REG - Diurnal Group PLC Neurocrine Bio. - RECOMMENDED CASH ACQUISITION

Neurocrine BiosciencesAnnouncement

30/08/2022 07:16

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RNS Number : 4757X  Diurnal Group PLC  30 August 2022

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION

FOR IMMEDIATE RELEASE

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED FOR THE PURPOSES OF
ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014 AS IT FORMS PART OF
DOMESTIC LAW IN THE UNITED KINGDOM PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL)
ACT 2018.

 30 August 2022

RECOMMENDED CASH ACQUISITION

of

Diurnal Group plc ("Diurnal")

by

Neurocrine Biosciences, Inc. ("Neurocrine")

to be implemented by means of a Scheme of Arrangement under Part 26 of the
Companies Act 2006

Summary

·              The boards of Neurocrine and Diurnal are pleased
to announce that they have reached agreement on the terms of a recommended
cash acquisition pursuant to which Neurocrine shall acquire the entire issued
and to be issued ordinary share capital of Diurnal (the "Acquisition"). The
Acquisition is to be effected by means of a scheme of arrangement under Part
26 of the Companies Act.

·              The Acquisition values the entire issued and to
be issued ordinary share capital of Diurnal at approximately £48.3 million.

·              Under the terms of the Acquisition, Diurnal
Shareholders shall be entitled to receive 27.5 pence in cash for each Diurnal
Share, representing a premium of approximately:

o  144 per cent. to the Closing Price per Diurnal Share of 11.25 pence on 26
August 2022 (being the last Business Day prior to this announcement, the
"Latest Practicable Date"); and

o  151 per cent. to the volume weighted average Closing Price of 10.93 pence
per Diurnal Share for the three months ended on the Latest Practicable Date .

·              If, on or after the date of this announcement and
on or prior to the Effective Date, any dividend, distribution, or other return
of value is declared, made, or paid or becomes payable by Diurnal, the
Acquisition Price shall be reduced accordingly. In such circumstances, Diurnal
Shareholders shall be entitled to retain any such dividend, distribution, or
other return of value declared, made, or paid.

·              The Acquisition is conditional on, amongst other
things, the approval of Diurnal Shareholders.

Information on Neurocrine

·              Neurocrine is a neuroscience-focused,
biopharmaceutical company with a simple purpose: to relieve suffering for
people with great needs, but few options. Neurocrine is dedicated to
discovering and developing life-changing treatments for patients with
under-addressed neurological, neuroendocrine and neuropsychiatric disorders.
Neurocrine's portfolio includes FDA-approved treatments for tardive dyskinesia
(TD), Parkinson's disease, endometriosis and uterine fibroids, and a
diversified portfolio of investigational therapies with the potential to
address unmet clinical needs of patients worldwide living with neurological,
endocrine and psychiatric disorders. Neurocrine has a workforce of
approximately 1,200 employees, and is headquartered in San Diego, California.

·              For the year ended 31 December 2021, Neurocrine
reported net product sales of $1.09 billion (c. £0.9 billion) and net income
of $89.6 million (c.£75.3 million). As at the Latest Practicable Date,
Neurocrine had a market capitalisation of $10.0 billion (c.£8.4 billion).

Information on Diurnal

·              Diurnal is a European specialty pharmaceutical
group targeting patient needs in chronic endocrine (hormonal) diseases.
Diurnal aims to develop and commercialise products to solve patient needs in
endocrine diseases, primarily those that result from a deficiency of cortisol
and testosterone, typically where there is either no licensed medicine or
where current treatment does not sufficiently address patients' needs.
Diurnal's portfolio includes approved treatments for paediatric adrenal
insufficiency (AI) and congenital adrenal hyperplasia (CAH). Diurnal has a
workforce of 33 employees, and is headquartered in Cardiff, UK.

·              For the six months ended 31 December 2021,
Diurnal reported unaudited net product sales (including royalties) of £2.13
million and a net loss of £7.95 million. As at the Latest Practicable Date,
Diurnal had a market capitalisation of £19.1 million. Unaudited net product
sales (including royalties) for the twelve months to 30 June 2022 were £4.62
million.

Diurnal recommendation

·              The Diurnal Directors, who have been so advised
by Panmure Gordon as to the financial terms of the Acquisition, consider the
terms of the Acquisition to be fair and reasonable. In providing its advice to
the Diurnal Directors, Panmure Gordon has taken into account the commercial
assessments of the Diurnal Directors. Panmure Gordon is providing independent
financial advice to the Diurnal Directors for the purposes of Rule 3 of the
Code.

·              Accordingly, the Diurnal Directors intend to
recommend unanimously that Diurnal Shareholders vote in favour of the Scheme
at the Court Meeting and the resolution to be proposed at the General Meeting
(or, in the event that the Acquisition is implemented by way of a Takeover
Offer, to accept or procure acceptance of the Takeover Offer), as those
Diurnal Directors who hold Diurnal Shares have irrevocably undertaken to do in
respect of their own beneficial holdings of 3,030,867 Diurnal Shares
representing, in aggregate, approximately 1.8 per cent. of the ordinary share
capital of Diurnal in issue on the Latest Practicable Date.

·              Neurocrine has also received an irrevocable
undertaking to vote in favour of the Scheme at the Court Meeting and the
resolutions to be proposed at the General Meeting (or, in the event that the
Acquisition is implemented by way of a Takeover Offer, to accept or procure
acceptance of the Takeover Offer) from IP Group in respect of a total of
49,900,285 Diurnal Shares, representing, in aggregate, approximately 29.3 per
cent. of the ordinary share capital of Diurnal in issue on the Latest
Practicable Date.

·              In addition, Neurocrine has also received an
irrevocable undertaking to vote in favour of the Scheme at the Court Meeting
and the resolutions to be proposed at the General Meeting (or, in the event
that the Acquisition is implemented by way of a Takeover Offer, to accept or
procure acceptance of the Takeover Offer) from (i) Development Bank of Wales
in respect of a total of 11,534,888 Diurnal Shares, representing, in
aggregate, approximately 6.8 per cent. of the ordinary share capital of
Diurnal in issue on the Latest Practicable Date and (ii) Polar Capital
Holdings plc in respect of a total of 20,000,000 Diurnal Shares, representing,
in aggregate, approximately 11.8 per cent. of the ordinary share capital of
Diurnal in issue on the Latest Practicable Date.

·              Neurocrine has therefore received irrevocable
undertakings in respect of a total of 84,466,040 Diurnal Shares representing,
in aggregate, approximately 49.7 per cent. of the ordinary share capital of
Diurnal in issue on the Latest Practicable Date.

·              Further details of these irrevocable undertakings
are set out in Appendix 3 to this announcement.

·              In addition to the irrevocable undertakings,
Neurocrine has received a letter of intent from Amati Global Investors in
respect of 8,786,429 Diurnal Shares, representing, in aggregate, approximately
5.2 per cent. of the ordinary share capital of Diurnal in issue on the Latest
Practicable Date.

·              In total, Neurocrine has received irrevocable
undertakings and a letter of intent in respect of a total of 93,252,469
Diurnal Shares representing, in aggregate, approximately 54.8 per cent. of the
ordinary share capital of Diurnal in issue on the Latest Practicable Date.

Timetable and Conditions

·              The Acquisition shall be put to Scheme
Shareholders at the Court Meeting. In order to become effective, the Scheme
must be approved by a majority in number of the Scheme Shareholders voting at
the Court Meeting, either in person or by proxy, representing at least 75 per
cent. in value of the Scheme Shares voted. In addition, the implementation of
the Scheme must also be approved at the General Meeting by Diurnal
Shareholders representing at least 75 per cent. of votes cast at the General
Meeting.

·              The Conditions to the Acquisition are set out in
Appendix 1 to this announcement, along with certain other terms; the full
terms and conditions will be provided in the Scheme Document.

·              The Scheme Document, containing further
information about the Acquisition and notices of the Court Meeting and the
General Meeting shall be published as soon as practicable and, in any event,
within 28 days of this announcement (or such later time as the Panel agrees).

·              The Acquisition is currently expected to complete
during late October or early November 2022, subject to satisfaction or (where
applicable) waiver of the Conditions. An expected timetable of key events
relating to the Acquisition will be provided in the Scheme Document.

Commenting on the Acquisition, Anders Härfstrand, Non-Executive Chairman of
Diurnal, said:

"The Board of Diurnal is delighted to announce this recommended offer for
Diurnal. Diurnal and Neurocrine are highly complementary businesses, and we
believe that Neurocrine's financial and operational resources will
substantially accelerate the development of a leading franchise in diseases of
cortisol deficiency, benefiting physicians and patients globally.

We believe that the Acquisition is compelling for Diurnal's shareholders given
the risks associated with achieving Diurnal's vision of creating a profitable
business, in particular the ongoing commercial roll out of Diurnal's products
in Europe and the execution of key clinical studies, in addition to the
substantial shareholder dilution that is likely to result from accessing the
capital required to deliver this vision."

Commenting on the Acquisition, Kyle Gano, Chief Business Development and
Strategy Officer of Neurocrine, said:

"We have followed Diurnal for several years and have a high regard for its
people. We see a good strategic fit that offers benefits for both companies'
stakeholders and the physician and patient communities we both serve."

This summary should be read in conjunction with the full text of this
announcement (including the Appendices). The Acquisition shall be subject to
the Conditions and further terms set out in Appendix 1 to this announcement
and to the full terms and conditions which shall be set out in the Scheme
Document. Appendix 2 to this announcement contains the sources of information
and bases of calculations of certain information contained in this
announcement, Appendix 3 to this announcement contains a summary of the
irrevocable undertakings received in relation to this Acquisition and Appendix
4 to this announcement contains definitions of certain expressions used in
this summary and in this announcement.

Enquiries:

 Neurocrine Biosciences, Inc.
 Todd Tushla, Vice President, Investor Relations                            +1 858 617 7143

 Smith Square Partners (Financial Adviser to Neurocrine)
 John Craven                                                                +44 (0) 20 3696 7260

 Toby Rolls

 Diurnal Group plc
 Richard Bungay, Interim Chief Executive Officer                            +44 (0) 20 3727 1000

 Panmure Gordon (UK) Limited (Rule 3 Adviser, Financial Adviser, Nominated
 Adviser and Joint Broker to Diurnal)
 Freddy Crossley                                                            +44 (0) 20 7886 2500

 Emma Earl

 Mark Rogers

 Rupert Dearden

 Torreya (Strategic Adviser to Diurnal)
 Stephanie Léouzon                                                          +44 (0) 20 7451 4550

 Kelly Curtin

 FTI Consulting (Media and Investor Relations)
 Simon Conway                                                               +44 (0)20 3727 1000

 Victoria Foster Mitchell

 Alex Davis

 

Cooley (UK) LLP is retained as legal adviser to Neurocrine and Eversheds
Sutherland (International) LLP is retained as legal adviser to Diurnal.

Important notices

Smith Square Partners, which is authorised and regulated in the UK by the FCA,
is acting exclusively as financial adviser to Neurocrine and no one else in
connection with the Acquisition and will not be responsible to anyone other
than Neurocrine for providing the protections afforded to clients of Smith
Square Partners nor for providing advice in relation to the Acquisition or any
other matters referred to in this document. Neither Smith Square Partners nor
any of its affiliates owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, whether in contract, in tort, under
statute or otherwise) to any person who is not a client of Smith Square
Partners in connection with the Acquisition, this document, any statement
contained herein or otherwise.

Panmure Gordon, which is authorised and regulated in the United Kingdom by the
FCA and is acting as financial adviser, Rule 3 adviser, nominated adviser and
joint broker to Diurnal and for no one else in connection with the Acquisition
and other matters referred to in this Announcement and will not be responsible
to anyone other than Diurnal for providing the protections afforded to its
clients or for providing advice in relation to the Acquisition, the contents
of this Announcement or any other matters referred to in this Announcement.
Neither Panmure Gordon nor any of its affiliates, directors or employees owes
or accepts any duty, liability or responsibility whatsoever (whether direct or
indirect, consequential, whether in contract, in tort, in delict, under
statute or otherwise) to any person who is not a client of Panmure Gordon in
connection with this Announcement, any statement contained herein, the
Acquisition or otherwise.

Torreya, which is authorised and regulated in the UK by the FCA and is a
member of FINRA/SIPC in the US, is acting exclusively for Diurnal and no one
else in connection with the Acquisition and will not be responsible to anyone
other than Diurnal for providing the protections afforded to clients of
Torreya nor for providing advice in connection with the Acquisition or any
other matter referred to herein.

This announcement is for information purposes only and does not constitute, or
form any part of, an offer to sell or an invitation to purchase any securities
or the solicitation of an offer to buy any securities in any jurisdiction,
pursuant to the Acquisition or otherwise.

The Acquisition shall be made solely by means of the Scheme Document (together
with the Forms of Proxy) (or, if the Acquisition is implemented by way of
Takeover Offer, the Takeover Offer document), which shall contain the full
terms and conditions of the Acquisition, including details of how to vote in
respect of the Acquisition.

This announcement has been prepared for the purpose of complying with the laws
of England and Wales and the Code and the information disclosed may not be the
same as that which would have been disclosed if this announcement had been
prepared in accordance with the laws of jurisdictions outside England and
Wales.

With input from Neurocrine, Diurnal shall prepare the Scheme Document to be
distributed to Diurnal Shareholders. Diurnal and Neurocrine urge Diurnal
Shareholders to read the Scheme Document when it becomes available because it
shall contain important information relating to the Acquisition.

This announcement does not constitute a prospectus or prospectus exempted
document.

Overseas Shareholders

The release, publication or distribution of this announcement in or into
certain jurisdictions other than the United Kingdom may be restricted by law.
Persons who are not resident in the United Kingdom or who are subject to other
jurisdictions should inform themselves of, and observe, any applicable
requirements.

Unless otherwise determined by Neurocrine or required by the Code, and
permitted by applicable law and regulation, the Acquisition shall not be made
available, directly or indirectly, in, into or from a Restricted Jurisdiction
where to do so would violate the laws in that jurisdiction and no person may
vote in favour of the Acquisition by any such use, means, instrumentality or
form within a Restricted Jurisdiction or any other jurisdiction if to do so
would constitute a violation of the laws of that jurisdiction. Accordingly,
copies of this announcement and all documents relating to the Acquisition are
not being, and must not be, directly or indirectly, mailed or otherwise
forwarded, distributed or sent in, into or from a Restricted Jurisdiction
where to do so would violate the laws in that jurisdiction, and persons
receiving this announcement and all documents relating to the Acquisition
(including custodians, nominees and trustees) must not mail or otherwise
distribute or send them in, into or from such jurisdictions where to do so
would violate the laws in that jurisdiction.

