Rule 9 Waiver does not apply to any other authority sought for the Company to purchase its own Ordinary Shares after the date of the General Meeting or any shareholding increase in relation to any Shareholder other than Henderson.

The Directors believe that it is in the best interests of the Company that the BuyBack Resolution be approved. The Directors believe that the purchase by the Company of its own Ordinary Shares would represent good use of the Company's available cash resources and any distributable reserves arising from the Capital Reduction. After taking into account payment of creditors and accruals outstanding at 30 June 2011, and the lease surrender, the net cash position of the Company at that date was in excess of GBP35m.

In addition, the Independent Directors believe that it is in the best interests of the Company that the Whitewash Resolution be passed so as to make the authority under the BuyBack Resolution fully utilisable.

9. Irrevocable commitments in relation to Share BuyBack

The Directors, who in aggregate hold 17,525,289 Ordinary Shares representing approximately 9.20 per cent. of the existing issued ordinary share capital of the Company, have irrevocably undertaken not to participate in the Share Buy Back by the Company and to vote in favour of the Resolutions. In addition, Kestrel Partners LLP, which holds 9,421,942 Ordinary Shares representing approximately 4.95 per cent. of the existing issued ordinary share capital of the Company has by way of its discretionary fund manager, irrevocably undertaken not to participate in the Share Buy Back by the Company and to vote in favour of the Resolutions.

In addition, Henderson, which holds 53,414,860 Ordinary Shares (representing approximately 28.05 per cent. of the existing issued ordinary share capital of the Company), has irrevocably undertaken not to participate in the Share Buy Back by the Company and to vote in favour of the Resolutions to the extent they are permitted by law to do so. If the interests of Henderson in the Company increase above 30 per cent., following the Share Buy Back, Henderson would normally be obliged to make a general offer, pursuant to Rule 9 of the Takeover Code, to all other Shareholders. However, in this instance, the Panel has agreed to waive the obligation to make a general offer that would otherwise arise as a result of Henderson not participating in the Share Buy Back subject to the approval of the Independent Shareholders on a poll at the General Meeting.

10. Taxation

The following comments are intended as a general guide only and relate only to certain UK tax consequences of receiving the B Shares under the Bonus Issue. The comments are based on current legislation and HM Revenue & Customs practice, both of which are subject to change, possibly with retrospective effect. These comments deal only with Shareholders who are resident and, if they are individuals, ordinarily resident for taxation purposes in the UK, who are the absolute beneficial owners of Ordinary Shares and who hold them as an investment and not on trading account. They do not deal with the position of certain classes of Shareholders, such as dealers in securities, insurance companies, collective investment schemes or persons regarded as having obtained their Ordinary Shares by reason of employment.

Bonus Issue and Capital Reduction

The Bonus Issue should be treated as a "reorganisation" for the purposes of UK taxation of chargeable gains ("CGT"), so that a Shareholder should not be treated as making a disposal or part disposal of his Ordinary Shares for CGT purposes upon receipt of the B Shares. Instead, the B Shares will be treated as the same asset, acquired at the same time, as his Ordinary Shares. On the basis that the B Shares will be treated as being paid up for "new consideration" received by the Company, the issue of the B Shares should not give rise to any liability to United Kingdom income tax (or corporation tax) in a Shareholder's hands.

Due to the fact the B Shares:

(a) have no voting rights or rights to income;

(b) have no market; and

(c) at the time issued it is known that the B Shares will be cancelled for no payment, the market value of the B Shares is considered to be nil for the duration of their existence. The CGT base cost of the B Shares and Ordinary Shares should be calculated by apportioning the base costs of the Ordinary Shares between the B Shares and the Ordinary Shares based on their respective market values. Consequently the issue of the B Shares should not impact the base cost of the Ordinary Shares and there should be no tax charge (nor any allowable loss) on the cancellation of the B Shares.

Stamp Duty and SDRT

No stamp duty or SDRT will be payable on the issue of the B Shares. This section is not intended to be, and should not be construed to be, legal or taxation advice to any particular Shareholder. Any Shareholder who has any doubt about his own taxation position, whether regarding CGT or otherwise, or who is subject to taxation in any jurisdiction other than the UK should consult his professional taxation adviser immediately.

