Vernalis PLC Release: Interim Results for the Six Months Ended 30 June 2011

3 August 2011 -- Vernalis plc, a revenue generating development stage pharmaceutical company with one marketed product and a broad pipeline of in-house and partnered clinical programmes, today announces its interim results for the six months ended 30 June 2011.

Highlights

Financial

- Strong balance sheet with £27.1 million cash resources (including cash, cash equivalents and held-to-maturity financial assets) at 30 June 2011 and debt free

- Underlying financial performance in-line with expectations:

- Revenue (excluding milestones) £4.3 million (2010: £5.2 million)

- Loss for the period reduced to £7.0 million (2010: £7.3 million)

- Underlying cash burn (cash burn excluding exceptional costs) £1.7 million (2010: £0.9 million)

- An exceptional £1.9 million cost related to an aborted acquisition of a US specialty pharmaceutical business

Frovatriptan

- Approval received from the Ministry of Health and Social Development for Menarini to market frovatriptan in Russia

- Underlying H1 2011 Menarini frovatriptan sales were €13.5 million (H1 2010: €16.2 million)

- German H2 2010 price reductions continue to impact total underlying sales - H1 2011 Germany sales €1.4 million (vs H1 2010: €3.6 million, vs H2 2010: €2.2 million)

- Underlying H1 2011 sales excluding Germany were down 4% compared to H1 2010

Pipeline

- Tosedostat (CHR2797):

- Licensing deal secured by Chroma Therapeutics for North, Central and South America (March 2011)

- Orphan drug status granted for Acute Myeloid Leukaemia (AML) by the US Food and Drug Administration and European Medicines Agency (March 2011)

- Positive Phase IIb data presented at ASCO (May 2011)

- AUY922:

- Included for the first time in Novartis’ selected pharmaceutical pipeline projects’ chart (July 2011)

- Estimated potential peak sales updated to >$1 billion

- V158866:

- Phase I trial to assess safety, tolerability and FAAH inhibition initiated in healthy volunteers (March 2011) 2

- Dosing Complete, results available during Q3 2011

- V81444:

- Rights successfully regained to Phase I ready A2A Parkinson’s programme from Biogen Idec (April 2011)

- MHRA approval to initiate Phase I study, dosing expected Q3 2011

Board Changes

- Following the retirement of George Kennedy from the Board, Carol Ferguson has been appointed as Senior Independent Director and Allan Baxter has been appointed Chairman of the Remuneration Committee, both positions previously held by Mr Kennedy.

- As separately announced today Nigel Sheail, Head of Corporate Mergers & Acquisitions and Global Head of Pharma Licensing at Hoffmann-La Roche will join the Board as a Non- Executive Director with immediate effect.

Anticipated newsflow

- V158866 (FAAH - pain): Phase I trial results (Q3 2011)

- V81444 (A2A - Parkinson’s Disease): Initiate Phase I trials (Q3 2011)

- V85546 (MMP12 - inflammation): Possible partnering and/or start Phase II studies (2011)

- V158411 (Chk1 - cancer): Complete pre-clinical studies (H1 2012)

- Tosedostat (aminopeptidase inhibitor - cancer) (Chroma): Initiate Phase II/III registration- directed trials (H1 2012)

- AUY922 (Hsp90 - cancer) (Novartis): Multiple Phase I and Phase II study results (timing not disclosed)

- HSP990 (Hsp90 - cancer) (Novartis): Establish Maximum Tolerated Dose (timing not disclosed)

- Secure in-licensing and/or M&A (undisclosed)

Ian Garland, Chief Executive Officer, commented: “Operational performance in the first half of 2011 has been strong within both our in-house and partnered programmes. Our in-house pipeline has been strengthened by the addition of V81444, an attractive potential novel treatment for Parkinson’s Disease that we will move into Phase I during the second half of the year. Our balance sheet and trading performance remain strong and although we did not secure an in-licensing deal or acquisition, we remain highly active in this area. We are very well positioned for a successful second half of the year both operationally and financially.”

Presentation & Conference Call

Vernalis management will host a presentation at 09.00am (UK) at Brunswick’s offices, 16 Lincoln’s Inn Fields, London WC2A 3ED today. It will also be available via webcast at http://www.vernalis.com/investor-centre/presentations-and-webcasts and www.cantos.com and via conference call, which can be joined by dialling + 44 (0)20 3140 0723.

Enquiries:

Vernalis Contacts

Ian Garland, Chief Executive Officer

+44 (0) 118 989 9360

David Mackney, Chief Financial Officer

Jon Coles

+44 (0) 20 7404 5959

Kristin Shine

Taylor Rafferty

Rob Newman

+44 (0) 20 7614 2900

Faisal Kanth

About Vernalis

Vernalis is a revenue generating development stage pharmaceutical company with significant expertise in taking promising product candidates along a commercially-focused path to market. The Group has one marketed product, frovatriptan for the acute treatment of migraine, and eight candidates in development, seven of which are designated priority programmes. Four of these priority development programmes are currently unpartnered and three are partnered. Pipeline programmes are derived from both our own research activities where we have significant expertise in fragment and structure based drug discovery, as well as from collaborations. Our technologies, capabilities and products are endorsed by collaborations with Endo, GSK, Lundbeck, Menarini, Novartis and Servier.

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