Issue of Equity

Allergy Therapeutics PLC
10 April 2006



             Allergy Therapeutics plc, "the Group" or "the Company"
    Placing of 19,000,000 new Ordinary Shares of 0.1p each at 100p per Share


Allergy Therapeutics plc, the specialist pharmaceutical Company focused on
allergy vaccination, today announces a Placing of £19 million. This additional
capital will primarily fund the completion of the Company's development pipeline
of innovative ultra-short course allergy vaccines, Pollinex(R) Quattro, through
to Registration.

The Placing is conditional upon, inter alia, the approval of Shareholders. A
circular convening an EGM of the Company, which is expected to take place on 4
May 2006, will be issued shortly.

Highlights

  • Allergy Therapeutics to raise approximately £18.2 million (net of
    expenses)


  • Funds to be utilised primarily for the development through Phase III to
    Registration of the Company's lead product, Pollinex Quattro


  • Institutional shareholder base further widened with additional new
    shareholders joining the Register

Allergy treatment is one of the largest therapeutic markets worldwide, with
estimated annual sales of $11 billion. Current market needs are only partly met
by the existing treatments. Allergy vaccines are the only treatment acknowledged
to address the underlying cause of the condition, not just the symptoms. Allergy
Therapeutics' strategy is to establish a position as a market leading provider
of novel therapies for the prevention and treatment of allergy, by providing a
comprehensive range of innovative, patent protected, high value, allergy
vaccines.

The Company's development efforts are currently focused on its lead product,
Pollinex(R) Quattro, a group of ultra-short course allergy vaccinations for the
treatment of allergies to grass, tree and ragweed pollens and Japanese Cedar.
Pollinex Quattro has the potential to transform allergy treatment and is the
only ultra-short course allergy vaccine currently on the market.

Commenting on the successful fund raising, Keith Carter, Chief Executive of
Allergy Therapeutics said:

"This fund raising is a significant step forward for Allergy Therapeutics.
Following the successful outcome to our pivotal study for Pollinex Quattro
Ragweed, the capital raised will help us to complete our Phase III programme for
Pollinex Quattro and will bring the Company closer to delivering the first and
only simple, four shot allergy vaccine therapy to patients worldwide.

"We have been delighted by investor appetite for our new stock, which we believe
reflects our ongoing success and the strong prospects for Allergy Therapeutics."


                                      -ends-


For further information please contact:

Allergy Therapeutics plc                                  01903 845 820
Keith Carter, Chief Executive
Ian Postlethwaite, Finance Director 

Bell Pottinger Corporate and Financial                    020 7861 3232
Daniel de Belder / Emma Charlton

Bridgewell Securities Limited                             020 7003 3000
Shaun Dobson / Nick Lovering


About Allergy Therapeutics plc

Allergy Therapeutics plc is a London Stock Exchange (AIM: AGY) listed specialist
pharmaceutical company focused on allergy vaccination. It has a profitable core
business achieving sales of allergy vaccines of over £22 million through its own
EU sales and marketing infrastructure.

Pollinex Quattro incorporates the innovative TLR4 agonist MPL, which acts as an
efficient vaccine adjuvant. Allergy Therapeutics has certain exclusive
intellectual property rights to the use of MPL(R) in both injected and oral
vaccines.

Allergy Therapeutics manufactures its own vaccine products in a MHRA approved,
sterile manufacturing facility in Worthing, United Kingdom. In January 2006 the
Company successfully underwent an audit by the MHRA.

Expected Placing Timetable

Extraordinary General Meeting                                         11 a.m. on 4 May 2006
Admission of the Placing Shares to AIM                                8 a.m. on 5 May 2006

Placing Statistics

Placing Price                                                          100 pence
Number of Placing Shares being placed on behalf of the Company         19,000,000
Number of Ordinary Shares in issue following Admission                 81,950,632
Percentage of enlarged issued share capital subject to the Placing     23.2%
Proceeds of the Placing available to the Company (net of expenses)     £18.2 million

Background to and reasons for the Placing
Allergy Therapeutics announces today that it is to raise £18.2 million (net of
expenses), from a Placing of 19,000,000 ordinary shares of 0.1p each at a
Placing price per share of 100 pence.

Allergy Therapeutics is a fully integrated, specialist pharmaceuticals business
focused on the treatment and prevention of allergies. The Group has a
manufacturing, sales and marketing, and product development infrastructure which
supports a portfolio of marketed products and a development pipeline of
innovative vaccines, and is focused on achieving Registrations of allergy
vaccines worldwide.

