VALIRX PLC

("ValiRx" or the "Company")

AUDITED RESULTS FOR THE 12 MONTH PERIOD ENDED 31 DECEMBER 2007

30 June 2008, London … ValiRx (AIM: VAL), the cancer therapeutics and diagnostics company, today announces its final results for the twelve month period ended 31 December 2007.

HIGHLIGHTS

Operations 

• Successful in vitro studies completed on GeneICE therapeutics platform

• GeneICE™ patents granted in Europe and the USA 

• Creation of diagnostics commercialisation business, ValiBIO SA

• European patent rights secured on Nucleosomics™, a high throughput screening mechanism for a wide range of cancers

• Solid progress made on HyperGenomics™, high throughput screening mechanism for acute myeloid leukemia and prostate cancer, 

Post year end

• GeneICE™ studies with VAL 101 showing positive results in in vivo model of pancreatic cancer

• Therapeutics portfolio broadened with development of a second GeneICE™ anti-cancer molecule

• GeneICE™ IP cover extended with patents granted in Australia

• European distribution rights secured for proven HPV test kit technology

• Successful completion of a funding round on 12 May 2008; raising £830,000 net cash proceeds for the Company

Dr Satu Vainikka, Chief Executive, commented: 

"We are pleased with the operational progress achieved by ValiRx in 2007 and encouraged by the deepening commercial relationships we have established. We are looking forward to generating first commercial revenues from our diagnostics portfolio in early 2009 and to progressing our first therapeutics programmes towards the clinic. Our positive progress was reflected in the successful closing of our funding round in May 2008."

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CHAIRMAN'S STATEMENT

It gives me pleasure to present the first set of year-end results for ValiRx since being appointed Chairman to your Company in October last year - particularly given the recent successful investment round through which the Company raised £830,000 after expenses.

Our ability to achieve this, given the recent difficulties in the financial markets, was a direct result of the excellent progress the Company made during 2007 on both the diagnostics and therapeutics sides of its business.  Of particular significance was the creation of our diagnostics development and commercialisation business, ValiBIO, located in one of the leading diagnostic centre's at the Institute of Pathology and Genetics in Belgium. Of similar importance was the strengthening of the patent position for a range of technologies held by the Company thereby increasing the potential to commercialise ValiRx's technologies in the future.

It is particularly encouraging to see the increasing interest being shown by the major industry players in the epigenetic arena and, in particular, validated epigenetic diagnostic and therapeutic products. This interest in epigenomics or put more simply, the study of changes in gene activity and gene expression, is driven by the increased recognition that a wide variety of illnesses, most notably cancers, are linked to the malfunction of epigenetic mechanisms. 

As a result, the market has begun to see a new trend emerging of collaboration and licensing deals between young biopharmaceutical companies and major pharmaceutical organisations wanting to acquire epigenetic based technologies and products. These deals signal the importance now being attributed by the major pharmaceutical companies to this sector as a route for potentially finding new blockbuster drugs.

Against this backdrop, your Board believes the Company is now well on track to generate first revenues from its range of diagnostic and drug research products in early 2009, and to continue advancing its principal therapeutics platform, GeneICE following the recently announced success of in vivo studies.

Nick Thorniley, Chairman

CHIEF EXECUTIVE OFFICER'S REPORT

Strategic overview

Epigenomics - the study of changes of gene expression within the genome - lies at the heart of all we do at ValiRx. Understanding what causes epigenetic changes and combating them is now increasingly recognised as a primary route for finding cures for many cancers and other illnesses. Epigenomic diagnosis is therefore a key for developing personalised diagnosis, prognosis and treatment plans for patients.

During 2007, the Company's activities were rationalised into two distinct, but closely related and complementary, strands within epigenomics - diagnostics and therapeutics. In both areas, significant advances were made allowing the Company to establish a suite of interlinked technologies and products that first allow for a broad range of cancers to be detected at an early stage and secondly then allow specific cancers to be treated.

