Interim results for the six months ended30 June 2016 & strategy update

27 September 2016

2Disclaimer

Neither this presentation nor any verbal communication shall constitute, or form part of, any offer, invitation orinducement to any person to underwrite, subscribe for, or otherwise acquire or dispose of, any shares or othersecurities in Circassia Pharmaceuticals plc (“Circassia”).

Forward-looking statements

This presentation and information communicated verbally to you may contain certain projections and otherforward-looking statements with respect to the financial condition, results of operations, businesses andprospects of Circassia. The use of terms such as “may”, “will”, “should”, “expect”, “anticipate”, “project”,“estimate”, “intend”, “continue”, “target” or “believe” and similar expressions (or the negatives thereof) aregenerally intended to identify forward-looking statements. These statements are based on current expectationsand involve risk and uncertainty because they relate to events and depend upon circumstances that may ormay not occur in the future. There are a number of factors which could cause actual results or developments todiffer materially from those expressed or implied by these forward-looking statements. Any of the assumptionsunderlying these forward-looking statements could prove inaccurate or incorrect and therefore any resultscontemplated in the forward-looking statements may not actually be achieved. Nothing contained in thispresentation or communicated verbally should be construed as a profit forecast or profit estimate. Investors orother recipients are cautioned not to place undue reliance on any forward-looking statements contained herein.Circassia undertakes no obligation to update or revise (publicly or otherwise) any forward-looking statement,whether as a result of new information, future events or other circumstances.

3Period of challenges and new opportunities

1 Cash, cash equivalents and short-term bank deposits

NIOX® performing strongly

Respiratory portfolio advancing

Unexpected allergy phase III results; prudent approach to portfolio

Board review concluded; confirms specialty strategy

Commercial infrastructure expanded as strategic growth platform

Specialty portfolio strengthened

Strong balance sheet (£138.0m1 cash at 30 June 2016)

Resolute focus on building self-sustaining specialty biopharma business

4

Strategy review charts directionIn-house development supplemented by acquisition & in-licensing

Deliver thepipeline

Build broad andbalanced portfolio

Market specialty products Direct in N America and

major EU markets Partnerships elsewhere

5

Respiratorydirectsubstitutes- Target approved

drugs

Broad and balanced specialty biopharmaceutical business

Specialty commercial infrastructure captures product value- Strong infrastructure in US covering 99 territories; growing presence in EU; China team in place

2

Robust strategy to build shareholder valueBusiness built on multiple pillars underpinned by robust balance sheet

Commercialplatformexploitation- Target commercial

assets- In-license,

acquire, partner

Out-licenseout-of-scopeassets- Non-substitutable

PCP products- Core products’

non-core markets

NIOX® asthmamanagementfranchise- Robust revenues- Strong sales

growth

SPIRE allergyproducts- Upside potential- HDM allergy

results willinform strategy

1 5 6

Robust balance sheet (£138.0m at 30 June 2016) to fund strategy

Respiratorynovelformulations- Targeting

underservedspecialty markets

3 4

6

Product Research Preclinical Phase I Phase IIRegistration study /

SubstituteFiled /

ApprovedMarketed

NIOX MINO®

NIOX VERO®

Flixotide® substitute*

Seretide® substitute

Flovent® substitute*

Spiriva® substitute

Cat SPIRE

Grass SPIRE

House Dust Mite SPIRE

Ragweed SPIRE

Birch SPIRE

LAMA novel formulation

Triple combination

Novel LABA / LAMA formulation

Novel COPD therapy formulation

Portfolio strategyBalanced approach: approved, nearer-term and earlier-stage products

*Partnered

Potentialsubstitute for

COPD blockbuster

Early work underwayleveraging respiratory

expertise

Negotiatingreturn of EU

rights

Large-scale fieldstudy to informallergy strategy

Seek partners forPCP products

7

NIOX® asthma management

Respiratory pipeline

SPIRE allergy therapies

1

2

3

Commercial infrastructure4

Summary6

Financial results5

8

NIOX® is only point-of-care FeNO device available across all major markets

Clinical evidence shows FeNO measurement improves asthma management

– Improves diagnosis

– Improves determination of inhaled steroid responsiveness andcontrol through tailoring use