Allergy treatment is one of the largest therapeutic markets worldwide, with
estimated annual sales of $11 billion. Allergy Therapeutics' strategy is to
establish a position as a market leading provider of novel therapies for the
prevention and treatment of allergies by providing a comprehensive range of
innovative, patent protected, high value, allergy vaccines.

The Company's development efforts are currently focused on its leading product,
Pollinex(R) Quattro, a group of ultra short course allergy vaccines for the
treatment of allergies to grass, tree and ragweed pollens and Japanese Cedar.
These products use tyrosine as a depot in combination with the innovative
patented adjuvant MPL(R) to which the Group has certain licensed exclusive
rights.

Pollinex Quattro, the Group's four-shot a year allergy vaccine, is the only
ultra-short course allergy vaccine on the market and the funds raised at this
Placing, supplemented by the Company's existing cash reserves and the operating
cash flows from the business, will be used primarily to fund the completion of
its development, through to Registration.

On a 'named patient product' ('NPP') basis, Pollinex Quattro is already a
marketed product in certain EU territories. Over 140,000 treatment sets have
been sold to date and this represents a considerable body of evidence in support
of the product's development. In the financial year ending 31 December 2005,
Pollinex Quattro generated sales of £7.2 million (2004: £5.1million) and sales
have continued to grow in the first half of the current financial year. This
growth was achieved through a targeted approach to marketing in key areas. In
Germany, which accounts for approximately 70% of the Group's sales, winning the
prestigious MMW Arzneimittelpreis, an Award for pharmaceutical innovation, had,
in the Directors' view, a positive effect on sales.

Through its own sales force in Germany, Italy, Spain, the UK, Austria, Czech
Republic, Slovakia and Poland and indirectly in more than 20 additional
countries (including 6 countries through licensing agreements), the Group
currently sells and distributes four families of allergy vaccine products,
injected and sub-lingual. In addition to Pollinex Quattro, the Group has a range
of non-MPL(R)-based short-course vaccines, registered in certain markets for the
major allergens of grass, tree and ragweed and sold under the TA Mix and
Pollinex brand names. The Group's portfolio is completed with Oralvac(R), a
sublingual product range and Venomil(R), a vaccine for allergies to bee and wasp
stings. A range of approximately 125 skin-prick allergy diagnostics is also
sold.

With its established business and current infrastructure, the Directors believe
that the Group has the basis to build a market leading allergy-focused
specialist pharmaceutical business through product development, in-licensing of
products and, in the longer term, the acquisition of both products and
businesses.

Allergy Therapeutics' development objective is to create modern allergy vaccines
capable of use as a first line therapy in the treatment and cure of allergic
diseases including allergic rhinitis, allergic conjunctivitis and allergic
asthma. The Board believes that Pollinex Quattro, which requires only four
injections per year, has the potential to transform allergy treatment, by
providing a convenient, safe, effective and potentially curative method of
treating seasonal allergic rhino-conjunctivitis (hayfever).

In mainstream pharmaceuticals, the products prescribed by physicians across the
world must have marketing authorisations, granted by national regulatory
authorities such as the FDA (tasked with the regulation of human medication in
the United States of America) and the EMEA (the European Union equivalent). The
granting of such authorisations is commonly referred to as 'Registration' and
requires rigorous proof of product quality, safety and efficacy through clinical
trials culminating in pivotal 'Phase III' studies.

Allergy vaccines have traditionally been made-to-order for individual
prescription according to the specific allergen causing the patient symptoms.
This has meant that, in general, allergy vaccines fall outside the normal
registration system and are sold as NPPs.

As part of Allergy Therapeutics' aim of transforming allergy treatment by
modernising allergy vaccination, the Group has embarked on a programme of
clinical trials with the objective of gaining Registration in all the major
markets worldwide for the Pollinex Quattro standardised products which are
suitable for a broad range of patients. The proceeds of the Placing will
primarily be applied to achieving this end and to put in place the additional
internal and external resources this will require.

Subject to regulatory approval, Allergy Therapeutics intends to initiate the
pivotal Phase III clinical trial programme during 2006 and to run the trials
throughout the 2007 pollen seasons. Three trials will be conducted, one for each
of the three most prevalent hayfever-causing allergens: grass, tree and ragweed.
These studies will be multi-centre, multi-national and conducted in both North
America and Europe. So far as the Directors are aware, no other allergy vaccines
are being developed on this worldwide basis, which requires the highest standard
of evidence of efficacy and safety.


R204 development

Allergy Therapeutics recently reported the successful outcome of its pivotal clinical efficacy and safety study, R204. 
This phase II/III data forms a crucial part of the development of the Pollinex Quattro product line, and is pivotal for 
the Registration of Pollinex Quattro Ragweed in Canada. It is estimated that more than 30 million people in North 
America suffer from allergies to ragweed.

