Phoqus Group plc: Fundraising at 50 pence per share raising £5.2 million

West Malling, UK, 3 July 2007

Phoqus Group plc (AIM: PQS) (“Phoqus” or the “Company”), the oral drug delivery and development company, today announces a proposed fundraising to raise £5.0 million ($10.1 million) net of expenses by way of a Placing of new Ordinary Shares to UK institutional investors and a management subscription. The Placing is fully underwritten by the Company’s nominated adviser, Nomura Code Securities Limited.

The Fundraising is conditional, inter alia, on the approval of Shareholders. A circular convening an EGM of the Company, which is expected to take place on 26 July 2007, is being posted to Shareholders. Admission will be made to the London Stock Exchange for the new Ordinary Shares to be admitted to trading on the AIM market of the London Stock Exchange. It is expected that Admission will become effective and that dealings on the new Ordinary Shares will commence on 27 July 2007.

Placing Highlights And Strategic Update

Phoqus to raise approximately £5.0 million ($10.1 million) net of expenses by way of a conditional fundraising to certain new and existing Shareholders of 10,409,300 new Ordinary Shares at an issue price of 50 pence per new Ordinary Share

• The funds raised will be used to progress the in-house development of Chronocort, the Company’s product for the treatment of congenital adrenal hyperplasia (“CAH”) and adrenal insufficiency (“AI”), through pivotal Phase III clinical trials
• The funds will also be used to provide the Company with the financial resources to implement its new strategy of developing in-house novel therapeutic products targeting unmet medical needs using its proprietary delivery technologies

Commenting on the proposed Placing, Dr. Richard Mason, Chief Executive of Phoqus, said:
“We are delighted to have the on-going support of our strong list of existing investors and to welcome new very high quality investors to the Company. This fundraising will allow us to progress our first major in-house product opportunity, Chronocort, through its pivotal Phase III clinical trials.
“Having conducted a strategic review, we have decided to focus the Company’s strategy on the development of novel therapeutic products that meet real and significant unmet medical needs. Chronocort is an excellent example of our ability to do this, using our advanced drug delivery technologies to improve or change the way that drugs behave in the body. We look forward to using these technologies at Phoqus to generate a valuable new pipeline of products able to bring significant benefits to patients.”

Enquiries:

Phoqus Group plc	01732 870227
Dr Richard Mason, CEO
Financial Dynamics	020 7831 3113
David Yates/John Gilbert
Nomura Code Securities Limited	020 7776 1200
Phil Walker