NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, NEW ZEALAND, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR IN ANY OTHER JURISDICTION I

NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE

DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, NEW ZEALAND, JAPAN OR THE REPUBLIC

OF SOUTH AFRICA OR IN ANY OTHER JURISDICTION IN WHICH OFFERS OR SALES WOULD BE PROHIBITED BY APPLICABLE LAW. THIS ANNOUNCEMENT

IS NOT AN OFFER TO SELL OR A SOLICITATION TO BUY SECURITIES IN ANY JURISDICTION, INCLUDING THE UNITED STATES, CANADA, AUSTRALIA,

NEW ZEALAND, JAPAN AND THE REPUBLIC OF SOUTH AFRICA. NEITHER THIS ANNOUNCEMENT NOR ANYTHING CONTAINED HEREIN SHALL FORM THE BASIS

OF, OR BE RELIED UPON IN CONNECTION WITH, ANY OFFER OR COMMITMENT WHATSOEVER IN ANY JURISDICTION.

("Midatech" or the "Company")

Finalisation of Strategic Investment and Licence

Midatech Pharma (AIM: MTPH; Nasdaq: MTP), the R&D

company focused on delivering innovative oncology and rare disease products to patients, is pleased to confirm that further to

the announcement made by the Company on 29 January 2019 and following the approval at yesterday's general meeting by shareholders

of the strategic investment by China Medical Systems Holdings Limited group ("CMS") and A&B (HK), the licence agreement

entered into by the Company and CMS is now formally in force.

The strategic investment by CMS and A&B (HK),

comprised an 8m subscription in Midatech, for in aggregate 207,792,206 Ordinary Shares at a price of 3.85 pence per share.

The Subscription Shares were admitted to trading on AIM today alongside the Placing Shares and Open Offer Shares.

From a Midatech product perspective, as stipulated

in the licence agreement, CMS has rights to develop and commercialize the Company's pipeline of products (including any products

which are in or enter into pre-clinical or clinical development within a period of three years) in Greater China and certain South

East Asian countries excluding Japan and South Korea (the "CMS Territory") in perpetuity. Subject to certain milestones

being achieved, the Company will be entitled to receive regulatory and sales-based milestone payments as well as royalty payments.

From a Midatech technology platform perspective

the licence agreement permits CMS to identify its own potential product opportunities and, if agreed by Midatech, CMS will be entitled

to carry out such development in China with initial assistance from Midatech which will be funded by CMS through a technology transfer

fee payable to the Company by CMS. If such products obtain approval, CMS will retain the rights specific to such developed products

and will license the Company to commercialize them outside the CMS Territory in the rest of the world.

China Medical System Holdings Limited (HKG: 0867),

is a well-established, innovation-driven specialty pharma with a focus on sales and marketing in China. CMS has established the

diversified product introduction strategies to constantly provide competitive products and services to fulfil the unmet medical

needs of the China market, as well as to sustain the momentum for its future development. CMS has a fully-covered nationwide promotional

network, mainly focusing on academic promotion. As at 30 June 2018, CMS covered over 48,000 hospitals and medical institutions

The collaboration provides Midatech with a key strategic

partnership in China and South East Asia, access to the significant Chinese market, substantial investment and funds for Midatech's

current key programs, as well as additional CMS funded opportunities for the Company's technology platforms Q-Sphera, MidaSolve,

Dr Craig Cook, Chief Executive Office of Midatech

Pharma, said: "We are delighted to finalise the licence agreement with China Medical Systems, a leading Hong Kong

based Chinese pharmaceutical company. This is a key collaboration for Midatech that provides a strong endorsement of our technologies

and pipeline whilst establishing a solid foundation for a successful and ambitious long-term partnership. The agreement will enable

development of current and new products and extend our reach to the important markets of China and South East Asia. We look forward

to developing this collaboration with CMS."

Mr Lam Kong, Chairman and Chief Executive Officer

of CMS, said: "We are excited to work with Midatech and the strategic investment and licence agreement is testament

to our confidence in the value of the Midatech product pipeline and technologies, and our commitment to the partnership. We look

forward to a fruitful relationship with Midatech as we contribute to the development of its innovative pipeline of products as

we incorporate them into the extensive CMS portfolio."

The capitalised terms not otherwise defined in the

text of this announcement are as set out in the circular to shareholders dated 5 February 2019.

About Midatech Pharma PLC

Midatech Pharma (LSE AIM: MTPH; NASDAQ: MTP) is

an R&D company focused on delivering innovative oncology and rare disease products to patients. The Company is developing a

range of improved chemo-therapeutics or new immuno-therapeutics, using its three-proprietary platform drug delivery technologies,

all of which are in the clinic, specifically:

Each of our three technologies are thus focussed

on improved bio-delivery and bio-distribution of medicines or agents to areas of the body where they are needed and can exert their

actions in an effective, safe and precise manner.

Midatech is headquartered in Oxfordshire, with an

R&D facility in Cardiff and a manufacturing operation in Bilbao, Spain. For more information please visit www.midatechpharma.com.