Delivering
pipeline progress
Silence Therapeutics plc  
Annual report and accounts 2010
Silence Therapeutics plc
The Royal Institution of Great Britain 
21 Albemarle Street 
London W1S 4BS
Tel:  +44 (0) 20 7491 6520 
Fax:  +44 (0) 20 7491 6521 
Email:  mail@silence-therapeutics.com
www.silence-therapeutics.com
Silence Therapeutics plc Annual report and accounts 2010 RNA interference, a Nobel Prize winning technology, is one of the most 
exciting areas of drug discovery today as it can selectively “silence” genes 
linked to the onset of disease, thus leading to the creation of a new class 
of therapeutic products: RNAi therapeutics.
Silence Therapeutics plc (Silence) is 
a leader in the discovery, development 
and delivery of novel RNA interference 
(RNAi) therapeutics for the treatment 
of serious diseases.
A strategic approach...
This strategy is based on:
 1.  Leveraging broad, proprietary RNAi 
technology base to establish multiple 
additional partnerships across a diverse 
range of therapeutic opportunities.
 2.  Continuing development of partnered 
and internal RNAi therapeutic pipeline.
High-value 
partnered and 
internal pipeline
Multiple 
partnerships
Corporate and 
shareholder value
Our approach is designed to best leverage 
our drug development expertise and broad 
RNAi therapeutic platform toward the creation 
of corporate and shareholder value.
Company information and advisers
Secretary
Max Herrmann
Registered office
22 Melton Street 
London NW1 2BW
Registered number 
2992058
Nominated advisers
Singer Capital Markets Ltd
1 Hanover Street 
London W15 1YZ
Registrars
Capita IRG plc
Northern House 
Woodsome Park 
Fenay Bridge 
Huddersfield HD8 0LA
Auditor
KPMG Audit Plc
15 Canada Square  
London E14 5GL Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
1
Review of the year Corporate governance Financial statements
Highlights of 2010
Operational
  Successful merger and integration of Silence and Intradigm
	 to	create	a	leading	company	 in	the	field	of	RNA	interference	(RNAi).
  Excellent progress made with ongoing Phase I clinical trial of Atu027, 
Silence’s	lead	compound,	for	the	treatment	of	solid	tumours.	As	of	March	2011,	
23 	 patients 	 have 	 been 	 treated 	 with 	 Atu027 	 and, 	 to 	 date, 	 the 	 compound 	 has 	 been	
shown	to	be	safe	and	well	tolerated.
  Atu027 shown to prevent the formation of lung metastases 
	 	 in	a	variety	of	preclinical	brea st	cancer	models.	Data	were	published	in	a	
peer -reviewed	paper	in	Clinical	Cancer	Research.
  Silence’s partner, Quark Pharmaceuticals, Inc., successfully	completed	
two	Phase	I	trials	of	QPI-1002,	which	incorporates	Silence’s	AtuRNAi	technology .	
Quark 	 subsequently 	 initiated 	 a 	 Phase 	 II 	 trial 	 of 	 QPI-1002 	 in 	 the 	 prevention 	 of 	 delayed	
graft	function	in	kidney	transplant	patients.	
  Silence to receive up to US$1.5m milestone following 	 Quark’s 	 receipt 	 of	
a	US$10m	payment	from	Novartis	for	an	option	to	develop	and	commercialise	
QPI-1002	signed	in	August	2010.	F uture	milestone	payments	to	Silence	related	
to	Quark’s	licence	agreement	with	Novartis	could	reach	US$80m.
  Silence and AstraZeneca extended two existing collaborations: 
	 	 one 	 aimed 	 at 	 the 	 discovery 	 and 	 development 	 of 	 siRNA 	 therapeutics 	 and 	 the 	 other	
at	the	delivery	of	siRNA	sequences.
  Silence expanded its siRNA delivery collaboration with Dainippon 
Sumitomo 	 to 	 include 	 additional 	 disease 	 targets 	 that 	 were 	 not 	 originally 	 specified 	
under	the	initial	collaboration.
  Zamore Design Rules patents issued. Silence, through its licence 
agreement	with	the	University	of	Massachusetts,	was	issued	several	US	and	
European	patents	which	broadly	cover	methods	of	enhancing	silencing	activity	
of	RNAi	therapeutics.	The	Company	believes	that	the	Zamore	technology	is	
invaluable	for	the	development	of	efficacious	RNAi	therapeutics.
Review of the year
1	 Highlights	of	201 0
2	 At	a	glance
4	 Chairman’s	state ment
6	 Chief	Executive’s	review
11	 Finance	review
Corporate governance
12	 Board	of	director s
14	 Directors’	report
Financial statements
19	 Independent	auditor’s	report
20	 Consolidated	inc ome	statement
21	 	 Consolidated	sta tement	
of	comprehensive	income
22	 Consolidated	ba lance	sheet
23	 	 Consolidated	sta tement	
of	changes	in	equity
24	 Company	balanc e	sheet
25	 	 Company	statement	
of	changes	in	equity
26	 Cash	flow	statements
28 	 Notes 	 to 	 the 	 financial 	 statements
IBC	 	 Company	inform ation	and	advisers
(2009:	£1.13m)
£5.20m
Administrative expenses:
(2009:	£4.20m)
£3.57m
Cash position:
£2.37m
Revenue:
(2009:	£1.72m)
£5.82m
Research & development costs:
(2009:	£5.07m)
Financial
Post year-end events
  In	January	2011,	Silence	announced	it	was	no	longer	in	discussions	that	may	
have	led	to	an	offer	for	the	Company .	Given	the	recent	progress	of	Atu027	and	
other	technological	achievements	made	during	the	last	year ,	Silence	believes	
it	is	well	placed	to	capitalise	on	its	leadership	position	in	RNAi	therapeutics.
	 	 In	April	2011,	 Silence	announced	plans	to	raise	up	to	£6.5m	by	a	placing	
and	open	offer .
(2009:	£1.13m) Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
2
At a glance
Silence is a leader in the discovery, development 
and delivery of novel RNA interference (RNAi) 
therapeutics for the treatment of serious diseases.
2006 2007
Our partnerships to date...
Our 	 RNAi 	 therapeutic 	 platform 	 has 	 received 	 key	
validation 	 through 	 multiple 	 major 	 partnerships	
with	pharmaceutical	companies	to	date.
W e 	 are 	 actively 	 pursuing 	 the 	 establishment	
of 	 additional 	 partnerships 	 with	
pharmaceutical 	 companies.
Pfizer/Quark (2006)
Quark	licenses	PF’655	to	Pfizer	
for	treatment	of	diabetic	macular	
oedema and age-related macular 
degeneration; 	 $95m 	 in 	 milestones	
plus	royalties.
AstraZeneca (2007)
$15m	upfront	payment	with	
up	to	$400m	in	milestones	plus	
sales	royalties	for	developing	
proprietary	siRNA	molecules	
to	five	targets.	
Quark (2007)
Expansion	of	option	and	
licence agreement to include 
QPI-1002 	 for 	 acute 	 renal 	 failure	
and	kidney	transplantation.	
Silence’s expertise encompasses 
RNAi structural chemistry and drug 
delivery, as well as preclinical and 
clinical development.
Silence	holds	a	powerful	and	strategic	position	
in	each	of	the	three	areas	believed	to	be	critical	
to	building,	protecting	and	commercialising	
RNAi	therapeutics:
	 proprietary	delivery	technologies;
	 potent	siRNA 	sequences;	and
	 innovative	siRNA	structural	f eatures.
Next-generation  
structural 
features and IP
High-value siRNA 
sequences and IP
siRNA delivery 
technologies and IP
Delivery from sequence to clinic Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
3
Review of the year Corporate governance Financial statements
2008 2009 2010
AstraZeneca (2008)
Collaboration	to	focus	on	
the	development	of	novel	
approaches	to	delivery	
of	siRNA	molecules.
Dainippon Sumitomo (2009)
siRNA	delivery	collaboration.	
Delivery	of	proprietary	siRNA	
molecules	to	specific	targets.
Dainippon Sumitomo (2010)
Expansion	of	delivery	
collaboration	to	include	
additional	targets.
Quark/Novaris (2010)
Quark	signs	option	agreement	
with	Novartis	for	QPI-1002.	
Phase 	 II 	 trial 	 started 	 in	
September	2010	in	delayed	
graft	function.
Our product pipeline...
Partners Research Preclinical Phase	I Phase	II
Pfizer/Quark
Pfizer/Quark
Quark/Novartis
Quark/Novartis
GI,	lung	and	other	cancers	 Internal
Solid tumours Internal
Acute	lung	injury	 Internal
Solid tumours Internal
PF-4523655 
(AtuRNAi)
QPI-1002 
(AtuRNAi)
Atu027 
(AtuRNAi)
Atu134 
(AtuRNAi)
Atu111 
(AtuRNAi)
Atu195 
(AtuRNAi)
2009 2010
Naked	siRNA
Naked	siRNA
Naked	siRNA
AtuPlex
AtuPlex
AtuPlex
Atu027
Atu027	is	Silence’s	most	advanced	
internal	drug	candidate.	It	combines	
the	Company’s	proprietary	AtuPlex	
delivery	technology	with	AtuRNAi,	
its	novel	RNAi	chemistry .	The	drug	
is 	 currently 	 the 	 subject 	 of 	 a 	 Phase 	 I	
cancer 	 trial 	 in 	 patients 	 with 	 solid 	 tumours.	
The	trial	has	progressed	well	and	we	
remain on target to complete the 
study	in	the	second	half	of	2011.
Naked	siRNA
D ACC8
Diabetic	macular	oedema
Age-related	 
macular degeneration
Acute	kidney	injury
Prevention	of	delayed	
graft	function Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
4
Chairman’s statement
RNAi therapeutics 
are succeeding.
Jerry Randall ACA Chairman
I	am	pleased	to	report	that	rapid	integration	
of	Silence	Therapeutics	plc	(Silence)	and	
Intradigm	Corporation	(Intradigm)	in	early	
2010	has	resulted	in	a	new	Group	with	a	
superior	scientific	platform,	robust	intellectual	
property protection and a strengthened 
management	team.	During	the	year ,	Silence,	
along	with	its	peers	and	collaborators,	made	
significant	progress	in	driving	advancements	
in	the	RNAi	sector .	W e	observed	important	
achievements	with	RNAi-based	compounds	
continuing	to	move	from	preclinical	studies	
into	development	and	through	clinical	trials.	
One 	 of 	 these 	 compounds 	 is 	 Silence’s 	 Atu027,	
which 	 has 	 produced 	 very 	 promising 	 preclinical	
data 	 in 	 the 	 area 	 of 	 cancer 	 – 	 findings 	 that 	 have 	
since	been	validated	with	encouraging	initial	
results 	 from 	 our 	 ongoing 	 Phase 	 I 	 clinical 	 trial. 	
Silence	also	published	and	presented	an	
extensive	amount	of	RNAi	data,	including	
data	on	Atu027	that	has	positioned	this	
compound	as	one	of	the	most	interesting	
and	potentially	promising	RNAi	therapeutics	
in 	 clinical 	 development. 	 Specifically 	 at 	 Silence, 	
our	technology	was	further	validated	by	the	
development,	expansion	and	extension	of	
our	agreements	with	major	pharmaceutical	
companies	including	AstraZeneca	plc	
(AstraZeneca), 	 Dainippon 	 Sumitomo 	 Co. 	 Ltd	
(Dainippon	Sumitomo)	and	Quark	
Pharmaceuticals	Inc.	(Quark)/Novartis	AG	
(Novartis).	Given	our	progress	in	the	clinic	
and	with	our	partners,	we	believe	Silence’s	
science and technology has the potential 
to play a leading role in the ultimate 
commercialisation 	 of 	 RNAi 	 into 	 next -generation	
therapeutics	for	patients	worldwide.	