– Improves monitoring of treatment compliance

– Potential to reduce exacerbations

Expanding direct sales in US & Germany to include UK

− Worldwide distributor network

− Revenues from sale of devices and repeat tests

− Reimbursement established

Research sales for use in big pharma clinical studies

− Validates importance; trains physicians; raises profile in asthma community

− Revenues dependent on study numbers and timings

Leadership in FeNO asthma managementMeeting key clinical need in major therapeutic market

NIOX VERO®

Launched in major markets

Ages 4+ EU; 7+ in US

6 and 10 sec test; ~60 sec result

Monitor lasts 5 yrs / 15,000 tests

9

Representative places experience program− Opportunity for clinicians to trial FeNO in everyday practise

− Customers commit to 100 tests over 3 months at reduced price

Support available during trial− Provide training, education & patient suitability advice

Strong program conversion rate− Program placements >80% ahead of FY2015

− Only 14% of programs returned at end of trial vs 38% FY2015

− Conversion time reduced to 72 days from 91 in 2015

Continuing program roll-out− Strong focus on driving conversion

− Program also implemented in Germany

Introducing NIOX® into clinical practiseIntroducing NIOX® into clinical practise

Experience program roll-outProviding the NIOX® experience to HCPs

10

US specialist opportunity

~$190m

US primary care opportunity

~$610m

KOLs

Specialists

Primary care

Top prescribers primary care

21% growth vs same period 2015(14% CER)

35% increase in direct clinical sales(26% CER)

Initiatives underway targetingaccelerated growth

Direct sales growth reduces significanceof more unpredictable research sales

Robust revenue growth

Significant market opportunityMarket under exploited to date

11

Positioned for growthPositioned for growth

Growing evidence of asthma misdiagnosis supports NIOX®

− 53.5% over-diagnosis in recent childhood primary care study*

− NICE reports 30% treated for asthma no longer have signs of condition

Inclusion in ATS treatment guidelines and NICE recommendation

NICE primary care implementation project ongoing in 7 UK centers

Expanding Circassia presence in US, Europe and China

Experience program roll-out underway

Study to extend US indication down to 4 years on track to report H2 2016

Primary ciliary dyskinesia diagnosis study to report H2 2016

R&D team in place to drive development of next generation device

Accelerating sales growthFoundations in place to boost NIOX® sales

*Br J Gen Pract 2016; DOI: 10.3399/bjgp16X683965

12

NIOX® asthma management

Respiratory pipeline

SPIRE allergy therapies

1

2

3

Commercial infrastructure4

Summary6

Financial results5

13

Particle-engineered respiratory productsNear-term pipeline & longer-term novel formulations

73.5% of pre-entry brand

price for first to market

generic in US during

exclusivity1

Significant pricing potential

1 Bureau of Economics, Federal Trade Commission, Working Paper No 317. The effect of generic drug competition on generic drug prices during the Hatch-Waxman 180-day exclusivity period. April 2013.

Device types

DPIpMDI

Directly substitutable products

– Limited development

– Abbreviated route to market; near-term revenue

– No requirement for significant promotion

– Challenging to achieve for respiratory products

Novel combinations / formulations

− Longer more extensive development

− Develop specialty products and partner for PCP

Novel technology controls API properties

14

Fliveo® strategy advancingTargeting direct substitution of GSK’s Flixotide® pMDI

1 Partner rights: USA, Canada, Australia and New Zealand, India, Europe (including the EU and EFTA states (Iceland, Liechtenstein, Norway and Switzerland)), Turkey, Russia and CIS

Originator sales estimate based on GSK Annual Reports 2011, 2014 and 2015 and selected IMS data 2011 and 2012

Flovent®substitute (US)

Estimated $820m originator sales (>60% US)

