PVG.L Regulatory News (PVG)

Ark Therapeutics Group plc

Preliminary results for the year ended 31 December 2011

London, UK, 12 March 2012 - Ark Therapeutics Group plc today announces its unaudited preliminary results for the year ended 31 December 2011.

HIGHLIGHTS

Martyn Williams, CEO of Ark, commented:

"In 2011 we completed the restructuring of the Company and focused on a number of short-term objectives to secure the medium term future of the Company and provide early validation of the new strategy. I am pleased to report success in achieving these twin aims. This progress represents the first stage in the execution of the revised strategy and the Company remains focused on continued delivery against realistic and value-creating objectives.

In 2012 we expect to announce further success in building a substantial third-party manufacturing solutions business as well as being able to report confirmation of third party interest in our therapeutic pipeline."

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Ark Therapeutics Group plc

Ark Therapeutics Group plc is a specialist healthcare group (the "Group") addressing high value areas of unmet medical need within vascular disease and cancer. These are large and growing markets, where opportunities exist for effective new products to generate significant revenues.

Ark has an early stage pipeline emanating from collaborations with University College, London and the AI Virtanen Institute in Kuopio, Finland, the development of which it intends to progress in collaboration with pharmaceutical and biotech partners.

In addition Ark has the ability to off-set a proportion of its R&D costs and to generate sustainable revenues through the exploitation of its proprietary technology platform, process development, scale-up and manufacturing capabilities on behalf of third parties.

Ark has its origins in businesses established in the mid-1990s by Professor John Martin of University College London and Professor Seppo Ylä-Herttuala of the AI Virtanen Institute at the University of Kuopio, Finland, both of whom remain consultants on the Company's research and development programmes.

Ark's shares were first listed on the London Stock Exchange in March 2004 (AKT.L).

This announcement includes "forward-looking statements" which include all statements other than statements of historical facts, including, without limitation, those regarding the Group's financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Group's products and services), and any statements preceded by, followed by or that include forward-looking terminology such as the words "targets", "believes", "estimates", "expects", "aims", "intends", "will", "can", "may", "anticipates", "would", "should", "could" or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Group's control that could cause the actual results, performance or achievements of the Group to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which the Group will operate in the future. Among the important factors that could cause the Group's actual results, performance or achievements to differ materially from those in forward-looking statements include those relating to Ark's funding requirements, regulatory approvals, clinical trials, reliance on third parties, intellectual property, key personnel and other factors. These forward-looking statements speak only as at the date of this announcement. The Group expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in the Group's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. As a result of these factors, readers are cautioned not to rely on any forward-looking statement.

Chairman's Letter

Dear Shareholder

Re-focused, science based and commercially driven

During 2011 the Company completed the first phase of the transformation work started in 2010 to re-focus and commercially re-orientate the business. As a consequence, I am pleased to report that Ark Therapeutics Group plc is now 'fit for purpose' having established a viral manufacturing services business in Finland and progressed plans to monetise and further develop its portfolio of science and intellectual property assets.

Following the disposal of the woundcare business, we were pleased to announce two new revenue generating contracts with third parties utilising our state-of-the-art viral process development and manufacturing assets based in Kuopio, Finland. During the year we also realised significant income from existing licences to key patents within our extensive intellectual property portfolio.

As a result, in 2011 we generated revenues in excess of £7m which coupled with a significantly reduced cost base resulted in the Company starting 2012 with £9.5m of cash available to it. In addition we have negotiated a restricted working capital facility of up to €3m (£2.5m) to support our manufacturing services business in Finland, to be accessed as manufacturing contracts are secured.

The Company has made good progress with each of its R&D pipeline programmes during the period, however we recognise that we have had to rely upon grant funding to support our science base.

Therefore in 2012, whilst we will continue to manage the business on a financially prudent basis, your Board and management have begun to determine the best way in which to develop our extensive research science base in order to create substantial shareholder value in the medium term.

We will continue to grow our process development and manufacturing services business in Finland, but we will also continue to work closely with our advisers to identify realistic strategic initiatives to further develop the business as a whole. We remain prepared to share the value creating potential of our assets to secure third party collaborations and support, thereby increasing significantly the probability of value creation and financial security. In addition, we will continue to assess both organic growth as well as M&A opportunities.