The	strides	made	in	RNAi	are	in	line	with,	
or	even	superior	to,	progress	made	with	
other	new	technologies	and	therapeutics	
in	the	past,	including	the	path	travelled	by	
monoclonal	antibodies	from	concept	to	
clinic	to	market.	Silence	has	made	significant	
advances	in	addressing	the	issue	of	siRNA	
delivery	that	not	long	ago	appeared	to	be	
an	insurmountable	challenge	for	our	sector .	
W e	have	laid	the	groundwork	for	developing	
RNAi	therapeutics	by	completing	extensive	
preclinical	research	with	a	broad	range	of	
technologies	and	approaches.	W e,	with	our	
partners, 	 have 	 administered 	 RNAi 	 therapeutics	
to	hundreds	of	patients,	over	300	of	which	
have	been	dosed	with	molecules	containing	
Silence’s	proprietary	AtuRNAi	technology .	
As 	 of 	 today , 	 there 	 are 	 around 	 12 	 clinical 	 trials 	
of	RNAi	therapeutics	underway	worldwide,	
almost	half	which	are	based	on	Silence’s	
fundamental	RNAi	technology .	The	data	that	
is 	 now 	 emerging 	 is 	 a 	 testament 	 to 	 how 	 quickly	
the 	 RNAi 	 field 	has 	 advanced 	 relative 	 to 	 timelines	
that	are	typical	in	the	life	science	industry .	
The	key	advances	made	more	broadly	
in	the	RNAi	sector	in	2010	were	in	evidence	
at	Silence.	During	the	year	we	continued	to	
develop 	 and 	 advance 	 what 	 we 	 believe 	 to 	 be	
one	of	the	industry’s	most	comprehensive	
RNAi	therapeutic	platforms,	comprised	of:
	 	 proprietary	delivery	technologies;
	 	 potent	siRNA	s equences;	and
	 	 innovative	siRNA	structural	featu res.
In summary
	 	 Achieved	rapid	integration	of	
Intradigm	Corporation	following	
its	acquisition	in	January	2010
	 	 Secured	funding	for	the	busin ess	
through	to	2012
	 	 Advanced	Silence	Therapeutics	
as 	 one 	 of 	 the 	 leaders 	 in	
RNAi	therapeutics
	 	 Made	strong	 progress	on	mu ltiple	
fronts	including	clinical	development,	
intellectual property and ongoing 
pharmaceutical partnerships
Jerry Randall ACA	Chairman Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
5
Review of the year Corporate governance Financial statements
2011 goals...
1.	 	 Complete	Phase	I	clinical	tria l	
of	Atu027
2.	 	 Present	interim	Phase	I	data	
on	Atu027
3.	 	 Advance	preclinical	programm es	
for	Atu134	and	Atu111
4.	 	 Complete	new 	corporate	allia nce
As	we	have	previously	stated,	these	are	the	
three 	 areas 	 we 	 believe 	 to 	 be 	 critical 	 for 	 building,	
protecting	and	commercialising	the	safest	
and	most	effective	RNAi	therapeutics.	T o	this	
end,	we	further	advanced	our	lead	product	
candidate, 	 Atu027, 	 through 	 its 	 Phase 	 I 	 clinical 	
trial	and,	thus	far ,	have	seen	what	we	believe	
to 	 be 	 extremely 	 encouraging 	 results, 	 including	
preliminary 	 evidence 	 of 	 remarkable 	 shrinkage	
of	target	and	non-target	lesions.	W e	also	
widely	and	actively	expanded	our	intellectual	
portfolio	estate	with	the	issuance	of	several	
key 	 patents 	 covering 	 all 	 three 	 key 	 areas 	 for 	 the	
development 	 of 	 RNAi 	 therapeutics. 	 T h i s 	 g l o b a l ,	
diverse 	 and 	 competitive 	 intellectual 	 property	
estate	further	positions	us	as	the	partner	of	
choice 	 for 	 other 	 companies 	 looking 	 to 	 develop	
RNAi	therapeutics	and	enables	us	to	further	
drive 	 therapeutic 	 advancements 	 both 	 internally	
and	with	collaborators	in	2011	and	beyond.
Shortly	after	the	merger	of	Silence	and	
Intradigm,	Dr	Phil	Haworth	assumed	the	role	
of	Chief	Executive	Officer ,	I	was	appointed	
Chairman	and	Max	Herrmann	was	appointed	
Chief 	 Financial 	 Officer 	 and 	 Company 	 Secretary 	
of	the	enlarged	Group.	On	behalf	of	the	
Board,	I	would	like	to	thank	Iain	Ross	and	
Melvyn	Davies,	who	stood	down	during	the	
period, 	 for 	 their 	 contributions 	 to 	 the 	 Company .
None	of	the	advancements	I	have	outlined	
would 	 have 	 been 	 possible 	 without 	 the 	 support	
of	our	shareholders	and	we	are	committed	to	
continuing	to	build	value	through	delivering	
meaningful	progress	in	the	future.
Thank	you	for	your	continued	support	
of	Silence	Therapeutics.
Jerry Randall ACA
Chairman
26 April 2011
During 2010, Silence 
made significant progress 
on multiple fronts driving 
advancements in the 
RNAi sector. Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
6
Chief Executive’s review
Philip Haworth PhD Chief	Executive	Officer
In 2010 we saw major 
advancements in the RNAi 
sector both at Silence and 
from our peers.
Overview
In	2010,	we	saw	major	advancements	in	the	
RNAi 	 sector 	 and 	 it 	 was 	 a 	 very 	 exciting 	 year 	 f o r	
Silence,	not	least	because	the	year	saw	the	
Group	successfully	complete	the	acquisition	
of 	 Intradigm. 	 Importantly , 	 Silence 	 made 	 some	
key 	 advancements 	 in 	 overcoming 	 the 	 challenge	
of	delivering	siRNA	molecules	safely	and	
effectively	to	a	variety	of	targets	and	tissue	
types 	 in 	 the 	 body 	 which 	 can 	 then 	 be 	 developed	
in 	 a 	 timely 	 and 	 cost -effective 	 manner . 	 Silence	
can	package	siRNA	molecules	in	multiple,	
distinct	delivery	systems	that	can	deliver	to	
more	target	cells	and	tissues	than	any	of	its	
competitors and can also generate multiple 
siRNA	products	rapidly	and	efficiently .	W e	
believe	that	these	advancements	support	
Silence’s 	 position 	 as 	 a 	 leader 	 in 	 the 	 discovery ,	
delivery 	 and 	 development 	 of 	 RNAi 	 therapeutics	
and	provide	benefits	not	only	to	Silence,	but	
to	the	sector	as	a	whole.
The 	 next 	 crucial 	 step 	 in 	 translating 	 the 	 science	
of 	 RNAi 	 into 	 meaningful 	 medicines 	 is 	 delivering	
positive 	 clinical 	 data 	 to 	 support 	 the 	 safety 	 and 	
efficacy 	 of 	 specific 	 RNAi 	 therapeutics 	 and 	 we 	
are	poised	to	begin	to	deliver	this	data	in	the	
coming	months.	
Before	looking	further	ahead,	I	would	like	
to	highlight	our	progress	in	2010	by	outlining	
the	key	events	that	created	value	for	our	
shareholders 	 and 	 contributed 	 to 	 our 	 leadership	
position	in	the	sector .	During	the	year ,	the	
company	made	progress	in	several	areas.	
These	included:
	 	 advancements	in	the	clinic	and	w ith	
our technologies;
	 	 the	establishment	and	expansion 	of	
valuable 	 pharmaceutical 	 partnerships; 	 and	
	 	 the	continued	strengthening	of	o ur	
intellectual	property	portfolio.
Operational
Progress with internal 
development programmes
W e	ended	2010	very	pleased	with	the	
progress	we	had	made	with	our	ongoing	
Phase	I	clinical	study	of	Atu027,	our	lead	
drug 	 candidate 	 for 	 the 	 treatment 	 of 	 advanced	
solid	tumours.	The	trial	remains	on	track	for	
completion	in	the	second	half	of	2011	and	
preliminary	findings	have	already	begun	to	
show	what	we	believe	to	be	encouraging	
human	data	that	is	consistent	with	the	
positive	preclinical	data	for	Atu027.	
In	November	2010,	we	published	a	 
peer -reviewed	paper	in	Clinical	Cancer	
Research	stating	that	Atu027	prevented	the	
spread 	 of 	 breast 	 cancer 	 to 	 the 	 lungs 	 in 	 animal	
models	of	cancer	metastases.	As	a	proven	
inhibitor	of	the	expression	of	PKN3,	a	gene	
that	is	believed	to	play	an	important	role	in	
the	progression	of	cancer	and	metastasis	
formation 	 in 	 particular , 	 Atu027 	 has 	 significant 	
promise	as	a	potential	cancer	treatment.
In 	 the 	 published 	 paper , 	 researchers 	 highlighted	
Atu027’s	inhibition	of	multiple	key	biological	
processes	that	trigger	the	formation	and	
spread	of	pulmonary	metastases	in	mice.	
W ith	metastasis	directly	linked	to	high	rates	
of	mortality	in	cancer	patients,	the	prevention	
of	metastasis	dissemination	and	formation	is	
a 	 critical 	 goal 	 of 	 cancer 	 treatment. 	 Importantly ,	
the 	 researchers 	 were 	 able 	 to 	 show 	 that 	 Atu027	
In summary
	 	 Excellent	progress	made	with	Atu027	
in	the	ongoing	Phase	I	trial	in	patients	
with	advanced	solid	tumours
	 	 Expanded	our	collaboration	w ith	
Dainippon	Sumitomo	and	extended	
our	collaboration	with	AstraZeneca
  Strengthened our intellectual property 
position	including	issuance	of	the	
Zamore	Design	Rules	patents	in	both	
the US and Europe
	 	 Secured	funding	well	into	201 2 Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
7
Review of the year Corporate governance Financial statements
inhibited	the	formation	of	metastases	in	the	
lung.	This	is	crucial	as	breast	cancer	cells	
prefer 	 to 	 metastasise 	 through 	 the 	 bloodstream	
to	the	lung.	
These	published	findings	not	only	indicate	
the	potential	clinical	impact	of	Atu027,	but	
also	help	us	further	understand	the	manner	
in	which	this	compound	works	against	the	
formation	of	metastases.	
We are optimistic that these preclinical 
findings	will	be	confirmed	in	our	ongoing	
Phase	I	clinical	trial	with	Atu027.	As	of	
March	2011,	researchers	conducting	the	
Phase	I	study	had	administered	over	170	
doses	of	Atu027	to	23	patients	across	eight	
dose	ranges	with	dose	escalation	continuing.	
T o	date,	Atu027	has	appeared	to	be	safe	and	
generally	well	tolerated	with	no	dose-limiting	
toxicities	observed.	Additionally ,	initial	human	
pharmacokinetic	(PK)	data	appears	to	be	
similar	to	preclinical	PK	data.	T o	date	six	
patients	have	shown	stable	disease	after	
three	months	on	study .	W e	expect	to	present	
interim	data	from	this	study	at	the	American	
Society	of	Clinical	Oncology	Annual	Meeting	
in	June	2011	and	complete	the	trial	in	the	
second	half	of	2011.	Complete	data	is	
expected	to	be	available	in	early	2012.
As	we	continue	the	Phase	I	trial	of	Atu027,	
we	are	concurrently	working	on	preclinical	
development	of	other	promising	therapeutic	
candidates	including	Atu111,	Atu134	
and	Atu195:
	 	 Atu111 	is	the	most	novel	of	our	p reclinical	
programmes.	Based	on	our	proprietary	
D ACC	delivery	system,	we	are	developing	
Atu111 	 for 	 the 	 treatment 	 of 	 acute 	 lung 	 injury .	
Acute	lung	injury	is	often	fatal	and	usually	
caused 	 by 	 pneumonia. 	 Currently 	 there 	 is 	 no	
other	effective	treatment	in	this	US$8bn	
annual	market.	In	2011,	we	plan	to	explore	
opportunistic 	 licensing 	 options 	 for 	 the 	 clinical	
development	of	Atu111;	
	 	 Atu134 ,	like	Atu027,	is	based	on	 our	
proprietary	AtuPlex	delivery	system.	