The availability of the Acquisition to Diurnal Shareholders who are not
resident in the United Kingdom may be affected by the laws of the relevant
jurisdictions in which they are resident. Persons who are not resident in the
United Kingdom should inform themselves of, and observe, any applicable
requirements.

The Acquisition shall be subject to the applicable requirements of the Code,
the AIM Rules, the Panel, the London Stock Exchange and the Financial Conduct
Authority.

Additional information for US investors

The Acquisition relates to shares of a UK company and is proposed to be
effected by means of a scheme of arrangement under the laws of England and
Wales. A transaction effected by means of a scheme of arrangement is not
subject to the tender offer rules or the proxy solicitation rules under the US
Securities Exchange Act.

Accordingly, the Acquisition is subject to the disclosure and procedural
requirements applicable in the United Kingdom to schemes of arrangement which
differ from the disclosure requirements of United States tender offer and
proxy solicitation rules.

However, if Neurocrine were (subject to Panel consent) to elect to implement
the Acquisition by means of a Takeover Offer, such Takeover Offer shall be
made in compliance with all applicable United States laws and regulations,
including Section 14(e) and Regulation 14E under the US Exchange Act and any
applicable exemptions thereunder. Such a takeover would be made in the United
States by Neurocrine and no one else.

In accordance with normal United Kingdom practice, Neurocrine or its nominees,
or its brokers (acting as agents), may from time to time make certain
purchases of, or arrangements to purchase, shares or other securities of
Diurnal outside of the US, other than pursuant to the Acquisition, until the
date on which the Acquisition and/or Scheme becomes effective, lapses or is
otherwise withdrawn. These purchases may occur either in the open market at
prevailing prices or in private transactions at negotiated prices. Any
information about such purchases or arrangements to purchase shall be
disclosed as required in the UK, shall be reported to a Regulatory Information
Service and shall be available on the London Stock Exchange website at
www.londonstockexchange.com (http://www.londonstockexchange.com) .

The receipt of consideration by a US holder for the transfer of its Diurnal
Shares pursuant to the Scheme shall be a taxable transaction for United States
federal income tax purposes. Each Diurnal Shareholder is urged to consult
their independent professional adviser immediately regarding the tax
consequences of the Acquisition applicable to them, including under applicable
United States state and local, as well as overseas and other, tax laws.

Financial information relating to Diurnal included in this announcement and
the Scheme Document has been or shall have been prepared in accordance with
accounting standards applicable in the United Kingdom and may not be
comparable to financial information of US companies or companies whose
financial statements are prepared in accordance with generally accepted
accounting principles in the United States.

Neurocrine is organised under the laws of the State of Delaware in the United
States of America and Diurnal is organised under the laws of England and
Wales. Some or all of the officers and directors of Neurocrine and Diurnal,
respectively, are residents of countries other than the United States. In
addition, some of the assets of Neurocrine and Diurnal are located outside the
United States. As a result, it may be difficult for US shareholders of Diurnal
to effect service of process within the United States upon Neurocrine or
Diurnal or their respective officers or directors or to enforce against them a
judgment of a US court predicated upon the securities laws of the United
Kingdom.

Forward looking statements

This announcement (including information incorporated by reference in this
announcement) may contain statements which are, or may be deemed to be,
"forward looking statements". Such forward looking statements are prospective
in nature and are not based on historical facts, but rather on current
expectations and on numerous assumptions regarding the business strategies and
the environment in which Diurnal, any member of the Diurnal Group, Neurocrine,
any member of the Neurocrine Group or the Enlarged Group shall operate in the
future and are subject to risks and uncertainties that could cause actual
results to differ materially from those expressed or implied by those
statements.

The forward-looking statements contained in this announcement may relate to
Diurnal, any member of the Diurnal Group, Neurocrine, any member of the
Neurocrine Group or the Enlarged Group's future prospects, developments and
business strategies, the expected timing and scope of the Acquisition and
other statements other than historical facts. In some cases, these forward
looking statements can be identified by the use of forward looking
terminology, including the terms "believes", "estimates", "will look to",
"would look to", "plans", "prepares", "anticipates", "expects", "is expected
to", "is subject to", "budget", "scheduled", "forecasts", "synergy",
"strategy", "goal", "cost-saving", "projects" "intends", "may", "will",
"shall" or "should" or their negatives or other variations or comparable
terminology. Forward-looking statements may include statements relating to the
following: (i) future capital expenditures, expenses, revenues, earnings,
synergies, economic performance, indebtedness, financial condition, dividend
policy, losses and future prospects; (ii) business and management strategies
and the expansion and growth of Neurocrine's, any member of the Neurocrine
Group or Diurnal's operations and potential synergies resulting from the
Acquisition; and (iii) the effects of global economic conditions and
governmental regulation on Neurocrine's, any member of the Neurocrine Group or
Diurnal's business.

By their nature, forward-looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that shall occur in
the future. These events and circumstances include changes in the global,
political, economic, business, competitive, market and regulatory forces,
future exchange and interest rates, changes in tax rates, future business
combinations or disposals, and any epidemic, pandemic or disease outbreak. If
any one or more of these risks or uncertainties materialises or if any one or
more of the assumptions prove incorrect, actual results may differ materially
from those expected, estimated or projected. Such forward looking statements
should therefore be construed in the light of such factors.

Neither Diurnal or any member of the Diurnal Group or any of Neurocrine or any
member of the Neurocrine Group, nor any of their respective associates or
directors, officers or advisers, provides any representation, assurance or
guarantee that the occurrence of the events expressed or implied in any
forward-looking statements in this announcement shall actually occur. Given
these risks and uncertainties, potential investors should not place any
reliance on forward looking statements.

Specifically, statements of estimated cost savings and synergies relate to
future actions and circumstances which, by their nature involve, risks,
uncertainties and contingencies. As a result, the cost savings and synergies
referred to may not be achieved, may be achieved later or sooner than
estimated, or those achieved could be materially different from those
estimated. Due to the scale of the Enlarged Group, there may be additional
changes to the Enlarged Group's operations. As a result, and given the fact
that the changes relate to the future, the resulting cost synergies may be
materially greater or less than those estimated.

The forward-looking statements speak only at the date of this announcement.
All subsequent oral or written forward-looking statements attributable to any
member of the Neurocrine Group or Diurnal Group, or any of their respective
associates, directors, officers, employees or advisers, are expressly
qualified in their entirety by the cautionary statement above.

Diurnal, the Diurnal Group, Neurocrine and the Neurocrine Group and their
respective associates, directors, officers, employees and advisers expressly
disclaim any obligation to update such statements other than as required by
law or by the rules of any competent regulatory authority, whether as a result
of new information, future events or otherwise.

No profit forecasts or estimates

No statement in this announcement is intended as a profit forecast or estimate
for any period and no statement in this announcement should be interpreted to
mean that earnings or earnings per share for Neurocrine or Diurnal, as
appropriate, for the current or future financial years would necessarily match
or exceed the historical published earnings or earnings per share for
Neurocrine or Diurnal, as appropriate.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or
more of any class of relevant securities of an offeree company or of any
securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the offer period and, if later, following the announcement in
which any securities exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no
later than 3.30 p.m. (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later than 3.30
p.m. (London time) on the 10th business day following the announcement in
which any securities exchange offeror is first identified. Relevant persons
who deal in the relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening Position
Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1
per cent. or more of any class of relevant securities of the offeree company
or of any securities exchange offeror must make a Dealing Disclosure if the
person deals in any relevant securities of the offeree company or of any
securities exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions in, and
rights to subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s), save to the extent that
these details have previously been disclosed under Rule 8. A Dealing
Disclosure by a person to whom Rule 8.3(b) applies must be made by no later
than 3.30 p.m. (London time) on the business day following the date of the
relevant dealing.

If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they shall
be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website at
http://www.thetakeoverpanel.org.uk/ (http://www.thetakeoverpanel.org.uk/) ,
including details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified. You should
contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are
in any doubt as to whether you are required to make an Opening Position
Disclosure or a Dealing Disclosure.

Electronic communications

Please be aware that addresses, electronic addresses and certain information
provided by Diurnal Shareholders, persons with information rights and other
relevant persons for the receipt of communications from Diurnal may be
provided to Neurocrine during the Offer Period as requested under Section 4 of
Appendix 4 of the Code to comply with Rule 2.11(c) of the Code.

Publication on website and availability of hard copies

A copy of this announcement shall be made available subject to certain
restrictions relating to persons resident in Restricted Jurisdictions on
Diurnal's website at https://www.diurnal.com/investor/dallas
(https://www.diurnal.com/investor/dallas) and on Neurocrine's website at
https://www.neurocrine.com/investors (https://www.neurocrine.com/investorsb)
by no later than 12 noon (London time) on the business day following the date
of this announcement. For the avoidance of doubt, the contents of this website
are not incorporated into and do not form part of this announcement.

Diurnal Shareholders may request a hard copy of this announcement by
contacting Link Group on 0371 664 0300. Calls are charged at the standard
geographic rate and will vary by provider. Calls outside the United Kingdom
will be charged at the applicable international rate. Lines are open between
09:00 am-17:30 pm, Monday to Friday excluding public holidays in England and
Wales or by submitting a request in writing to our Registrars at Link Group,
10th Floor, Central Square, 29 Wellington Street, Leeds, LS1 4DL. If you have
received this announcement in electronic form, copies of this announcement and
any document or information incorporated by reference into this announcement
will not be provided unless such a request is made.

Rounding

Certain figures included in this announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of the figures that precede them.

Rule 2.9 of the Code

For the purposes of Rule 2.9 of the Code, Diurnal confirms that, as at the
Latest Practicable Date, it had 170,040,825 ordinary shares of £0.05 each in
issue and admitted to trading on AIM. Diurnal does not hold any shares in
treasury. The International Securities Identification Number for the Diurnal
Shares is GB00BDB6Q760.

General

If the Acquisition is effected by way of a Takeover Offer, and such Takeover
Offer becomes or is declared unconditional in all respects and sufficient
acceptances are received, Neurocrine intends to exercise its rights to apply
the provisions of Chapter 3 of Part 28 of the Companies Act so as to acquire
compulsorily the remaining Diurnal Shares in respect of which the Takeover
Offer has not been accepted.

If you are in any doubt about the contents of this announcement or the action
you should take, you are recommended to seek your own independent financial
advice immediately from your stockbroker, bank manager, solicitor or
independent financial adviser duly authorised under Financial Services and
Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if
not, from another appropriate authorised independent financial adviser.

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION

FOR IMMEDIATE RELEASE

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED FOR THE PURPOSES OF
ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014 AS IT FORMS PART OF
DOMESTIC LAW IN THE UNITED KINGDOM PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL)
ACT 2018.

 

30 August 2022

RECOMMENDED CASH ACQUISITION

of

Diurnal Group plc ("Diurnal")

by

Neurocrine Biosciences, Inc. ("Neurocrine")

to be implemented by means of a Scheme of Arrangement under Part 26 of the
Companies Act 2006

1.         Introduction

The boards of Neurocrine and Diurnal are pleased to announce that they have
reached agreement on the terms of a recommended cash acquisition pursuant to
which Neurocrine shall acquire the entire issued and to be issued ordinary
share capital of Diurnal (the "Acquisition"). The Acquisition is to be
effected by means of a scheme of arrangement under Part 26 of the Companies
Act.

2.         The Acquisition

Under the terms of the Acquisition, which shall be subject to the Conditions
and further terms set out in Appendix 1 to this announcement and to be set out
in the Scheme Document, Diurnal Shareholders shall be entitled to receive: for
each Diurnal Share, 27.5 pence in cash

The Acquisition values the entire issued and to be issued ordinary share
capital of Diurnal at approximately £48.3 million. This represents a premium
of approximately:

·              144 per cent. to the Closing Price per Diurnal
Share of 11.25 pence on the Latest Practicable Date; and

·              151 per cent. to the volume weighted average
Closing Price of 10.93 pence per Diurnal Share for the three months ended on
the Latest Practicable Date.

If, on or after the date of this announcement and on or prior to the Effective
Date, any dividend, distribution, or other return of value is declared, made,
or paid or becomes payable by Diurnal, the Acquisition Price shall be reduced
accordingly. In such circumstances, Diurnal Shareholders shall be entitled to
retain any such dividend, distribution, or other return of value declared,
made, or paid.

It is expected that the Scheme Document shall be published as soon as
reasonably practicable and that the Court Meeting and the General Meeting
shall be held during October 2022. Subject to satisfaction (or waiver, where
applicable) of the Conditions, the Scheme is expected to become effective
during late October or early November 2022.

3.         Background to and reasons for the Acquisition

Neurocrine is a neuroscience-focused, biopharmaceutical company with a simple
purpose: to relieve suffering for people with great needs, but few options.
Neurocrine is dedicated to discovering and developing life-changing treatments
for patients with under-addressed neurological, neuroendocrine and
neuropsychiatric disorders. Neurocrine's portfolio includes FDA-approved
treatments for tardive dyskinesia (TD), Parkinson's disease, endometriosis and
uterine fibroids, and a diversified portfolio of investigational therapies
with the potential to address unmet clinical needs of patients worldwide
living with neurological, endocrine and psychiatric disorders. Neurocrine has
a workforce of approximately 1,200 employees, and is headquartered in San
Diego, California.

For the year ended 31 December 2021, Neurocrine reported net product sales of
$1.09 billion (c. £0.9 billion) and net income of $89.6 million (c.£75.3
million). As at the Latest Practicable Date, Neurocrine had a market
capitalisation of $10.0 billion (c.£8.4 billion).

Having followed Diurnal's development for several years, Neurocrine believes
that Diurnal represents an excellent strategic fit with Neurocrine's existing
business and will allow Neurocrine to accelerate the establishment of its
clinical development and commercial capabilities in Europe to the benefit of
all stakeholders and patient communities. Neurocrine holds Diurnal's people in
high regard and would expect them to continue to play an important role in the
Enlarged Group. The acquisition of Diurnal represents an important step in the
expansion of Neurocrine's business outside North America.

4.         Recommendation

The Diurnal Directors, who have been so advised by Panmure Gordon as to the
financial terms of the Acquisition, consider the terms of the Acquisition to
be fair and reasonable. In providing its advice to the Diurnal Directors,
Panmure Gordon has taken into account the commercial assessments of the
Diurnal Directors. Panmure Gordon is providing independent financial advice to
the Diurnal Directors for the purposes of Rule 3 of the Code.