11. General Meeting

The notice convening a General Meeting to be held on 12 September 2011 at 10.00 a.m. at Morrison & Foerster (UK) LLP, CityPoint, One Ropemaker Street, London, EC2Y 9AW is set out at the end of this document, where the following Resolutions will be proposed.

Resolution 1 - Delisting Resolution

A special resolution to authorise the Board to cancel the Company's listing of Ordinary Shares on the Official List of the UKLA, remove such Ordinary Shares from trading on the London Stock Exchange's Main Market and to apply for admission of the Company's issued share capital to trading on AIM. This Resolution is conditional on the passing of Resolutions 2, 3, 4 and 5.

Resolution 2 - Capital Reduction Resolution

A special resolution to capitalise the amount standing to the credit of the merger reserve account by way of the issue of Capital Reduction Shares, and to cancel and reduce the amount standing to the credit of the share premium account and the Capital Reduction Shares to create distributable reserves. This resolution is conditional upon the passing of Resolution 1 upon the Company being admitted to trading on AIM.

Resolution 3 - New Articles of Association

A special resolution to adopt the New Articles of Association and to replace the Current Articles of Association. This resolution is conditional upon the passing of Resolution 1 and Resolution 2 and upon the Company being admitted to trading on AIM.

Resolution 4 - BuyBack Resolution

A special resolution to permit the Company to purchase up to 25 per cent. of the Ordinary Shares in the market. This resolution is conditional upon the passing of Resolutions 1, 2, 3 and 5 and upon the Company being admitted to trading on AIM.

Resolution 5 - Whitewash Resolution

An ordinary resolution to approve the Rule 9 Waiver, which will be taken on a poll and in respect of which only Independent Shareholders will be entitled to vote.

The ordinary resolution 5 will require a simple majority of those voting in person or on a poll by proxy in favour of the Resolutions. The special resolutions 1 to 4 will require approval by not less than 75 per cent. of the votes cast by Shareholders voting in person or on a poll by proxy. As described in paragraph above, only Independent Shareholders will vote on Resolution 5. All the Resolutions are inter-conditional so that if any of them is not passed, none of them will be effective.

12. Action to be taken

A Form of Proxy for use in connection with the General Meeting is enclosed. Whether or not Shareholders intend to attend the General Meeting in person, it is important, particularly in view of the fact that the Whitewash Resolution to be put to the Meeting will be determined by a poll, that you duly complete, execute and return the Form of Proxy, by hand or by post to the Company's registrars, Capita Registrars, PXS, 34 Beckenham Road, Beckenham, BR3 4TU or submit the Form of Proxy electronically to renovo@mofo.com.

To be valid, the completed Form of Proxy must be returned, or submitted electronically, as soon as possible and, in any event, so as to be received by not later than 10.00 a.m. on 8 September 2011. Completion and return of a Form of Proxy will not prevent Shareholders from attending and voting at the General Meeting in person should they wish to do so.

13. Recommendation

The Board believes that:

(a) the Delisting and Admission to AIM;
(b) the Capital Reduction;
(c) the Rule 9 Waiver; and
(d) the adoption of the New Articles of Association,

(together the "Resolutions")

are in the best interests of the Company and the Shareholders as a whole. In addition, the Independent Directors, who have been so advised by Panmure Gordon, consider the terms of Resolution 4 (Share Buy Back) and the related Resolution 5 (Whitewash Resolution) to be fair and reasonable and in the best interests of the Independent Shareholders and the Company as a whole. In providing advice to the Independent Directors, Panmure Gordon has taken into account, the Independent Directors' commercial assessments.

Accordingly, the Board unanimously recommends that:

(a) Shareholders vote in favour of Resolutions 1 to 4 to be proposed at the General Meeting; and
(b) the Independent Shareholders vote in favour of Resolution 5 to be proposed at the General Meeting,
(c) as they intend to do in respect of their own beneficial holdings amounting (as at 17 August 2011, being the latest practicable date prior to the publication of this document) to an aggregate of 17,525,289 Ordinary Shares representing approximately 9.20 per cent. of the current issued ordinary share capital of the Company. In addition, Henderson Global Investors have undertaken to vote in favour of the resolutions, save for Resolution 5 where only Independent Shareholders will be entitled to vote, with respect to an aggregate of 53,414,860 Ordinary Shares representing approximately a further 28.05 per cent. of the current issued ordinary share capital of the Company.

All capitalised terms in this announcement have the same meaning as defined in the circular.