Atu134	targets	CD -31,	which	is	known	
to	be	expressed	in	certain	solid	tumours,	
but	has	proved	difficult	to	target	with	
traditional	delivery	approaches.	W e	view	
Atu134	as	an	expansion	of	our	AtuPlex	
franchise 	 and 	 we 	 are 	 evaluating 	 the	
compound in preclinical testing as a 
potential 	 treatment 	 for 	 solid 	 tumours; 	 and
	 	 Atu195 	represents	the	third	prog ramme	
in 	 our 	 AtuPlex 	 franchise 	 which 	 we 	 are 	 also	
evaluating	as	a	potential	treatment	for	
solid	tumours.	
Progress with partners
Silence’s	technologies	were	further	validated	
in	2010	with	the	extension	and	expansion	of	
our 	 discovery 	 and 	 delivery 	 partnerships 	 as 	 well	
as 	 the 	 advancement 	 of 	 several 	 of 	 our 	 partnered	
development	programmes	through	the	clinic.	
In	March	2010,	we	expanded	our	siRNA	
delivery 	 collaboration 	 with 	 Dainippon 	 Sumitomo.	
Under	this	collaboration,	entered	into	in	
August	2009,	we	are	jointly	leveraging	
Silence’s	proprietary	siRNA	molecules	as	
well	as	delivery	and	targeting	technologies	
to	demonstrate	functional	delivery	of	RNAi	
therapeutics	to	specific	disease	targets	in	
the 	 body . 	 Under 	 the 	 terms 	 of 	 the 	 collaboration	
expansion	signed	in	2010,	we	will	examine	
the	efficacy	of	additional	disease	targets	
selected	by	Dainippon	Sumitomo	that	were	
not	originally	specified	under	the	initial	
collaboration	signed	in	2009.	W e	see	the	
expansion 	 of 	 this 	 agreement 	 as 	 further 	 validation	
of	the	potential	value	of	our	technologies.
In	addition	to	our	collaboration	with	
Dainippon 	 Sumitomo, 	 we 	 have 	 two 	 ongoing	
collaborations 	 with 	 AstraZeneca, 	 which	
were	initiated	in	June	2007	and	March	2008.	
Both	collaborations	were	extended	this	year .	
In	April	2010,	Silence	and	AstraZeneca	
announced	a	one-year	extension	of	our	
ongoing	siRNA	delivery	collaboration.	
The	purpose	of	this	collaboration,	which	
was	originally	established	in	March	2008,	
is	to	develop	a	range	of	novel	approaches	
for	the	delivery	of	siRNA	molecules.
In	July	2010,	we	announced	the	
continuation 	 of 	 our 	 ongoing 	 RNAi 	 research	
and 	 development 	 collaboration 	 with	
AstraZeneca. 	 The 	 collaboration 	 was 	 originally	
established	in	July	2007	for	the	purpose	of	
developing 	 and 	 optimising 	 five 	 novel 	 siRNA	
therapeutics addressing respiratory and 
oncology	indications.	 Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
8
Chief Executive’s review continued
Operational continued
Progress with partners continued
The	extension	of	both	of	our	AstraZeneca	
collaborations	this	year	provides	further	
testimony 	 to 	 the 	 value 	 that 	 the 	 pharmaceutical	
industry	assigns	to	Silence	and	its	science.
In 	 August 	 2010, 	 our 	 partner , 	 Quark,	
announced 	 the 	 grant 	 of 	 an 	 option 	 to 	 Novartis	
to	obtain	an	exclusive	worldwide	licence	to	
develop	and	commercialise	QPI-1002,	which	
incorporates	Silence’s	AtuRNAi	technology .	
In 	 December 	 2010, 	 we 	 reached 	 an 	 agreement	
with	Quark	whereby	Silence	is	due	to	receive	
milestone	payments	of	up	to	US$1.5m	in	
relation to the option agreement signed 
between	Quark	and	Novartis	for	QPI-1002.	
Silence	received	US$0.63m	of	this	milestone	
in	early	2011.	F uture	milestone	payments	to	
Silence	relating	to	Quark’s	license	agreement	
with	Novartis	could	reach	US$80m.
Quark	is	developing	QPI-1002	for	the	
prevention	of	acute	kidney	injury	(AKI)	in	
patients	undergoing	major	cardiovascular	
surgery	and	for	the	prophylaxis	of	delayed	
graft	function	(DGF)	in	patients	receiving	
deceased	donor	kidney	transplants.	Phase	I	
studies 	 in 	 these 	 patient 	 populations 	 have 	 been	
successfully	completed.	In	September	2010,	
Quark	initiated	a	Phase	II	trial	of	QPI-1002	for	
the	prophylaxis	of	DGF	in	patients	receiving	
deceased	donor	kidney	transplants.	Quark	
plans	to	initiate	dosing	in	a	Phase	II	trial	in	
AKI	in	2011.
Additionally ,	in	March	2011,	Quark	
announced	Phase	II	results	of	PF -4523655	
from	the	184	patient	DEGAS	study	in	
diabetic	macular	oedema	(DME).	The	trial	
demonstrated	not	only	that	the	drug	was	
safe	and	well	tolerated	but	also	showed	
efficacy	benefits	over	laser	treatment	against	
which	PF -4523655	was	compared.	However ,	
advances 	 in 	 the 	 treatment 	 of 	 diabetic 	 macular	
oedema	means	Quark	now	plans	to	conduct	
a 	 further 	 Phase 	 IIb 	 trial 	 comparing 	 PF -4523655	
against 	 Lucentis, 	 which 	 was 	 recently 	 approved	
for	the	treatment	of	DME .	This	trial	is	due	to	
start	in	2011.	Data	from	the	DEGAS	trial	have	
not	only	confirmed	the	potential	utility	of	
RNAi	therapeutics	but,	far	more	importantly	
for	Silence,	have	reinforced	claims	about	
the	safety	of	Silence’s	AtuRNAi	technology .	
Results	from	a	further	Phase	II	study	
of	PF -4523655	in	age-related	macular	
degeneration	are	expected	during	the	
course	of	2011.
W e 	 are 	 extremely 	 pleased 	 with 	 the	
progress	we	have	made	with	our	existing	
collaborations	in	2010	from	both	business	
and	clinical	development	perspectives.	
These	collaborations,	some	of	which	focus	
on	mid	to	late-stage	clinical	development	
programmes, 	 demonstrate 	 the 	 advancements	
of	the	RNAi	sector	as	a	whole	and	ultimately	
bring	value	to	the	industry	as	well	as	our	
shareholders.	W e	are	pleased	to	be	playing	
a leadership role in the sector’s progress and 
expect	this	momentum	to	continue	into	2011	
and	beyond.
Restructuring
F ollowing	the	Intradigm	acquisition,	
Silence	announced	in	April	2010	a	major	
restructuring	to	streamline	the	business.	
This	resulted	in	a	smaller ,	more	focused	
operation	headquartered	in	London	with	
research	&	development	activities	in	Berlin	
and 	 business 	 development 	 activities 	 in	
Redwood 	 City , 	 California. 	 Over 	 the 	 last 	 twelve	
months,	it	has	become	apparent	that,	for	an	
organisation 	 of 	 approximately 	 40 	 employees,	
t h e 	 g e o g r a p h i c a l 	 diversity 	 of 	 the 	 Group 	 creates	
considerable 	 operational 	 difficulties 	 as 	 well 	 as 	
increased 	 operating 	 costs. 	 Therefore, 	 the 	 Board	
plans 	 to 	 close 	 the 	 Redwood 	 City 	 office 	 as 	 soon 	
as	practicable.	In	order	to	enable	a	smooth	
and 	 orderly 	 transition, 	 I 	 have 	 agreed 	 t o 	 r e m a i n	
in	the	role	of	Chief	Executive	Officer	until	an	
appropriate	replacement	has	been	recruited.
Strength through intellectual property
W e	continue	to	view	intellectual	property	(IP)	
as	one	of	the	cornerstones	of	our	business	
and 	 our 	 sector . 	 In 	 2010, 	 we 	 executed 	 a 	 proactive	
strategy	to	continue	to	build	and	strengthen	
a	diverse	and	competitive	IP	portfolio	
that	provides	us	with	a	strong	proprietary	
position	in	the	RNAi	therapeutics	space	
and	a	meaningful	competitive	advantage	
with	respect	to	peer	companies.	
Valuable disease targets and sequences
In	2010	and	early	2011,	we	made	progress	
in	expanding	IP	around	valuable	disease	
targets	and	sequences	that	we	believe	
will	help	drive	the	expansion	of	our	
RNAi	therapeutics	platform.
We made excellent progress 
in our Phase I clinical trial 
of Atu027 as a treatment for 
advanced solid tumours. Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
9
Review of the year Corporate governance Financial statements
During 	 2010 	 and 	 early 	 2011, 	 the 	 United 	 States	
P atent	and	T rademark	Office	(USPTO)	issued	
Silence 	 a 	 number 	 of 	 individual 	 patents 	 directed	
to 	 double-stranded 	 siRNA 	 sequences 	 against 	
validated	cancer	targets	including:
 
	 PKN-3,	a	high-value	therapeutic	target	in	
the 	 area 	 of 	 oncology . 	 Importantly , 	 the 	 patent	
claims	related	to	PKN-3	cover	siRNA	
molecules	for	treating	cancer;
	 	 vascular	endothelial	growth	facto r	
receptor	2	(VEGFR2).	VEGFR2	has	been	
demonstrated to play an important role in 
the	vasculogenic	and	angiogenic	activities	
that	contribute	to	the	development	and	
progression	of	tumours	associated	with	
a	broad	range	of	cancers.	The	VEGFR2	
patent	also	covered	methods	for	reducing	
tumour	growth;
	 	 vascular	endothelial	growth	facto r	
receptor	1	(VEGFR1),	which	has	been	
demonstrated	to	play	a	key	role	in	the	
underlying	causes	of	various	cancers	
including	abnormal	angiogenesis	and	
uncontrolled	cell	division.	Similar	to	
VEGFR2, 	 VEGFR1 	 also 	 is 	 implicated 	 in	
the	development	and	progression	of	
age-related	macular	degeneration	(AMD)	
and other serious ocular diseases;
	 	 epidermal	growth	factor	receptor 	related	
protein	(EGFR-RP),	which	has	also	been	
demonstrated	to	play	a	key	role	in	the	
underlying	causes	of	various	cancers	
including	abnormal	angiogenesis	and	
uncontrolled	cell	division;	and
	 	 vascular	endothelial	growth	facto r	(VEGF),	
which, 	 like 	 the 	 other 	 targets 	 above, 	 has 	 also	
been	demonstrated	to	play	an	important	
role	in	the	underlying	causes	of	various	
cancers	including	abnormal	angiogenesis	
and	uncontrolled	cell	division.
By	successfully	securing	IP	around	multiple	
high-value,	validated	cancer	targets,	Silence	
has 	 taken 	 a 	 critical 	 step 	 in 	 building 	 a 	 successful	
franchise 	 in 	 cancer -focused 	 RNAi 	 therapeutics.	
Zamore Design Rules
Silence	owns	exclusive	licences	to	three	
Zamore	patent	families	from	the	University	
of	Massachusetts	Medical	School	(UMass),	
where 	 Phillip 	 D . 	 Zamore, 	 PhD , 	 Howard 	 Hughes	
Medical	Institute	Investigator ,	the	Gretchen	
Stone	Cook	Chair	of	Biomedical	Sciences,	
and	Professor	of	Biochemistry	&	Molecular	
Pharmacology 	 at 	 University 	 of 	 Massachusetts	
Medical	School,	is	the	co-director	of	the	
RNA	Therapeutics	Institute.	
These	patent	families	disclose	various	
efficacy -enhancing	methods	and	structural	
elements	for	RNAi	therapeutics,	informally	
known 	 as 	 the 	 Zamore 	 Design 	 Rules 	 and 	 based	
on	Dr	Zamore’s	work	at	UMass.	There	is	
a	growing	consensus	within	the	industry	
regarding	the	important	role	of	optimised	
siRNA 	 structures 	 for 	 developing 	 more 	 potent	
next -generation 	 RNAi 	 therapeutics.	
