RB nr 18/2007

Legal basis: Art. 56 subpar. 1 of the Act on Public Offering

The Management Board of MCI Management S.A. informs that on April 3, 2007 the fund took up 566 shares with the nominal value of PLN 158.00 in Finepharm sp. z o.o. MCI paid 1 million PLN for the purchased shares that is PLN 1766.78 per one share. The purchased shares correspond to 20% in the share capital of the company. The concluded investment agreement assumes that after achieving certain budget parameters in 2007 additional financing will be implemented to the first round of financing in the amount of another PLN 1 million. Furthermore, the agreement provides for another, optional round of financing in the amount of PLN 5 million in the middle of 2009 which shall be implemented based on current financial results of the company. In the second round of financing MCI will take up to 60% of shares in the company. The conditions of the investment agreement provide for preferential conditions of exit from the investment by MCI Management SA.

Finepharm Sp. z o.o. has been operating in the biotechnology and pharmaceutical products market since 2003 when it was established on the basis of production divisions bought out by by Jelfa Pharmaceutical Company. Since 2004 the company has been selling its own products for PLN 6 million annually and at the same time it has been conducting a costly modernization of production and laboratory areas. Finepharm manufactures so called Active Pharmaceutical Ingredients (API) which are used by the pharmaceutical industry for production of finished drugs and diet supplements. The company is at present one of few entities in Poland which deal in biotechnology on the industrial scale. Finepharm uses biotechnological know-how and its own unique production and research technologies to produce APIs.
The financial means of MCI will be spent on the development of technology and the production hall, completion of the implementation of the GMP production standard as well as the development of the range of new products which by 2011 should result in a few times bigger production scale. Furthermore, the company is going to go public within the next 3 years.

The investment in Finepharm ideally fits in the strategy of MCI Management SA regarding the investment commitment in the “biotech” and “medtech” sectors. It is also in line with the forecasts of quick growth of these sectors. Finepharm is a biotechnology company in its growth stage; it has a technological potential, adequate human resources and a range of pharmaceutical products, available production and research laboratory facilities. All this provides the company with the market potential which makes it possible for the company to develop fast and increase its value. Furthermore, MCI sees a huge potential in the growing market of biotechnology in Poland as well as a possibility for the company to expand into the markets of the European Union.

The purchased shares correspond to 20% in the share capital of the Finepharm Sp. z o.o. and are considered assets of significant value.