Flixotide®substitute (EU)

Negotiating return of EU rights from partner1

Main market – US – held by partner

Smaller EU market represents important opportunity for Circassia

Product approved in all three strengths in UK & Sweden

EU regulatory strategy and launch planning ongoing

Manufacturing & company name variation planning underway

Leveraging expanding commercial infrastructure

Targeting EU roll-out

15

Seriveo® (Seretide® pMDI substitute) on trackMajor commercial opportunity; UK originator gross sales $360m

Positive in vitro performance; Seriveo® formulations vs Seretide®

Clinical testing of two optimized formulations underway

Plan to move best performing formulation into final pharmacokinetic study

UK filing anticipated H2 2017

Seretide®substitute

Finesalmeterolparticles

Similarin vitro

Originator 2015 sales pre-discount:NHS prescription cost analysis

16

‘Triple’ clinical study successfully completedSimilar overall salmeterol relative bioavailability as Serevent®

Novel triplepresentation

Salmeterol xinafoate pharmacokinetic profiles vs Serevent®

No significant safety or tolerability concerns; no serious adverse events

All three components bioavailable

Overall relative bioavailability of LABA component similar to Serevent®

Increased triple ICS bioavailability vs single ICS formulation

1717

Spiriva® DPI substituteLeveraging particle-engineering technology

Spiriva®substitute

Significant progress

Pharmacokinetic study planned for 2017

Major market opportunity – originator sales $3.9Bn

In vitro comparison of engineered substitute vs Spiriva®

1818

New product opportunities initiatedSpecialist COPD treatments with significant market potential

Products leverage respiratory expertise with initial technical assessments complete

Potential to leverage proprietary particle-engineering technology

- Encouraging results using similar process as approved Flixotide® pMDI substitute

Target underserved major market opportunities

- LABA / LAMA targeting up to $700m opportunity in US + EU5

- Treatment for COPD exacerbation reduction targeting up to $250m opportunity

Optimized particle distributionHighly crystalline particles

19

NIOX® asthma management

Respiratory pipeline

SPIRE allergy therapies

1

2

3

Commercial infrastructure4

Summary6

Financial results5

20Proprietary allergy technology

T cellepitopesselected

Wholeallergen

Modern, synthetic, rationally-designed pharmaceuticalsModern, synthetic, rationally-designed pharmaceuticals

Identifies T-cell epitopes

– Short linear stretches of amino acids in allergen sequence

– Binds to antigen presenting cells to induce regulatory T cells

– Identified from blood of allergic individuals

Short treatment designed to provide efficacy without the safety issues

– Regulatory T cells down-regulate allergic response

– Lack of B-cell epitopes avoids cross-linking of mast cells eliminating

early response / no need to dose escalate

– Synthetic manufacture – no extraction from whole allergens

Broadly applicable approach across range of allergies

– Allergens already identified; no research required

SPIREs – Synthetic Peptide Immuno-Regulatory Epitopes

21Cat SPIRE phase III study

Robust study designRobust study design

Double-blind, randomized, multi-center field study― Three arms (4 x 6nmol; 8 x 6nmol; placebo)

― ITT population n=1,245; safety population n=1,407

Primary endpoint: difference in combined TRSS / rescue medication use

score one year after start of treatment vs placebo― Designed with 99% power vs placebo

― Powered for 25% improvement; FDA requires at least 15% treatment effect*

― Assumed 50% greater variability than observational field study

Inclusion criteria minimize confounding factors― Moderate to severe allergy: baseline TRSS ≥10

― Subjects live with cat(s) in the home

― Centers in cold dry locations to minimize confounding allergens

* With upper bound of 95% confidence interval minimum10%

22

Mean Combined Score 52-54 weeks after treatment initiation

ITT population Placebo (n=414) 4 x 6 nmol (n=417) 8 x 6 nmol (n=414)