W ith	exclusive	access	to	the	industry	leading	
technology in this area, Silence continues 
to	position	itself	as	the	partner	of	choice	for	
pharmaceutical	companies	with	interest	in	
the	RNAi	space.	In	2010,	the	USPTO	issued	
the	following	critical	patents	related	to	the	
valuable	Zamore	Design	Rules:
  a patent that generally claims methods 
of	enhancing	the	RNA	silencing	activity	
of	RNAi	agents	through	certain	structural	
modifications.	The	issued	claims	not	only	
cover	enhancing	the	efficacy	of	silencing	
gene	expression	using	siRNA	but	also	
include	specific	claims	directed	to	micro	
RNA	(miRNA),	pre-miRNA ,	and	short	
hairpin	RNA	(shRNA);
  a patent that generally claims methods 
of 	 producing 	 double 	 stranded 	 RNAi 	 agents 	
having 	 decreased 	 off -target 	 silencing 	 activity	
through	certain	structural	modifications.	
The 	 ability 	 to 	 minimise 	 the 	 off -target	
effects	of	RNAi	therapeutics	is	critical	for	
controlling	unwanted	cellular	activity	and/
or	potential	safety	concerns.	The	issued	
claims	not	only	cover	minimising	off -target	
gene	expression	silencing	using	siRNA	
but	also	include	specific	claims	directed	
to	miRNA ;	and
  a patent that generally claims methods 
of	enhancing	RNA	silencing	with	a	double	
stranded	RNAi	agent.	The	patent’s	RNA	
silencing	method	claims	include	coverage	
for	the	administering	of	a	pharmaceutical	
composition	containing	siRNA ,	miRNA ,	
pre-miRNA 	 or 	 shRNA 	 molecules. 	 Silence	
believes 	 the 	 proprietary 	 structural	
modification	techniques	covered	in	this	
patent	will	play	a	key	role	in	increasing	
the	potential	therapeutic	efficacy	
of	RNAi	therapeutics.	
During	2010,	the	USPTO	received	four	
anonymous	requests	for	re-examination	
of	the	US	issued	Zamore	Design	Rules	
patents.	The	Company	is	working	with	
UMass	and	its	counsel	in	responding	to	
these 	 validity 	 challenges. 	 The 	 patents 	 remain	
valid	during	the	re-examination	process.
During	2010,	the	European	P atent	Office	
(EPO)	also	granted	Silence	a	new	patent	
providing	broad	protection	on	novel	aspects	
of	the	Zamore	Design	Rules.	The	European	
patent	 covers	 various	 breakthrough	 structural	
modification,	methods	and	compositions.	
This	patent	is	currently	being	opposed	
by	Alnylam. Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
10
Operational continued
Zamore Design Rules continued
W e 	 strongly 	 believe 	 that 	 the 	 Zamore	
technology	is	invaluable	for	the	development	
and	commercialisation	of	RNAi	therapeutics	
with	enhanced	efficacy .	As	we	move	toward	
the 	 translation 	 of 	 RNAi 	 candidates 	 into 
medicines, 	 we 	 expect 	 that 	 our 	 exclusive	
access 	 to 	 these 	 Design 	 Rules 	 will 	 trigger 	 an	
increased	interest	in	new	partnerships	from	
a	number	of	companies	working	in	this	area.
AtuRNAi
Subsequent	to	the	year	end,	we	also	
announced	the	issuance	of	another	US	
patent	covering	chemically	modified	
RNAi	molecules	with	defined	positional	
modifications 	 including 	 siRNA 	 molecules 	 that 	
are	blunt	ended,	as	well	as	molecules	with	
one	or	more	overhangs.	This	is	a	particularly	
important	piece	of	IP	as	it	broadens	our	
protection	of	these	RNAi	molecules	to	those	
with	a	chemically	modified	core	length	
between	17	and	29	nucleotides	including	
the	company’s	portfolio	of	25mer	siRNA	
sequences.	This	patented	siRNA	technology	
forms	the	foundation	for	our	proprietary	
AtuRNAi	technology ,	which	is	the	basis	of	
five	ongoing	clinical	trials	being	conducted	
by	Silence	and	our	partners.
W e	believe	that	Silence	will	continue	to	make	
significant	progress	in	these	efforts	and	we	
expect	additional	RNAi	patents	to	be	issued	
in	Japan,	the	US	and	Europe	during	2011.	
Our	comprehensive	IP	portfolio	enables	us	
to	make	groundbreaking	advancements	
with	our	development	programmes	and	
technologies, 	 moving 	 us 	 closer 	 to 	 producing 	
treatment 	 options 	 for 	 patients 	 in 	 need. 	 At 	 the	
same 	 time, 	 this 	 growing 	 patent 	 estate 	 has	
significant	value	to	others	in	the	RNAi	
therapeutics	space	and	provides	Silence	
with	a	key	asset	for	pursuing	collaborations	
and	licensing	deals.
Summary and outlook
2010 	 was 	 a 	 year 	 of 	 great 	 progress 	 for 	 Silence	
and 	 we 	 look 	 forward 	 to 	 continuing 	 to 	 build 	 upon	
the	momentum	in	2011.
As	we	have	previously	announced,	the	value	
of	our	programmes	and	technologies	caught	
the	attention	of	key	players	in	our	industry	
in	2010	and	we	received	a	number	of	
approaches to discuss potential strategic 
combinations.	The	management	team	and	
Board	members	carefully	evaluated	each	
opportunity .	After	completing	a	period	of	
comprehensive	review ,	we	deemed	that	
these	approaches,	while	well	intentioned,	
were	not	in	the	best	interest	of	shareholders	
at 	 this 	 time. 	 W e 	 continue 	 to 	 work 	 toward 	 building	
maximum	value	for	our	shareholders	and	will	
review	all	future	opportunities	on	that	basis.
As	we	look	to	the	balance	of	2011,	we	
anticipate	the	achievement	of	multiple	
milestones,	most	notably ,	the	reporting	of	
interim	data	from	our	Phase	I	clinical	trial	of	
Atu027	throughout	the	year	and	completion	
of	the	trial	in	the	second	half	of	the	year .	
In	addition	to	Atu027,	we	will	also	continue	
to	advance	our	portfolio	of	preclinical	internal	
programmes	with	the	goal	of	moving	these	
into	clinical	trials.	At	the	same	time,	we	look	
forward	to	the	continued	advancement	of	our	
partnered programmes, including the potential 
for	some	to	advance	into	pivotal	Phase	III	
studies.	Finally ,	we	expect	to	continue	our	
successful	IP	strategy	with	the	issuance	of	
new	patents	in	the	US,	Europe	and	Japan	
that	cover	a	range	of	key	RNAi	technologies.
2011	promises	to	be	a	year	rich	in	data	from	
RNAi	clinical	trials.	At	Silence,	we	believe	that	
this	data	will	serve	as	the	primary	vehicle	for	
continuing	to	build	investor	and	industry	
confidence	in	RNAi’s	potential	to	change	the	
future	of	medicine	and	bring	much	needed	
therapeutics	to	patients	that	currently	have	
no	treatment	options.	W e	believe	that	Silence	
will 	 be 	 at 	 the 	 forefront 	 of 	 this 	 progress, 	 leading	
the	way	for	a	new	generation	of	medicine.
I	would	like	to	express	my	thanks	to	the	
employees	of	Silence	Therapeutics	and	you,	
our	shareholders,	for	your	continued	support	
and	confidence	in	our	company .
Philip Haworth PhD
Chief Executive Officer
26 April 2011
2011 promises to be a year 
rich in data from RNAi 
clinical trials including our 
own Atu027 Phase I trial.
Chief Executive’s review continued Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
11
Review of the year Corporate governance Financial statements
Finance review
In 2010, we successfully 
strengthened our financial  
position through a 
£15m fundraising.
Max Herrmann Chief	Financial	Officer
£3.57m
Group cash position:
(2009:	£1.13m)
£8.66m
Operating loss:
(2009:	£7.55m)
£2.37m
Revenues:
(2009:	£1.72m)
Silence	successfully	strengthened	its	
financial	position	in	early	2010	through	
a	fundraising	that	completed	concurrently	
with	the	acquisition	of	Intradigm	and	that	
generated 	 proceeds 	 of 	 £15.00m 	 (gross). 	
This	funding	provided	cash	resources	that	
will	support	the	Company’s	operations	into	
the	third	quarter	of	2011.	This	is	without	
taking	into	account	any	milestone	or	other	
receipts	that	the	Company	believes	it	could	
receive	in	2011.
Revenue
Revenue	generated	in	the	year	increased	
to	£2.37m	in	2010	from	£1.72m	in	2009.	
Revenue	recognised	in	the	year	related	
to	income	from	Silence’s	collaborations	
with	AstraZeneca,	Dainippon	Sumitomo,	
Quark	and	certain	government	grants.	
The	increase	in	revenue	in	2010	primarily	
reflects	the	milestone	due	from	Quark	
triggered	by	the	option	it	gave	to	Novartis	
for	QPI-1002.
Research and development expenses
Research	and	development	expenses	during	
the	year	increased	to	£5.82m	in	2010	from	
£5.07m	in	2009.	The	increase	in	research	
and	development	expense	is	attributed	to	the	
enlarged	Group	structure.	On	completion	of	
the	 acquisition	 of	 Intradigm,	 Silence	 operated	
two	R&D	facilities:	one	in	Berlin	and	one	in	
P alo	Alto,	California.	However ,	in	April	2010	
the	Group	took	the	decision,	as	part	of	the	
integration	of	Intradigm,	to	close	the	P alo	
Alto	facility .	
Administrative expenses
Administrative	expenses	during	the	year	
increased	to	£5.20m	in	2010	from	£4.20m	
in	2009.	The	increase	in	administrative	
expenses	is	again	attributed	to	the	enlarged	
Group	structure	in	the	first	half	of	2010	prior	
to	the	integration	of	Intradigm.	As	part	of	the	
closure 	 of 	 the 	 P alo 	 Alto 	 facility 	 described 	 above,	
a	small	administrative	operation	was	retained	
with	operations	moving	to	Redwood	City ,	
California	in	July	2010.
Financial income
Financial	income	was	£0.10m	in	2010	
compared	to	£0.05m	in	2009.	This	was	
despite	higher	cash	balances	during	2010	
and	reflects	the	continued	low	interest	
rate	environment.
Taxation
Corporation	tax	payable	in	2010	was	£nil.	
In	2009,	the	corporation	tax	receivable	of	
£0.04m	reflected	an	adjustment	in	respect	
of	prior	years.
Liquidity, cash, cash equivalents and 
money market investments
The	Group’s	cash	position	at	year	end	was	
£3.57m. 	 At 	 the 	 end 	 of 	 2009, 	 Silence 	 had 	 cash 	
of 	 £1.13m. 	 A 	 further 	 £14.36m 	 net 	 of 	 expenses 	
was	raised	in	January	2010	through	an	
institutional	placing	of	22,724,295	shares	
at	23p.
The	net	cash	outflow	from	operating	activities	
in	2010	was	£10.55m	against	an	operating	
loss	of	£8.66m	(2009:	£7.55m)	primarily	
reflecting	the	impact	of	changes	in	other	
working	capital	of	£2.89m	(2009:	£1.61m)	
which	were	partially	offset	by	non-cash	items	
such as depreciation, amortisation and share 
option	charges	of	£0.98m	(2009:	£1.03m).	
T rade	and	other	receivables	at	year	end	
were	£0.78m	(2009:	£0.56m).	The	increase	
reflects	recognition	of	a	milestone	payment	
due 	 from 	 Quark, 	 which 	 was 	 received 	 in 	 early	
January	2011.	T rade	and	other	payables	
were	£1.69m	at	year	end	(2009:	£2.10m).	
