Alliance Pharma : Proposed acquisition of Vamousse

ALLIANCE PHARMA PLC

('Alliance' or the 'Group')

Proposed acquisition of Vamousse®

Alliance Pharma plc(AIM: APH), the specialty pharmaceutical company, announces that its wholly owned subsidiary, Alliance Pharmaceuticals Limited, has entered into an agreement to acquire the worldwide rights to Vamousse from TyraTech Inc (AIM: TYR and TYRU) for an initial consideration of US$13.0 million and deferred contingentconsideration of up to US$4.5 million. This agreement is subject to the approval of TyraTech's shareholders and the purchase is expected to complete before 31 December 2017.

The Vamousse assets comprise an innovative, pesticide-free range of consumer healthcare products for the prevention and treatment of human head lice.

Vamoussewas launched in the US and the UK in 2014 and has gained strong retail distribution in both territories. Net sales of Vamousse by TyraTech for the year ended 31 December 2016 were US$6.6 million with a gross profit of US$4.6 million and for the 6 months to 30 June 2017 net sales were US$3.3 million with a gross profit of US$2.3 million. Approximately 83% of current revenue is derived in the US and 17% in the UK. With its unique physical mode of action, the market share of Vamousse has grown significantly ahead of its category in the US. Alliance plans to make use of its EU affiliates and extensive distribution network to drive further growth in the brand.

Upon completion of the transaction, TyraTech will enter into a Transition Services Agreement to transfer the existing Vamousse business to Alliance during 2018.

The initial consideration will be funded from existing cash and bank facilities, including a drawdown from the Group's £35 million Revolving Credit Facility ('RCF'). Approximately £1.3 million of the RCF will remain undrawn on completion of the acquisition of Vamousse. The deferred contingent consideration will be funded from the Group's cash generation. Up to US$2.0 millionof this will be payable in 2019, and up to US$2.5 millionwill be payable in 2020, both dependent on the revenue growth ofVamousse.

The Group's adjusted net debt/EBITDA ratio will be almost 2.5 times as at 31 December 2017 as a result of this drawdown. As set out in the Group's announcement of the acquisition of Ametop®on 1 December 2017, Alliance has recently agreed an increase in its debt covenant from 2.5 times to 3.0 times for the remainder of its credit facility. Due to the strong ongoing cash generation of the business the Group anticipates that this ratio will reduce to below 2.0 times by the end of 2018.

In addition to the Vamousserights, Alliance will be acquiring inventory with an expected value of approximately US$0.8 million.

Commenting on the acquisition, John Dawson, Alliance Pharma's Chief Executive Officer, said:'We are delighted to acquire the innovative consumer healthcare brand Vamousse, which will become our third major international growth brand. The acquisition will be immediately earnings enhancing and expected to be accretive to our return on invested capital from the second year. Vamousse will leverage our current infrastructure as it fits well into our growing UK consumer business, whilst expanding our footprint into the US. The brand will also benefit from added distribution both through our EU affiliates and through our international partner network operating in over 90 territories worldwide.'

Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) prior to its release as part of this announcement.

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About Alliance Pharma

Alliance, founded in 1998, is an international speciality pharmaceutical company based in Chippenham, Wiltshire, UK. The Group has sales in more than 100 countries worldwide via direct sales, joint ventures and a network of distributors. Alliance has a strong track record of acquiring the rights to established niche products and it currently owns or licenses the rights to approximately 90 pharmaceutical and consumer healthcare products. The Group continues to explore opportunities to expand its product portfolio.

Alliance joined the AIM market of the London Stock Exchange in December 2003 and trades under the symbol APH.