Accordingly, the Diurnal Directors intend to recommend unanimously that
Diurnal Shareholders vote in favour of the Scheme at the Court Meeting and the
resolution to be proposed at the General Meeting (or, in the event that the
Acquisition is implemented by way of a Takeover Offer, to accept or procure
acceptance of the Takeover Offer), as those Diurnal Directors who hold Diurnal
Shares have irrevocably undertaken to do in respect of their own beneficial
holdings of 3,030,867 Diurnal Shares representing, in aggregate, approximately
1.8 per cent. of the ordinary share capital of Diurnal in issue on the Latest
Practicable Date.

Neurocrine has also received an irrevocable undertaking to vote in favour of
the Scheme at the Court Meeting and the resolutions to be proposed at the
General Meeting (or, in the event that the Acquisition is implemented by way
of a Takeover Offer, to accept or procure acceptance of the Takeover Offer)
from IP Group in respect of a total of 49,900,285 Diurnal Shares,
representing, in aggregate, approximately 29.3 per cent. of the ordinary share
capital of Diurnal in issue on the Latest Practicable Date.

In addition, Neurocrine has also received an irrevocable undertaking to vote
in favour of the Scheme at the Court Meeting and the resolutions to be
proposed at the General Meeting (or, in the event that the Acquisition is
implemented by way of a Takeover Offer, to accept or procure acceptance of the
Takeover Offer) from (i) Development Bank of Wales in respect of a total of
11,534,888 Diurnal Shares, representing, in aggregate, approximately 6.8 per
cent. of the ordinary share capital of Diurnal in issue on the Latest
Practicable Date and (ii) Polar Capital Holdings in respect of a total of
20,000,000 Diurnal Shares, representing, in aggregate, approximately 11.8 per
cent. of the ordinary share capital of Diurnal in issue on the Latest
Practicable Date.

Neurocrine have therefore received irrevocable undertakings in respect of a
total of 84,466,040 Diurnal Shares representing, in aggregate, approximately
49.7 per cent. of the ordinary share capital of Diurnal in issue on the Latest
Practicable Date. In accordance with the terms of the irrevocable undertakings
from IP Group, Development Bank of Wales and Polar Capital Holdings and as
further set out in Appendix 3, the irrevocable undertakings will lapse in the
event that a competing offer is made and Neurocrine does not make a revised
offer within certain timeframes as set out in the irrevocable undertakings,
with a competing offer being one which is not subject to pre-conditions, to
acquire the whole of Diurnal's issued and to be issued ordinary share capital,
other than that already beneficially owned by the person making the offer on
terms which represent (in the reasonable opinion of Smith Square Partners LLP)
an improvement of at least 15 per cent. (15%) in the amount or value of the
consideration offered under the terms.

In addition to the irrevocable undertakings, Neurocrine has received a letter
of intent from Amati Global Investors in respect of 8,786,429 Diurnal Shares,
representing, in aggregate, approximately 5.2 per cent. of the ordinary share
capital of Diurnal in issue on the Latest Practicable Date. Further details of
these irrevocable undertakings are set out in Appendix 3 to this announcement.

Therefore, Neurocrine has received irrevocable undertakings and a letter of
intent in respect of a total of 93,252,469 Diurnal Shares representing, in
aggregate, approximately 54.8 per cent. of the ordinary share capital of
Diurnal in issue on the Latest Practicable Date.

5.         Background to and reasons for the recommendation

Diurnal is a European specialty pharmaceutical group targeting patient needs
in chronic endocrine (hormonal) diseases. It currently has two marketed
products: Alkindi for the treatment of adrenal insufficiency in infants,
children and adolescents which commenced initial sales in Europe in 2018 and
initial sales in the US (as Alkindi Sprinkle) in late 2020 (via Diurnal's
licence partner, Eton Pharmaceuticals); and Efmody for the treatment of
congenital adrenal hyperplasia (CAH) in adolescent and adult patients which
had initial commercial launches in Europe in 2021. Diurnal also has on-going
clinical trials to potentially expand its treatment for CAH in adults into
additional territories (US and Japan) via the CONnECT study and a line
extension into the treatment of adrenal insufficiency in adults in Europe via
the CHAMPAIN study. Further pipeline products include DNL-0300, a native oral
testosterone therapy for the treatment of male hypogonadism which is poised to
enter into a Phase I US multiple ascending dose clinical trial.

Whilst Diurnal has made strong progress in bringing products to market, the
commercial roll-out of both of its products has been adversely impacted by the
Covid-19 pandemic, and the commercial take-up of Efmody in the UK has been
significantly impacted by not receiving pricing reimbursement for Efmody in
Scotland. Both of these factors resulted in the Diurnal Group announcing in
March 2022 that its revenues would be lower than expected, consequently the
Diurnal Directors identified the need for additional funding to take the
Diurnal Group's cortisol franchise through to profitability, which is also
likely to require positive results from CHAMPAIN and CONnECT in order to
redress negative pricing reimbursement decisions. The CHAMPAIN study is
currently anticipated to have headline data readout in Q1 2023 whilst the
CONnECT study is currently anticipated to read out in 2024.

Although the Diurnal Directors believe Diurnal could potentially have a very
strong future as an independent business, they recognise the constraints
resulting from Diurnal's relative lack of scale; the potential for future
clinical trial failure or delays and commercialisation risk, combined with the
requirement for further funding to potentially deliver material valuation
inflection points. Neurocrine's financial and operational resources coupled
with the substantial strategic benefits for the Diurnal business expected from
a combination with the Wider Neurocrine Group make it an attractive
alternative. The Diurnal Directors believe the Acquisition represents an
opportunity for Diurnal Shareholders to realise the value of their holdings in
cash at an attractive premium to the prevailing share price, particularly in
the context of Diurnal's relative lack of liquidity as a small cap publicly
listed company and significant near-term funding requirement relative to
Diurnal's existing market capitalisation which is likely to lead to
substantial dilution for existing shareholders. To date, Diurnal has not been
able to secure material non-dilutive funding and further equity funding at the
current share price would be dilutive to Diurnal Shareholders with no
certainty that such funding would be sufficient for the businesses' future
needs in view of the risks and challenges facing the Diurnal Group. The
Acquisition will allow Diurnal Shareholders to realise the value of their
shareholdings at a premium of 144 per cent. to the Closing Price of Diurnal
Group's Ordinary Shares on the Latest Practicable Date and a premium of 151
per cent. to the volume weighted average price per Ordinary Share of
10.93 pence during the three-month period to the Latest Practicable Date.

In considering the recommendation of the Acquisition to Diurnal's
Shareholders, the Diurnal Directors have also given due consideration to
Neurocrine's intentions regarding the employees of Diurnal, and in particular
Neurocrine's intention to maintain Diurnal's research and development
activities in the UK.

Therefore, after careful consideration of the above factors, the Diurnal
Directors believe the terms of the Acquisition provide certainty to Diurnal
Shareholders, recognising the risks and challenges associated with achieving
Diurnal's future prospects. As such, the Diurnal Directors unanimously intend
to recommend that Scheme Shareholders vote, or procure the vote, in favour of
the Scheme at the Court Meeting and that Diurnal Shareholders vote, or procure
the vote, in favour of the Resolutions to be proposed at the General Meeting.

6.         Information on Neurocrine

Neurocrine is a neuroscience-focused, biopharmaceutical company with a simple
purpose: to relieve suffering for people with great needs, but few options.
Neurocrine is dedicated to discovering and developing life-changing treatments
for patients with under-addressed neurological, neuroendocrine and
neuropsychiatric disorders. Neurocrine's portfolio includes FDA-approved
treatments for tardive dyskinesia (TD), Parkinson's disease, endometriosis and
uterine fibroids, and a diversified portfolio of investigational therapies
with the potential to address unmet clinical needs of patients worldwide
living with neurological, endocrine and psychiatric disorders. Neurocrine has
a workforce of approximately 1,200 employees, and is headquartered in San
Diego, California.

For the year ended 31 December 2021, Neurocrine reported net product sales of
$1.09 billion (c. £0.9 billion) and net income of $89.6 million (c.£75.3
million). As at the Latest Practicable Date, Neurocrine had a market
capitalisation of $10.0 billion (c.£8.4 billion).

7.         Information on Diurnal

Diurnal is a European specialty pharmaceutical group targeting patient needs
in chronic endocrine (hormonal) diseases. Diurnal aims to develop and
commercialise products to solve patient needs in endocrine diseases, primarily
those that result from a deficiency of cortisol and testosterone, typically
where there is either no licensed medicine or where current treatment does not
sufficiently address patients' needs. Diurnal's portfolio includes approved
treatments for paediatric adrenal insufficiency (AI) and congenital adrenal
hyperplasia (CAH). Diurnal has a workforce of 33 employees, and is
headquartered in Cardiff, UK.

For the six months ended 31 December 2021, Diurnal reported unaudited net
product sales (including royalties) of £2.13 million and a net loss of £7.95
million. As at the Latest Practicable Date, Diurnal had a market
capitalisation of £19.1 million. Unaudited net product sales (including
royalties) for the twelve months to 30 June 2022 were £4.62 million.

8.         Directors, management, employees, research and development
and locations

8.1        Intentions for the future business of Diurnal and the
Diurnal Group

Neurocrine attaches great importance to the skills, knowledge and expertise of
the Diurnal Group's management and employees and they are expected to continue
to be key to the success of Diurnal as part of the Enlarged Group.

Neurocrine believes that the Diurnal Group's management and employees will
benefit from enhanced opportunities as part of the Enlarged Group as
Neurocrine deploys its financial and operational resources to accelerate the
development of the Enlarged Group's product candidates. It is Neurocrine's
intention that the Diurnal Group's current research and development functions
will continue to be in the UK, with no planned changes in current places of
business or material reductions in headcount.

Neurocrine and Diurnal have had some initial, high level discussions regarding
the opportunities arising from the integration of Diurnal into the Enlarged
Group.

Following preliminary analysis Neurocrine expects to maintain the existing
operations of the Diurnal Group whilst realising some limited cost savings for
the Enlarged Group through the removal of administrative costs associated with
Diurnal's current status as a listed company, which will cease to be required
following completion of the Acquisition, leading to limited headcount
reductions.

The integration of the Neurocrine and Diurnal businesses will be led by an
integration team comprised of key Neurocrine and Diurnal Group personnel.

8.2        Intentions for management and employees

Neurocrine has given assurances to the Diurnal Directors that the existing
contractual and statutory employment rights of Diurnal's existing management
and employees will be safeguarded in accordance with applicable law and that
Neurocrine does not intend to make any material reduction in headcount or
material change in the conditions of employment, including pension rights, of
Diurnal employees following the Scheme becoming effective. Neurocrine's
intention is to maintain Diurnal's current operations with limited
post-integration changes, linked to the limited cost savings referred to
above.

Neurocrine does not intend to make any material change to the balance of
skills and functions of Diurnal Group's employees and management. Neurocrine
does not intend to make any changes to the benefits provided by Diurnal's
defined contribution pension schemes and intends for the employer to continue
to make contributions in line with the current arrangements, including the
accrual of benefits for existing members and the admission of new members.

It is intended that all the non-executive directors of Diurnal will cease to
be directors of Diurnal immediately following the Effective Date.

8.3        Intentions for management and employee incentivisation
arrangements

Neurocrine intends, following completion of the Acquisition, to continue to
operate cash-based compensation and incentive programmes for the Diurnal
Group's management and employees. For future share based incentivisation, as
Diurnal shares will no longer be listed or traded, awards will be made in
accordance with the rules and eligibility criteria of the applicable
Neurocrine incentive plans. Neurocrine intends to put in place certain
incentive arrangements for the management and employees of the Diurnal Group
following completion of the Acquisition. Neurocrine has not entered into, and
has not had any discussions on proposals to enter into, any form of
incentivisation or other arrangements with members of the Diurnal Group's
management or employees.

8.4        Intentions for locations, fixed assets and research &
development

Neurocrine confirms that it has no plans to (i) change the principal locations
of Diurnal Group's businesses, or (ii) redeploy any of Diurnal Group's fixed
assets.

It is Neurocrine's intention that the Diurnal Group's current research and
development functions will continue to be in the UK, with no planned changes
in current places of business or material reductions in headcount.

8.5        Trading facilities

Diurnal Shares are currently admitted to trading on AIM. As explained in
paragraph 13 below, prior to the Scheme becoming effective, an application
will be made to the London Stock Exchange to cancel the admission of the
Diurnal Shares to trading on AIM with effect from the closing date of the
Acquisition. It is expected that the last day of dealings in Diurnal Shares on
AIM will be the Business Day immediately prior to the Effective Date.

None of the statements in this paragraph 8 are "post-offer undertakings" for
the purposes of Rule 19.5 of the Code.

9.         Diurnal Share Awards

Holders of Diurnal Share Awards shall be contacted regarding the effect of the
Acquisition on their rights under the Diurnal Share Awards and appropriate
proposals shall be made to such persons in due course. Further details of the
terms of such proposals shall be included in the Scheme Document.

10.        Financing

The cash consideration payable under the Acquisition is being financed by cash
on the balance sheet of Neurocrine.

Smith Square Partners is satisfied that sufficient resources are available to
Neurocrine to enable it to satisfy in full the cash consideration payable to
Diurnal Shareholders under the terms of the Acquisition.

11.        Offer-related arrangements

11.1      Confidentiality agreement

Neurocrine and Diurnal entered into a confidentiality agreement dated 15 July
2022 (the "Confidentiality Agreement") pursuant to which Neurocrine has
undertaken to (i) keep confidential information relating to, inter alia, the
Acquisition and Diurnal and not to disclose it to third parties (other than to
certain permitted parties) unless required by law or regulation; and (ii) use
the confidential information only in connection with the Acquisition.

These confidentiality obligations shall remain in force for a specified period
from the date of the Confidentiality Agreement. This agreement also includes
customary non-solicitation obligations on Neurocrine.

11.2      Bonus arrangement

Richard Bungay, the Interim Chief Executive Officer of Diurnal, is party to a
bonus arrangement with Diurnal pursuant to which, conditional on completion of
the Acquisition (or the completion of any other acquisition of the entire
issued, and to be issued, share capital of the Company by third party), he
would be entitled to receive a payment of £200,000 from Diurnal.

12.        Structure of and Conditions to the Acquisition

It is intended that the Acquisition shall be effected by means of a
Court-approved scheme of arrangement between Diurnal and the Scheme
Shareholders under Part 26 of the Companies Act although Neurocrine reserves
the right to implement the Acquisition by means of a Takeover Offer (subject
to Panel consent).

The purpose of the Scheme is to provide for Neurocrine to become the holder of
the entire issued and to be issued ordinary share capital of Diurnal. This is
to be achieved by the transfer of the Diurnal Shares to Neurocrine, in
consideration for which the Diurnal Shareholders shall receive cash
consideration on the basis set out in paragraph 2 of this announcement.

