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AGM statement

AGM statement

Nottingham, UK, 15 March 2006 - Innovata plc (LSE: IOV) will hold its Annual General Meeting today at 11.00am at the offices of Jones Day in London. The following is a summary of comments to be made by Ian Kent, Chairman.

"I have just completed my first year as Chairman of Innovata. It has been a time of transformation for the business and I would like to re-iterate some of the key achievements made in this period:

• restructuring of the cost base through removal of overheads and refocusing of R&D efforts;
• acquisition of Quadrant in July 2005 and successful integration to create a company focused on the development of pulmonary products;
• strengthened corporate governance through the appointment of three new non-executive directors;
• signing of some valuable deals including a global marketing agreement with Baxter for Adept, our adhesion reduction solution for use in abdominal surgery. This agreement has the potential to transform the revenues of this product in Europe, where it is already marketed, as well as in the larger US market where we anticipate the outcome of the FDA's regulatory review in the near future;
• a second deal for the Duohaler combination asthma therapy device;
• a restructuring of the inhaled insulin agreement with Bristol Myers Squibb; and
• approval of the Budesonide and Formoterol Clickhaler products in some European markets, with further approvals expected through 2006, as well as increased sales of the Clickhaler in Japan and entry into a Phase III study in that territory

"These achievements demonstrate our ability to build relationships, deliver value and gain the confidence of key collaborators. Interest in our pulmonary product development capabilities continues to grow as we step up our business development activities to attract new partners.

"Going forward, revenues from our pulmonary product development agreements will continue to be balanced by royalty income from our non-pulmonary marketed products. It is this mix of revenues that differentiates Innovata from its peers and gives us a strong platform from which we can create a sustainable and profitable company.

"We have signalled our intent to acquire and integrate revenue based, products and technologies and we will continue to evaluate further opportunities in the year ahead.

"Strong corporate governance is a key consideration in a company such as Innovata and, as a board, we are keen to continue to improve in this area. In this context, we have been mindful of concerns raised by certain shareholders as to our proposal to seek a disapplication of pre-emption rights for cash issues of up to 10% of the Company's issued share capital. We are therefore proposing to make a board commitment not to exercise the authority, if so granted by shareholders, in respect of allotments in excess of 5% without prior consultation with major shareholders and shareholder representative bodies, so as to address these concerns.

"In summary, we believe that much has been achieved in improving the fortunes of Innovata since the arrival of the new executive team in March 2005 and I have now transitioned to the role of non-executive Chairman, as planned. The current year has got off to a strong start and we look to the remainder of the year with confidence."

Contacts:

Notes to Editors

Innovata plc specialises in the development of pulmonary products for the treatment of respiratory disorders and other serious diseases. Using its proprietary dry powder inhaler and drug formulation technologies, the company has developed a pipeline of revenue-generating/marketed and clinical-stage products. In addition, the Company has a portfolio of non-pulmonary products with growing revenues. Innovata has established development and marketing partnerships with a number of pharmaceutical companies including Baxter, Merck KGaA, UCB and Otsuka.

Innovata was formed in July 2005 when ML Laboratories PLC acquired Quadrant Technologies Limited and the remaining minority interest in Innovata Biomed Limited. The company has over 90 employees of whom of 65 are engaged in research and development, mainly based at Innovata plc’s headquarters in Ruddington, Nottingham, United Kingdom.