Renovo Raises Major Financing Of £21 Million (US$33 Million) In A Second Round Led By HealthCap

Jerry Karabelas and Carl-Johan Dalsgaard Appointed to the Board

Manchester, UK: 2nd December 2002

Renovo Ltd., a biopharmaceutical company developing unique drugs to prevent scars and accelerate wound healing in the skin, today announced the closing of a second round of private equity financing totalling £21 million (US$33 million). HealthCap acted as lead investor for a global syndicate of funds including new investor, Care Capital LLC, as well as existing investors, Atlas Venture and JPMorgan Partners. Argeris "Jerry" Karabelas, Partner of Care Capital and Carl-Johan Dalsgaard, Partner and advisor of HealthCap have been appointed to Renovo's Board of Directors.

"Renovo is developing products that have the potential to revolutionize the treatment of many different types of wounds by exploiting recently discovered molecular mechanisms involved in scarring and healing. This financing, from such a distinguished group of experienced investors, will allow us to concentrate our efforts in advancing these compounds through clinical evaluation and ultimately provide patients with a significant benefit over current standards of care," Professor Mark Ferguson, CEO of Renovo commented. "For those patients with burns, skin ulcers or undergoing surgery, therapy is not only painful but also very emotional. We believe our products may offer an effective advance over current therapy during this traumatic time."

The proceeds from this financing will be used to continue clinical development of Renovo's two lead drugs, one to prevent scarring and a second to accelerate wound healing. Renovo will also use the funds to accelerate the entry of additional products into clinical trials and enhance its already significant discovery platforms. As its pipeline of products progresses to the end of Phase II, the financing will allow Renovo to seek the best partner to commercialise its products. In addition, Renovo will increase the number of employees to 75.

"In a short time Renovo has built an outstanding portfolio of innovative products, started clinical evaluation of two programs, built an outstanding management and advisory team, and developed its own clinical and laboratory infrastructure. These assets have drawn not only HealthCap to invest, but also allowed us to attract such a strong international syndicate," stated Carl-Johan Dalsgaard, Partner and advisor of HealthCap. "We are particularly pleased that the round was over-subscribed by investors, an endorsement of the positive prospects ahead for the company."

"Renovo's products work by selectively modulating the multiple cellular, molecular and genetic mechanisms involved in healing," explained Dr Sharon O'Kane, Executive Director of R&D at Renovo. "These drugs prevent scarring in acute wounds, e.g., trauma, surgery, burns and promote the healing of chronic wounds, e.g., diabetic, venous and pressure ulcers, by regenerating tissue."

The market for skin wound healing products is growing at 10-15% per year and represents a multi-billion dollar opportunity. Currently, there are no marketed drugs for scar prevention and the chronic wound healing market is largely served by variations on traditional dressings or tissue engineered skin substitutes. In addition to being stand-alone therapies, Renovo's drugs are complementary to these standard therapies.

New Board Members

Welcoming the new board members, Prof. Ferguson added: "We are also honoured to have Jerry and Carl-Johan join our Board, not only for their extensive investing knowledge, but each bring unique qualities and experience that is directly relevant to Renovo."

Jerry Karabelas was Head of Healthcare and CEO of worldwide Pharmaceuticals for Novartis AG from 1998 until July 2000. Prior to joining Novartis, Jerry was Executive Vice President of SmithKline Beecham responsible for US operations, European operations, Regulatory, and Strategic Marketing. He has been responsible for numerous pharmaceutical product approvals and new product launches, including the launch of three US$1 billion products. Jerry was the Founder and Chairman of the Novartis Bio Venture Fund from July 2000 until December 2001. In this role he invested approximately US$ 40 million in 14 portfolio companies.

Carl-Johan Dalsgaard has 10 years experience of senior management from pharmaceutical industry as VP Preclinical Research, Astra Pain Control AB; President, Astra Pain Control AB and most recently VP and Head of Therapy Area Pain Control, AstraZeneca R&D. In addition, Carl-Johan has fulfilled specialist training in plastic and reconstructive surgery at the Karolinska Hospital.

About Renovo

Renovo is a biopharmaceutical company focused on the development of drugs that exploit molecular mechanisms involved in scar prevention and promotion of wound healing in the skin. The company is currently conducting clinical trials with products to prevent scar formation and accelerate healing. Supporting these products is a broad portfolio of compounds emerging from Renovo's unique research and discovery programmes. Founded in 2000 as a spin-out from the University of Manchester by Professor Mark Ferguson and Dr Sharon O'Kane (CEO and Executive Director of R&D, respectively), Renovo comprises a team of highly experienced and innovative scientists and clinicians. Renovo's innovative products and technologies are based on a portfolio of over 300 patents and patent applications worldwide. The company is based in custom-built facilities in the Manchester Incubator Building and currently employs 50 people.

On the web, Renovo can be visited at www.renovo.com, HealthCap at www.healthcap.se, Care Capital at www.carecapital.com, Atlas Venture at www.atlasventure.com and JPMorgan Partners at www.JPMorganPartners.com.

For further information, please contact:
Renovo Ltd

Telephone: +44 (0) 161 606 7222

e-mail: info@renovo.com