The Acquisition shall be subject to the Conditions and further terms set out
below and in Appendix 1 to this announcement and to be set out in the Scheme
Document and shall only become effective, if, among other things, the
following events occur on or before 11.59 p.m. on the Long-stop Date:

(a)        the approval of the Scheme by a majority in number of the
Scheme Shareholders who are present and vote, whether in person or by proxy,
at the Court Meeting and who represent 75 per cent. in value of the Scheme
Shares voted by those Diurnal Shareholders;

(b)        the resolutions required to approve and implement the Scheme
being duly passed by Diurnal Shareholders representing the requisite majority
or majorities of votes cast at the General Meeting;

(c)        the approval of the Scheme by the Court (with or without
modification but subject to any modification being on terms acceptable to
Diurnal and Neurocrine); and

(d)        the delivery of a copy of the Court Order to the Registrar
of Companies.

The Scheme shall lapse if:

·              the Court Meeting and the General Meeting are not
held by the 22(nd) day following the expected date of those meetings to be set
out in the Scheme Document in due course, (or such later date as Neurocrine
and Diurnal may agree and (if required) the Court may allow);

·              the Scheme is not approved by a majority in
number of the Scheme Shareholders who are present and vote, whether in person
or by proxy, at the Court Meeting and who represent 75 per cent. in value of
the Scheme Shares voted by those Diurnal Shareholders;

·              the resolutions required to approve and implement
the Scheme are not duly passed by Diurnal Shareholders representing the
requisite majority or majorities of votes cast at the General Meeting; or

·              the Scheme does not become effective by no later
than 11.59 p.m. on the Long-stop Date (or such later date as Diurnal and
Neurocrine may agree and the Panel and the Court may allow).

Once the necessary approvals from Diurnal Shareholders have been obtained and
the other Conditions have been satisfied or (where applicable) waived and the
Scheme has been approved by the Court, the Scheme will become effective upon
delivery of the Court Order to the Registrar of Companies.

Subject to satisfaction (or waiver, where applicable) of the Conditions, the
Scheme is expected to become effective during late October or early November
2022.

Upon the Scheme becoming effective, it shall be binding on all Diurnal
Shareholders, irrespective of whether or not they attended or voted at the
Court Meeting or the General Meeting. In accordance with the applicable
provisions of the Code, the consideration payable under the Acquisition for
the transfer of the Diurnal Shares to Neurocrine will be despatched no later
than 14 days after the Effective Date (and in respect of the holders of
Diurnal Share Awards who exercise their rights under the Diurnal Share Awards
such consideration shall be paid in accordance with the proposals to be made
to such persons).

Further details of the Scheme, including an indicative timetable for its
implementation, shall be set out in the Scheme Document which is expected to
be despatched to Scheme Shareholders as soon as reasonably practicable, and in
any event within 28 days of the date of this announcement (unless Diurnal and
Neurocrine both agree, and the Panel consents, to a later date).

13.        Cancellation of admission to trading and re-registration

Prior to the Scheme becoming effective, Diurnal shall make an application to
the London Stock Exchange for the cancellation of admission to trading of the
Diurnal Shares on AIM to take effect from or shortly after the Effective Date.
The last day of dealings in Diurnal Shares on AIM is expected to be the
Business Day immediately prior to the Effective Date and no transfers in
respect of such dealings shall be registered after 6.00 p.m. on that date.

On the Effective Date, share certificates in respect of Diurnal Shares shall
cease to be valid and entitlements to Diurnal Shares held within the CREST
system shall be cancelled.

It is also proposed that, following the Effective Date and after the admission
to trading of Diurnal Shares has been cancelled, Diurnal shall be
re-registered as a private company under the relevant provision of the
Companies Act.

14.        Dividends

If, on or after the date of this announcement and on or prior to the Effective
Date, any dividend, distribution, or other return of value is declared, made,
or paid or becomes payable by Diurnal, the Acquisition Price shall be reduced
accordingly. In such circumstances, Diurnal Shareholders shall be entitled to
retain any such dividend, distribution, or other return of value declared,
made, or paid.

15.        Disclosure of interests in Diurnal

Save in respect of the irrevocable undertakings referred to in paragraph 4
above, as at the Latest Practicable Date, neither Neurocrine, nor any of its
directors, nor, so far as Neurocrine is aware, any person acting in concert
(within the meaning of the Code) with it has (i) any interest in or right to
subscribe for any relevant securities of Diurnal; (ii) any short positions in
respect of relevant Diurnal Shares (whether conditional or absolute and
whether in the money or otherwise), including any short position under a
derivative, any agreement to sell or any delivery obligation or right to
require another person to purchase or take delivery; (iii) any Dealing
Arrangement, in relation to Diurnal Shares or in relation to any securities
convertible or exchangeable into Diurnal Shares; or (iv) borrowed or lent any
relevant Diurnal Shares (including, for these purposes, any financial
collateral arrangements of the kind referred to in Note 4 on Rule 4.6 of the
Code).

'Interests in securities' for these purposes arise, in summary, when a person
has long economic exposure, whether absolute or conditional, to changes in the
price of securities (and a person who only has a short position in securities
is not treated as interested in those securities). In particular, a person
shall be treated as having an 'interest' by virtue of the ownership, voting
rights or control of securities, or by virtue of any agreement to purchase,
option in respect of, or derivative referenced to, securities.

It has not been practicable for Neurocrine to make enquiries of all of its
concert parties in advance of the release of this announcement. Therefore, all
relevant details in respect of Neurocrine's concert parties shall be included
in the Opening Position Disclosure in accordance with Rule 8.1(a) and Note
2(a)(i) on Rule 8 of the Code.

16.        General

Neurocrine reserves the right to elect (with the consent of the Panel) to
implement the Acquisition by way of a Takeover Offer for the Diurnal Shares as
an alternative to the Scheme. In such event, the Takeover Offer shall be
implemented on the same terms, so far as applicable as those which would apply
to the Scheme, subject to appropriate amendments, including (without
limitation) an acceptance condition set at 75 per cent. or such other
percentage as Neurocrine and Diurnal may, subject to the rules of the Code and
with the consent of the Panel, decide, of the shares to which such Takeover
Offer relates.

The Acquisition shall be made subject to the Conditions and further terms set
out in Appendix 1 to this announcement and to be set out in the Scheme
Document. The bases and sources of certain financial information contained in
this announcement are set out in Appendix 2 to this announcement. A summary of
the irrevocable undertakings given in relation to the Acquisition is contained
in Appendix 3 to this announcement. Certain terms used in this announcement
are defined in Appendix 4 to this announcement.

Smith Square Partners, Panmure Gordon, Torreya and FTI Consulting have each
given and not withdrawn their consent to the publication of this announcement
with the inclusion herein of the references to their names in the form and
context in which they appear.

17.        Documents available on website

Copies of the following documents shall be made available on Diurnal's website
at https://www.diurnal.com/investor/dallas
(https://www.diurnal.com/investor/dallas) and on Neurocrine's website at
https://www.neurocrine.com/investors (https://www.neurocrine.com/investorsb)
until the Effective Date:

·              the irrevocable undertakings referred to in
paragraph 4 above and summarised in Appendix 3 to this announcement;

·              the Confidentiality Agreement; and

·              this announcement.

Enquiries:

 Neurocrine Biosciences, Inc.
 Todd Tushla, Vice President, Investor Relations                           +1 858 617 7143

 Smith Square Partners (Financial Adviser to Neurocrine)
 John Craven                                                               +44 (0) 20 3696 7260

 Toby Rolls

 Diurnal Group plc
 Richard Bungay, Interim Chief Executive Officer                           +44 (0) 20 3727 1000

 Panmure Gordon (UK) Limited (Rule 3 Adviser Financial Adviser, Nominated
 Adviser and Joint Broker to Diurnal)
 Freddy Crossley                                                           +44 (0) 20 7886 2500

 Emma Earl

 Mark Rogers

 Rupert Dearden

 Torreya (Strategic Adviser to Diurnal)
 Stephanie Léouzon                                                         +44 (0) 20 7451 4550

 Kelly Curtin

 FTI Consulting (Media and Investor Relations)
 Simon Conway                                                              +44 (0)20 3727 1000

 Victoria Foster Mitchell

 Alex Davis

 

Cooley (UK) LLP is retained as legal adviser to Neurocrine and Eversheds
Sutherland (International) LLP is retained as legal adviser to Diurnal.

Important Notices

Smith Square Partners, which is authorised and regulated in the UK by the FCA,
is acting exclusively as financial adviser to Neurocrine and no one else in
connection with the Acquisition and will not be responsible to anyone other
than Neurocrine for providing the protections afforded to clients of Smith
Square Partners nor for providing advice in relation to the Acquisition or any
other matters referred to in this document. Neither Smith Square Partners nor
any of its affiliates owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, whether in contract, in tort, under
statute or otherwise) to any person who is not a client of Smith Square
Partners in connection with the Acquisition, this document, any statement
contained herein or otherwise.

Panmure Gordon, which is authorised and regulated in the United Kingdom by the
FCA and is acting as financial adviser, Rule 3 adviser, nominated adviser and
joint broker to Diurnal and for no one else in connection with the Acquisition
and other matters referred to in this Announcement and will not be responsible
to anyone other than Diurnal for providing the protections afforded to its
clients or for providing advice in relation to the Acquisition, the contents
of this Announcement or any other matters referred to in this Announcement.
Neither Panmure Gordon nor any of its affiliates, directors or employees owes
or accepts any duty, liability or responsibility whatsoever (whether direct or
indirect, consequential, whether in contract, in tort, in delict, under
statute or otherwise) to any person who is not a client of Panmure Gordon in
connection with this Announcement, any statement contained herein, the
Acquisition or otherwise.

Torreya, which is authorised and regulated in the UK by the FCA and is a
member of FINRA/SIPC in the US, is acting exclusively for Diurnal and no one
else in connection with the Acquisition and will not be responsible to anyone
other than Diurnal for providing the protections afforded to clients of
Torreya nor for providing advice in connection with the Acquisition or any
other matter referred to herein.

This announcement is for information purposes only and does not constitute, or
form any part of, an offer to sell or an invitation to purchase any securities
or the solicitation of an offer to buy any securities in any jurisdiction,
pursuant to the Acquisition or otherwise.

The Acquisition shall be made solely by means of the Scheme Document (together
with the Forms of Proxy) (or, if the Acquisition is implemented by way of
Takeover Offer, the Takeover Offer document), which shall contain the full
terms and conditions of the Acquisition, including details of how to vote in
respect of the Acquisition.

This announcement has been prepared for the purpose of complying with English
law and the Code and the information disclosed may not be the same as that
which would have been disclosed if this announcement had been prepared in
accordance with the laws of jurisdictions outside England and Wales.

With input from Neurocrine, Diurnal shall prepare the Scheme Document to be
distributed to Diurnal Shareholders. Diurnal and Neurocrine urge Diurnal
Shareholders to read the Scheme Document when it becomes available because it
shall contain important information relating to the Acquisition.

Overseas Shareholders

The release, publication or distribution of this announcement in or into
certain jurisdictions other than the United Kingdom may be restricted by law.
Persons who are not resident in the United Kingdom or who are subject to other
jurisdictions should inform themselves of, and observe, any applicable
requirements.

Unless otherwise determined by Neurocrine or required by the Code, and
permitted by applicable law and regulation, the Acquisition shall not be made
available, directly or indirectly, in, into or from a Restricted Jurisdiction
where to do so would violate the laws in that jurisdiction and no person may
vote in favour of the offer by any such use, means, instrumentality or form
within a Restricted Jurisdiction or any other jurisdiction if to do so would
constitute a violation of the laws of that jurisdiction. Accordingly, copies
of this announcement and all documents relating to the Acquisition are not
being, and must not be, directly or indirectly, mailed or otherwise forwarded,
distributed or sent in, into or from a Restricted Jurisdiction where to do so
would violate the laws in that jurisdiction, and persons receiving this
announcement and all documents relating to the Acquisition (including
custodians, nominees and trustees) must not mail or otherwise distribute or
send them in, into or from such jurisdictions where to do so would violate the
laws in that jurisdiction.

The availability of the Acquisition to Diurnal Shareholders who are not
resident in the United Kingdom may be affected by the laws of the relevant
jurisdictions in which they are resident. Persons who are not resident in the
United Kingdom should inform themselves of, and observe, any applicable
requirements.

The Acquisition shall be subject to the applicable requirements of the Code,
the AIM Rules, the Panel, the London Stock Exchange and the Financial Conduct
Authority.

This announcement does not constitute a prospectus or prospectus exempted
document.

Additional information for US investors

The Acquisition relates to shares of a UK company and is proposed to be
effected by means of a scheme of arrangement under the laws of England and
Wales. A transaction effected by means of a scheme of arrangement is not
subject to the tender offer rules or the proxy solicitation rules under the US
Securities Exchange Act.

Accordingly, the Acquisition is subject to the disclosure and procedural
requirements applicable in the United Kingdom to schemes of arrangement which
differ from the disclosure requirements of United States tender offer and
proxy solicitation rules.

However, if Neurocrine were (subject to Panel consent) to elect to implement
the Acquisition by means of a Takeover Offer, such Takeover Offer shall be
made in compliance with all applicable United States laws and regulations,
including Section 14(e) and Regulation 14E under the US Exchange Act and any
applicable exemptions thereunder. Such a takeover would be made in the United
States by Neurocrine and no one else.

In accordance with normal United Kingdom practice, Neurocrine or its nominees,
or its brokers (acting as agents), may from time to time make certain
purchases of, or arrangements to purchase, shares or other securities of
Diurnal outside of the US, other than pursuant to the Acquisition, until the
date on which the Acquisition and/or Scheme becomes effective, lapses or is
otherwise withdrawn. These purchases may occur either in the open market at
prevailing prices or in private transactions at negotiated prices. Any
information about such purchases or arrangements to purchase shall be
disclosed as required in the UK, shall be reported to a Regulatory Information
Service and shall be available on the London Stock Exchange website at
www.londonstockexchange.com (http://www.londonstockexchange.com) .

The receipt of consideration by a US holder for the transfer of its Diurnal
Shares pursuant to the Scheme shall be a taxable transaction for United States
federal income tax purposes. Each Diurnal Shareholder is urged to consult
their independent professional adviser immediately regarding the tax
consequences of the Acquisition applicable to them, including under applicable
United States state and local, as well as overseas and other, tax laws.