Mean Combined Score (baseline) 2.53 pts 2.49 pts 2.49 pts

Mean Combined Score (52-54 weeks) 1.05 pts 1.04 pts 1.00 pts

Combined Score reduction from baseline 58.5% 58.2% 59.8%

LS mean difference vs placebo (52-54 weeks) - -0.01 pts (-0.7%) -0.05 pts (-4.7%)

P value vs placebo - 0.914 0.439

Unexpected resultsPrimary endpoint

Primary endpoint: combined TRSS (0-24 scale) and rescue medication use (RMS) score (0-3 scale)

- Combined Score (0-6 scale) = (TRSS / 8) + (RMS)

23

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

Phase IIb Phase III

Mea

nT

RS

S

Placebo (baseline) Placebo (1 year) 4 x 6 nmol (baseline) 4 x 6nmol (1 year)

Phase IIb vs phase III symptoms comparisonDramatic placebo response in phase III study

TRSS at baseline and 1 yearTRSS at baseline and 1 year

61.0%59.5%46.5%

18.2%

24

Full dataset review completeNo major confounding factors identified

Broad range of endpoints and sub-populations analyzedBroad range of endpoints and sub-populations analyzed

Secondary endpoints

― Total Rhinoconjunctivitis Symptom Score (TRSS)

― Rescue medication use

― Nasal symptoms

― Ocular symptoms

― Rhinoconjunctivitis quality of life

― # of days with no severe / moderate TRSS without rescue medication use

Exploratory endpoints

― Health economic (work/school days lost; hospital/doctor visits; non-rescue medication treatment)

― Work place productivity & activity impairment/classroom impairment

― Pittsburgh sleep quality index

― Global impression of change in rhinoconjunctivitis score

― Change in asthma control in asthmatics

― Cat specific and total IgE levels

Post-hoc sub-population analysis

― Demographics: age, gender, asthma status

― Study design: country, year of enrolment

― Disease status: number of allergies, symptom levels

POST-HOC ANALYSIS

Potential signal in pooled European

subjects receiving double course

p=0.044; statistical hurdle threshold

p<0.025

25Independent expert review

Robust review by international expertsRobust review by international experts

International Medical Advisory Board― “Subjects were highly sensitised, highly symptomatic, not under-exposed to allergen.

This was the perfect study in terms of patient selection.”― Placebo effect may wane in two-year follow-up

Independent statistical review― Data capture, processing and analysis integrity confirmed

NIH feedback― Alternative study design in subjects without cat at home although significant issues

to achieve FDA design approval

Independent clinical expert review― Confirmed no clear evidence-based explanation for large placebo effect

Expert opinion on placebo effect― Placebo effect increasingly affecting studies in many indications― Several factors correlate to increased effect inc injected products & multiple doses

26

Birch-SPIRE first-in-human study completePrimary endpoint: safe and well tolerated

Secondary endpoint: conjunctival provocation test (minimally effective concentration of allergen)

6 nmol (n=12) 12 nmol (n=11) 24 nmol (n=11) Placebo (n=10)

Baseline (median) 340.00 340.00 340.00 340.00

Post-season (median)* 1700.00 1700.00 1700.00 1020.00

Secondary endpoint: skin prick test (early phase skin response wheal area change from baseline post-season)

6 nmol (n=12) 12 nmol (n=11) 24 nmol (n=11) Placebo (n=10)

LS mean difference vs placebo -58.04 -90.51 -92.07 -

p value 0.122 0.017 0.017 -

Exploratory endpoint: TRSS at peak season (modest pollen levels)

6 nmol (n=12) 12 nmol (n=11) 24 nmol (n=11) Placebo (n=10)

LS mean difference vs placebo -0.98 0.50 -0.66 -

p value 0.443 0.700 0.614 -

*awaiting p values

27

Prudent allergy portfolio strategyRevisit allergy investment if justified by compelling HDM SPIRE results

