Intercytex implements restructuring actions to reduce cash burn

26th January 2009 Intercytex Group plc (LSE: ICX) ("Intercytex" or "the Company"), a leading developer of regenerative medicine products, today announces a restructuring plan to reduce cash burn. Despite the very positive progress being made on all projects, with the financial markets in their current state, the Company will shortly commence a 30 day consultation period with employee representatives proposing a reduction in headcount at the Company's facilities in Manchester UK and Boston, USA of around 50% from the current level of 76 employees. The reduction in workforce will extend the Company's existing cash resources to fund operations until around the end of 2009. The measures are expected to be implemented with effect from March 2009.

The recent completion of the Phase III trial of Intercytex' lead product for the treatment of chronic wounds, Cyzact® (formerly known as ICX-PRO), has resulted in a requirement for significantly fewer employees. The results of the Phase III Cyzact® trial are still expected towards the end of the current quarter. The Board has also taken the view that it is inappropriate for the Company to be commencing new projects in the present climate.

Good progress continues to be made on all Intercytex' products. The commercialisation of Vavelta® in the UK for aesthetic uses is generating significant excitement. Completion of the Phase II trial of ICX-TRC for hair regeneration continues to be expected at the end of this quarter and good progress has been made on developing ICX-SKN for the treatment of burns helped with funding from the US Armed Forces Institute of Regenerative Medicine. In addition, the recent acquisition of Axordia has now been fully integrated and provides an exciting entry into the area of treatments for blindness and the dramatically expanding opportunities for stem cell therapies.

Nick Higgins, Intercytex' CEO, commented: "Despite the very positive progress being made on each of our clinical programmes, with the markets in their current state it has become all too evident that these restructuring actions now need to be undertaken. We very much regret their impact on employees, but the measures being taken will enable us to preserve the fundamental capabilities of the Company and, in addition to extending our cash, will give us the time and flexibility to explore fully the optimal partnering options for our key products. We look forward to announcing the Phase III Cyzact trial results within the near future and, with positive clinical results, concluding our partnering discussions."