Financial information relating to Diurnal included in this announcement and
the Scheme Document has been or shall have been prepared in accordance with
accounting standards applicable in the United Kingdom and may not be
comparable to financial information of US companies or companies whose
financial statements are prepared in accordance with generally accepted
accounting principles in the United States.

Neurocrine is organised under the laws of the State of Delaware in the United
States of America and Diurnal is organised under the laws of England and
Wales. Some or all of the officers and directors of Neurocrine and Diurnal,
respectively, are residents of countries other than the United States. In
addition, some of the assets of the Neurocrine and Diurnal are located outside
the United States. As a result, it may be difficult for US shareholders of
Diurnal to effect service of process within the United States upon Neurocrine
or Diurnal or their respective officers or directors or to enforce against
them a judgment of a US court predicated upon the securities laws of the
United Kingdom.

Forward looking statements

This announcement (including information incorporated by reference in this
announcement), may contain statements which are, or may be deemed to be,
"forward looking statements". Such forward looking statements are prospective
in nature and are not based on historical facts, but rather on current
expectations and on numerous assumptions regarding the business strategies and
the environment in which Diurnal, any member of the Diurnal Group, Neurocrine,
any member of the Neurocrine Group or the Enlarged Group shall operate in the
future and are subject to risks and uncertainties that could cause actual
results to differ materially from those expressed or implied by those
statements.

The forward-looking statements contained in this announcement may relate to
Diurnal, any member of the Diurnal Group, Neurocrine, any member of the
Neurocrine Group or the Enlarged Group's future prospects, developments and
business strategies, the expected timing and scope of the Acquisition and
other statements other than historical facts. In some cases, these forward
looking statements can be identified by the use of forward looking
terminology, including the terms "believes", "estimates", "will look to",
"would look to", "plans", "prepares", "anticipates", "expects", "is expected
to", "is subject to", "budget", "scheduled", "forecasts", "synergy",
"strategy", "goal", "cost-saving", "projects" "intends", "may", "will",
"shall" or "should" or their negatives or other variations or comparable
terminology. Forward-looking statements may include statements relating to the
following: (i) future capital expenditures, expenses, revenues, earnings,
synergies, economic performance, indebtedness, financial condition, dividend
policy, losses and future prospects; (ii) business and management strategies
and the expansion and growth of Neurocrine's, any member of the Neurocrine
Group or Diurnal's operations and potential synergies resulting from the
Acquisition; and (iii) the effects of global economic conditions and
governmental regulation on Neurocrine's, any member of the Neurocrine Group or
Diurnal's business.

By their nature, forward-looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that shall occur in
the future. These events and circumstances include changes in the global,
political, economic, business, competitive, market and regulatory forces,
future exchange and interest rates, changes in tax rates, future business
combinations or disposals, and any epidemic, pandemic or disease outbreak. If
any one or more of these risks or uncertainties materialises or if any one or
more of the assumptions prove incorrect, actual results may differ materially
from those expected, estimated or projected. Such forward looking statements
should therefore be construed in the light of such factors.

Neither Diurnal or any of Neurocrine or any member of the Neurocrine Group,
nor any of their respective associates or directors, officers or advisers,
provides any representation, assurance or guarantee that the occurrence of the
events expressed or implied in any forward-looking statements in this
announcement shall actually occur. Given these risks and uncertainties,
potential investors should not place any reliance on forward looking
statements.

Specifically, statements of estimated cost savings and synergies relate to
future actions and circumstances which, by their nature involve, risks,
uncertainties and contingencies. As a result, the cost savings and synergies
referred to may not be achieved, may be achieved later or sooner than
estimated, or those achieved could be materially different from those
estimated. Due to the scale of the Enlarged Group, there may be additional
changes to the Enlarged Group's operations. As a result, and given the fact
that the changes relate to the future, the resulting cost synergies may be
materially greater or less than those estimated.

The forward-looking statements speak only at the date of this announcement.
All subsequent oral or written forward-looking statements attributable to any
member of the Neurocrine Group or Diurnal Group, or any of their respective
associates, directors, officers, employees or advisers, are expressly
qualified in their entirety by the cautionary statement above.

Diurnal, the Diurnal Group, Neurocrine and the Neurocrine Group and their
respective associates, directors, officers, employees or advisers expressly
disclaim any obligation to update such statements other than as required by
law or by the rules of any competent regulatory authority, whether as a result
of new information, future events or otherwise.

No profit forecasts or estimates

No statement in this announcement is intended as a profit forecast or estimate
for any period and no statement in this announcement should be interpreted to
mean that earnings or earnings per share for Neurocrine or Diurnal, as
appropriate, for the current or future financial years would necessarily match
or exceed the historical published earnings or earnings per share for
Neurocrine or Diurnal, as appropriate.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or
more of any class of relevant securities of an offeree company or of any
securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the offer period and, if later, following the announcement in
which any securities exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no
later than 3.30 p.m. (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later than 3.30
p.m. (London time) on the 10th business day following the announcement in
which any securities exchange offeror is first identified. Relevant persons
who deal in the relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening Position
Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1
per cent. or more of any class of relevant securities of the offeree company
or of any securities exchange offeror must make a Dealing Disclosure if the
person deals in any relevant securities of the offeree company or of any
securities exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions in, and
rights to subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s), save to the extent that
these details have previously been disclosed under Rule 8. A Dealing
Disclosure by a person to whom Rule 8.3(b) applies must be made by no later
than 3.30 p.m. (London time) on the business day following the date of the
relevant dealing.

If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they shall
be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website at
http://www.thetakeoverpanel.org.uk (http://www.thetakeoverpanel.org.uk) ,
including details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified. You should
contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are
in any doubt as to whether you are required to make an Opening Position
Disclosure or a Dealing Disclosure.

Publication on website and availability of hard copies

A copy of this announcement shall be made available subject to certain
restrictions relating to persons resident in Restricted Jurisdictions on
Diurnal's website at https://www.diurnal.com/investor/dallas
(https://www.diurnal.com/investor/dallas) and on Neurocrine's website at
https://www.neurocrine.com/investors (https://www.neurocrine.com/investorsb)
by no later than 12 noon (London time) on the business day following the date
of this announcement. For the avoidance of doubt, the contents of this website
are not incorporated into and do not form part of this announcement.

Diurnal Shareholders may request a hard copy of this announcement by
contacting Link Group on 0371 664 0300. Calls are charged at the standard
geographic rate and will vary by provider. Calls outside the United Kingdom
will be charged at the applicable international rate. Lines are open between
09:00 am-17:30 pm, Monday to Friday excluding public holidays in England and
Wales or by submitting a request in writing to our Registrars at Link Group,
10th Floor, Central Square, 29 Wellington Street, Leeds, LS1 4DL. If you have
received this announcement in electronic form, copies of this announcement and
any document or information incorporated by reference into this announcement
will not be provided unless such a request is made.

Electronic communications

Please be aware that addresses, electronic addresses and certain information
provided by Diurnal Shareholders, persons with information rights and other
relevant persons for the receipt of communications from Diurnal may be
provided to Neurocrine during the Offer Period as requested under Section 4 of
Appendix 4 of the Code to comply with Rule 2.11(c) of the Code.

Rounding

Certain figures included in this announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of the figures that precede them.

Rule 2.9 of the Code

For the purposes of Rule 2.9 of the Code, Diurnal confirms that, as at the
Latest Practicable Date, it had 170,040,825 ordinary shares of £0.05 each in
issue and admitted to trading on AIM. Diurnal does not hold any shares in
treasury. The International Securities Identification Number for the Diurnal
Shares is GB00BDB6Q760.

General

If the Acquisition is effected by way of a Takeover Offer, and such Takeover
Offer becomes or is declared unconditional in all respects and sufficient
acceptances are received, Neurocrine intends to exercise its rights to apply
the provisions of Chapter 3 of Part 28 of the Companies Act so as to acquire
compulsorily the remaining Diurnal Shares in respect of which the Takeover
Offer has not been accepted.

If you are in any doubt about the contents of this announcement or the action
you should take, you are recommended to seek your own independent financial
advice immediately from your stockbroker, bank manager, solicitor or
independent financial adviser duly authorised under Financial Services and
Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if
not, from another appropriate authorised independent financial adviser.

 

Appendix 1

CONDITIONS AND FURTHER TERMS OF THE ACQUISITION

Part A: Conditions to the Scheme and the Acquisition

1.         The Acquisition is conditional upon the Scheme becoming
unconditional and effective, subject to the Code, by no later than 11.59 p.m.
on the Long-stop Date.

2.         The Scheme shall be subject to the following conditions:

2.1

(i)         its approval by a majority in number of the Scheme
Shareholders who are present and vote (and are entitled to vote), whether in
person or by proxy, at the Court Meeting and who represent 75 per cent. or
more in value of the Scheme Shares voted by those Scheme Shareholders; and

(ii)         such Court Meeting being held on or before the 22nd day
after the expected date of the Court Meeting to be set out in the Scheme
Document in due course, or such later date (if any) as Diurnal and Neurocrine
may agree and (if required) the Court may allow;

2.2

(i)         the resolutions required to implement the Scheme being
duly passed by the requisite majority of votes cast at the General Meeting;
and

(ii)         such General Meeting being held on or before the 22nd day
after the expected date of the Court Meeting to be set out in the Scheme
Document in due course, or such later date (if any) as Diurnal and Neurocrine
may agree and (if required) the Court may allow;

2.3

(i)         the sanction of the Scheme by the Court (with or without
modification but subject to any modification being on terms acceptable to
Diurnal and Neurocrine) and the delivery of a copy of the Court Order to the
Registrar of Companies; and

(ii)         the Court Hearing being held on or before the 22nd day
after the expected date of the Court Hearing to be set out in the Scheme
Document in due course (or such later date as may be agreed by Neurocrine and
Diurnal and, if required, the Court may allow);

3.         In addition, subject as stated in Part B below and to the
requirements of the Panel, the Acquisition shall be conditional upon the
following Conditions and, accordingly, the Court Order shall not be delivered
to the Registrar of Companies unless such Conditions (as amended if
appropriate) have been satisfied or, where relevant, waived:

Official authorisations, regulatory clearances and third-party clearances

General antitrust and regulatory

(a)        all notifications, filings, applications or submissions
which are necessary having been made in connection with the Acquisition and
all necessary waiting periods (including any extensions thereof) under any
applicable legislation or regulation of any jurisdiction having expired,
lapsed or been terminated (as appropriate) and all statutory and regulatory
obligations in any jurisdiction having been complied with in each case in
respect of the Acquisition and all necessary Authorisations in any
jurisdiction for or in respect of the Acquisition and, except pursuant to
Chapter 3 of Part 28 of the Companies Act, the acquisition or the proposed
acquisition of any shares or other securities in, or control or management of,
Diurnal or any other member of the Wider Diurnal Group by any member of the
Wider Neurocrine Group, in each case which is material in the context of the
Neurocrine Group or the Diurnal Group as a whole, having been obtained in
terms and in a form reasonably satisfactory to Neurocrine from all appropriate
Third Parties or (without prejudice to the generality of the foregoing) from
any person or bodies with whom any member of the Wider Diurnal Group or the
Wider Neurocrine Group has entered into contractual arrangements and all such
Authorisations necessary to carry on the business of any member of the Wider
Diurnal Group in any jurisdiction, in each case which is material in the
context of the Neurocrine Group or the Diurnal Group as a whole, having been
obtained and all such Authorisations remaining in full force and effect at the
time at which the Acquisition becomes otherwise unconditional and there being
no notice or intimation of an intention to revoke, suspend, restrict, modify
or not to renew such Authorisations;

(b)        no antitrust regulator or Third Party having given notice of
a decision to take, institute, implement or threaten any action, proceeding,
suit, investigation, enquiry or reference (and in each case, not having
withdrawn the same), or having required any action to be taken or otherwise
having done anything, or having enacted, made or proposed any statute,
regulation, decision, order or change to published practice (and in each case,
not having withdrawn the same) and there not continuing to be outstanding any
statute, regulation, decision or order which would or might reasonably be
expected to (in each case so as to be material in the context of the
Neurocrine Group or the Diurnal Group as a whole):

(i)         require, prevent or materially delay the divestiture or
materially alter the terms envisaged for such divestiture by any member of the
Wider Neurocrine Group or by any member of the Wider Diurnal Group of all or
any material part of its businesses, assets or property or impose any
limitation on the ability of all or any of them to conduct their businesses
(or any part thereof) or to own, control or manage any of their assets or
properties (or any part thereof);

(ii)         except pursuant to Chapter 3 of Part 28 of the Companies
Act, require any member of the Wider Neurocrine Group or the Wider Diurnal
Group to acquire or offer to acquire any shares, other securities (or the
equivalent) or interest in any member of the Wider Diurnal Group or any asset
owned by any Third Party (other than in the implementation of the
Acquisition);

(iii)        impose any material limitation on, or result in a material
delay in, the ability of any member of the Wider Neurocrine Group directly or
indirectly to acquire, hold or to exercise effectively all or any rights of
ownership in respect of shares or other securities in Diurnal or on the
ability of any member of the Wider Diurnal Group or any member of the Wider
Neurocrine Group directly or indirectly to hold or exercise effectively all or
any rights of ownership in respect of shares or other securities (or the
equivalent) in, or to exercise voting or management control over, any member
of the Wider Diurnal Group;

(iv)        otherwise adversely affect any or all of the business,
assets, profits or prospects of any member of the Wider Diurnal Group or any
member of the Wider Neurocrine Group;

(v)        result in any member of the Wider Diurnal Group or any
member of the Wider Neurocrine Group ceasing to be able to carry on business
under any name under which it presently carries on business;

(vi)        make the Acquisition, its implementation or the acquisition
or proposed acquisition of any shares or other securities in, or control or
management of, Diurnal by any member of the Wider Neurocrine Group void,
unenforceable and/or illegal under the laws of any relevant jurisdiction, or
otherwise, directly or indirectly materially prevent or prohibit, restrict,
restrain, or delay or otherwise to a material extent or otherwise materially
interfere with the implementation of, or impose material additional conditions
or obligations with respect to, or otherwise materially challenge, impede,
interfere or require material amendment of the Acquisition or the acquisition
or proposed acquisition of any shares or other securities in, or control or
management of, Diurnal by any member of the Wider Neurocrine Group;

(vii)       require, prevent or materially delay a divestiture by any
member of the Wider Neurocrine Group of any shares or other securities (or the
equivalent) in any member of the Wider Diurnal Group or any member of the
Wider Neurocrine Group; or

(viii)      impose any material limitation on the ability of any member
of the Wider Neurocrine Group or any member of the Wider Diurnal Group to
conduct, integrate or co-ordinate all or any part of its business with all or
any part of the business of any other member of the Wider Neurocrine Group
and/or the Wider Diurnal Group,

and all applicable waiting and other time periods (including any extensions
thereof) during which any such antitrust regulator or Third Party could decide
to take, institute, implement or threaten any such action, proceeding, suit,
investigation, enquiry or reference or take any other step under the laws of
any jurisdiction in respect of the Acquisition or the acquisition or proposed
acquisition of any Diurnal Shares or otherwise intervene having expired,
lapsed or been terminated;

Certain matters arising as a result of any arrangement, agreement, etc.

