Corporate Presentation

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Corporate Presentation
14 November 2006
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Important Disclaimer

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• This presentation is being communicated in the
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  professional experience in matters relating to
  investments falling within Article 19(1) of the
  Financial Services and Markets Act 2000
  (Financial Promotion) Order 2001 (the Order) or
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  of the Order (all such persons being referred to
  as relevant persons). This presentation is
  only directed at relevant persons, and any
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• The distribution of this presentation in other
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  reasonable care has been taken to ensure that the
  facts stated in this presentation are accurate
  and that the opinions expressed are fair and
  reasonable, the contents of this presentation
  have not been verified by Vernalis plc or any
  other person. Accordingly no representation or
  warranty, express or implied, is made as to the
  fairness, accuracy, completeness or correctness
  of the information and opinions contained in this
  presentation and no reliance should be placed on
  such information or opinions. None of Vernalis
  plc or any of its respective members, directors,
  officers or employees nor any other person
  accepts any liability whatsoever for any loss
  howsoever arising from any use of such
  information or opinions or otherwise arising in
  connection with this presentation. This
  presentation does not form part of any offer of
  securities, or constitute a solicitation of any
  offer to purchase or subscribe for securities.
  By participating in this presentation you agree
  to be bound by the foregoing terms.
• This presentation is not an offer of securities
  for sale in the United States of America.
  Securities may not be offered or sold in the
  United States of America absent registration or
  an exemption from registration.
• Safe Harbour statement this presentation may
  contain forward-looking statements that reflect
  the Company's current views and expectations
  regarding future events. In particular certain
  statements with regard to managements strategic
  vision, aims and objectives, the conduct of
  clinical trials, the filing dates for product
  licence applications including that of Frova for
  menstrual migraine and the anticipated launch of
  specified products in various markets, the
  Companys ability to find partners for the
  development and commercialisation of its products
  as well as the terms for such partnerships,
  anticipated levels of demand for existing
  products and products in development, the effect
  of competition, anticipated efficiencies, trends
  in results of operations, margins, the overall
  pharmaceutical market and exchange rates, are all
  forward looking in nature.
• Forward-looking statements involve risks and
  uncertainties that could cause actual results to
  differ materially from those expressed or implied
  by the forward looking statements. Although not
  exhaustive, the following factors could cause
  actual results to differ materially from those
  the Company expects difficulties inherent in
  the discovery and development of new products and
  the design and implementation of pre-clinical and
  clinical studies, trials and investigations,
  delays in and results from such studies, trials
  and investigations that are inconsistent with
  previous results and the Companys expectations,
  the failure to obtain and maintain required
  regulatory approvals, product and pricing
  initiatives by the Companys competitors,
  inability of the Company to market existing
  products (including Apokyn and Frova) and new
  products effectively and the failure of the
  Company to agree beneficial terms with potential
  partners for any of its products or the failure
  of the Companys existing partners to perform
  their obligations, the ability of the Company to
  obtain additional financing for its operations
  and the market conditions affecting the
  availability and terms of such financing, 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 and the risks described in our most
  recent annual report on Form 20-F filed with the
  U.S. Securities and Exchange Commission (File No
  0-20104).

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Vernalis

• Listed in London (LSEVER) and on Nasdaq (VNLS)
• Market capitalisation 191m (363m)
• To become a sustainable, self funded, RD driven
  speciality bio-pharmaceutical company with a
  focus in neurology
• In place - research, development, outsourced
  manufacture and a U.S. distribution and sales and
  marketing team
• Continuous revenue stream
• 34 person speciality sales force in place
  marketing Apokyn and Frova
• Franchises in Parkinsons disease and pain
  management

Strategy
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Strong Cash Position to Drive Products Through
the Clinic

• One of the best funded biotech companies in the
  UK
• 50.9m (96m) cash in the bank
• Milestones expected from Endo
• 15m as part of original Frova agreement
  received Sept 2006
• 40m on approval of Frova for MM expected mid
  2007
• Milestone expected from Biogen Idec
• 3m on the start of V2006 Phase II expected H2
  2006
• Strong cash position allowing Vernalis to execute
  its strategy for growth
• Objective to retain U.S. rights where appropriate

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Vernalis Key Products and Programmes
Marketing Rights
Indication
Product
Late Research
Pre- clinical
Phase I
Phase II
Phase III
Market
Pain franchise
US Co-promotion Endo (None EU - Menarini)
Frova
Acute migraine
US Co-promotion Endo (None EU - Menarini)
Frova
Menstrual migraine
Acute post-operative pain
Option US profit share Reckitt Benckiser
V1003
Acute neuropathic pain
V3381
World Wide
Neurology franchise
Parkinsons disease (advanced)
Apokyn
North American
Parkinsons disease (moderate/advanced)
V1512
World Wide (excl. Italy)
V10153
Ischaemic stroke
World Wide
Parkinsons disease (mild/moderate)
US Co-promotion Biogen Idec
V2006
Others
Inflammation
MMPI
None (Serono)
Obesity
V24343
World Wide
Hsp90 inhib.
Cancer
None (Novartis)
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Frova Overview