Cat SPIRE

– Two-year follow-up to report H1 2017

– No treatment during follow-up; potential insights into placebo response

Seasonal allergy immunotherapies

– Grass SPIRE registration study recruitment stopped

– Ragweed SPIRE clinical study preparation activities stopped

– Birch SPIRE study encouraging

House dust mite SPIRE

– Large-scale field study fully recruited (n=715)

– Differences in subject population vs cat SPIRE study

– Majority of expenditure incurred

– Study to complete Spring 2017

HDM SPIRE to move into phase III only if supported by compelling data

28

NIOX® asthma management

Respiratory pipeline

SPIRE allergy therapies

1

2

3

Commercial infrastructure4

Summary6

Financial results5

29

Specialty commercial strategyBuilding strategic growth platform

KOLs

Specialists

Primary care

Top prescribers primary care

Specialty products

- Leverage infrastructure in US, EU and China

- Sales forces currently targeting specialists with ‘clinical sell’

- Supported by Medical Affairs / Clinical Science Liaisons

- Marketing, key accounts, managed markets expertise in place

- Supply chain, logistics, finance, compliance, pharmacovigilance established

- Rare breadth and depth of specialty product commercialization expertise

- Platform supported by NIOX® sales

Substitutable products

- Leverage managed markets, supply chain, logistics, finance capabilities

- No significant promotion required

Platform for specialty product in-licensing, partnering and acquisition

30

US infrastructure significantly expandedSubstantial increase in commercial presence

Calls on US physicians

Majorgrowth insales forcewith

concurrent territoryre-organization

Substantialincrease insales force in-market activity

31

UK direct sales build underwayBuild and grow strategy

Experienced UK Commercial Director in place

Territory strategy developed with Quintiles

Two market access territories (North & South)

Five key account territories initially

Opportunity to launch Fliveo® through same infrastructure

Territory 1 N Ireland,

Scotland & N EastTerritory 2 N West, Yorkshire

& Humber

Territory 3 Wales & W

Midlands

Territory 4 E Midlands

& Eastern

Territory 5 London &

S East

UK Direct Sales Model

AdvocatesAdvocates InfluencersInfluencers ImplementersImplementers

Secure accessto critical

stakeholders

Secure formularyadoption in target

CCGs

NIOX VERO®clinical pull-

through

Commercialresource

Commercialresource

Market AccessExecutive

Hospital KeyAccountManager

MarketAccess

Executive

Hospital KeyAccountManager

Objective

32

France and Italy opportunitiesEvaluating optimal approach

French opportunity

Distributor agreement terminated

Funding for inpatient FeNO testing available

Currently no national outpatient reimbursement forFeNO testing

Two funding mechanisms available

Transitional funding for innovative devices whileevidence collected

Evaluating optimal inpatient / outpatient approach

Italian opportunity

Italian distribution agreement terminated

Reimbursement on regional basis

Major regions with reimbursement

~70% of respiratory centers of excellence &largest hospitals in these regions

Plus ~59% of Italian asthma population

Reviewing options for commercial presence

33

Strong specialty commercial infrastructureStrategic growth platform

Sales force expanded to 99 territories

Managed markets, key accounts andmedical affairs teams in place

Field-based resources approx 140

Global commercial team approx 200

Expanding EU presence

Recruiting UK direct sales team

New Commercial Directors appointed inUK and Germany

Evaluating approach in France and Italy

Beijing-based team manage localdistributors

China sales increased over 100% H12016 vs H1 2015

Team strengthened with new marketaccess and medical functions

Global commercial platform

34

NIOX® asthma management

Respiratory pipeline

SPIRE allergy therapies

1

2

3

Commercial infrastructure4

Summary6

Financial results5

35

Financial highlightsSix months ended 30 June 2016

H1 2016 results dominated by two main factors

– Impairment of goodwill allocated to allergy franchise for future benefit of acquired Aerocrine salesinfrastructure

– Full six months’ NIOX® and respiratory business contribution compared with limited contribution in H1 2015

Underlying loss for H1 2016 of £25.4m (H1 2015: £21.7m)

– Provisions and impairment of allergy portfolio goodwill and other intangibles of £76.4 million