(c)        except as Disclosed, there being no provision of any
arrangement, agreement, lease, licence, franchise, permit or other instrument
to which any member of the Wider Diurnal Group is a party or by or to which
any such member or any of its assets is or may be bound, entitled or be
subject or any event or circumstance which, as a consequence of the
Acquisition or the acquisition or the proposed acquisition by any member of
the Wider Neurocrine Group of any shares or other securities (or the
equivalent) in Diurnal or because of a change in the control or management of
any member of the Wider Diurnal Group or otherwise, could or might reasonably
be expect to result in any of the following to an extent which is material and
adverse in the context of the Wider Diurnal Group, or the Wider Neurocrine
Group, in either case, taken as a whole:

(i)         any monies borrowed by, or any other indebtedness, actual
or contingent, of, or any grant available to, any member of the Wider Diurnal
Group being or becoming repayable, or capable of being declared repayable,
immediately or prior to its or their stated maturity date or repayment date,
or the ability of any such member to borrow monies or incur any indebtedness
being withdrawn or inhibited or being capable of becoming or being withdrawn
or inhibited;

(ii)         the creation, save in the ordinary and usual course of
business, or enforcement of any mortgage, charge or other security interest
over the whole or any part of the business, property or assets of any member
of the Wider Diurnal Group or any such mortgage, charge or other security
interest (whenever created, arising or having arisen) becoming enforceable;

(iii)        any such arrangement, agreement, lease, licence,
franchise, permit or other instrument being terminated or the rights,
liabilities, obligations or interests of any member of the Wider Diurnal Group
being materially and adversely modified or materially and adversely affected
or any obligation or liability arising or any materially adverse action being
taken or arising thereunder;

(iv)        any liability of any member of the Wider Diurnal Group to
make any severance, termination, bonus or other payment to any of its
directors, or other officers;

(v)        the rights, liabilities, obligations, interests or business
of any member of the Wider Diurnal Group or any member of the Wider Neurocrine
Group under any such arrangement, agreement, licence, permit, lease or
instrument or the interests or business of any member of the Wider Diurnal
Group or any member of the Wider Neurocrine Group in or with any other person
or body or firm or company (or any arrangement or arrangement relating to any
such interests or business) being or becoming capable of being terminated, or
adversely modified or affected or any onerous obligation or liability arising
or any adverse action being taken thereunder;

(vi)        any member of the Wider Diurnal Group ceasing to be able to
carry on business under any name under which it presently carries on business
to an extent which is or would be material in the context of the Wider Diurnal
Group taken as a whole;

(vii)       the value of, or the financial or trading position or
prospects of, any member of the Wider Diurnal Group being materially
prejudiced or materially and adversely affected; or

(viii)      the creation or acceleration of any liability (actual or
contingent) by any member of the Wider Diurnal Group other than trade
creditors or other liabilities incurred in the ordinary course of business,
and no event having occurred which, under any provision of any arrangement,
agreement, licence, permit, franchise, lease or other instrument to which any
member of the Wider Diurnal Group is a party or by or to which any such member
or any of its assets are bound, entitled or subject, would or might result in
any of the events or circumstances as are referred to in Conditions 3(c) (i)
to (viii), in each case to the extent material in the context of the Wider
Diurnal Group taken as a whole;

Certain events occurring since 30 June 2021

(d)        except as Disclosed, no member of the Wider Diurnal Group
having since 30 June 2021:

(i)         issued or agreed to issue or authorised or proposed or
announced its intention to authorise or propose the issue, of additional
shares of any class, or securities or securities convertible into, or
exchangeable for, or rights, warrants or options to subscribe for or acquire,
any such shares, securities or convertible securities or transferred or sold
or agreed to transfer or sell or authorised or proposed the transfer or sale
of Diurnal Shares out of treasury (except, where relevant, as between Diurnal
and wholly-owned subsidiaries of Diurnal or between the wholly-owned
subsidiaries of Diurnal and except for the issue or transfer out of treasury
of Diurnal Shares on or in connection with the exercise of share options or
vesting of share awards in the ordinary course under the Diurnal Share
Awards);

(ii)         recommended, declared, paid or made or proposed to
recommend, declare, pay or make any bonus, dividend or other distribution
(whether payable in cash or otherwise) other than dividends (or other
distributions whether payable in cash or otherwise) lawfully paid or made by
any wholly-owned subsidiary of Diurnal to Diurnal or any of its wholly-owned
subsidiaries;

(iii)        other than pursuant to the Acquisition (and except for
transactions between Diurnal and its wholly-owned subsidiaries or between the
wholly-owned subsidiaries of Diurnal and transactions in the ordinary course
of business) implemented, effected, authorised or proposed or announced its
intention to implement, effect, authorise or propose any merger, demerger,
reconstruction, amalgamation, scheme, commitment or acquisition or disposal of
assets or shares or loan capital (or the equivalent thereof) in any
undertaking or undertakings in any such case to an extent which is material in
the context of the Wider Diurnal Group taken as a whole;

(iv)        except for transactions between Diurnal and its
wholly-owned subsidiaries or between the wholly-owned subsidiaries of Diurnal
and except for transactions in the ordinary course of business disposed of, or
transferred, mortgaged or created any security interest over any material
asset or any right, title or interest in any material asset or authorised,
proposed or announced any intention to do so;

(v)        (except for transactions between Diurnal and its
wholly-owned subsidiaries or between the wholly-owned subsidiaries of Diurnal)
issued, authorised or proposed or announced an intention to authorise or
propose, the issue of or made any change in or to the terms of any debentures
or become subject to any contingent liability or incurred or increased any
indebtedness which is material in the context of the Wider Diurnal Group as a
whole;

(vi)        entered into or varied or authorised, proposed or announced
its intention to enter into or vary any material contract, arrangement,
agreement, transaction or commitment (whether in respect of capital
expenditure or otherwise) except in the ordinary course of business which is
of a long term, unusual or onerous nature or magnitude or which is or which
involves or could involve an obligation of a nature or magnitude which is
reasonably likely to be materially restrictive on the business of any member
of the Wider Diurnal Group which is material in the context of the Wider
Diurnal Group as a whole;

(vii)       entered into or varied the terms of, or made any offer
(which remains open for acceptance) to enter into or vary to a material extent
the terms of any contract, service agreement, commitment or arrangement with
any director or senior executive of any member of the Wider Diurnal Group,
except for salary increases, bonuses or variations of terms in the ordinary
course;

(viii)      proposed, agreed to provide or modified the terms of any
share option scheme, incentive scheme or other benefit relating to the
employment or termination of employment of any employee of the Wider Diurnal
Group which are material in the context of the Wider Diurnal Group taken as a
whole;

(ix)        purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities or reduced
or, except in respect of the matters mentioned in sub-paragraph (i) above,
made any other change to any part of its share capital;

(x)        except in the ordinary course of business, waived,
compromised or settled any claim which is material in the context of the Wider
Diurnal Group as a whole;

(xi)        terminated or varied the terms of any agreement or
arrangement between any member of the Wider Diurnal Group and any other person
in a manner which would or might reasonably be expected to have a material
adverse effect on the financial position of the Wider Diurnal Group taken as a
whole;

(xii)       (except as disclosed on publicly available registers) made
any material alteration to its memorandum or articles of association or other
incorporation documents;

(xiii)      except in relation to changes made or agreed as a result of,
or arising from, changes to legislation, made or agreed or consented to any
significant change to:

(A)        the terms of the trust deeds and rules constituting the
pension scheme(s) established by any member of the Wider Diurnal Group for its
directors, employees or their dependants;

(B)        the contributions payable to any such scheme(s) or to the
benefits which accrue, or to the pensions which are payable, thereunder;

(C)        the basis on which qualification for, or accrual or
entitlement to, such benefits or pensions are calculated or determined; or

(D)        the basis upon which the liabilities (including pensions) of
such pension schemes are funded, valued, made, agreed or consented to,

to an extent which is in any such case material in the context of the Wider
Diurnal Group;

(xiv)      been unable, or admitted in writing that it is unable, to pay
its debts or commenced negotiations with one or more of its creditors with a
view to rescheduling or restructuring any of its indebtedness, or having
stopped or suspended (or threatened to stop or suspend) payment of its debts
generally or ceased or threatened to cease carrying on all or a substantial
part of its business which is material in the context of the Wider Diurnal
Group taken as a whole;

(xv)       (other than in respect of a member of the Wider Diurnal Group
which is dormant and was solvent at the relevant time) taken or proposed any
steps, corporate action or had any legal proceedings instituted or threatened
against it in relation to the suspension of payments, a moratorium of any
indebtedness, its winding-up (voluntary or otherwise), dissolution,
reorganisation or for the appointment of a receiver, administrator, manager,
administrative receiver, trustee or similar officer of all or any material
part of its assets or revenues or any analogous or equivalent steps or
proceedings in any jurisdiction or appointed any analogous person in any
jurisdiction or had any such person appointed;

(xvi)      (except for transactions between Diurnal and its wholly-owned
subsidiaries or between the wholly-owned subsidiaries), made, authorised,
proposed or announced an intention to propose any change in its loan capital;

(xvii)     other than in the ordinary course of trading, entered into,
implemented or authorised the entry into, any joint venture, asset or profit
sharing arrangement, partnership or merger of business or corporate entities;

(xviii)    having taken (or agreed or proposed to take) any action which
requires or would require, the consent of the Panel or the approval of Diurnal
Shareholders in general meeting in accordance with, or as contemplated by,
Rule 21.1 of the Code; or

(xix)      entered into any agreement, arrangement, commitment or
contract or passed any resolution or made any offer (which remains open for
acceptance) with respect to or announced an intention to, or to propose to,
effect any of the transactions, matters or events referred to in this
Condition 3(d);

No adverse change, litigation, regulatory enquiry or similar

(e)        except as Disclosed, since 30 June 2021 there having been:

(i)         no adverse change and no circumstance having arisen which
would or might be expected to result in any adverse change in, the business,
assets, financial or trading position or profits or prospects or operational
performance of any member of the Wider Diurnal Group which is material in the
context of the Wider Diurnal Group taken as a whole;

(ii)         no litigation, arbitration proceedings, prosecution or
other legal proceedings having been threatened, announced or instituted by or
against or remaining outstanding against or in respect of, any member of the
Wider Diurnal Group or to which any member of the Wider Diurnal Group is or
may become a party (whether as claimant, defendant or otherwise) having been
threatened, announced, instituted or remaining outstanding by, against or in
respect of, any member of the Wider Diurnal Group, in each case which might
reasonably be expected to have a material adverse effect on the Wider Diurnal
Group taken as a whole;

(iii)        no enquiry, review or investigation by, or complaint or
reference to, any Third Party against or in respect of any member of the Wider
Diurnal Group having been threatened, announced or instituted or remaining
outstanding by, against or in respect of any member of the Wider Diurnal
Group, in each case which might reasonably be expected to have a material
adverse effect on the Wider Diurnal Group taken as a whole;

(iv)        no contingent or other liability having arisen or become
apparent to Neurocrine or increased other than in the ordinary course of
business which is reasonably likely to affect adversely the business, assets,
financial or trading position or profits or prospects of any member of the
Wider Diurnal Group to an extent which is material in the context of the Wider
Diurnal Group taken as a whole; and

(v)        no steps having been taken and no omissions having been made
which are reasonably likely to result in the withdrawal, cancellation,
termination or modification of any licence held by any member of the Wider
Diurnal Group which is necessary for the proper carrying on of its business
and the withdrawal, cancellation, termination or modification of which might
reasonably be expected to have a material adverse effect on the Wider Diurnal
Group taken as a whole;

No discovery of certain matters regarding information, liabilities and
environmental issues

(f)         except as Disclosed, Neurocrine not having discovered
that:

(i)         any financial, business or other information concerning
the Wider Diurnal Group publicly announced prior to the date of this
announcement or disclosed at any time to any member of the Wider Neurocrine
Group by or on behalf of any member of the Wider Diurnal Group prior to the
date of this announcement is misleading, contains a material misrepresentation
of any fact, or omits to state a fact necessary to make that information not
misleading, in any such case to a material extent, in the context of the Wider
Diurnal Group taken as a whole;

(ii)         any member of the Wider Diurnal Group is, otherwise than
in the ordinary course of business, subject to any liability, contingent or
otherwise and which is material in the context of the Wider Diurnal Group
taken as a whole;

(iii)        any past or present member of the Wider Diurnal Group has
not complied in any material respect in the context of the Wider Diurnal Group
taken as a whole with all applicable legislation, regulations or other
requirements of any jurisdiction or any Authorisations relating to the use,
treatment, storage, carriage, disposal, discharge, spillage, release, leak or
emission of any waste or hazardous substance or any substance likely to impair
the environment (including property) or harm human health or otherwise
relating to environmental matters or the health and safety of humans, which
non-compliance would be likely to give rise to any material liability
including any penalty for non-compliance (whether actual or contingent) on the
part of any member of the Wider Diurnal Group;

(iv)        there has been a material disposal, discharge, spillage,
accumulation, release, leak, emission or the migration, production, supply,
treatment, storage, transport or use of any waste or hazardous substance or
any substance likely to impair the environment (including any property) or
harm human health which (whether or not giving rise to non-compliance with any
law or regulation), would be likely to give rise to any material liability
(whether actual or contingent) on the part of any member of the Wider Diurnal
Group;

Anti-corruption

(v)        any member of the Wider Diurnal Group or any person that
performs or has performed services for or on behalf of any such company is or
has engaged in any activity, practice or conduct which would constitute an
offence under the Bribery Act 2010 or any other applicable anti-corruption
legislation;

(vi)        any member of the Wider Diurnal Group is ineligible to be
awarded any contract or business under regulation 57 of the Public Contracts
Regulations 2015 or regulation 80 of the Utilities Contracts Regulations 2015
(each as amended); or

(vii)       any member of the Wider Diurnal Group has engaged in any
transaction which would cause any member of the Wider Neurocrine Group to be
in breach of applicable law or regulation upon completion of the Acquisition,
including the economic sanctions of the United States Office of Foreign Assets
Control or HM Treasury & Customs, or any government, entity or individual
targeted by any of the economic sanctions of the United Nations, United States
or the European Union or any of its member states, save that this shall not
apply if and to the extent that it is or would be unenforceable by reason of
breach of any applicable Blocking Law; or

No criminal property

(viii)      any asset of any member of the Wider Diurnal Group
constitutes criminal property as defined by section 340(3) of the Proceeds of
Crime Act 2002 (but disregarding paragraph (b) of that definition).

