Half Yearly Report

Oxford Pharmascience Group plc

("Oxford Pharmascience" or "the Company")

Oxford Pharmascience publishes its interim results for the six months to 30 June 2012

Oxford Pharmascience Group Plc is pleased to announce its unaudited interim results for the six months to 30 June 2012.

Chairman's Statement

2011 was a breakthrough year for the Company having changed its focus to the higher value pharmaceutical market. The commencement of sales to Aché, one of Brazil's largest pharmaceutical companies and the launch of its OXP zero™ taste masking technology left it well placed going into this year.

I said at the time the challenge for the Company going forward was twofold. First, we must continue to develop excellent science into innovative products that industry wants and requires. Second, we must continue to commercialise these products with major pharma companies to secure a profitable route to market. I am delighted with the progress made in the first half of 2012.

Revenues from our OXPchew™ technology continue to grow with strong sales from Aché and earlier than expected commencement of revenues to the Far East. Importantly the company signed its first licensing deal with a major global pharmaceutical company, Bayer. This demonstrates our ability to do commercial deals with the 'big boys' and bodes exceedingly well if this is repeated for the OXPzero™ and OXPtarget™ technologies.

Co-development work has begun with Hermes Pharma for a range of ibuprofen direct to mouth granules using OXPzero™. This will result in clinical studies later this year to demonstrate the bio-equivalence of our OXPzero™ ibuprofen salt, a major step towards securing the first licensed medicine using the technology. Repeating the success of the OXPchew™ business with OXPzero™ by first commercialising a product and then extending this to deals with other highly reputable pharmaceutical companies in ibuprofen alone will take the company a long way forward.

World leading science and intellectual property remains at the core of our technology portfolio. The recent announcement that we have now signed an exclusive global license from The School of Pharmacy, University of London, with the intention to develop and commercialise a range of 'safer' formulations of Simvastatin and Atorvastatin moves the company into an area with potential for exponential growth. Cardiovascular disease is the number one cause of deaths worldwide and Statins are the leading drugs used to combat this. Continued concerns remain though about potential side effects of using statins, particularly at higher doses and this is a major issue for this sector. Our Safestat™ products will potentially allow the formulation of lower dose statins, up to four times lower dosage, but with the equivalent lipid reduction effect of the current higher dose statin.

The Company has continued to evolve excellent science into innovative potential products and expanded the commercial success of its existing products. Now the challenge is to convert these new potential products into real exciting products that industry wants and to repeat the commercial success of OXPchew™ by signing commercial agreements in the more attractive and higher value areas of NSAIDs and Statins. I believe that we have the team and technology to achieve this and look forward to the future with continued confidence.

David Norwood

Chairman

14 September 2012

The loss for the year arises from the Group's continuing operations.

Approved by the Board and authorised for issue on 14 September 2012.

Nigel Theobald Chief Executive Officer Michael Bretherton Finance Director

1) BASIS OF PREPARATION

The interim financial statements of Oxford Pharmascience Group Plc are unaudited condensed consolidated financial statements for the six months to 30 June 2012. These include unaudited comparatives for the six months to 30 June 2011 together with audited comparatives for the year to 31 December 2011.

The Company was incorporated on 7 October 2009 as Oxford Nutrascience Group Plc and changed its name to Oxford Pharmascience Group Plc on 19 May 2011. The Company was specifically created to implement a re-organisation in relation to Oxford Pharmascience Limited (formerly Oxford Nutrascience Limited) which would permit admission of the Group to the AIM market. Under the re-organisation, Oxford Pharmascience Limited became a wholly owned subsidiary of Oxford Pharmascience Group Plc on 27 January 2011.

Shareholders in the company at the time of re-organisation received shares in Oxford Pharmascience Group Plc in the same proportionate interest as they had in Oxford Pharmascience Limited. The business, operations, assets and liabilities of the Oxford Pharmascience Group under the new holding company immediately after the re-organisation were no different from those immediately before the re-organisation and the Directors have therefore treated this combination as a simple re-organisation using the pooling of interests method of accounting.

