Vernalis Regains European Rights to Frovatriptan

8 March 2010

Vernalis Regains European Rights to Frovatriptan

Vernalis plc (LSE: VER) today announces that it has completed the termination of the Paul Capital Healthcare Agreements (the PCH Agreements) and regained rights to 100% of the royalties receivable from Menarini's sales of frovatriptan, in exchange for a one-off net cash payment of $32.57 million (approximately £21 million) to Paul Capital Healthcare (PCH). In addition, PCH subscribed for and was granted 2.1 million warrants over Vernalis Ordinary Shares.

Menarini markets frovatriptan in the EU and certain other territories and in 2009 sales increased 15% to €32.4 million. Following today's termination of the PCH Agreements and with effect from 1 January 2010 Vernalis earns and retains the entire 25.25% royalty on Menarini's sales.

Ian Garland, Chief Executive Officer of Vernalis, commented:

"This is a further important step in re-building shareholder value for Vernalis. By terminating the PCH Agreements we become debt free, regain a sustainable income stream and extend our cash runway beyond 2012."

The warrants over 2,100,000 Ordinary Shares granted to PCH comprise 1,100,000 series A warrants each exercisable at an exercise price of 95 pence and 1,000,000 series B warrants each exercisable at an exercise price of 114 pence.

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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.

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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.