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("Midatech" or the "Company")

Result of the Placing

Launch of the Open Offer

Midatech Pharma (AIM: MTPH, Nasdaq: MTP),

the R&D company focused on delivering innovative oncology and rare disease products to patients, is pleased to announce the

completion of the Placing announced earlier today ("Placing Launch Announcement").

The Company has conditionally raised, in

aggregate, approximately 4.66 million, before expenses, by way of the Placing of 120,966,718 Units (each Unit comprising

one Placing Share and one Warrant) at the Issue Price of 3.85 pence per Unit.

Together with the Subscription, the Company

has therefore conditionally raised gross proceeds of approximately 12.66 million.

In addition, to provide Qualifying Shareholders

with an opportunity to participate in the fundraise at the Issue Price, the Company is making an Open Offer to all Qualifying Shareholders

to raise additional gross proceeds of up to approximately 0.75 million for the Company through the offer of up to 19,456,554

Units. The Open Offer is being made on the basis of:

0.318 Open Offer Units (comprising one

Open Offer Share and one Warrant) for every 1 Existing Ordinary Share held by the Qualifying Shareholder on the Record Date.

entitlements to Open Offer Units not subscribed for by Qualifying Shareholders will be available to Qualifying Shareholders under

the Excess Application Facility. A timetable in respect of the Open Offer is set out below.

The Placing and Open Offer follows the

Company's announcement on 29 January 2019 (the "Subscription Announcement") that it has entered into conditional

agreements with a subsidiary of China Medical System Holdings Limited ("CMS") and A&B (HK) Company Ltd to raise

8 million in aggregate through the issue of 207,792,206 Units at the Issue Price. Subject to completion of the Subscription,

the Company has entered into the CMS Licence Agreement for the development and commercialisation of the Group's pipeline of

products in Greater China and certain countries in south east Asia. The Placing and Open Offer Units are priced on identical terms

as the Subscription.

The aggregate net proceeds of the Placing

and Subscription of approximately 11.61 million (after fees and expenses) are expected to provide the Company with an estimated

cash runway through Q1 2020. Based on current expectations on trial design, clinical trial approvals and associated costs, the

Directors believe that this funding would allow the Company to deliver data read-out on a pivotal MTD201 clinical trial and potentially

interim efficacy data on MTX110's open label study.

The Placing Shares and the Subscription

Shares represent approximately 84.3% per cent. of the issued share capital of the Company as enlarged by the Placing and Subscription.

The Issue Price represents a discount of approximately 6.1 per cent. to the middle market closing price of an Ordinary Share as

at 1 February 2019. The Placing and Subscription has received support from both existing and new Shareholders.

The Placing and Open Offer is conditional

Commenting on the Placing and Open Offer,

Craig Cook, CEO of Midatech Pharma, said: "We would like to thank investors for their support, which allows us to

further advance our innovative pipeline. With the combined proceeds of the Capital Raising, we believe that Midatech is poised

for a transformational period of growth and the funds should enable us to proceed with the Pivotal MTD201 trial, scheduled to commence

around mid 2019, whilst supporting the US MTX110 Phase I/II trial currently ongoing."

Concert Party holding

As noted in the Placing Launch Announcement,

the Subscription is also conditional on Shareholder approval of the Resolutions. The terms of the Subscription give rise to certain

considerations under the Takeover Code as a result of the proposed issue of Subscription Shares and Subscriber Warrants to the

Subscribers. CMS, (including its subsidiary CMS Venture), A&B (HK) and Mr. Lam Kong together comprise a concert party (the

"Concert Party"). Assuming completion of the Placing but excluding the Open Offer Shares, upon completion of the Subscription,

the Concert Party would have an aggregate shareholding in the Company of approximately 53.3 per cent. of the so enlarged share

capital. The issue of the Warrants to the Subscribers would mean that, if exercised (and assuming no other new Ordinary Shares

are issued prior to any such exercise and excluding any shares which may be issued pursuant to the Open Offer), the Concert Party's

aggregate shareholding would increase to up to 415,584,412 Ordinary Shares, representing up to 69.5 per cent. of the then further

enlarged share capital of the Company. Accordingly, completion of the Subscription and the CMS Licence Agreement is also conditional

on a waiver of Rule 9 of the Takeover Code being permitted by the Takeover Panel, which would be subject to the approval by the

Independent Shareholders of a waiver of any obligation of the Concert Party (or any of its members) to make a mandatory general

offer to the Company's shareholders under Rule 9 of the Takeover Code upon issue of the Subscription Shares arising from the Subscription

and upon exercise of the Subscriber Warrants granted to the Subscribers ("Panel Waiver"). There is no guarantee that

the Independent Shareholders will approve the Panel Waiver. If the Panel Waiver is not approved, neither the Subscription, the

CMS Licence Agreement, the Placing or the Open Offer will proceed and, as noted in the Placing Launch Announcement, it is unlikely

that the Company will be able to continue as a going concern.

Subject to the Panel Waiver being approved

and completion of the Placing and Subscription, on Admission, the Concert Party will hold more than 50 per cent. of the Company's

voting share capital. In these circumstances, for so long as the members of the Concert Party continue to be treated as acting

in concert, the Concert Party may increase its aggregate interest in the Ordinary Shares without incurring any obligation under

Rule 9 of the Takeover Code to make a general offer, although individual members of the Concert Party will not be able to increase

their percentage interests in Ordinary Shares through or between a relevant Rule 9 threshold without the consent of the Takeover

The Company intends to publish a circular

setting out full details of the Panel Waiver, further information on the Concert Party, and the terms and conditions of the Open

Offer together with application forms for the Open Offer and notice of the General Meeting to be held on 25 February 2019 (the

"Circular") on or around 5 February 2019. The Circular will also be available at this time on the Company's website at

www.midatechpharma.com.

Subject to all conditions being met, application

will be made to the London Stock Exchange for Admission. Subject to, amongst other things, the Resolutions being passed by the

requisite majorities at the General Meeting, it is expected that settlement of any such shares and Warrants and Admission will

become effective on or around 26 February 2019 and that dealings in the Placing Shares will commence at that time.

A further announcement will be made regarding

the outcome of the Open Offer and the new total number of voting rights in Midatech (subject to Admission) on or around the 25

Related party transaction

Woodford Investment Management Ltd, in

its capacity as discretionary investment manager, acting as agent on behalf of Woodford Patient Capital Trust and the LF Woodford

Equity Income Fund, a sub fund of LF Woodford Investment Fund ("Woodford") has subscribed for Placing Shares at the

Issue Price of 3.85 pence. As at 1 February 2019 (being the latest practicable date prior to the publication of this announcement)

and, subject to and immediately following Admission, the interest of Woodford Investment Group in the issued share capital of the

Company is as follows:

*Assuming full take up of the Open Offer

The participation by Woodford in the Placing

constitutes a related party transaction for the purposes of the AIM Rules. The independent Directors for the purpose of the Placing,

having consulted with the Company's nominated adviser, Panmure Gordon, consider that the terms of the related party transaction

are fair and reasonable insofar as the Shareholders are concerned.