Corporate governance

The Directors remain committed to maintaining the highest standards of transparency, ethics and corporate governance, whilst also providing leadership, controls and strategic oversight to ensure we deliver value to all the Company's shareholders. Each Director brings independence of character and judgment to the role. Board and Committee meetings are characterised by robust, constructive debate based upon high-quality reporting from management, and the Board keeps its performance and core governance principles under regular review.

Dr David Bloxham joined the Board in March 2011. David has extensive industry experience and an impressive track record in corporate development, R&D and manufacturing.

After 14 years with the Company, Peter Keen has indicated he will not be seeking re-election to the Board as a Non-Executive Director at the Annual General Meeting in May. On behalf of the Board, I would like to thank Peter for his contribution over the years, in particular his support to me over the last year as we took steps to re-align the business.

The Board has continued to evaluate the balance of skills, knowledge and experience among its members. In light of this, the Board is pleased to announce the appointment of a new Non-Executive Director, Mr Charles Spicer. Charles brings a wealth of strategic, financial and international experience and has an impressive record in the biotech sector which will be brought to bear during the coming 12 months as we further transform the business.

With the first phase of our transformation completed, I want to thank the Board, the management and the staff for their tireless efforts during a challenging but rewarding twelve months. In my first full year as Chairman it has been a pleasure to work with Martyn Williams and his team and I look forward to working with them on the second phase of our transformation as we build our revenue base and to realise the value from our science which is of the highest quality.

Finally, I would like to thank the shareholders for their support and I look forward to working more closely with you over the coming 12 months.

Iain G Ross

Chairman

Ark Therapeutics Group plc

12 March 2012

Chief Executive's review

A year ago, I reported that, following an exhaustive strategic review, the Company was refocusing on its core strengths - an ability to innovate in areas of unmet medical need based on its world leading science and unrivalled biologics manufacturing expertise. I referred to a number of short term objectives, building on the successful disposal of the woundcare business in the first quarter, which the management team had set itself as early validation of the new strategy - the initiation of new manufacturing partnerships, further exploitation of our intellectual property portfolio and confirmation of third party interest in our early stage programmes.

As our Chairman has noted, this first phase of Ark's new strategy, concentrating on securing the medium term future of the Company whilst at the same time setting in place the elements of a successful long term future, has undoubtedly been achieved. The announcements of important new manufacturing partnerships with PsiOxus Therapeutics Ltd and the University of Glasgow's Institute of Cardiovascular and Medical Sciences in the second half of the year are just the first tangible demonstration of the value of Ark's live viral manufacturing capability. The formal grant of US patents covering the use of Boehringer Ingelheim's Telmisartan for the prevention and treatment of stroke and the prevention of myocardial infarction related heart damage triggered significant milestone receipts for the Company and was further validation of the value within our intellectual property.

Whilst not able to announce during the year definitive confirmation of third party interest in our early stage programmes, we have made further good progress in lead-optimisation and demonstration of efficacy in our anti-cancer NRP-1 antagonist programme and believe that our unique position will enable us to secure an important partner to enable us to capitalise on this ground-breaking work. Good progress has been achieved during the year in our early clinical programme, EG011 in refractory angina, and the pre-clinical proof-of-concept data in the EG013, foetal growth restriction ("FGR"), programme have been strengthened considerably in the period. The progress made in developing our pipeline programmes and our science base has been made possible, in part, by our continuing success in accessing grant funding. In July we announced that a consortium of which Ark is a member had secured a €5.3m EU Framework Programme 7 grant, of which Ark would receive €1.1m over the term of the project. This followed an announcement in the same month of the award of €0.6m in Finnish grants. We anticipate that the quality of our research will ensure future success in securing grant funding for the Company.

The selection of key partners for our programmes is a fundamental part of our strategy as we move forward, serving to validate the quality of our science and provide funds for further development. In this context, discussions continue with a number of parties on joint exploitation of the Company's later stage clinical assets.

Manufacturing

As we announced in 2010, a major focus of the Company in 2011 has been to exploit our world leading manufacturing capability in Kuopio, Finland. Our strategy at that time was not to set ourselves up as a standard contract manufacturing organisation but rather to develop deeper collaborative partnerships and to offer manufacturing solutions based on our scientific and technical leadership.