– Allergy R&D expenditure of £13.8m

Cash at 30 June 2016 £138.0m (31 December 2015 £203.8m)

– Contingent £30.0m consideration paid January 2016 to Prosonix ex-shareholders

– £3.2m payment for remaining 2.1% of Aerocrine issued share capital

Well positioned with robust balance sheet

– Invest in commercial infrastructure to increase NIOX® sales and attract third-party products

– Progress broader respiratory portfolio; invest in earlier-stage work on new products

– Minimize expenditure on allergy portfolio; finalize allergy approach Spring 2017

36

Income statementSix months ended 30 June 2016

37

Income statementSix months ended 30 June 2016

Revenues (inc period prior to ownership)

– Sales increased 21% from £9.1m (14% CER)

– Direct clinical sales increased 35% to £8.8m (26% CER)

Sales and marketing

– £74.5m allergy franchise goodwill impairment

– Significant expansion of US presence

Net finance income

– Includes £5.8m forex gain due to sterling weakening

Taxation

– HMRC R&D tax credit

– Credit due to higher R&D spend & increased relief rate

38

Research & developmentSix months ended 30 June 2016

Allergy expenditure limited to three areas

– Completion of house dust mite allergy field study

– Drug product and stability programs

– Committed costs including cat allergy two-year follow-up

Respiratory programs

– Mainly relates to Seriveo® program and triple fixed dosecombination clinical study

NIOX® franchise

– £1.0m amortization for acquired R&D technology

Impairment and provisions

– Impairment of allergy licences and patents

– Production termination for cat & grass allergy programs

Anticipated R&D costs H2 2016 ~£21m

– Allergy costs ~£8m

39

NIOX® asthma management

Respiratory pipeline

SPIRE allergy therapies

1

2

3

Commercial infrastructure4

Summary6

Financial results5

40

Respiratorydirectsubstitutes- Target approved

drugs

Broad and balanced specialty biopharmaceutical business

Specialty commercial infrastructure captures product value- Strong infrastructure in US covering 99 territories; growing presence in EU; China team in place

2

Robust strategy to build shareholder valueBusiness built on multiple pillars underpinned by robust balance sheet

Commercialplatformexploitation- Target commercial

assets- In-license,

acquire, partner

Out-licenseout-of-scopeassets- Non-substitutable

PCP products- Core products’

non-core markets

NIOX® asthmamanagementfranchise- Robust revenues- Strong sales

growth

SPIRE allergyproducts- Upside potential- HDM allergy

results willinform strategy

1 5 6

Robust balance sheet (£138.0m at 30 June 2016) to fund strategy

Respiratorynovelformulations- Targeting

underservedspecialty markets

3 4

41

News Date*

NIOX VERO® US label extension study results H2’16

NIOX VERO® PCD study report H2’16

Seriveo® clinical study reports H2’16

UK commercial team recruitment complete H2’16

Italy and France commercial strategy complete Q1’17

NIOX® sales data Q1’17

HDM SPIRE field study results Spring ’17

Cat SPIRE two-year follow-up reports Spring ’17

Allergy strategy review Spring ’17

Fliveo® launch TBC

NIOX® sales data Q3’17

Seriveo® filing H2’17

Spiriva® substitute move into clinic H2’17

Strong newsflow

*To be included in announcements as appropriate and in-line with financial calendar including half-year / full-year results

In-license / acquire additional products; out-license non-strategic assets

Contact us

Office Investors Financial and CorporateCommunications

CircassiaNorthbrook HouseRobert Robinson AvenueOxford Science ParkOxford OX4 4GAUnited Kingdom

W: www.circassia.comE: ir@circassia.com

Steven Harris, CEOJulien Cotta, CFO

T: +44 (0) 1865 405560

FTI Consulting200 AldersgateAldersgate StreetLondon EC1A 4HDUnited Kingdom

T: +44 (0) 20 3727 1000E: circassia@FTIConsulting.com