T rade	and	other	payables	were	high	at	
31	December	2009	reflecting	Intradigm	
deal	costs	incurred	at	the	end	of	2009	
but	not	paid	until	early	2010.	
Goodwill	at	year	end	was	£28.35m	
(2009:	£8.13m).	The	increase	reflects	
goodwill	on	the	acquisition	of	Intradigm	
in	January	2010.	As	part	of	this	acquisition	
Silence	issued	79,640,668	shares	to	
Intradigm	shareholders.	Other	intangible	
assets	at	31	December	2010	were	£0.95m	
(2009: 	 £0.74m). 	 The 	 increase 	 in 	 other 	 intangible	
assets	primarily	reflects	the	inclusion	of	the	
Zamore	Design	Rules	patents.
Max Herrmann
Chief Financial Officer
26 April 2011 Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
12
Board of directors
Committee composition
Audit Committee 
Assisting	Board	oversight	of	accounting	and	
financial	reporting	processes	and	the	audits	
of	the	Company’s	financial	statements.	
	 	 Jerry	Randall	(Chairman)
	 	 David	U’Prichard
Nominations and Governance Committee 
Recommending	to	the	Board	those	persons	
to	be	nominated	for	election	as	Directors	at	
any	shareholders	meeting.	
	 	 David	U’Prichard	(Chairman)
	 	 Annette	Clancy
	 	 David	Mack
Remuneration Committee 
Assisting	the	Board	in	the	discharging	of	
its	responsibilities	related	to	remuneration	
of	the	Company’s	Executive	officers.	
	 	 Annette	Clancy	(Chairman)
	 	 James	T opper
	 	 David	U’Prichard
	 	 David	Mack
	 	 Jerry	Randall
Jerry Randall
Non‑executive Chairman
Mr	Randall	is	an	entrepreneur	with	interests	in	a	number	of	business	areas.	He	was	appointed	
Chairman 	 of 	 the 	 Board 	 in 	 F ebruary 	 2010, 	 following 	 the 	 resignation 	 of 	 Iain 	 Ross. 	 Until 	 November 	 2009,	
he	was	Chief	Financial	Officer	of	Sinclair	Pharmaceuticals	plc,	which	he	joined	in	2000	as	part	
of	a	management	buy -in	team.	Prior	to	this,	Mr	Randall	worked	in	corporate	finance	with	
Gambit	Corporate	Finance	and	had	previously	been	involved	in	two	other	buy -ins.	He	acted	as	
adviser	to	both	private	and	quoted	companies	between	1993	and	2000,	in	both	the	capacity	of	
nominated	adviser	and	in	practice	with	KPMG.	During	this	period,	he	was	involved	in	a	number	
of	flotations	and	transactions	on	the	Official	List,	Unlisted	Securities	Market	and	AIM,	as	well	as	
raising	private	equity .	Mr	Randall	is	a	qualified	Chartered	Accountant.
Dr Phil Haworth
Chief Executive Officer
Dr	Haworth	was	appointed	Chief	Executive	Officer	of	Silence	Therapeutics	in	January	2010	
following	the	Company’s	acquisition	of	Intradigm	Corporation.	Prior	to	this	role,	Dr	Haworth	
served	as	CEO	of	Intradigm,	following	his	tenure	as	the	company’s	vice	president	of	business	
development.	He	joined	Intradigm	in	2007,	having	spent	the	previous	15	years	in	senior	business	
development	roles	at	several	leading	biotechnology	companies	including	Genencor	International,	
COR 	 Therapeutics 	 and 	 Affymax/Affymetrix, 	 among 	 others. 	 In 	 these 	 positions, 	 he 	 led 	 the 	 identification	
and	negotiation	of	numerous	collaborative	and	licensing	agreements	with	a	range	of	global	and	
regional 	 pharmaceutical 	 companies. 	 He 	 most 	 recently 	 served 	 as 	 vice 	 president, 	 business 	 development	
at	Codexis,	Inc.	He	possesses	deep	deal	making	expertise	that	spans	establishing	discovery	and	
development	partnerships,	technology	and	product	in	and	out	licensing,	mergers	and	acquisitions,	
and 	 financing 	 support. 	 Dr 	 Haworth 	 earned 	 his 	 JD 	 from 	 Stanford 	 University 	 Law 	 School 	 and 	 his 	 PhD . 	
in	biochemistry	from	the	University	of	Manchester	in	the	UK .
Max Herrmann
Chief Financial Officer and Company Secretary
Mr	Herrmann	was	appointed	Chief	Financial	Officer	of	Silence	Therapeutics	in	May	2010.	
He	is	a	qualified	Chartered	Accountant	and	possesses	more	than	20	years	of	biotechnology	
and	pharmaceutical	industry	experience	having	held	key	management	positions	with	leading	
development	stage	companies,	as	well	as	several	investment	banks.	Prior	to	joining	Silence,	
Mr	Herrmann	served	as	Chief	Financial	Officer	of	Intercytex	Group	plc,	a	publicly	traded	company	
focused	on	the	emerging	area	of	regenerative	medicine.	Before	joining	Intercytex,	he	spent	over	
ten	years	as	a	sell-side	equity	analyst,	most	recently	as	managing	director	and	head	of	European	
pharmaceutical	and	biotechnology	research	at	ING.	He	has	also	held	the	position	of	financial	
controller	for	US -based	Onyx	Pharmaceuticals	Inc	and	currently	serves	on	the	board	of	
Regenerative	Medicine	Assets	Limited. Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
13
Review of the year Corporate governance Financial statements
Annette Clancy
Non‑executive Director
Ms	Clancy	has	had	a	distinguished	career	spanning	30	years	with	GlaxoSmithKline	(GSK).	
She 	 spent 	 15 	 years 	 in 	 business 	 development 	 at 	 GSK 	 and 	 led 	 their 	 global 	 transactions 	 and 	 alliance	
management	teams	during	her	last	three	years	at	GSK .	During	her	tenure	she	and	her	team	were	
responsible 	 for 	 concluding 	 a 	 large 	 number 	 of 	 research, 	 development 	 and 	 commercial 	 business 	
collaborations 	 on 	 behalf 	 of 	 GSK . 	 Prior 	 to 	 her 	 role 	 in 	 business 	 development, 	 Ms 	 Clancy 	 held 	 a 	 number	
of 	 positions 	 in 	 clinical 	 research, 	 R&D 	 project 	 management 	 and 	 commercialisation. 	 Ms 	 Clancy 	 has 	
a	B Sc	(Hons)	Pharmacology	from	Bath	University	in	the	UK .
Dr David Mack
Non‑executive Director
Dr	Mack	is	a	director	at	Alta	P artners	where	he	led	the	investment	in	Angiosyn	as	a	director	and	
acting	CEO	(acquired	by	Pfizer	in	2005).	He	joined	Intradigm’s	board	in	May	2006	and	served	on	
that	board	until	the	merger	with	Silence	Therapeutics.	He	is	currently	on	the	board	of	directors	of	
Aerie	Pharmaceuticals,	Ceregene	and	Proacta.	Prior	to	Alta,	Dr	Mack	co-founded	and	served	as	
vice 	 president 	 of 	 Genomics 	 Research 	 at 	 Eos 	 Biotechnology 	 (acquired 	 by 	 Protein 	 Design 	 Labs 	 in 	 2003).	
F rom	1995	to	1997,	he	served	at	Affymetrix	as	head	of	cancer	biology	where	he	oversaw	the	
development 	 and 	 application 	 of 	 DNA 	 array 	 technology 	 in 	 the 	 areas 	 of 	 oncology 	 and 	 inflammation. 	
He	was	also	a	pivotal	member	of	the	P olymerase	Chain	Reaction	(PCR)	invention	group	at	Cetus	
(now	Chiron)	in	the	mid	1980s.	Dr	Mack	received	his	PhD	in	1992	from	the	University	of	Chicago.
Dr James Topper
Non‑executive Director
Dr 	 T opper 	 is 	 a 	 general 	 partner 	 at 	 F razier 	 Healthcare 	 V entures’ 	 P alo 	 Alto 	 office 	 and 	 was 	 the 	 chairman 	
of	the	board	of	Intradigm	from	May	2006	to	the	date	of	the	merger	with	Silence	Therapeutics.	
Since 	 joining 	 F razier 	 Healthcare 	 in 	 2003, 	 Dr 	 T opper 	 has 	 led 	 several 	 biopharma 	 investments 	 including 	
Arête	Therapeutics,	Cotherix	and	MacuSight.	Dr	T opper	is	also	an	advisory	board	member	to	the	
Harvard-P artners	Center	for	Genetics	and	Genomics.	Prior	to	joining	F razier	Healthcare,	he	served	
as	head	of	the	cardiovascular	research	and	development	franchise	at	Millennium	Pharmaceuticals	
and	ran	Millennium	San	F rancisco	(formerly	COR	Therapeutics).	Prior	to	the	merger	of	COR	and	
Millennium,	he	served	as	the	vice	president	of	biology	at	COR	and	was	responsible	for	managing	
all 	 of 	 its 	 research 	 activities. 	 Dr 	 T opper 	 received 	 his 	 MD 	 and 	 PhD 	 in 	 biophysics 	 from 	 Stanford 	 University	
School	of	Medicine	in	1991.	He	continues	to	hold	an	appointment	as	a	clinical	assistant	professor	
of	Medicine	at	Stanford	University .
Dr David U’Prichard
Non‑executive Director
Prior	to	joining	the	Board	of	Silence	Therapeutics,	Dr	David	U’Prichard	was	chief	executive	officer	
and	a	member	of	the	board	of	directors	of	3-Dimensional	Pharmaceuticals	Inc.	Y ardley	P A	(3DP)	
from	1999–2003.	During	that	time	he	took	3DP	public	and	secured	major	collaborations	with	
Bristol-Myers 	 Squibb 	 and 	 Johnson 	 & 	 Johnson. 	 In 	 March 	 2003, 	 3DP 	 became 	 a 	 part 	 of 	 Johnson 	 & 	 Johnson	
Pharmaceutical	R&D .	F rom	1997	to	1999,	Dr	U’Prichard	served	as	chairman	of	research	and	
development 	 at 	 SmithKline 	 Beecham, 	 where 	 he 	 oversaw 	 the 	 entry 	 of 	 approximately 	 ten 	 compounds	
into	global	development:	four	compounds	into	Phase	III	trials	and	six	compounds	into	early	clinical	
trials.	Additionally ,	he	was	involved	in	several	major	restructuring	efforts	at	the	company .	Prior	to	
SmithKline 	 Beecham, 	 Dr 	 U’Prichard 	 worked 	 for 	 ICI/Zeneca 	 from 	 1986 	 to 	 1997, 	 as 	 executive 	 vice 	 president	
and	international	research	director	from	1994	to	1997. Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
14
The Directors present their report and the Financial Statements for the year ended 31 December 2010.
Principal activities
The Group carries out research and development of pharmaceutical products. In particular the Group is focused on the development of RNAi 
therapeutics which incorporates its structural chemistry and delivery technologies. The Group’s lead product, Atu027, is currently in a Phase I 
clinical trial. 
Review of the business and future developments
The Chairman’s Statement on pages 4 and 5 provides details of the Group’s progress during the year against all its performance targets. 
The Chief Executive’s Review, on pages 6 to 10, describes the research and development activity during the year as well as outlining future 
planned developments. The product development pipeline is also shown on page 3 with a briefing on the Group’s technology. Details of the 
financial performance, including comments on the cash position and research and development expenditure, are given in the Financial Review 
section on page 11. The Group’s key performance indicators are the cash position in relation to cash flow, the expenditure on research and 
development activities and the development milestones reached, together with the signing of research collaborations and licences to bring 
in both development partners and revenues. 
Health, safety and environment
The Directors are committed to ensuring the highest standards of health and safety, both for their employees and for the communities within 
which the Group operates. The Directors are also committed to minimising the impact of the Group’s operations on the environment; for example, 
the Group has implemented paper recycling at its head office.
