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Vernalis plc: Interim Results for the Six Months Ended 30 June 2006

12 September 2006

- Vernalis Delivers on Significant Clinical Milestones and Establishes Commercial Operation -

Vernalis plc (LSE: VER, Nasdaq: VNLS) today announced its interim results for the six months ended 30 June 2006.

Highlights

• U.S. commercial business fully operational detailing Apokyn® and Frova®
• Strong financial position with closing cash of £50.9 million
• Losses reduced at £19.4 million (2005: £20 million)
• Frova® supplemental New Drug Application (sNDA) submitted to US FDA for the prevention of menstrual migraine (MM)
• V1003 (partial opioid agonist) meets primary end point in Phase IIa study for the management of post-operative pain
• Significant progress towards initiation of four further clinical trials in H2 2006
  • V1512 (methylester of levadopa) Phase III study in Parkinson’s disease
  • V2006 (A_2A antagonist) Phase II study in Parkinson’s disease
  • V24343 (CB₁ antagonist) Phase I study in obesity
  • Hsp90 (Hsp90 inhibitor) Phase I study in cancer
• Entered into an agreement with Pfizer to sub-lease approximately half of premises at Granta Park, Cambridge

Simon Sturge, chief executive officer of Vernalis, commented:
"Vernalis is continuing to show substantial progress toward becoming a self-funding, sustainable R&D driven commercial business. Establishing our U.S. operation with the successful launch of Apokyn® and completing the Frova® clinical trials for the short-term prevention of menstrual migraine were significant achievements. The second half of 2006 is expected to have substantial news flow as we progress our drug candidates through the clinic and boost our product revenues.”

U.S. Commercial Operation Fully Operational

During the first six months of 2006 Vernalis’ North American commercial business became fully operational and is now marketing the Company’s Parkinson’s disease drug, Apokyn® (apomorphine hydrochloride injection), as well as co-promoting its migraine drug, Frova® (frovatriptan succinate) 2.5 mg tablets alongside its partner, Endo Pharmaceuticals (Endo).

Apokyn®

Vernalis’ U.S. commercial operation has established its credibility through a significant increase in new prescriptions for Apokyn® following its re-launch in January 2006. However, gross sales for the first six months of 2006 of $2.3 million are somewhat below initial expectations because of lower levels of repeat business due to an under-reporting of patients who had discontinued their treatment during the period prior to acquisition by Vernalis. The lower sales in H1 2006 mean that, while we still believe gross sales for the full year will be within the guidance initially provided of $6 million - $7.5 million, we would now expect them to be at the lower end of this range. Net sales for the period, after provisions, were $1.8 million.

The substantial growth in new business, along with the new marketing initiatives including the Nurse Support Programme (The APOKYN® Circle of Care™) and the introduction of product sampling, gives us considerable confidence in the potential of Apokyn®.

Frova®

In May 2006 Vernalis completed the final Phase III pivotal efficacy study in MM patients who had failed on acute therapy, aimed at obtaining approval for Frova® for use as an intermittent, short-term preventative treatment for MM. This study achieved its primary end point and, together with the Phase III efficacy and safety studies previously conducted, resulted in the submission of the sNDA to the FDA. If the sNDA is successful, Vernalis expects FDA approval in mid-2007.

Development Portfolio Update

Pain Franchise

• V1003 (partial opioid agonist) – Achieved the primary endpoint in a Phase IIa study in acute post-operative pain. Vernalis is now working with its partner, Reckitt Benckiser, to identify the most appropriate development programme for nasal delivery of buprenorphine.
• V3381 (dual NMDA antagonist/MAO-A inhibitor) – In August 2006, Vernalis started a Phase IIa trial in patients with neuropathic pain resulting from long-standing diabetes.

Neurology Franchise

• V1512 (methylester of levadopa) – This potential treatment for Parkinson’s disease has completed Phase II studies with a Phase III study expected to begin in H2 2006.
• V10153 (thrombolytic) – Phase IIa trial in acute ischaemic stroke is on-going with the aim to determine whether V10153 can be clinically effective in patients up to 9 hours after the occurrence of a stroke. The trial is targeted to complete patient enrolment in H2 2006.
• V2006 (A_2A antagonist) – A series of Phase I trials has been completed. Vernalis’ partner, Biogen Idec, is now responsible for moving forward into Phase II trials which are expected to start in H2 2006.

Other Programmes

• V24343 (CB₁ antagonist) – This potent and selective cannabinoid receptor antagonist is a potential treatment for obesity and related disorders. Vernalis expects to start Phase I testing in overweight and mildly obese volunteers in H2 2006.
• Hsp90 (Hsp90 inhibitor) – Vernalis’ partner, Novartis, has selected a clinical development candidate in this oncology programme. Phase I testing is expected to start in H2 2006.
• MMPI-12 (metalloenzyme inhibitor) – Vernalis’ partner, Serono, has completed a Phase I study of this matrix metalloprotease inhibitor looking at its therapeutic potential in inflammatory disorders including multiple sclerosis.

Financial Position

Revenues increased to £6.6 million in the first six months of 2006 from £5.9 million in the same period of 2005. In addition, Vernalis reduced its loss before taxes to £19.4 million during the first half of 2006 as compared to £20.0 million in the same period of 2005. Following a successful fund raising completed at the end of 2005, Vernalis’ cash resources at the end of June 2006 totalled £50.9 million.

View the Interim Results for the six months ended 30 June 2005 (PDF - 212KB).

----ends----

Simon Sturge and Tony Weir, CEO and CFO of Vernalis respectively, will today host an analyst / investor presentation and conference call at 9:00 am BST to discuss the interim results.
This may be accessed by dialling: +44(0)1452 541076, and quoting 'Vernalis conference call.’
A replay facility will be available for 7 days by dialling: +44(0)1452 550000, with the access code: 5493221#

Enquiries:

Vernalis plc	+44 (0) 118 977 3133
Simon Sturge, Chief Executive Officer
Tony Weir, Chief Financial Officer
Julia Wilson, Head of Corporate Communication
Brunswick Group	+44 (0) 20 7404 5959
Jon Coles
Justine Mcllroy

About Vernalis
Vernalis is a speciality bio-pharmaceutical company focused on products marketed to specialist neurologists. The company has two marketed products, Frova® and Apokyn®, and a development pipeline focused on neurology and central nervous system disorders. The company has seven products in clinical development and development collaborations with leading, global pharmaceutical companies including Novartis, Biogen Idec and Serono:

Vernalis has established a U.S. commercial operation to promote Apokyn® and co-promote Frova® alongside its North American licensing partner, Endo Pharmaceuticals, progressing the company towards its goal of becoming a sustainable, self-funding, R&D-driven, speciality bio-pharmaceutical company. For further information about Vernalis, please visit www.vernalis.com.

Vernalis Forward-Looking Statement

This news release may contain forward-looking statements that reflect the Company’s current expectations regarding future events including the clinical development and regulatory clearance of the Company’s products, the Company’s ability to find partners for the development and commercialisation of its products, as well as the Company’s future capital raising activities. Forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein and depend on a number of factors including the success of the Company’s research strategies, the applicability of the discoveries made therein, the successful and timely completion of clinical studies, the uncertainties related to the regulatory process, the ability of the Company to identify and agree beneficial terms with suitable partners for the commercialisation and/or development of its products, as well as the achievement of expected synergies from such transactions, the acceptance of Frova® and Apokyn®and other products by consumers and medical professionals, the successful integration of completed mergers and acquisitions and achievement of expected synergies from such transactions, and the ability of the Company to identify and consummate suitable strategic and business combination transactions.

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