IN-STEP Phase IIb study results

24 March 2010

IN-STEP Phase IIb study results - V3381 misses primary endpoint in neuropathic pain

Vernalis plc (LSE: VER), a development stage pharmaceutical company with a broad pipeline of clinical and early stage programmes, today announces the top-line results from the IN-STEP Phase IIb study, evaluating further the safety and efficacy of V3381 (indantadol) in patients with neuropathic pain due to diabetes.

This study enrolled 271 subjects with neuropathic pain caused by underlying diabetes into a 2-week placebo run-in period. Following this, 162 subjects were enrolled into a 13-week, double blind, placebo controlled treatment phase in which they were randomised to receive placebo or up to 400mg of indantadol twice a day. Although there was a 25% reduction compared to baseline in pain scores in patients who received V3381, there was also a marked reduction in the placebo-treated subjects and consequently no significant difference between the two treatment groups.

Indantadol was generally well tolerated at all doses in this study. As expected, the most common adverse event was dizziness (placebo 4%, indantadol 26%).

While the full analysis of the primary and secondary data from the study is ongoing, Vernalis is unlikely to conduct further studies with V3381 in neuropathic pain due to diabetes. However, the ongoing pilot trial for the product in chronic cough will be completed, and the data assessed in the normal way to decide whether it should be progressed to the next stage of development.

Vernalis has one marketed product on which it receives royalties and seven priority product candidates in development (three of which are partnered), including five programmes in clinical development and two in pre-clinical development. Vernalis also has a number of other competitive research programmes. Our technologies, capabilities and products are endorsed by collaborations with leading, global pharmaceutical companies including GSK, Biogen Idec, Novartis, Servier, Chiesi, Menarini, and Endo.

Ian Garland, CEO of Vernalis commented: "We have consistently stated the highly risky nature of diabetic neuropathy studies but nevertheless are disappointed with the results of the IN-STEP study in this difficult to treat indication. However, Vernalis has a broad portfolio of products in clinical trials addressing substantial market opportunities. This, combined with the royalties from increasing sales of frovatriptan and significant existing cash resources that fund us for at least three years at current research and development investment levels, continues to give Vernalis strong potential for growth and value generation".

-- ends --

Enquiries:

Notes to Editors

About Vernalis

Vernalis is a development stage pharmaceutical company with significant expertise both in de novo fragment and structure-based drug discovery and pre-clinical and clinical development. The Group has one marketed product, frovatriptan for the acute treatment of migraine, and five priority product candidates in clinical development (three of which are partnered), two further priority programmes in pre-clinical development (neither of which is partnered) and other collaborative drug discovery programmes. Vernalis has a further two partnered programmes that are in clinical development in which it retains an economic interest. Our technologies, capabilities and products are endorsed by collaborations with leading, global pharmaceutical companies including GSK, Biogen Idec, Novartis, Servier, Chiesi, Menarini, and Endo.

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 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.