In 2011 we have begun to demonstrate success with this strategy, maintaining the Manufacturing Licence for our state of the art facilities and offering our in-house personnel skills to develop and validate manufacturing processes for clients, over a wide range of virally delivered and other biological products. Typical of the broader, collaborative relationships we seek is the development work we have continued in 2011 for Laurantis Pharma Oy (previously LX Therapeutics Oy), with whom we started working in 2009: we look forward to supplying clinical material for them in 2012. We were delighted to announce, in the second half of the year, manufacturing development contracts with PsiOxus Therapeutics Ltd for their oncolytic virus ColoAd1 and with Glasgow University to provide clinical material for use in cardiac surgery. Detailed discussions continue with a growing number of companies who wish to avail themselves of our unrivalled expertise and we expect to be able to announce a number of new manufacturing partnerships during 2012.

It was also pleasing to report breakthrough work by Ark's scientists in creating a scalable platform for lentiviral manufacture as published in the journal 'Gene Therapy'. This innovation should provide a solution to the manufacturing obstacle that has hitherto hampered lentiviral-based gene therapy products from progressing to larger clinical trials and commercial application.

Pipeline Update

EG011 is being developed for treating patients suffering from refractory angina. The initial academic clinical study in Finland has progressed well throughout 2011, including completion of recruitment to the middle dose of the dose-ranging phase. The final high dose phase has been initiated and is on track for completion in the first quarter 2012. It is then planned to recruit further patients at the selected dose in order to build up the data on safety and efficacy. The results will be used in progressing the interest from other companies in this programme.

EG016 is designed to improve the outcome for people undergoing bypass procedures to overcome blockage of the main blood vessel to the lower leg. This product also uses an adenovirus vector that is administered to the patient around the time of the main surgery. The vector elicits the expression of VEGF-D protein with the property of stimulating new blood vessel development to improve the otherwise poor "run off" into the smaller blood vessels. An academic clinical study of the approach is underway but recruitment has been stopped temporarily, pending planned re-initiation mid-year with the more efficacious short-form of VEGF-D that is also being applied to refractory angina.

EG013 uses Ark's platform of adenoviral vector-delivered VEGF-D gene expression to restore adequate maternal vascularisation where foetuses are suffering severe growth restriction as a result of a deficient blood supply. During 2011 our academic collaborators have notably extended the proof-of-concept data, now showing efficacy in models of FGR in two species and including promising indications that the improved development of the offspring continues postnatally. Working closely with University College, London, we are currently applying for grant funding to help bring the programme through pre-clinical safety studies and into initial clinical trials.

EG014 is a programme developing small molecule antagonists of VEGF binding to the neuropilin-1 receptor (NRP-1) as cancer therapeutics. Ark has been successful in developing the only known drug-like molecules with this activity and has demonstrated their efficacy both in vitro and in vivo. A strong patent protection has been established on the compound structures. Efficacy results have been supported by results from academic collaborators and we plan to expand the number of such relationships to enable demonstration of the therapeutic potential in a wider range of disease models. This effort is also making use of a unique transgenic in vivo model developed by Ark's scientists that specifically represents the effects of antagonism of VEGF binding to NRP-1. Although at an early lead-optimisation stage Ark considers that its unique position in this promising therapeutic approach will enable it to attract a partner to exploit this position further.

Discussions continue with a number of parties who have expressed interest in funding a further clinical study for Cerepro®, Ark's late stage clinical asset in malignant glioma.

Patent Portfolio Update

Ark continues working towards extended granted patent protection on its therapeutic products, including those that are priorities for partnering, and is preparing new patent filings in relation to its primary adenoviral VEGF gene therapy and small molecule NRP-1 antagonist programmes.

In July we reported that the United States Patent and Trademark Office ("USPTO") had issued Notices of Allowance in respect of two renin-angiotensin system patents covering the use of Boehringer Ingelheim's compound Telmisartan for the prevention and treatment of stroke and the prevention of myocardial infarction related heart damage. Formal grant of these patents later in the year triggered significant milestone payments to Ark under its licence agreement with Boehringer Ingelheim. Prosecution of the wider renin-angiotensin system patent in the USA continues to be actively progressed and granting of this patent would enable further exploitation of this patent in the US.

In August we reported the appeal filed at European Patent Office (EPO) in respect of the upheld opposition to the European version of the renin-angiotensin system patent was dismissed thus precluding any further exploitation of this patent in Europe.