Part B: Certain further terms of the Acquisition

1.         Subject to the requirements of the Panel, Neurocrine
reserves the right, in its sole discretion, to waive, in whole or in part, all
or any of the Conditions set out in Part A of Appendix 1 above, except
Conditions 2.1(i), 2.2(i), and 2.3(i), which cannot be waived. If any of
Conditions 2.1(ii), 2.2(ii), and 2.3(ii) is not satisfied by the relevant
deadline specified in the relevant Condition, Neurocrine shall make an
announcement by 8.00 a.m. on the Business Day following such deadline
confirming whether it has invoked the relevant Condition, waived the relevant
deadlines, or agreed with Diurnal to extend the relevant deadline.

2.         If Neurocrine is required by the Panel to make an offer for
Diurnal Shares under the provisions of Rule 9 of the Code, Neurocrine may make
such alterations to any of the above Conditions and terms of the Acquisition
as are necessary to comply with the provisions of that Rule.

3.         Neurocrine shall be under no obligation to waive (if
capable of waiver), to determine to be or remain satisfied or to treat as
fulfilled any of the Conditions in Part A of Appendix 1 above that are capable
of waiver by a date earlier than the latest date for the fulfilment of that
Condition notwithstanding that the other Conditions of the Acquisition may at
such earlier date have been waived or fulfilled and that there are at such
earlier date no circumstances indicating that any of such Conditions may not
be capable of fulfilment.

4.         Under Rule 13.5(a) of the City Code, Neurocrine may not
invoke a Condition so as to cause the Acquisition not to proceed, to lapse or
to be withdrawn unless the circumstances which give rise to the right to
invoke the Condition are of material significance to Neurocrine in the context
of the Acquisition. Neurocrine may only invoke a condition that is subject to
Rule 13.5(a) with the consent of the Panel.

5.         Condition 1, Conditions 2.1, 2.2, and 2.3 in Part A of
Appendix 1 above, and, if applicable, any acceptance condition if the
Acquisition is implemented by means of a Takeover Offer, are not subject to
Rule 13.5(a) of the Code.

6.         Any Condition that is subject to Rule 13.5(a) of the Code
may be waived by Neurocrine.

7.         The Diurnal Shares acquired under the Acquisition shall be
acquired fully paid and free from all liens, equities, charges, encumbrances,
options, rights of pre-emption and any other third party rights and interests
of any nature and together with all rights now or hereafter attaching or
accruing to them, including, without limitation, voting rights and the right
to receive and retain in full all dividends and other distributions (if any)
declared, made or paid, or any other return of value (whether by reduction of
share capital or share premium account or otherwise) made on or after the
Effective Date.

8.         If, on or after the date of this announcement and prior to
or on the Effective Date, any dividend, distribution or other return of value
is declared, paid or made, or becomes payable by Diurnal, Neurocrine reserves
the right (without prejudice to any right of Neurocrine, with the consent of
the Panel, to invoke Condition 3(d)(ii) of Appendix 1 above) to reduce the
consideration payable under the Acquisition to reflect the aggregate amount of
such dividend, distribution, or other return of value or excess. In such
circumstances, Diurnal Shareholders shall be entitled to retain any such
dividend, distribution, or other return of value declared, made, or paid.

If on or after the date of this announcement, and to the extent that any such
dividend, distribution or other return of value has been declared, paid, or
made, or becomes payable by Diurnal on or prior to the Effective Date and
Neurocrine exercises its rights under this paragraph 8 to reduce the
consideration payable under the terms of the Acquisition, any reference in
this announcement to the consideration payable under the terms of the
Acquisition shall be deemed to be a reference to the consideration as so
reduced.

If and to the extent that such a dividend, distribution, or other return of
value has been declared or announced, but not paid or made, or is not payable
by reference to a record date on or prior to the Effective Date and is or
shall be (i) transferred pursuant to the Acquisition on a basis which entitles
Neurocrine to receive the dividend, distribution, or other return of value and
to retain it; or (ii) cancelled, the consideration payable under the terms of
the Acquisition shall not be subject to change in accordance with this
paragraph 8. Neurocrine also reserves the right to reduce the consideration
payable under the Acquisition in such circumstances as are, and by such amount
as is, permitted by the Panel.

Any exercise by Neurocrine of its rights referred to in this paragraph 8 shall
be the subject of an announcement and, for the avoidance of doubt, shall not
be regarded as constituting any revision or variation of the Acquisition.

9.         Neurocrine reserves the right to elect (with the consent of
the Panel,) to implement the Acquisition by way of a Takeover Offer for the
Diurnal Shares as an alternative to the Scheme. In such event, the Takeover
Offer shall be implemented on the same terms, so far as applicable, as those
which would apply to the Scheme, subject to appropriate amendments, including
(without limitation) an acceptance condition set at 75 per cent. or such other
percentage as Neurocrine and Diurnal may, subject to the rules of the Code and
with the consent of the Panel, decide , of the shares to which such Takeover
Offer relates.

10.        The availability of the Acquisition to persons not resident
in the United Kingdom may be affected by the laws of the relevant
jurisdictions. Persons who are not resident in the United Kingdom should
inform themselves about and observe any applicable requirements.

11.        The Acquisition is not being made, directly or indirectly,
in, into or from, or by use of the mails of, or by any means of
instrumentality (including, but not limited to, facsimile, e-mail or other
electronic transmission, telex or telephone) of interstate or foreign commerce
of, or of any facility of a national, state or other securities exchange of,
any jurisdiction where to do so would violate the laws of that jurisdiction.

12.        The Acquisition is governed by the law of England and Wales
and is subject to the jurisdiction of the courts of England and Wales and to
the Conditions and further terms set out in this Appendix 1 and to be set out
in the Scheme Document. The Acquisition shall be subject to the applicable
requirements of the Code, the Panel, the AIM Rules, the London Stock Exchange
and the Financial Conduct Authority.

13.        Each of the Conditions shall be regarded as a separate
Condition and shall not be limited by reference to any other Condition.

 

Appendix 2

SOURCES OF INFORMATION AND BASES OF CALCULATION

(i)         As at 26 August 2022 (being the latest practicable date
prior to publication of this announcement), there were 170,040,825 Diurnal
Shares in issue. The International Securities Identification Number for
Diurnal Shares is GB00BDB6Q760.

(ii)         Any references to the issued and to be issued share
capital of Diurnal are based on:

·              the 170,040,825 Diurnal Shares referred to in
paragraph (i) above; and

·              5,718,900 Diurnal Shares which may be issued on
or after the date of this announcement to satisfy the exercise of options or
vesting of awards pursuant to the Diurnal Share Awards (such number of Diurnal
Shares having been calculated assuming that unvested Diurnal LTIP Awards will
vest as to 70% of the maximum number of Diurnal Shares that are subject to the
unvested Diurnal LTIP Awards, and having applied pro-rating to Diurnal LTIP
Awards held by former employees).

(iii)        The value of the Acquisition based on the Acquisition
Price of 27.5 pence per Diurnal Share is calculated on the basis of the issued
and to be issued share capital of Diurnal as set out in paragraph (ii) above.

(iv)        Unless otherwise stated, the Closing Prices and volume
weighted average prices referred to in this announcement are taken from
Refinitiv Eikon.

(v)        Unless otherwise stated, the financial information relating
to Diurnal is extracted from the audited consolidated financial statements of
Diurnal for the financial year to 30 June 2021, prepared in accordance with
IFRS, the unaudited interim statements for the six months ended 31 December
2021 and the unaudited trading statement in relation to the twelve months
ended 30 June 2022.

 

 

Appendix 3

IRREVOCABLE UNDERTAKINGS

PART A: Diurnal Directors' irrevocable undertakings

The following Diurnal Directors have given irrevocable undertakings to vote in
favour of the Scheme at the Court Meeting and the resolutions to be proposed
at the General Meeting and, if Neurocrine exercises its right to implement the
Acquisition by way of a Takeover Offer, to accept or procure acceptance of
such offer:

 Name of Diurnal Director  Number of Diurnal Shares in respect of which undertaking is given  Percentage of Diurnal issued share capital (excluding shares under option)
 Richard Ross              2,284,047                                                          1.34
 Richard Bungay            337,578                                                            0.20
 John Goddard              228,574                                                            0.13
 Sam Williams              113,819                                                            0.07
 Alan Raymond              66,849                                                             0.04
 TOTAL                     3,030,867                                                          1.78

 

The obligations of the Diurnal Directors under the irrevocable undertakings
shall lapse and cease to have effect on and from the following occurrences:

·              the Scheme Document (or, if Neurocrine elects to
implement the Acquisition by way of a Takeover Offer, the Takeover Offer
document) is not published within 28 days of the date of release of this
announcement (or within such longer period as the Panel may agree);

·              the Scheme lapses or is withdrawn unless
Neurocrine announces, at the same time as the announcement of such lapse or
withdrawal, with the consent of the Panel, a firm intention to implement the
Acquisition by way of a Takeover Offer;

·              the Scheme becomes effective in accordance with
its terms or a Takeover Offer (if applicable) is declared unconditional in
accordance with the requirements of the Code;

·              any competing offer for the issued and to be
issued ordinary share capital of Diurnal is made which is declared wholly
unconditional (if implemented by way of a takeover offer) or otherwise becomes
effective (if implemented by way of a scheme of arrangement);

·              the Scheme does not become effective, or, if
Neurocrine elects to implement the Acquisition by way of a Takeover Offer, the
Takeover Offer does not become unconditional in accordance with the
requirements of the Code (as the case may be), by the Long-stop Date; or

·              the Acquisition otherwise lapses or is withdrawn.

 

PART B: Non-director Diurnal Shareholder irrevocable undertakings

The following holders or controllers of Diurnal Shares have given irrevocable
undertakings to vote in favour of the Scheme at the Court Meeting and the
resolutions to be proposed at the General Meeting and, if Neurocrine exercises
its right to implement the Acquisition by way of a Takeover Offer, to accept
or procure acceptance of such offer:

 Name of Diurnal Shareholder giving undertaking  Number of Diurnal Shares in respect of which undertaking is given  Percentage of Diurnal issued share capital (excluding shares under option)
 IP Group                                        49,900,285                                                         29.3
 Polar Capital Holdings plc                      20,000,000                                                         11.8
 Development Bank of Wales                       11,534,888                                                         6.8
 TOTAL                                           81,435,173                                                         47.9

 

The obligations of IP Group, Development Bank of Wales and Polar Capital
Holdings plc under the irrevocable undertakings shall lapse and cease to have
effect on and from the following occurrences:

·              the Scheme Document (or, if Neurocrine elects to
implement the Acquisition by way of a Takeover Offer, the Takeover Offer
document) is not published within 28 days of the date of release of this
announcement (or within such longer period as the Panel may agree);

·              the Scheme lapses or is withdrawn unless
Neurocrine announces, at the same time as the announcement of such lapse or
withdrawal, with the consent of the Panel, a firm intention to implement the
Acquisition by way of a Takeover Offer;

·              the Scheme becomes effective in accordance with
its terms or a Takeover Offer (if applicable) is declared unconditional in
accordance with the requirements of the Code;

·              the Scheme does not become effective, or, if
Neurocrine elects to implement the Acquisition by way of a Takeover Offer, the
Takeover Offer does not become unconditional in accordance with the
requirements of the Code (as the case may be), by the Long-stop Date;

·              the Acquisition otherwise lapses or is withdrawn;

·              with respect to IP Group, a person other than
Neurocrine or any person acting in concert with it announces pursuant to Rule
2.7 of the Code a firm intention to make a Competing Offer and Neurocrine has
not on or before 11.59 p.m. on the fifth business day after the date of the
announcement of the Competing Offer announced a new, increased or revised
terms of the Scheme, or a new, increased or revised Takeover Offer, on terms
which exceed the value of the Competing Offer in the reasonable opinion of
Smith Square Partners LLP and for these purposes a Competing Offer is an offer
(however structured), which is not subject to pre-conditions, to acquire the
whole of Diurnal's issued and to be issued ordinary share capital, other than
that already beneficially owned by the person making the offer on terms which
represent (in the reasonable opinion of Smith Square Partners LLP) an
improvement of at least 15 per cent. (15%) in the amount or value of the
consideration offered under the terms of the Scheme as at 5.00 p.m. on the
last dealing day prior to the date on which such third party offer is
announced; or

·              with respect to Polar Capital Holdings plc and
the Development Bank of Wales, a person other than Neurocrine or any person
acting in concert with it announces pursuant to Rule 2.7 of the Code by no
later than 3.30 p.m. on the fifth business day after the Scheme Document (or,
if Neurocrine elects to implement the Acquisition by way of a Takeover Offer,
the Takeover Offer document) is dispatched to Diurnal Shareholders a firm
intention to make a Competing Offer and Neurocrine has not, on or before 11.59
p.m. on the fourteenth day after the date of the announcement of the Competing
Offer announced a Revised Offer and for these purposes: (i) a Competing Offer
is an offer (however structured), which is not subject to pre-conditions, to
acquire the whole of Diurnal's issued and to be issued ordinary share capital,
other than that already beneficially owned by the person making the offer on
terms which represent (in the reasonable opinion of Smith Square Partners LLP)
an improvement of at least 15 per cent. (15%) in the amount or value of the
consideration offered under the terms of the Scheme as at 5.00 p.m. on the
last dealing day prior to the date on which such third party offer is
announced and which has been unanimously recommended by the directors of
Diurnal and (ii) a Revised Offer means new, increased or revised terms of the
Scheme, or a new, increased or revised Takeover Offer, on terms which equal or
exceed the value of the Competing Offer in the reasonable opinion of Smith
Square Partners LLP.

 

PART C: Total irrevocable undertakings

Neurocrine has received irrevocable undertakings to vote in favour of the
Scheme at the Court Meeting and the resolutions to be proposed at the General
Meeting (or, in the event that the Acquisition is implemented by way of a
Takeover Offer, to accept or procure acceptance of the Takeover Offer) from:
(i) IP Group; (ii) Development Bank of Wales; and (iii) Polar Capital
Holdings, which are irrevocable undertakings over 81,435,173 Diurnal Shares,
representing, in aggregate, approximately 47.9 per cent. of the ordinary share
capital of Diurnal in issue on the Latest Practicable Date.