Employees
The Directors are committed to continuing involvement and communication with employees on matters affecting both the employees and 
the Company. Management conducts regular all employee site meetings.
Subsequent events
A description of subsequent events is set out in Note 27 to the Financial Statements.
Results and dividends
The Group recorded a loss for the year before taxation of £8,795,274 (2009: £7,508,311). Further details are given in the preceding Financial Review. 
The Group is not yet in a position to pay a dividend (2009: £nil) and the loss for both periods has been added to the retained loss.
Financial and non-financial Key Performance Indicators (KPIs)
The Directors consider cash and research and development spend to be the Group’s financial KPIs at the current stage of the Company’s 
development. These are detailed in the Financial Review on page 11. The Directors consider that the most important non-financial KPIs relate 
to the number of drugs in development by stage of development and the number of pharmaceutical collaborations, both of which are detailed 
in the Chief Executive’s Review on pages 6 to 10.
Directors
The Directors who served at any time during the year were:
Chairman
J A P Randall   (appointed 27 February 2010) 
I G Ross    (resigned 27 February 2010)
Executive Directors
P Haworth   (appointed 5 January 2010) 
M Herrmann   (appointed 14 May 2010) 
J M Davies   (resigned 27 February 2010)
Non-executive Directors
J L Curnock Cook   (resigned 5 January 2010) 
A Clancy 
D Mack    (appointed 5 January 2010) 
H R P Reynolds   (resigned 5 January 2010) 
D C U’Prichard 
J Topper    (appointed 5 January 2010) 
B O Wetzel   (resigned 5 January 2010)
The interests of the Directors in the share options of the Company are set out in Note 19 to the Financial Statements. 
Directors’ report Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
15
Review of the year Corporate governance Financial statements
Substantial interests
At 31 December 2010 the Company had been informed of the following substantial interests of over 3% in the issued share capital of the Company:
            Percentage  
           Number  of share 
           issued capital
Frazier Healthcare Ventures         27,265,465 9.74
ACP Capital          25,356,422 9.06
Fidelity Investments          17,451,109 6.23
Lilly Ventures          16,747,951 5.98
Gartmore Investment Ltd         10,014,443 3.58
Neue Bank, Vaduz          9,873,270 3.53
Corporate governance
The Board meets regularly and has ultimate responsibility for the management of the Group, and sub-committees, comprising  
Non-executive Directors, meet as and when required to deal with Remuneration and Audit matters.
Committee structure
Remuneration Committee   A Clancy (Chair), J A P Randall, D C U’Prichard, D Mack and J Topper
Audit Committee    J A P Randall (Chair) and D C U’Prichard
Nominations and Governance Committee D C U’Prichard (Chair), A Clancy and D Mack
Remuneration Committee
The Group has established a Remuneration Committee comprising of five Non-executive Directors to determine and review the emolument 
packages of the Directors of both the parent and subsidiary companies. The Committee meets at least twice a year and is responsible for setting 
the Group’s overall policy on executive remuneration and employment conditions, including setting the specific remuneration, benefits and terms 
of employment for each Executive Director.
The Board of Directors has considered the Remuneration Committee’s proposals in respect of the remuneration of the Directors and 
senior executives and has accepted them without substantial revision.
Audit Committee
The Board seeks to present a balanced and understandable assessment of the Group’s position and prospects in all interim, final and 
price-sensitive reports and information required to be presented by statute.
The Audit Committee comprises two Non-executive Directors and its terms of reference include keeping under review the scope and results 
of the external audit and its cost effectiveness. The Committee reviews the independence and objectivity of the external auditor, KPMG Audit Plc, 
including the nature and extent of any non-audit services supplied by them to the Group. 
Nominations and Governance Committee
The Nominations and Corporate Governance Committee is chaired by Dr D C U’Prichard. A Clancy and D Mack are also members of 
the committee. The Committee recommends to the Board appointment of new Directors, having applied objective criteria in making any 
nomination, to ensure the Board has a balance of relevant skills and experience. It also evaluates the structure, size and composition 
of the Board and recommends any changes to the membership of the Board it considers appropriate and assesses the independence 
of Non-executive Directors. The Nominations Committee met once during the year and the meeting was fully attended.
Shareholder communications
The Company uses its corporate website (www.silence-therapeutics.com) to ensure that the latest announcements, press releases and 
published financial information are available to all shareholders and other interested parties.
The AGM is used to communicate with both institutional shareholders and private investors and all shareholders are encouraged to participate. 
Separate resolutions are proposed on each issue so that they can be given proper consideration and there is a resolution to approve the 
Annual Report and Accounts. The Company counts all proxy votes and will indicate the level of proxies lodged on each resolution after it has 
been dealt with by a show of hands.
Compliance with BIA code
The Group was a member of the BioIndustry Association (BIA) during 2010 and complied with the BIA code of best practice throughout the year. 
The BIA code consists of principles and provisions relating to corporate governance, access to external advice, release of sensitive information 
and public announcements concerning the Group’s products and technology. The Code, which is obligatory for members of the BIA, is designed 
to operate with reference to the particular circumstances of biotechnology companies. Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
16
Directors’ report continued
Disclosure of information to auditor
The Directors who held office at the date of approval of this Directors’ report confirm that, so far as they are each aware, there is no relevant audit 
information of which the Company’s auditor is unaware and each Director has taken all the steps that he/she ought to have taken as a Director to 
make himself/herself aware of any relevant audit information and to establish that the Company’s auditor is aware of that information. 
Auditor
In accordance with Section 489 of the Companies Act 2006, a resolution for the re-appointment of KPMG Audit Plc as auditor of the Company 
is to be proposed at the forthcoming Annual General Meeting. 
Directors’ responsibilities for the Financial Statements
The Directors are responsible for preparing the Annual Report and Financial Statements in accordance with applicable law and regulations. 
Company law requires the Directors to prepare financial statements for each financial year. As required by the AIM Rules of the 
London Stock Exchange they are required to prepare the Group Financial Statements in accordance with IFRS as adopted by the  
EU (EU–IFRS) and applicable law and have elected to prepare the parent company Financial Statements on the same basis. 
Under company law the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of 
the state of affairs of the Group and parent company and of their profit or loss for that period. 
In preparing each of the Group and parent company financial statements, the Directors are required to:
 select suitable accounting policies and then apply them consistently;
 make judgements and estimates that are reasonable and prudent;
 state whether they have been prepared in accordance with IFRSs as adopted by the EU; and
  prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the parent company 
will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent company’s 
transactions and disclose with reasonable accuracy at any time the financial position of the parent company and enable them to ensure that 
its Financial Statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open 
to them to safeguard the assets of the Group and to prevent and detect 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 UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Risk factors
The Group’s principal activity is biotechnology research and development. As with any business in this sector, there are risks and uncertainties 
relevant to the Group’s business. Certain of these risk factors affect the majority of businesses, some are common to businesses in the biotechnology 
sector and others are more specific to the Group.
Risks common to most businesses
 Failure to maintain legal and regulatory compliance.
 New accounting standards causing a material adverse impact on reported financial results.
 Failure to balance product portfolio against market projections and demands.
 Increasing cost and decreasing availability of insurance.
 Lack of control over external economic factors affecting business.
 Unforeseen events which would be classified as force majeure, e.g. fire, flood, loss of utilities.
 Inability to access sufficient resources to trade as a going concern.
Risks applicable to the biotechnology sector and the Group
Clinical and regulatory risk
  The nature of pharmaceutical development is such that drug candidates may not be successful due to an inability to demonstrate in a timely manner 
the necessary safety and efficacy in a clinical setting to the satisfaction of appropriate regulatory bodies, such as the Food and Drug Administration 
(FDA) in the US and the European Medicines Agency (EMEA) in Europe. The Group will have limited control over the type and cost of trial 
required to obtain regulatory approval. 
  The Group will rely on third parties to conduct clinical trials. If these third parties do not successfully carry out their contractual duties or meet 
expected deadlines, the programmes of the Group may be delayed or the Group may not be able to obtain regulatory approval for its products. 
Any failure or delay of projects in development or clinical trials could have an adverse effect on the business. 
  With the prime focus of the Group being on such a new area of technology, there can be no assurance that the Group’s products will receive 
and maintain regulatory approval.  Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
17
Review of the year Corporate governance Financial statements
Risk factors continued
Risks applicable to the biotechnology sector and the Group continued
Product development risk
  The Group is involved at the leading edge of a revolutionary technology. Within the pharmaceutical sector more drugs fail in development 
than progress to market and there is no guarantee that the Group will be able to successfully develop this new technology or bring any of 
the drug candidates it is developing to market. Further, the drugs that the Group does bring to market may not be commercially successful.
  The Group has no track record of successful development and registration of any product and will need to acquire or gain access to relevant 
additional expertise.
  In order to progress the Group’s product development plans it may be desirable or necessary to find collaborators on certain projects. 
The Group cannot guarantee that it will be able to find and maintain suitable collaborators under acceptable terms or that, once found, 
such collaborators will devote sufficient resources to the collaboration to make it commercially successful. 
  The Group’s suppliers may encounter unexpected difficulties in the design and construction of manufacturing processes and the scale-up 
of production to viable commercial levels or may otherwise be unable to supply materials to the Group in a timely manner. 
  Competition for talented employees in the biotechnology sector may lead to increased costs or decreased availability of staff. As a result, 
the Group may be unable to recruit or retain certain important employees. This could weaken the Group’s scientific and management 
capabilities and could delay or halt the development of products and technologies. 
Competition risk
  RNAi technology is attracting increased interest and with that is increased competition. Competitors in the sector may have greater financial, 
human and other resources and more experience to develop competing products or technology.
  Many companies are trying to develop competing technologies and one or more of these may restrict the potential commercial success 
of the Group’s products or render them obsolete. 
 Increasing competition may also have an adverse effect on the timing or scale of commercialisation of the Group’s technology. 
Intellectual property risk
  Intellectual property issues from challenges by others or lack of protection for its own products may negatively impact the Group. Other companies 
may have or develop intellectual property that restricts the Group’s freedom of use or imposes high additional costs to obtain licenses.
  The Group may be unable to successfully establish and protect its intellectual property which is significant to the Group’s competitive position.
 The Group’s intellectual property may become invalid or expire before its products are successfully commercialised.
  The Group may be unable to successfully protect its competitive position through the establishment and enforcement of intellectual property; 
the lack of sufficient intellectual property protection for the Group’s technologies may have a material adverse effect on its commercial success. 
In particular, there can be no assurance that the Group’s patent and other intellectual property applications will be granted, or that its granted 
intellectual property (including any granted in future further to those applications) are or will be valid or of sufficiently broad scope to provide 
commercially meaningful protection against third party competition. The Group’s competitors may also have, or acquire in future, substantially 
equivalent technologies to those on which the Group does or will depend, or otherwise design around the Group’s intellectual property.
  Other companies may have or acquire intellectual property that restricts the Group’s freedom to operate or imposes high additional costs 
for the Group in obtaining licences, and there can be no assurance that the Group will be able to design around such intellectual property 
or obtain relevant licences on commercially acceptable terms, if at all.
  The Group may incur substantial costs in enforcing its intellectual property, and in bringing and prosecuting opposition or interference 
actions to seek to prevent third parties from obtaining patent or other protection. The Group may incur substantial costs in defending 
against such actions. There can be no guarantee that such actions will be successful for the Group.
  The patent landscape in the field of RNAi is complex, and the Group is aware of the issuance and the pendency of patents and patent 
applications in Europe, the US and in other jurisdictions that are owned by third parties and that purport to cover structurally defined classes 
of siRNAs and their uses. This patent landscape is in flux, with ongoing oppositions, litigations, and continuing prosecution before patent 
offices around the world, and the Directors cannot be certain that siRNA claims issued to third parties to date or in the future will not restrict 
the Group’s freedom to operate.