The condensed consolidated financial statements do not constitute statutory accounts. The statutory accounts for the year to 31 December 2011 have been reported on by the auditors to Oxford Pharmascience Group Plc and have been filed with the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under section 498 of the Companies Act 2006.

2) SIGNIFICANT ACCOUNTING POLICIES

The condensed consolidated financial statements have been prepared under the historical cost convention in accordance with International Financial Reporting Standards as adopted by the European Union.

The accounting policies adopted are consistent with those followed in the preparation of the annual financial statements of Oxford Group PLC for the year ended 31 December 2011.

3) SEGMENTAL REPORTING

Primary reporting format - business segments 

At 30 June 2012, the Group operated in one business segment, that of the development and commercialisation of medicines via reformulation using advanced pharmaceutic technologies to add value to generic and soon to be generic drugs. All revenues have been generated from continuing operations and are from external customers.

Secondary reporting format - geographical segments

The Group operates in four main geographic areas, although all are managed in the UK. The Group's revenue per geographical segment is as follows:

All the Group's assets are held in the UK and all of its capital expenditure arises in the UK.

4) TAXATION

The Group has accumulated losses available to carry forward against future trading profits. No deferred tax asset has been recognised in respect of tax losses since it is uncertain at the balance sheet date as to whether future profits will be available against which the unused tax losses can be utilised.

5) LOSS PER SHARE (BASIC AND DILUTED)

Basic loss per share is calculated by dividing the loss attributable to equity holders of the parent by the weighted average number of ordinary shares in issue during the period. Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares in issue during the period to assume conversion of all dilutive potential ordinary shares.

The Company has issued employee options over 9,500,000 ordinary shares which are potentially dilutive. There is however, no dilutive effect of these issued options as there is a loss for each of the periods concerned.

6) SHARE CAPITAL

As permitted by the provisions of the Companies Act 2006, the Company does not have an upper limit to its authorised share capital.

The acquisition of Oxford Pharmascience Limited in 2010 has been accounted for as a re-organisation using the pooling of interests method of accounting as set out in note 1 to these financial statements and under which the shares issued by the Company are recorded at nominal value together with an amount established as Merger reserve in order to replicate the total issued capital of Oxford Pharmascience Limited as at the acquisition date. 

7) RELATED PARTY TRANSACTIONS

During the period the Company entered into the following transactions with ORA Capital Limited (a wholly owned subsidiary of a significant corporate shareholder which as at 30 June 2012 held 33.3% of the Company's issued share capital).

During the six month period ended 30 June 2012, the Company entered into numerous transactions with its subsidiary company which net off on consolidation - these have not been shown.

In addition, during the period the Company paid remuneration to the Directors' in accordance with their service contracts and letters of appointment.

8) INTERIM FINANCIAL REPORT

A copy of this interim report will be distributed to shareholders and is also available on the Company's website at www.oxfordpharmascience.com 

For further information:

Oxford Pharmascience Group Plc

Nigel Theobald, Chief Executive +44 1865 854874

Hybridan LLP (Broker)

Claire Noyce / Deepak Reddy +44 20 7947 4350

ZAI Corporate Finance (Nominated Adviser)

John Depasquale/ John Treacy +44 20 7060 2220

About Oxford Pharmascience Group Plc

Oxford Pharmascience Group Plc develops advanced yet practical pharmaceutical technologies to enable reformulation that adds value to off patent and soon to be off patent drugs. The Company does not manufacture or sell its own pharmaceutical products but instead seeks to license its technologies to a network of partners, mainly leading pharmaceutical companies with Rx (prescription) and OTC (Over the Counter) branded portfolios. These partners use our technologies to reposition their products helping them sustain market share and profitability by delivering improved health outcomes and/or clinical profiles via reformulated versions of the same API (active pharmaceutical ingredient).

Oxford Pharmascience Group Plc develops platform technologies that have application across multiple drug categories and can be leveraged across a broad range of reformulation problems. This business model allows us to provide solutions across the industry and fund the ongoing development of cutting edge technologies to better serve the needs of our partners. The partner companies who adopt our technology pay an up-front license fee followed by development milestone payments and then royalties on finished products sold using the technology. OXP invests the upfront licence fee to optimise product development and to ensure seamless technology transfer to the pharmaceutical partner.