The main outcome of this study showed a statistically significant (p<0.01) achievement of the primary endpoint - a 42% 
reduction in symptoms versus baseline; this was a 48% relative improvement over placebo. A 6 times increase in IgG was 
also shown (also statistically significant (p<0.001)), confirming that the effect was due to fundamental immunological 
changes.

The positive R204 study results mark an important step in the development of
Pollinex Quattro, since they:

  • support the Group's application for Registration of Pollinex Quattro
    Ragweed in Canada planned for the middle of 2006;
  • provide a key element in "End of Phase II" discussions with the FDA and
    other authorities prior to initiating Phase III; and
  • contribute to the data on safety and efficacy of the Group's other
    ultra-short course Pollinex Quattro vaccines in grass and tree.

It was on the basis of the excellent R204 results that the Board decided that it
was in the best interests of the Company to advance concurrently into full Phase
III studies with Pollinex Quattro vaccines for each of grass, tree and ragweed,
giving rise to the funding requirement behind the Placing.

Financial

The Company's interim results for the six month period to 31 December 2005 were
announced on 27 March 2006.

The results for the six months to 31 December 2005 were very encouraging and
have continued the progress shown in previous years.

The Group reported gross sales, before compulsory rebate in Germany, of £14.7m
(H1 2004: £14.1m). This represents an increase of 4% over the previous period,
driven primarily by growth of 10% in named-patient sales of Pollinex Quattro,
the Group's four-shot allergy vaccine. Year-on-year improvement in operating
profit was inhibited by some manufacturing issues, resulting primarily from the
demands made on all manufacturing resources in meeting the needs of both the
markets and the clinical trials. The Directors are confident that the
investments and actions initiated over the period will prevent a recurrence of
these problems.

Owing to the seasonality of the allergy market, some 70% of the Group's sales
are generated in the first half of the Company's financial year and as a
consequence the interim results do not give a representative indication for the
full year performance.

Gross profit grew by 21% to £11.4m, representing a gross margin of 80% of sales,
compared with £9.4m and 78% in the same period last year. This was an expected
trend because of the decrease in German rebates. The initiation of the
investment programme in the manufacturing facility and further investment in
manufacturing headcount to maintain compliance with good manufacturing practices
(GMP) will reduce the gross margin in the short term.

Marketing expenses, the major component of distribution costs, have increased in
line with our expectations as we have set up new markets in Poland, Austria, the
UK, the Czech Republic and Slovakia and intensified the promotional spend on our
high margin products. Costs for marketing and promotion increased to £5.0m (H1
2004: £3.8m), an increase of 33% over the previous period. Returns on these
revenue investments are anticipated in coming years. Administration costs of
£1.7m (H1 2004: £2.0m) were lower by 13%, benefiting by the release in the
period of a bad debt provision.

Research and development expenditure increased during the period to £5.5m (H1
2004: £0.7m) as the development activity for the MPL(R)-based vaccine range was
progressed.

The operating loss for the period was £0.7m (H1 2004 profit: £2.6m) but before
development costs, the operating profit was £4.8m (H1 2004, pre-exceptional
costs: £3.9m), an increase of 23%.

Net assets of £19.7m (H1 2004: £24.8m) show a net decrease of £5.1m against the
previous period end, due primarily to the investment in R&D over the period.

Net cash outflow before financing for the period was £4.2m (H1 2004 inflow:
£1.7m), less than the previous period by £5.9m due principally to the
accelerated investment in R&D in the period.

Bank funding

New funding lines were agreed in principle in March 2006 with the Company's
bank, Royal Bank of Scotland plc, to provide a new banking facility of £4m. This
facility will be used primarily to fund the investment required to prepare the
production facilities for the United States launch of the Group's products and
to support working capital requirements as the Group grows.

The Placing

The Placing Shares are expected to be admitted to trading on AIM on 5 May 2006.
The Placing is conditional, inter alia, upon:

   • the approval of the Resolutions at the EGM;
   • the Placing Agreement becoming unconditional in all respects and not
     having been terminated in accordance with its terms; and
   • Admission.

The Placing is to be effected on behalf of the Company by Bridgewell Securities
on the terms of the Placing Agreement. The Placing Agreement provides for
Bridgewell Securities to use its reasonable endeavours to procure subscribers
for the Placing Shares. The above obligations are subject to certain conditions
including those listed above. The Placing has not been underwritten by
Bridgewell Securities.

The Placing Shares represent approximately 23.2 per cent. of the enlarged issued
ordinary share capital of the Company following the Placing.



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