  In addition, there are many issued and pending patents that claim various aspects of oligonucleotide chemistry that the Directors may need 
to apply to the Group’s siRNA drug candidates. There are also many issued patents that claim genes or portions of genes that may be relevant 
for siRNA drugs we wish to develop. There are further many issued and pending patents that claim various aspects of nucleic acid delivery 
systems that the Directors may need to license in order to deliver the Group’s siRNA drug candidates topically or systemically to the appropriate 
target tissues. Thus, it is possible that one or more third parties may hold, or later will hold, patent rights to which the Group will need a license. 
If those parties refuse to grant the Group a license to such patent rights on reasonable terms, the Group may not be able to perform research 
with or market products covered by these patents.
  The Group also relies on trade secrets, know-how and technology, which are not protected by patents, to maintain its competitive position. 
If any trade secret, know-how or other technology not protected by a patent were to be disclosed to or independently developed by a competitor, 
the Group’s business and financial condition could be materially adversely affected. Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
18
Risk factors continued
Risks applicable to the biotechnology sector and the Group continued
Retention of key personnel
The Group’s success is largely dependent on the personal efforts and abilities of the Group’s existing senior management. The loss of key 
employees or advisers or the inability to attract or retain other qualified employees or advisers could have a material adverse effect on the 
Group’s results, operations and financial condition.
Financial risk
 There are very high costs of product development, where products have lead times to market of many years.
  The lack of a substantial recurrent revenue stream and the significant resources needed for ongoing investment in its R&D pipeline require the 
Group to gain access to additional funding from licensing, capital markets or elsewhere. There can be no assurances that such funding will 
be achieved on favourable terms, if at all. 
  Additional funding will be required to give the Group time to reach profitability. If the Group is unable to raise those funds, there may be 
insufficient finance for product development or operations and consequent delay, reduction or elimination of development programmes 
could result. 
  The Group has a small portfolio of products. Success or failure with individual products could have a significant impact on the share price. 
This in turn may make it difficult for the Group to continue funding its development programme. 
 The Group may be unable to secure adequate insurance at an acceptable cost.
  The Group has operations in the UK, Germany and the US and, therefore, the Group will be exposed to risks associated with foreign currency 
exchange rates and fluctuation therein.
This list should not be considered an exhaustive statement of all potential risks and uncertainties.
Going concern
The Financial Statements have been prepared on a going concern basis that assumes that the Group will continue in operational existence 
for the foreseeable future.
During the year ended 31 December 2010, the Group’s net cash outflow was £10.55m and at 31 December 2010 the Group had cash balances 
of £3.57m. Since the year end, the Group has continued to progress its research and development programmes, resulting in a net cash outflow of 
£0.91m, and at 31 March 2011 the Group’s cash balances stood at £2.66m. The Group’s cash flow forecasts, based on current levels of research 
and development expenditure, administrative costs and contracted cash inflows, show that the Group will require additional funding by Q3 2011. 
The Group does not have any overdraft or loan facilities.
The Group plans to raise £5.5m before expenses by placing shares with existing and new investors. In addition, it plans to raise up to a further 
£1.0m before expenses through an open offer. On 26 April 2011, commitments were received from certain investors to participate in the placing 
for an aggregate amount of £5.5m which has been fully underwritten by Singer Capital Markets Limited. Shareholder approval is needed for 
the placing and open offer and the Directors are confident this will be received. The Directors believe that existing cash resources together with the 
expected proceeds arising from the placing and open offer will provide sufficient funds for the Group to continue its research & development 
programme and to remain in operation for at least twelve months from the date of approval of these accounts.
In the event that the fundraising is not approved by the Company’s shareholders, the Group will be reliant on obtaining further funds through 
grants, and milestone and licence fee payments from either existing or new agreements or from other finance sources. There is no guarantee 
that sufficient cash would be generated from these sources to enable the Group to continue to progress its research and development programme.
The outcome of the shareholder vote with respect to the placing and open offer is a material uncertainty that may cast significant doubt on the 
Group’s and the Company’s ability to continue as a going concern. The Group and Company may therefore be unable to continue realising its 
assets and discharging its liabilities in the normal course of business. The Financial Statements do not include any adjustments that might 
result were the basis of preparation inappropriate.
Political and charitable donations
The Group made no political or charitable donations during 2010 (2009: £nil). 
Payment of creditors
It is the Group’s policy to make payments to creditors in accordance with individually agreed terms, generally within 30 days either of the 
invoice date or from the end of the month the invoice was received. Using the method set out in the Companies Act, the ratio for the Group 
of trade creditors at the year end to total costs was 22 days (2009: 45 days).
ON BEHALF OF THE BOARD
Jerry Randall
Chairman 
26 April 2011
Directors’ report continued Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
19
Review of the year Corporate governance Financial statements
We have audited the Financial Statements of Silence Therapeutics plc for the year ended 31 December 2010. The financial reporting framework 
that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the EU and, 
as regards the parent company Financial Statements, as applied in accordance with the provisions of the Companies Act 2006.
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. 
Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them 
in an auditor’s report and for no other purpose. T o the fullest extent permitted by law, we do not accept or assume responsibility to anyone 
other than the Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditor
As explained more fully in the Directors’ Responsibilities Statement set out on page 16, the Directors are responsible for the preparation 
of the Financial Statements and for being satisfied that they give a true and fair view. Our responsibility is to audit, and express an opinion on, 
the Financial Statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require 
us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of Financial Statements is provided on the APB’s website at www.frc.org.uk/apb/scope/UKNP .
Opinion on financial statements
In our opinion:
  the Financial Statements give a true and fair view of the state of the Group’s and of the parent company’s affairs as at 31 December 2010 
and of the Group’s loss for the year then ended;
  the Group Financial Statements have been properly prepared in accordance with IFRSs as adopted by the EU;
   the parent company Financial Statements have been properly prepared in accordance with IFRSs as adopted by the EU and as applied 
in accordance with the provisions of the Companies Act 2006; and
 the Financial Statements have been prepared in accordance with the requirements of the Companies Act 2006.
Emphasis of matter – going concern
In forming our opinion on the Financial Statements, which is not modified, we have considered the adequacy of the disclosure made in Note 2.3 
to the Financial Statements concerning the Group’s and the parent company’s ability to continue as a going concern. In particular, the receipt 
of shareholder approval for the placing and open offer represents a material uncertainty that may cast significant doubt on the Group’s and 
the parent company’s ability to continue as a going concern. The Financial Statements do not include the adjustments that would result if the 
Group and the parent company were unable to continue as a going concern.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors’ report for the financial year for which the Financial Statements are prepared is consistent 
with the Financial Statements. 
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
  adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from 
branches not visited by us; or
 the parent company Financial Statements are not in agreement with the accounting records and returns; or
 certain disclosures of Directors’ remuneration specified by law are not made; or
 we have not received all the information and explanations we require for our audit.
Richard Broadbelt
Senior Statutory Auditor
For and on behalf of KPMG Audit Plc, Statutory Auditor
Chartered Accountants
15 Canada Square
London E14 5GL
26 April 2011
Independent auditor’s report
to the members of Silence Therapeutics plc Silence Therapeutics plc Annual report and accounts 2010
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20
Consolidated income statement
year ended 31 December 2010
           2010 2009 
          Notes £ £
Revenue         3 2,365,877 1,723,289
Research and development costs        (5,821,212) (5,073,333)
Gross loss          (3,455,335) (3,350,044)
Administrative expenses         (5,202,938) (4,204,371)
Operating loss         5, 6 (8,658,273) (7,554,415)
Finance income         7 95,343 46,104
Finance expense          (63,295) —
Loss on sale of assets         (169,049) —
Loss before taxation          (8,795,274) (7,508,311)
Taxation           8 — 37,714
Loss for the year attributable to owners of the parent company      (8,795,274) (7,470,597)
Loss per share (basic and diluted)       9 (3.16)p (5.55)p
The accompanying accounting policies and notes form an integral part of these Financial Statements. Silence Therapeutics plc Annual report and accounts 2010
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Review of the year Corporate governance Financial statements
           2010 2009 
           £ £
Loss for the year after taxation         (8,795,274) (7,470,597)
Other comprehensive income:
 – exchange differences arising on consolidation of foreign operations     151,696 (410,482)
Total comprehensive income for the year attributable to owners of the parent company   (8,643,578) (7,881,079)
The accompanying accounting policies and notes form an integral part of these Financial Statements.
Consolidated statement of comprehensive income
year ended 31 December 2010 Silence Therapeutics plc Annual report and accounts 2010
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           2010 2009 
          Notes £ £
Non-current assets
Property, plant and equipment        11 287,613 376,676
Goodwill          12 28,346,276 8,130,972
Other intangible assets        13 945,391 736,117
           29,579,280 9,243,765
Current assets
Inventory           27,438 —
Trade and other receivables        15 782,596 560,190
Current tax assets          — 59,198
Cash and cash equivalents        16 3,566,877 1,131,146
           4,376,911 1,750,534
Current liabilities
Trade and other payables        17 1,686,516 2,103,144
           1,686,516 2,103,144
Total assets less current liabilities        32,269,675 8,891,155
Net assets          32,269,675 8,891,155
Equity
Share capital         19 2,798,915 1,350,334
Capital reserves         20 80,269,278 49,810,071
Translation reserve          3,032,703 2,881,007
Retained loss          (53,831,221) (45,150,257)
Total equity          32,269,675 8,891,155
The Financial Statements were approved by the Board of Directors on 26 April 2011.
Max Herrmann  Company number
Chief Financial Officer  02992058
The accompanying accounting policies and notes form an integral part of these Financial Statements.
Consolidated balance sheet
at 31 December 2010 Silence Therapeutics plc Annual report and accounts 2010
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Review of the year Corporate governance Financial statements
        Share Capital Translation Retained Total 
        capital reserves reserve loss equity 
        £ £ £ £ £
At 1 January 2009       1,199,134 47,010,414 3,291,489 (38,057,057) 13,443,980
Recognition of share-based payments     — 661,704 — — 661,704
Transfer upon:
 – exercise of options in year      — (4,514) — 4,514 —
 – lapse of vested options in year      — (372,883) — 372,883 —
Shares issued in the year      151,200 2,515,350 — — 2,666,550
Transactions with owners      151,200 2,799,657 — 377,397 3,328,254
Loss for the period       — — — (7,470,597) (7,470,597)
Other comprehensive income
Exchange differences arising on consolidation of foreign operations   — — (410,482) — (410,482)
Total comprehensive income for the year attributable to owners  
of the parent company      — — (410,482) (7,470,597) (7,881,079)
At 31 December 2009      1,350,334 49,810,071 2,881,007 (45,150,257) 8,891,155
Recognition of share-based payments     — 760,053 — — 760,053
Transfer upon:
 – exercise of options in year      — — — — —
 – lapse of vested options in year      — (2,477) — 2,477 —
 – lapse of vested warrants in year      — (111,833) — 111,833 —
Shares issued in the year      1,448,581 29,813,464 — — 31,262,045
Transactions with owners      1,448,581 30,459,207 — 114,310 32,022,098
Loss for the period       — — — (8,795,274) (8,795,274)
Other comprehensive income
Exchange differences arising on consolidation of foreign operations   — — 151,696 — 151,696
Total comprehensive income for the year attributable to owners  
of the parent company      — — 151,696 (8,795,274) (8,643,578)
At 31 December 2010      2,798,915 80,269,278 3,032,703 (53,831,221) 32,269,675
Consolidated statement of changes in equity
year ended 31 December 2010 Silence Therapeutics plc Annual report and accounts 2010
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           2010 2009 
          Notes £ £
Non-current assets
Investment in subsidiary undertakings       14 50,615,307 23,494,482
Current assets
Trade and other receivables        15 46,024 91,236
Cash and cash equivalents        16 2,283,300 358,256
           2,329,324 449,492
Current liabilities
Trade and other payables        17 249,846 1,185,705
           249,846 1,185,705
Total assets less current liabilities        52,694,785 22,758,269
Net assets          52,694,785 22,758,269
Equity
Share capital         19 2,798,915 1,350,334
Capital reserves         20 80,085,362 49,626,155
Retained loss          (30,189,492) (28,218,220)
Total equity          52,694,785 22,758,269
The Financial Statements were approved by the Board of Directors on 26 April 2011.