Summary and Outlook

In 2011 we completed the restructuring of the Company and focused on a number of short-term objectives which would secure the medium term future of the Company and provide early validation of the new strategy. I am pleased to have been able to report on our success in achieving these twin aims, success which is due in large measure to the efforts and skill of our staff, who have shown considerable commitment during what was a difficult period.

We realise, however, very clearly that this progress represents only the first stage in the execution of the revised strategy and remain totally focused on continued delivery against realistic and value-creating objectives. As part of this strategy we are building a centre of excellence based in Kuopio with expertise in manufacture of viral products, their development and their discovery, the value of which is enhanced by a deep collaboration with University College London and the University of Eastern Finland.

In 2012, we fully expect to announce further successes in building a substantial third-party manufacturing solutions business as well as being able to report confirmation of third party interest in our therapeutic pipeline. By the end of the year we expect to have substantially completed recruitment into the Phase I clinical studies in EG011 and EG016 and look forward to building on the encouraging results in our FGR programme in the final pre-clinical stage.

We ended the year with £9.5m of cash and expect to have access to a restricted working capital facility negotiated for our manufacturing operations of up to €3m (£2.5m). Given the anticipated progress in the next year, I remain very confident that our current cash will enable us to achieve the next short term objectives which we have set out. With the welcome guidance of our Chairman, Iain Ross, we remain focused, realistic and results-driven.

Martyn Williams

Chief Executive Officer

12 March 2012

Financial review

Overview

Ignoring the effect of exceptional items in 2010, the loss from continuing operations before tax decreased significantly during the year (£4.4m in 2011 compared to £15.2m in 2010). This was as a result of the restructuring activities previously announced in 2010 and the receipt of £6.5m of milestone payments under an existing licence agreement. Further milestones under this specific licence agreement are unlikely to arise in future periods. The restructuring activities included reducing headcount across all functions at our UK and Finland sites and also ceasing activity on our late-stage clinical trials, resulting in the reduction of research and development expenses from £10.8m in 2010 to £7.7m in 2011. In addition, other administrative expenses reduced from £5.0m in 2010 to £3.7m in 2011.

As announced previously, we completed the disposal of our woundcare business to Crawford Woundcare Limited. This was effective 1 January 2011. Total profit recognised in the current year from this disposal totalled £0.3m and is disclosed under discontinued operations on the face of the consolidated income statement.

Cash and cash equivalents as at 31 December 2011 totalled £9.5m (2010: £10.6m).

Results of Operations

Years ended 31 December 2011 and 2010

Revenue

Revenue from continuing operations recorded in 2011 totalling £7.1m, and related to the provision of contract manufacturing services (£0.6m) and milestone receipts under an existing licensing agreement (£6.5m). In 2010 revenue comprised manufacturing services revenue of £0.8m. The decrease in manufacturing services revenue arose due to the timing of new contracts being near the end of 2011.

In future years an increasing proportion of revenues is expected to come from contract manufacturing services and the out-licensing of early stage products.

Research and development expenses

Ark conducts research at its facilities in Kuopio Finland, at University College London and through specialist sub-contractors. Research and development expenditure in 2011 was £7.7m (2010:£10.8m), the decrease principally due to the full year effect of various cost-saving measures put in place towards the end of 2010 and the cessation of the Trinam® clinical trial. Research and development expenses comprise clinical development costs, manufacturing development costs and research costs and are detailed below.

Clinical development costs

Expenditure on the clinical development of late-stage assets was significantly reduced in 2010 and effectively ceased in early 2011. Total development expenditure amounted to £0.2m in 2011, compared to £2.5m in 2010.

Manufacturing development costs

Manufacturing development costs decreased during the year, from £5.5m in 2010 to £4.9m in 2011. Again this was primarily due to the reduced headcount and other cost-saving measures put in place as a result of the restructuring. Care was taken to ensure that such cost control measures would not in any way adversely affect our existing and prospective third party and internal manufacturing services obligations.

Research costs

Research costs in the period totalled £2.6m (2010: £2.8m), reflecting our continuing commitment to invest in our early stage pipeline (albeit at a reduced level compared to previous years).

Other administrative expenses for the period were £3.7m (2010: £5.0m). Administrative expenses consist primarily of remuneration for employees in executive and operational functions (including finance, commercial development, legal and IT), facilities costs and professional fees, and the reduction reflected the full year effect of cost reduction measures put in place previously.

