January 2021 Midatech Pharma PLC ("Midatech" or the "Company") Business Update Midatech Pharma PLC (AIM: MTPH.L; Nasdaq: MTP), an R&D biotechnology company focused on improving the bio-delivery and biodistribution of med

("Midatech" or the "Company")

Midatech Pharma PLC (AIM: MTPH.L; Nasdaq:

MTP), an R&D biotechnology company focused on improving the bio-delivery and biodistribution of medicines, announces a number

The Q-Sphera R&D pipeline

has expanded to a net five active projects with all proceeding to plan. At their option, the collaboration with the European affiliate

of a global pharmaceutical company has expanded to three active pharmaceutical ingredients ("API"s). Optimised formulations

have been developed for the two internal pipeline programmes, MTD211 and MTD219, with the former undergoing and the latter shortly

to begin in vivo studies. The collaboration with Dr Reddy's Laboratories Ltd was mutually terminated.

The encouraging survival data

from the Phase I study of MTX110 in DIPG announced on 19 October 2020 combined with a significant increase in budgeted costs by

the proposed Phase II clinical site at Kinderspital, Zurich have prompted a re-evaluation of the MTX110 programme. By moving the

clinical trial programme to the US and employing an alternative convection enhanced delivery ("CED") system, the Company

will be able to undertake both a Phase I/II study in DIPG and a pilot Phase I study in a defined subset of adult glioblastoma multiforme

("GBM") patients, a much larger indication with also a very significant unmet medical need. The Company expects that

both studies can be completed for less than the cost of the original planned study in Zurich. Both the Phase I/II study in DIPG

and the Phase I pilot study in GBM are expected to begin enrolment later this year with completion expected in 2023 and 2022, respectively.

The EU has notified the Company

that, because its relationships with China Medical System Holdings Ltd and its affiliate, it does not qualify as an SME and is

therefore not eligible to receive the GlioKIDS grant.

The Company is engaged in tentative

discussions around potential co-development of MTX110 although given the early stage of such discussions, there can be no assurance

of a successful conclusion.

Further to the update outlined

in the Company's results for the year ended 31 December 2019, Secura Bio, Inc. ("Secura Bio"), the licensor of

panobinostat, the API component of MTX110, has twice declined an invitation to withdraw its purported termination of the license.

The Company continues to enjoy freedom to use panobinostat for research purposes and believes the relevant Secura Bio patents may

marginally delay a launch of MTX110 for DIPG but not MTX110 for GBM.

The Company's facilities

were closed in early June 2020 following successful negotiations with a Worker's Council. Certain assets, including gold

nanoparticle manufacturing equipment were transferred to Cardiff and others were sold. All liabilities have been settled other

than one small Spanish Government loan which has been cash collateralised.

Following the re-financing of

the Company in mid-2020, clinical progress with MTX110 and the encouraging development of the Q-Sphera R&D pipeline, the Company

has drawn to a close the Strategic Review process originally announced on 31 March 2020. The Company is focused on its realigned

strategy for its Q-Sphera technology and MTX110 and will continue to pursue licensing opportunities for its products and/or technologies.

Taking into account available cash resources

and the updates referenced above, the Company confirms it continues to expect to have sufficient working capital to fund operations

into the fourth quarter of 2021, assuming its programmes are progressed as planned and zero licence fee milestone receipts.

Commenting, Stephen Stamp, CEO and CFO

of Midatech, said: "In a year that posed challenges for everybody, I am particularly proud of how Midatech was able to

pivot away from a single product focus towards a more broadly-based collaborative strategy - a strategy which is gaining

traction. Our Q-Sphera pipeline is significantly expanded, providing more opportunities for partnering success. The re-alignment

of MTX110 to include GBM, an opportunity 30-50 times the size of DIPG, significantly enhances the potential for that programme

also. We are well positioned for a productive 2021."

This announcement contains inside information

for the purposes of Article 7 of Regulation (EU) 596/2014 (MAR).

For more information, please contact:

Midatech Pharma PLC (dual listed on LSE

AIM: MTPH; and NASDAQ: MTP) is a drug delivery technology company focused on improving the bio-delivery and bio-distribution of

medicines. The Company combines approved and development medications with its proprietary and innovative drug delivery technologies

to provide compelling products that have the potential to powerfully impact the lives of patients.

The Company has developed three in-house

technology platforms, each with its own unique mechanism to improve delivery of medications to sites of disease. All of the Company's

technologies have successfully entered human use in the clinic, providing important validation of the potential for each platform:

The platform nature of the technologies

offers the potential to develop multiple drug assets rather than being reliant on a limited number of programmes. Midatech's

technologies are supported by 36 patent families including 120 granted patents and an additional 70 patent applications. Midatech's

headquarters and R&D facility is in Cardiff, UK. For more information please visit www.midatechpharma.com

Forward-Looking Statements

Certain statements in this press release

may constitute "forward-looking statements" within the meaning of legislation in the United Kingdom and/or United States

Private Securities Litigation Reform Act. All statements contained in this press release that do not relate to matters of historical

fact should be considered forward-looking statements.

Reference should be made to those documents

that Midatech shall file from time to time or announcements that may be made by Midatech in accordance with the London Stock Exchange

AIM Rules for Companies ("AIM Rules"), the Disclosure and Transparency Rules ("DTRs") and the rules and regulations

promulgated by the US Securities and Exchange Commission, which contains and identifies other important factors that could cause

actual results to differ materially from those contained in any projections or forward-looking statements. These forward-looking

statements speak only as of the date of this announcement. All subsequent written and oral forward-looking statements by or concerning

Midatech are expressly qualified in their entirety by the cautionary statements above. Except as may be required under the AIM

Rules or the DTRs or by relevant law in the United Kingdom or the United States, Midatech does not undertake any obligation to

publicly update or revise any forward-looking statements because of new information, future events or otherwise arising.