Diurnal Directors, Richard Ross, Richard Bungay, John Goddard, Sam Williams
and Alan Raymond have provided irrevocable undertakings which are irrevocable
undertakings over 3,030,867 Diurnal Shares, representing, in aggregate,
approximately 1.78 per cent. of the ordinary share capital of Diurnal in issue
on the Latest Practicable Date.

Accordingly, irrevocable undertakings have been provided over 84,466,040
Diurnal Shares, representing, in aggregate, approximately 49.7 per cent. of
the ordinary share capital of Diurnal in issue on the Last Practicable Date.

 

PART D: Letter of intent

In addition to the irrevocable undertakings, Neurocrine has received a letter
of intent from Amati Global Investors in respect of 8,786,429 Diurnal Shares,
representing, in aggregate, approximately 5.2 per cent. of the ordinary share
capital of Diurnal in issue on the Latest Practicable Date.

The letter of intent confirms Amati Global Investors intention to vote in
favour of the Scheme at the Court Meeting and the resolutions to be proposed
at the General Meeting (or, in the event that the Acquisition is implemented
by way of a Takeover Offer, to accept or procure acceptance of the Takeover
Offer).

 

PART E: Total irrevocable undertakings and letter of intent

Considering: (i) the Director irrevocable undertakings, representing
approximately 1.78 per cent. of the ordinary share capital of Diurnal in issue
on the Latest Practicable Date; (ii) the Shareholder irrevocable undertakings
given by IP Group, Development Bank of Wales and Polar Capital Holdings,
representing approximately 47.9 per cent. of the ordinary share capital of
Diurnal in issue on the Latest Practicable Date; and (iii) the letter of
intent received from Amati Global Investors representing, in aggregate,
approximately 5.2 per cent. of the ordinary share capital of Diurnal in issue
on the Latest Practicable Date, Neurocrine has received irrevocable
undertakings and a letter of intent in respect of a total of 93,252,469
Diurnal Shares representing, in aggregate, approximately 54.8 per cent. of the
ordinary share capital of Diurnal in issue on the Latest Practicable Date.

 

Appendix 4

DEFINITIONS

The following definitions apply throughout this announcement unless the
context requires otherwise:

 Acquisition                           the recommended cash acquisition being made by Neurocrine to acquire the
                                       entire issued and to be issued ordinary share capital of Diurnal to be
                                       effected by means of the Scheme (or by way of Takeover Offer under certain
                                       circumstances described in this announcement) and, where the context admits,
                                       any subsequent revision, variation, extension or renewal thereof
 Acquisition Price                     27.5 pence per Diurnal Share
 AIM                                   the AIM market, a market operated by the London Stock Exchange
 AIM Rules                             the AIM Rules for Companies governing the admission to and operation of AIM
                                       published by the London Stock Exchange as amended from time to time
 Authorisations                        regulatory authorisations, orders, recognitions, grants, consents, clearances,
                                       confirmations, certificates, licences, permissions or approvals, in each case,
                                       of a Third Party
 Blocking Law                          means (i) any provision of Council Regulation (EC) No 2271/1996 of 22 November
                                       1996 (or any law or regulation implementing such Regulation in any member
                                       state of the European Union); or (ii) any provision of Council Regulation (EC)
                                       No 2271/1996 of 22 November 1996, as it forms part of domestic law in the
                                       United Kingdom by virtue of the European Union (Withdrawal) Act 2018
 Business Day                          a day (other than Saturdays, Sundays and public holidays in the UK) on which
                                       banks are open for business in London
 Closing Price                         the closing middle market price of a Diurnal Share on a particular trading day
                                       as derived from the AIM Appendix to the Daily Official List
 Code                                  the City Code on Takeovers and Mergers
 Companies Act                         the Companies Act 2006, as amended
 Conditions                            the conditions to the implementation of the Acquisition, as set out in
                                       Appendix 1 to this announcement and to be set out in the Scheme Document
 Court                                 the High Court of Justice in England and Wales
 Court Hearing                         the hearing by the Court of the application to sanction the Scheme under Part
                                       26 of the Companies Act
 Court Meeting                         the meeting of Scheme Shareholders to be convened pursuant to an order of the
                                       Court under the Companies Act for the purpose of considering and, if thought
                                       fit, approving the Scheme (with or without amendment), including any
                                       adjournment thereof, notice of which is to be contained in the Scheme Document
 Court Order                           the order of the Court sanctioning the Scheme
 Daily Official List                   the Daily Official List published by the London Stock Exchange
 Dealing Arrangement                   an arrangement of the kind referred to in Note 11(a) on the definition of
                                       acting in concert in the Code
 Dealing Disclosure                    has the same meaning as in Rule 8 of the Code
 Disclosed                             the information disclosed by, or on behalf of Diurnal, (i) in the annual
                                       report and accounts of the Diurnal Group for the financial years ended 30 June
                                       2019, 30 June 2020 or 30 June 2021; (ii) in the unaudited interim statements
                                       for the Diurnal Group for the six months ended 31 December 2021; (iii) in the
                                       unaudited trading statement for the Diurnal Group in relation to the twelve
                                       months ended 30 June 2022; (iv) in this announcement; (v) in any other
                                       announcement to a Regulatory Information Service by, or on behalf of Diurnal
                                       prior to the publication of this announcement; or (vi) as otherwise fairly
                                       disclosed to Neurocrine (or its respective officers, employees, agents or
                                       advisers) prior to the date of this announcement, including (but not limited
                                       to): (i) in connection with any management presentation in connection with the
                                       Acquisition which was attended by Neurocrine (or any of their respective
                                       officers, employees, agents or advisers in their capacity as such), or (ii)
                                       via the virtual data room operated on behalf of Diurnal in respect of the
                                       Acquisition
 Diurnal                               Diurnal Group plc
 Diurnal Consultant Option             the option granted by Diurnal on 12 April 2016 in exchange for an option
                                       granted by Diurnal Limited on 23 September 2015 which was not granted pursuant
                                       to the Diurnal Share Option Scheme 2015
 Diurnal Directors                     the directors of Diurnal at the time of this announcement or, where the
                                       context so requires, the directors of Diurnal from time to time
 Diurnal Group                         Diurnal and its subsidiary undertakings and, where the context permits, each
                                       of them
 Diurnal LTIP Awards                   options or awards granted pursuant to the Diurnal Group plc Long Term
                                       Incentive Plan adopted by the Diurnal Directors on 21 December 2015
 Diurnal Market Value Options          the options granted by Diurnal in exchange for options granted by Diurnal
                                       Limited pursuant to the Diurnal Share Option Scheme 2015
 Diurnal Shareholders or Shareholders  the holders of Diurnal Shares at any relevant date or time
 Diurnal Shares                        the existing unconditionally allotted or issued and fully paid ordinary shares
                                       of 5 pence each in the capital of Diurnal and any further such ordinary shares
                                       which are unconditionally allotted or issued before the Scheme becomes
                                       effective
 Diurnal Share Awards                  the Diurnal LTIP Awards, the Diurnal Consultant Option and the Diurnal Market
                                       Value Options
 Diurnal Share Option Scheme 2015      the Diurnal Share Option Scheme 2015 adopted by the board of directors of
                                       Diurnal Limited
 Effective                             in the context of the Acquisition:

                                       (a)     if the Acquisition is implemented by way of the Scheme, the Scheme
                                       having become effective pursuant to its terms; or

                                       (b)     if the Acquisition is implemented by way of a Takeover Offer, such
                                       Takeover Offer having been declared and become unconditional in accordance
                                       with the Code
 Effective Date                        the date on which either (i) the Scheme becomes effective in accordance with
                                       its terms or; if Neurocrine elects, and the Panel consents, to implement the
                                       Acquisition by way of a Takeover Offer (as defined in Chapter 3 of Part 28 of
                                       the Companies Act), the date on which such Takeover Offer becomes or is
                                       declared unconditional
 Enlarged Group                        the combined Diurnal Group and Neurocrine Group following completion of the
                                       Acquisition
 Excluded Shares                       (i) any Diurnal Shares beneficially owned by Neurocrine or any other member of
                                       the Neurocrine Group; (ii) any Diurnal Shares held in treasury by Diurnal; and
                                       (iii) any other Diurnal Shares which Neurocrine and Diurnal agree will not be
                                       subject to the Scheme
 FCA or Financial Conduct Authority    the Financial Conduct Authority acting in its capacity as the competent
                                       authority for the purposes of Part VI of the UK Financial Services and Markets
                                       Act 2000
 Forms of Proxy                        the forms of proxy in connection with each of the Court Meeting and the
                                       General Meeting, which shall accompany the Scheme Document
 FTI Consulting                        FTI Consulting LLP
 General Meeting                       the general meeting of Diurnal Shareholders (including any adjournment
                                       thereof) to be convened in connection with the Scheme
 IFRS                                  International Financial Reporting Standards
 IP Group                              IP2IPO Portfolio (GP) Limited acting in its capacity as general partner of
                                       IP2IPO Portfolio LP and IP2IPO Limited
 Latest Practicable Date               means 26 August 2022, being the latest practicable date prior to the
                                       publication of this Announcement
 London Stock Exchange                 London Stock Exchange plc
 Long-stop Date                        28 February 2023, or such later date as may be agreed by Neurocrine and
                                       Diurnal (with the Panel's consent and as the Court may approve (if such
                                       approval(s) are required))
 Neurocrine                            Neurocrine Biosciences, Inc., a Delaware corporation whose registered office
                                       is at 12780 El Camino Real, San Diego, California 92130, United States of
                                       America
 Neurocrine Group                      Neurocrine and its subsidiary undertakings and, where the context permits,
                                       each of them
 Offer Period                          the offer period (as defined by the Code) relating to Diurnal, which commenced
                                       on the date of this announcement
 Opening Position Disclosure           has the same meaning as in Rule 8 of the Code
 Overseas Shareholders                 Diurnal Shareholders (or nominees of, or custodians or trustees for Diurnal
                                       Shareholders) not resident in, or nationals or citizens of the United Kingdom
 Panel                                 the Panel on Takeovers and Mergers
 Panmure Gordon                        Panmure Gordon (UK) Limited, Diurnal's financial adviser, Rule 3 adviser,
                                       nominated adviser and joint broker
 Registrar of Companies                the Registrar of Companies in England and Wales
 Regulatory Information Service        a service approved by the London Stock Exchange for the distribution to the
                                       public of announcements and included within the list on the website of the
                                       London Stock Exchange
 Restricted Jurisdiction               any jurisdiction where local laws or regulations may result in a significant
                                       risk of civil, regulatory or criminal exposure if information concerning the
                                       Acquisition is sent or made available to Diurnal Shareholders
 Scheme or Scheme of Arrangement       the proposed scheme of arrangement under Part 26 of the Companies Act between
                                       Diurnal and the Scheme Shareholders in connection with the Acquisition, with
                                       or subject to any modification, addition or condition approved or imposed by
                                       the Court and agreed by Diurnal and Neurocrine
 Scheme Document                       the document to be sent to Diurnal Shareholders (and persons with information
                                       rights) containing, amongst other things, the Scheme and the notices convening
                                       the Court Meeting and the General Meeting
 Scheme Record Time                    the time and date specified as such in the Scheme Document, expected to be
                                       6.00 p.m. on the Business Day immediately prior to the Effective Date
 Scheme Shareholder                    a holder of Scheme Shares at any relevant date or time
 Scheme Shares                         a definition to be specified in the Scheme Document, expected to be:

                                       (a)     Diurnal Shares in issue as at the date of the Scheme Document;

                                       (b)     (if any) Diurnal Shares issued after the date of the Scheme
                                       Document but prior to the Voting Record Time; and

                                       (c)     (if any) Diurnal Shares issued at or after the Voting Record Time
                                       and before the Scheme Record Time, either on terms that the original or any
                                       subsequent holders thereof shall be bound by the Scheme, or in respect of
                                       which the holders thereof shall have agreed in writing to be, bound by the
                                       Scheme,

                                       and, in each case (where the context requires), remaining in issue at the
                                       Scheme Record Time, but excluding Excluded Shares
 Significant Interest                  in relation to an undertaking, a direct or indirect interest of 20 per cent.
                                       or more of the total voting rights conferred by the equity share capital (as
                                       defined in section 548 of the Companies Act) of such undertaking
 Smith Square Partners                 Smith Square Partners LLP
 Takeover Offer                        should the Acquisition be implemented by way of a Takeover Offer as defined in
                                       Chapter 3 of Part 28 of the Companies Act, the offer to be made by or on
                                       behalf of Neurocrine to acquire the entire issued and to be issued ordinary
                                       share capital of Diurnal and, where the context admits, any subsequent
                                       revision, variation, extension or renewal of such takeover offer
 Third Party                           each of a central bank, government or governmental, quasi-governmental,
                                       supranational, statutory, regulatory, environmental, administrative, fiscal or
                                       investigative body, court, trade agency, association, institution,
                                       environmental body, employee representative body or any other body or person
                                       whatsoever in any jurisdiction
 Torreya                               Torreya Capital LLC
 United Kingdom or UK                  the United Kingdom of Great Britain and Northern Ireland
 United States or US                   the United States of America, its territories and possessions, any state of
                                       the United States of America, the District of Columbia and all other areas
                                       subject to its jurisdiction and any political sub-division thereof
 US Exchange Act                       the United States Securities Exchange Act of 1934
 Voting Record Time                    the time and date to be specified in the Scheme Document by reference to which
                                       entitlement to vote on the Scheme will be determined
 Wider Neurocrine Group                Neurocrine and associated undertakings and any other body corporate,
                                       partnership, joint venture or person in which Neurocrine and all such
                                       undertakings (aggregating their interests) have a Significant Interest and
 Wider Diurnal Group                   Diurnal and associated undertakings and any other body corporate, partnership,
                                       joint venture or person in which Diurnal and such undertakings (aggregating
                                       their interests) have a Significant Interest.

 

For the purposes of this announcement, "subsidiary", "subsidiary undertaking",
"undertaking" and "associated undertaking" have the respective meanings given
thereto by the Companies Act.

All references to "pounds", "pounds Sterling", "Sterling", "£", "pence",
"penny" and "p" are to the lawful currency of the United Kingdom.

All references to "Euros", "EUR" and "€" are to the lawful currency of the
member states of the European Union that adopt a single currency in accordance
with the Treaty establishing the European Community as amended by the Treaty
on the European Union.

All references to "US$", "$" and "US Dollars" are to the lawful currency of
the United States.

All the times referred to in this announcement are London times unless
otherwise stated.

References to the singular include the plural and vice versa.

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