Other income and expenses comprised exchange differences, income from EU and Government grants, and any profit or loss realised on the disposal of assets during the year associated with the move to smaller premises in the UK. During the year the Group recognised net other income of £0.3m compared with net expenses of £0.3m in 2010.

The Group invests its surplus cash in bank deposits of up to one year in accordance with the terms of the investment policy ("Investment Policy") approved by the Board. This policy has as its principal aim the security of the Group's cash balances and contains strict criteria on minimum credit ratings and maximum deposit size. Net interest receivable comprises the interest income generated from cash invested in term and overnight deposits. In the year ended 31 December 2011 the Group earned investment income of £0.1m (2010: £0.1m) on cash deposits.

Taxation

There was no UK corporation tax charge for the year under review due to a taxable loss being made in the period. We continue the policy of surrendering tax losses for cash by making research and development tax claims to the tax authorities and anticipate a tax credit receivable of £0.7m in respect of the year ended 31 December 2011 (2010: £1.0m), The decrease results from a lower level of qualifying research and development expenditure in the year.

Balance sheet

Total net assets (defined as total assets less total liabilities) have reduced from £18.8m at 31 December 2010 to £15.4m at 31 December 2011, principally as a result of the continued depreciation of our tangible fixed assets, together with operating cash outflows during the period.

Cash flow

The net cash outflow from operating activities for the year was £1.6m (2010: £10.7m). Ark's net cash outflow from capital expenditure was £0.3m (2010: £0.3m). Intangible capital expenditure included licence payments to access technology used in Ark's research programmes.

The Board operates an Investment Policy governing the investment of the Group's cash resources, under which the primary objective is to invest in low risk cash or cash equivalent investments to safeguard the principal, ensuring that these resources remain available to fund the Group's operations.

Russell Banks

Chief Financial Officer

12 March 2012

Directors' responsibilities statement

The Directors are responsible for preparing the annual report, Directors' remuneration report and the Group and the Company financial statements in accordance with applicable laws and regulations.

Company law requires the Directors to prepare such financial statements for each financial year. Under IAS Regulation the Directors are required to prepare Group financial statements in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the European Union ("EU"). The Group Financial Statements are also required by law to be prepared in accordance with Article 4 of the IAS Regulation and the Companies Act 2006. The Directors have also chosen to prepare the parent Company financial statements under IFRSs as adopted by the EU. Under company law the Directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the Directors are required to:

·; properly select and apply accounting policies; and

·; present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; and

·; provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and

·; make an assessment of the Company's ability to continue as a going concern.

The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Group financial statements and the Directors' remuneration report comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Directors confirm to the best of their knowledge that, in relation to the annual report:

(a) the financial statements, prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

 (b) the Business Review, which is incorporated in the Directors' report, includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

By order of the Board

Consolidated income statement

for the year ended 31 December 2011 (unaudited)

Consolidated statement of comprehensive income

For the year ended 31 December 2011 (unaudited)

Consolidated balance sheet

as at 31 December 2011 (unaudited)

Consolidated cash flow statement

for the year ended 31 December 2011 (unaudited)

Condensed statement of changes in equity for the year ended 31 December 2011(unaudited)

Selected notes to the financial information (unaudited)

1 Presentation of financial information

The financial information set out in this unaudited preliminary statement does not comprise Ark Therapeutics Group plc's statutory accounts for the year ended 31 December 2011 or 2010 within the meaning of section 435 of the Companies Act 2006. The audit of the statutory accounts of Ark Therapeutics Group plc for the year ended 31 December 2011 is not yet complete. These accounts will be finalised on the basis of the financial information presented by the Directors in this unaudited preliminary statement and will be delivered to the Registrar of Companies for England and Wales in due course and will also be sent to shareholders.

Whilst the financial information included in this unaudited preliminary announcement has been computed in accordance with International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The accounting policies adopted in the preparation of the unaudited preliminary announcement are consistent with those followed in the preparation of the Group's financial statements for the year ended 31 December 2010, except for the adoption of new standards and interpretations, as outlined below. The Company expects to publish full financial statements that comply with IFRSs in March 2012.