Diagnostics

In the diagnostics field, the key development was the creation of ValiBIO, the diagnostics development and commercialisation company that was established with BIO.be, the commercial outlet of the Institute of Pathology and Genetics ("IPG"), a leading pathology centre in Belgium in July 2007. With access to IPG's state-of-the-art laboratories and key personnel, we are advancing the development of two key products for which we hold exclusive commercial rights - Nucleosomics and HyperGenomics. 

The Nucleosomics technology, for which we secured European patent rights, has the potential to screen for early signs for a broad number of cancers using blood samples. Our aim is to create a high throughput, rapid, and affordable testing mechanism for cancer. Indeed, based on the licensing negotiations that begun post period, we are confident that first revenues will now be generated from this technology early in 2009.

With regard to HyperGenomics, this screening technology is being specifically developed to provide a high throughput screening mechanism for acute myeloid leukemia and prostate cancer. We are also now well on track to begin the commercialisation process for this technology.

In February 2008, we further broadened our portfolio of screening technologies by signing an agreement with Clarity MD to secure the European distribution rights for its HPV Genotype Diagnostic Test Kit, a next generation test for cervical cancer which has already been shown to be a superior method to existing smear-based tests.  

Therapeutics

GeneICE continues to be our core focus in the therapeutics arena. During the course of the year, significant progress was made in our joint development activity with Cancer Research Technology Limited ("CRT"). As reported on 17 January 2008, CRT completed its in vitro studies on GeneICE, which demonstrated that GeneICE's lead compound restored apoptosis (cell death), causing the death of several well established cancer cell lines. 

We have continued 2nd stage pre-clinical studies with encouraging results showing GeneICE efficacy and therapeutic potential. After completion of these studies we anticipate being able to prepare filings for the first in-man trials.

During 2007 we significantly extended the patent protection of GeneICE, securing patents for the technology in Europe and the USA and, post period, in Australia.

We are also expanding our therapeutics portfolio with a late stage pre-clinical compound that has already been shown to be effective in treating prostate and breast cancers in in vivo studies. This further strengthens our therapeutics offering with a compound that is capable of progression into the clinic within a relatively short timeframe.

In addition, excellent progress was made in our research collaboration with Physiomics Plc, with the development of an 'Apoptosis Model' completed in December 2007, for which a patent application is to be filed. The Model will initially be used as an R&D tool internally by ValiRx and at a later stage out-licensed to interested third parties.

Financial Overview

The principal business of the Company is the development of advanced healthcare technologies. Accordingly, the Company invests in research, development and trials to advance the Company's products towards commercialisation. 

In line with the Company's budgets, research & development costs were £156,048, whilst administrative expenses for the year were £882,957, up by £609,665 on the previous year and included establishment costs of the diagnostics commercialisation business, ValiBIO. Revenues from the provision of consulting services were £42,289 (2006: £9,577).

Following an interim funding round in September 2007, the loss for the year ended 31 December 2007 was £1,239,541 compared to £286,957 for the previous year. This loss was in line with the Board's expectations. Net cash as at 31 December 2007 was £88,275. On 12 May 2008, the Company successfully completed a funding round raising £830,000 net. 

Morphogenesis, the US cancer therapeutics company in which the Company holds an 8.2% stake, continued to progress its ImmuneFx cancer vaccine. Despite this progress, an independent valuation of this company resulted in the Directors considering it prudent to make a provision of £428,000 against the value of the investment in Morphogenesis. 

Summary

Whilst the financial markets and biopharmaceutical sector have experienced significant turbulence in the year, we are pleased with the operational progress we have made in 2007. We are also encouraged by the deepening commercial relationships we have established over that time which resulted in the successful closing of our funding round post period end. 

As a result of the above developments, we believe the Company is well positioned to begin generating first commercial revenues in early 2009 whilst at the same time broadening the suite of products and technologies it owns. 

Dr. Satu Vainikka

Chief Exceutive

Valirx plc

Consolidated income statement for the year ended 31 December, 2007

There are no recognised gains and losses other than those passing through the income statement

Valirx plc

Statement of changes in shareholders equity for the year ended 31 December, 2007

Valirx plc

Consolidated balance sheet as at 31 December 2007

Valirx plc

Consolidated cash flow statement for the year ended 31 December 2007