• 5HT1B/1D agonist for migraine
• Approved in US and EU for the acute treatment of
  migraine
• Licensed to Menarini in EU
• May 2004 North American rights reacquired from
  Elan
• July 2004 Re-licensed and co-promotion agreement
  with Endo
• Vernalis/Endo co-promotion
• Vernalis established US commercial organisation
• Became effective 1 January 2006
• Endo funds Vernalis on a cost per detail
• Distinctive characteristic long half-life of 26
  hours
• Lowest headache recurrence rates in triptan class

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Key point of differentiation
Long half-life - Low recurrence

50
40
recurrence
30
Frova
20
10
30
20
25
10
0
15
5
Plasma half-life (h)
Zolmitriptan 2.5mg
Frova 2.5mg
Eletriptan 80mg
Sumatriptan 6mg (sc)
Rizatriptan 10mg
Almotriptan 12.5mg
Sumatriptan 100mg
Naratriptan 2.5mg
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Frova for Prevention of Menstrual Migraine (MM)

• New indication short term prevention of MM
• No triptan currently approved
• 12 million women in the US suffer from MM
• MM is predictable, long-lasting and likely to
  recur
• Frova half-life is ideally suited to prevent MM
• Half-life at least 4 times longer than any other
  triptan
• Only once or twice daily dosing
• Reduce opportunity for breakthrough headache

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Clinical Trials completed for Frova for
Prevention of MM

• Phase III efficacy study in 550 MM patients
  completed demonstrating highly significant
  benefit for Frova
• Phase III one year safety study in 525 MM
  patients completed demonstrating long term safety
  profile
• Phase III second efficacy study in 427 MM
  patients completed in May 2006 demonstrating
  highly significant benefit for Frova
• Both dose levels of Frova were highly effective
  in difficult to treat patients in preventing MM
• Both dose levels were highly effective on
  secondary measures
• Both doses significantly reduced need for rescue
  medication
• Both dose regimens were very well tolerated
• Safety profile similar to that previously
  observed
• No safety concerns arose from the repeated dosing
  of Frova over 6 days

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Frova Re-launch with New Marketing Focus
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Frova for Prevention of MM Summary

• Completed the MM Clinical Trials
• sNDA filing accepted by FDA September 2006
• PDUFA date 19 May 2007
• 40m Milestone from Endo on MM approval
• Opportunity to grow Frova sales on MM approval
• Endo sales force increased to 590 reps
• Vernalis sales force fully operational

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V3381 Neuropathic Pain

• Dual-mechanism of action
• NMDA (N-methyl-D Aspartate) antagonist
• MAO-A (monoamine oxidase-A) inhibitor
• Existing therapies maybe unsatisfactory due to
• Non-response or low efficacy
• Side-effects
• Phase 1 clinical studies completed
• Safe and well tolerated up to 14 days
• Twice daily administration
• Phase II trial in diabetic neuropathic pain
  initiated in August 2006
• Randomised, double-blind, crossover study in US
  and Canada
• Safety, pharmacokinetics and preliminary efficacy
  of repeat dosing

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Parkinsons Disease

• Progressive neurological disease
• Loss of dopamine containing neurones in basal
  ganglia
• Affects approximately 1.5 million people in the
  United States
• Characterised by motor symptoms
• Tremor, bradykinesia, muscle rigidity, gait
  dysfunction and postural instability
• Standard of care Levodopa (L-dopa)
  decarboxylase inhibitor
• All drugs currently on the market offer
  symptomatic treatment
• Inadequate symptom control in later stages
• Motor complications develop progressively
• Significant side-effects from treatment

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Parkinson's - Disease Progression Treatment
Options
Early Symptoms
Severe PD 25 patients
Moderate-to-severe PD 65 patients
Mild PD 10 patients
Uncontrolled Symptoms/ Off Episodes
Uncontrolled Symptoms
Initiate Treatment
Uncontrolled Symptoms
End-of-Dose Wearing Off
Diagnosis
Disease Progression
Possibly AddSecond Agent
DBS Other Surgery
Typically MonotherapyWith a Dopamine Agonist or
Carbidopa-Levodopa
Continue Adjusting Meds orRescue With Apokyn
Adjust Doses or Add Other Meds

V1512



Apokyn
Apokyn Infusion
V2006

Nasal Apomorphine
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Apokyn Parkinsons Disease