The financial information set out in this unaudited preliminary statement includes comparative figures that have been prepared on the same basis. The financial information for the year ended 31 December 2010 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The Auditors have reported on the financial statements for the year ended 31 December 2010 which were prepared under IFRSs. Their report was unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain any statements under s498(2) or (3) Companies Act 2006.

Going concern

In determining the appropriate basis of preparation of the financial statements, the Directors are required to consider whether the Group can continue in operational existence for the foreseeable future, being a period of not less than twelve months from the date of the approval of the annual report.

As at 31 December 2011, the Group had cash and cash equivalents of £9.5m and net assets of £15.4m. In March 2011 the sale of the woundcare business closed, raising £1.4m in 2011, with further amounts falling due on the achievement of certain sales targets and other conditions. In September/October 2011, the Company received milestone payments totalling £6.5m under an existing licensing agreement. During the year there has been a continuing focus on the management of costs within the Group and, following the conclusion of restructuring initiated in 2010, the cost base of the Group remains significantly reduced.

Management prepares detailed cash flow forecasts which are reviewed by the Board on a regular basis. The forecasts include assumptions regarding future income and expenditure together with various scenarios which reflect opportunities, risks and appropriate mitigating actions. These scenarios recognise the current regulatory and commercial status of the Group's product portfolio and its contract manufacturing activities and consider the range of outcomes which may arise and resulting actions available to the Group, taking into account existing cash resources. Whilst there are inherent uncertainties regarding the cash flows associated with product development and commercialisation and the performance of contract manufacturing services for third parties, the Directors are satisfied that there is sufficient discretion and control as to the timing and quantum of cash outflows to ensure that the Group is able to meet its liabilities as they fall due for the foreseeable future.

Therefore, having made relevant enquiries, including consideration of the Group's current cash resources and the cash flow forecasts, the Board has a reasonable expectation that, at the time of approving the annual report, the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the Board continues to adopt the going concern basis in preparing the annual report.

The longer term sustainability of the Group will be dependent upon generating cash flows from successful development and commercialisation of the Group's products and from the performance of manufacturing services. Until the point of sustainability is reached, the Group will be dependent upon existing cash resources and any additional funding (for example through the disposal of its woundcare business mentioned above), completion of additional licensing and partnering deals or manufacturing contracts, or through the raising of additional capital.

Adoption of new and revised standards

The following new and revised Standards and Interpretations have been adopted in the current year. Their adoption has not had any significant impact on the amounts reported in these financial statements, but with the exception of the amendment to IFRS 1, may impact the accounting for future transactions and arrangements.

At the date of authorisation of these financial statements, the following Standards and Interpretations which have not been applied in these financial statements were in issue but not yet effective (and in some cases had not yet been adopted by the EU):

Improvements to IFRSs (May 2010)

The adoption of IFRS 9 which the Group plans to adopt for the year beginning on 1 January 2013 will impact both the measurement and disclosures of Financial Instruments. The directors do not expect that the adoption of the other standards listed above will have a material impact on the financial statements of the Group in future periods.

This preliminary statement was approved by the Board on 8 March 2012.

2 Revenue

An analysis of the Group's revenue is as follows:

Investment income consists of interest on money-market investments and cash and cash equivalents. Investment income is earned on financial assets categorised under IFRS7 as loans and receivables (including cash and cash equivalents).

3 Business and geographical segments

In accordance with IFRS 8, the Group is required to define its operating segments based on, inter alia, the internal reports presented to its chief operating decision maker in order to allocate resources and assess performance. These reports focus on the Group's only business activity, being the discovery, development and commercialisation of products in areas of specialist medicine, with particular focus on vascular disease and cancer, and therefore no segmental information has been shown.

An analysis of the Group's geographical non-current assets is shown below:

4 Loss per share

The calculation of basic and diluted loss per ordinary share is based on the loss of £3,737,000 (2010: £15,903,000) and on 209,276,676 ordinary shares (2010: 209,017,211) being the weighted average number of ordinary shares in issue.

5 Dividends

The Group incurred a loss after taxation of £3.5m (2010: loss of £16.2m). The Directors are unable to recommend the payment of a dividend (2010: £nil).

6 Events after the balance sheet date

In February 2012, an agreement was reached with the Finnish Government agency, TEKES, whereby the value of two outstanding loans plus associated accrued interest, originally repayable before the end of 2011, would be reduced from €338,000 to €176,000 and would now be repayable in 2012.