• Apokyn (apomorphine hydrochloride injection)
  non-ergoline dopamine agonist
• Apokyn is the only therapy available in the
  United States for the acute, intermittent
  treatment of immobilising off episodes
  associated with Parkinsons disease
• Acquired from Mylan Pharmaceuticals Nov 2005
• - Cash payment of 23m
• Indicated for the acute use for motor
  complications
• Hypomobility
• Off episodes
• Delayed On and On/Off

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Apokyn Parkinsons Disease (contd)

• Approved by the FDA as an Orphan Drug in April
  2004 and launched in the US in July 2004
• Orphan Drug exclusivity until April 2011
• Designated an Orphan Drug to treat approximately
  112,000 Parkinsons disease patients
  who experience the severe "on/off" motor
  fluctuations unresponsive to other therapies
• Vernalis estimates Apokyn sales in 2006 to be
  around 6m
• Potential line extensions through collaboration
  with Britannia Pharmaceuticals
• Infusion Marketed in EU
• Nasal powder Phase II

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The Apokyn Circle of Care
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V1512 Parkinsons Disease

• Patented formulation combining levodopa
  methyl-ester and carbidopa
• Marketed in Italy by Chiesi for rescue (fast
  onset) in Parkinsons disease
• Based on existing drug, therefore indicates a
  reduced risk profile
• Worldwide rights except for Italy (Chiesi)
• Phase II studies completed Phase III to start
  2H 2006
• Improvement on standard therapy for patients with
  moderate/severe Parkinsons disease
• Increased water solubility
• Reliable absorption (Important in patients with
  GI dysfunction)
• Easier mode of administration (Effervescent in 3
  tablespoons of water)
• Faster acting (8.5 minutes faster activity per
  dose(1))
• Longer lasting (15.4 minutes less off time per
  dose(1))
• Safe well tolerated (Tested in 696 patients)

(1) Studied in 1x/day and 2x/day dosing. Patients
average 4 or more doses per day
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V2006 A2A antagonist for Parkinsons disease

• A selective adenosine A2A receptor antagonist
• Positive results from series of Phase I studies
• Therapeutic concentrations achieved at low doses
• Prolonged half-life consistent with once-daily
  dosing
• IND for Phase II filed Dec 2005
• Phase II safety and pharmacokinetic study to
  initiate 2H 2006
• Collaboration with Biogen Idec signed in June
  2004
• Biogen Idec funds all development
• Milestones and double digit royalties
• Option for Vernalis to co-promote in the US

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V10153 Clot dissolving agent for stroke

• Novel recombinant thrombolytic protein designed
  to have significantly lower bleeding potential
• Positive results in initial Phase II proof of
  principal study in acute MI
• Stroke identified as primary target
• Phase II study in approx 150 patients initiated
• Looking at 3-9 hour window of opportunity
• V10153 - Stroke
• Phase IIa recruitment expected to complete in 4Q
  06
• Recruitment (as with other stroke trials) slower
  than expected
• Steps taken
• Revision of inclusion criteria
• 25 centres now opened in the US and Canada

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Vernalis Key Products and Programmes
Marketing Rights
Indication
Product
Late Research
Pre- clinical
Phase I
Phase II
Phase III
Market
Pain franchise
US Co-promotion Endo (None EU - Menarini)
Frova
Acute migraine
US Co-promotion Endo (None EU - Menarini)
Frova
Menstrual migraine
Acute post-operative pain
Option US profit share Reckitt Benckiser
V1003
Acute neuropathic pain
V3381
World Wide
Neurology franchise
Parkinsons disease (advanced)
Apokyn
North American
Parkinsons disease (moderate/advanced)
V1512
World Wide (excl. Italy)
V10153
Ischaemic stroke
World Wide
Parkinsons disease (mild/moderate)
US Co-promotion Biogen Idec
V2006
Others
Inflammation
MMPI
None (Serono)
Obesity
V24343
World Wide
Hsp90 inhib.
Cancer
None (Novartis)
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Expected Newsflow in 2H 2006

• V1512 Start of Phase III in Parkinsons
  disease
• V2006 Start of Phase II in Parkinsons disease
  (Biogen)
• V24343 Start of Phase I in obesity
• Hsp90 Start of Phase I (Novartis)
• V10153 Complete Recruitment in Phase IIa in
  stroke

Milestone due to Vernalis
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Summary

• Financial
• Strong cash position 50.9 million
• Pipeline
• 2 products on the market Apokyn and Frova
• 1 product with sNDA filing Frova (MM)
• 1 product in or entering Phase III development
• 4 products in or entering Phase II development
• 1 other clinical programme
• Strong research base (90 people)
• Sales Force
• 34 strong sales force fully operational
• Established credibility through significant turn
  around in new Apokyn prescriptions
• Menstrual Migraine Phase III second efficacy
  study completed
• Both dose levels of Frova were highly effective
  in difficult to treat patients in preventing MM
• sNDA filed with FDA in July 2006 - PDUFA date 19
  May 2007

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