Max Herrmann  Company number
Chief Financial Officer  02992058
The accompanying accounting policies and notes form an integral part of these Financial Statements.
Company balance sheet
year ended 31 December 2010 Silence Therapeutics plc Annual report and accounts 2010
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Review of the year Corporate governance Financial statements
         Share Capital Retained Total 
         capital reserves loss equity 
         £ £ £ £
At 1 January 2009        1,199,134 46,826,498 (26,275,207) 21,750,425
Loss for the period        — — (2,313,382) (2,313,382)
Recognition of share-based payments      — 661,704 — 661,704
Transfer upon:
 – exercise of options in year       — (4,514) — (4,514)
 – lapse of vested options in year       — (372,883) 370,369 (2,514)
Shares issued in the year       151,200 2,515,350 — 2,666,550
Movement in the year       151,200 2,799,657 (1,943,013) 1,007,844
At 31 December 2009       1,350,334 49,626,155 (28,218,220) 22,758,269
Loss for the period        — — (2,083,105) (2,083,105)
Recognition of share-based payments       — 760,053 — 760,053
Transfer upon:
 – exercise of options in year       — — — —
 – lapse of vested options in year       — (2,477) — (2,477)
 – lapse of vested warrants in year      — (111,833) 111,833 —
Shares issued in the year       1,448,581 29,813,464 — 31,262,045
Movement in the year       1,448,581 30,459,207 (1,971,272) 29,936,516
At 31 December 2010       2,798,915 80,085,362 (30,189,492) 52,694,785
Company statement of changes in equity
year ended 31 December 2010 Silence Therapeutics plc Annual report and accounts 2010
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        Group  Company
         2010 2009 2010 2009 
         £ £ £ £
Cash flow from operating activities
Loss before taxation       (8,795,274) (7,508,311) (2,083,105) (2,313,382)
Adjustments for:
 – depreciation charges       141,689 150,293 — —
 – amortisation charges       181,604 220,658 — —
 – loss on sale of property, plant and equipment     169,049 19,577 — —
 – charge for the year in respect of share-based payments     659,018 661,704 267,447 318,027
 – other non-cash flow movements      — 198,717 — —
 – reduction in impairment provision against loan to subsidiary    — — (152,337) (140,667)
 – finance income        (95,343) (46,104) (124,866) (43,971)
 – finance expense        63,295 — — —
         (7,675,962) (6,303,466) (2,092,861) (2,179,993)
(Increase)/decrease in trade and other receivables     (43,948) 438,512 45,213 (25,489)
Increase in inventory        (27,438) — — —
(Decrease)/increase in trade and other payables     (2,819,261) 1,168,543 (935,859) 1,038,931
Cash (absorbed) by operations       (10,566,609) (4,696,411) (2,983,507) (1,166,551)
Taxation received        59,198 48,516 — —
Interest paid        (44,302) — — —
Net cash outflow from operating activities     (10,551,713) (4,647,895) (2,983,507) (1,166,551)
Cash flow from investing activities
Acquisition of business        746,108 — — —
Proceeds from sale of property, plant and equipment     66,407 — — —
Investment in subsidiary undertakings      — — (5,554,405) (3,409,986)
(Increase)/reduction in loans to subsidiary undertakings     — — (4,020,223) 310,084
Interest received        37,565 46,104 124,866 43,971
Additions to property, plant and equipment      (31,539) (36,648) — —
Additions to intangible assets       (259,980) (188,494) — —
Net cash generated from/(used in) investing activities     558,561 (179,038) (9,449,762) (3,055,931)
Cash flow from financing activities
Proceeds from issue of share capital      14,358,313 2,666,550 14,358,313 2,666,550
Repayment of notes payable       (1,940,492) — — —
Net cash generated from financing activities     12,417,821 — 14,358,313 —
Increase/(decrease) in cash and cash equivalents     2,424,669 (2,160,383) 1,925,044 (1,555,932)
Cash and cash equivalents at start of year     1,131,146 3,350,187 358,256 1,914,188
Net increase/(decrease) in the year      2,424,669 (2,160,383) 1,925,044 (1,555,932)
Effect of exchange rate fluctuations on cash held     11,062 (58,658) — —
Cash and cash equivalents at end of year      3,566,877 1,131,146 2,283,300 358,256
Cash flow statements
year ended 31 December 2010 Silence Therapeutics plc Annual report and accounts 2010
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Review of the year Corporate governance Financial statements
       Group  Company
         2010 2009 2010 2009 
         £ £ £ £
Cash and cash equivalents includes:
 – instant access bank accounts       3,566,877 1,131,146 2,283,300 358,256
Supplementary disclosure of non-cash items:
 – issuance of share capital for merger acquisition     — — 16,903,732 —
 –  share-based compensation issued as partial consideration for merger acquisition   — — 101,035 —
 –  investment in subsidiary undertakings through issuance of share-based compensation  — — 391,571 —
 – reduction in investment through lapse of vested options     — — 2,477 —
The accompanying accounting policies and notes form an integral part of these Financial Statements.
Cash flow statements continued
year ended 31 December 2010 Silence Therapeutics plc Annual report and accounts 2010
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1. General information
1.1 Group
Silence Therapeutics plc (Silence Therapeutics or the Company) and its subsidiaries (together the Group) are primarily involved in the 
research and development of novel pharmaceutical products. Silence, a public limited company incorporated and domiciled in England, 
is the Group’s ultimate parent company. The address of Silence’s registered office is 22 Melton Street, London NW1 2EP and the principal place 
of business is The Royal Institution of Great Britain, 21 Albemarle Street, London W1S 4BS.
1.2 Company income statement
The Company has taken advantage of Section 408 of the Companies Act 2006 and has not included its own profit and loss account in these 
Financial Statements. The loss for the financial year dealt with in the accounts of the Company, including provision against the loans to and 
investments in subsidiary companies, amounted to £2,083,105 (2009: £2,313,382).
2. Principal accounting policies
2.1 Basis of preparation
Both the parent company and the Group Financial Statements have been prepared in accordance with the Companies Act 2006 and 
International Financial Reporting Standards (IFRSs) as adopted by the EU under the historical cost convention. The accounting policies 
set out below have, unless otherwise stated, been applied consistently to all periods presented in these consolidated Financial Statements. 
The accounts are prepared in Pounds Sterling and presented to the nearest pound.
The Group has not adopted the following new IFRS and International Accounting Standards (IAS) that have been issued but are not yet effective:
            Effective from
IFRS 9       Financial Instruments    1 January 2013*
IAS 24 (revised 2010)     Related Party Disclosures    1 January 2011
IFRIC 14 (amendment to)      Prepayments of a Minimum Funding Requirement  1 January 2011
* Not yet endorsed by the European Union.
None of these are expected to have a significant impact on the Financial Statements.
The following standards, amendments and interpretations have been applied for the first time in the year under review:
  IFRS 3 (revised) “Business Combinations and Consequential Amendments to IAS 27”, “Consolidated and Separate Financial Statements” 
have been applied for the acquisition of Intradigm Corporation;
  IFRS 2 (amendment) “Share-based Payment”. IFRS 2 (amendment) deals with vesting conditions and cancellations. The amendment does 
not have a material impact on the Group’s Financial Statements;
  IAS 20 (amendment) “Government Grants and Disclosure of Government Assistance”. The amendment does not have a material impact 
on the Group’s Financial Statements; and
  IAS 32 (amendment) “Classification of Rights Issues”. The amendment does not have a material impact on the Group’s Financial Statements.
There are no other new standards likely to have an effect on the Financial Statements for the year ending 31 December 2010. Adoption of the 
above amendments has not had a significant impact on the Financial Statements. The impact of the adoption of IFRS 3 (revised) has been 
detailed in Note 2.4.
The principal accounting policies adopted are set out below.
2.2 Basis of consolidation
The Group Financial Statements consolidate those of the Company and its controlled subsidiary undertakings drawn up to 31 December 2010. 
Control is achieved where the Company has the power to govern the financial and operating policies of the entity so as to obtain benefits from 
its activities. The parent company Financial Statements present information about the Company as a separate entity and not about its Group.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date 
of acquisition or up to the effective date of disposal.
Where necessary, adjustments are made to the Financial Statements of subsidiaries to bring accounting policies into line with those used for 
reporting the operations of the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation. 
Notes to the financial statements
year ended 31 December 2010 Silence Therapeutics plc Annual report and accounts 2010
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Review of the year Corporate governance Financial statements
2. Principal accounting policies continued
2.3 Going concern
The Financial Statements have been prepared on a going concern basis that assumes that the Group will continue in operational existence 
for the foreseeable future.
During the year ended 31 December 2010, the Group’s net cash outflow was £10.55m and at 31 December 2010 the Group had cash balances 
of £3.57m. Since the year end, the Group has continued to progress its research and development programmes, resulting in a net cash outflow of 
£0.91m, and at 31 March 2011 the Group’s cash balances stood at £2.66m. The Group’s cash flow forecasts, based on current levels of research 
and development expenditure, administrative costs and contracted cash inflows, show that the Group will require additional funding by Q3 2011. 
The Group does not have any overdraft or loan facilities.
The Group plans to raise £5.5m before expenses by placing shares with existing and new investors. In addition, it plans to raise up to a further 
£1.0m before expenses through an open offer. On 26 April 2011, commitments were received from certain investors to participate in the placing 
for an aggregate amount of £5.5m which has been fully underwritten by Singer Capital Markets Limited. Shareholder approval is needed for 
the placing and open offer and the Directors are confident this will be received. The Directors believe that existing cash resources together with the 
expected proceeds arising from the placing and open offer will provide sufficient funds for the Group to continue its research & development 
programme and to remain in operation for at least twelve months from the date of approval of these accounts.
In the event that the fundraising is not approved by the Company’s shareholders, the Group will be reliant on obtaining further funds through grants, 
and milestone and licence fee payments from either existing or new agreements or from other finance sources. There is no guarantee that sufficient 
cash would be generated from these sources to enable the Group to continue to progress its research and development programme.
The outcome of the shareholder vote with respect to the placing and open offer is a material uncertainty that may cast significant doubt 
on the Group’s and the Company’s ability to continue as a going concern. The Group and Company may therefore be unable to continue 
realising its assets and discharging its liabilities in the normal course of business. The Financial Statements do not include any adjustments 
that might result were the basis of preparation inappropriate.
2.4 Business combinations
Business combinations which occurred in 2010 are accounted for by applying the acquisition method described in IFRS 3 (revised) as at 
the acquisition date, which is the date on which control is transferred to the Group. In arriving at the cost of acquisition, the fair value of the 
shares issued by the Company is taken to be the bid price of those shares at the date of the issue. Where this figure exceeds the nominal 
value of the shares, the excess amount is treated as an addition to the merger reserve. 
Acquisitions on or after 1 January 2010
For acquisitions on or after 1 January 2010, the Group measures goodwill at the acquisition date as:
 the fair value of the consideration transferred; plus 
 the recognised amount of any non-controlling interests in the acquiree; plus
 the fair value of the existing equity interest in the acquiree; less
 the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, are expensed as incurred.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, 
it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration 
are recognised in profit or loss.
On a transaction-by-transaction basis, the Group elects to measure non-controlling interests either at their fair value or at their proportionate 
interest in the recognised amount of the identifiable net assets of the acquiree at the acquisition date.
Acquisitions before 1 January 2010
For acquisitions which occurred before 1 January 2010, goodwill represents the excess of the cost of the acquisition over the Group’s interest 
in the recognised amount (generally fair value) of the identifiable assets, liabilities and contingent liabilities of the acquiree. When the excess 
was negative, a bargain purchase gain was recognised immediately in profit or loss.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurred in connection with business 
combinations were capitalised as part of the cost of the acquisition. Silence Therapeutics plc Annual report and accounts 2010
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2. Principal accounting policies continued
2.5 Goodwill and other intangible assets
Goodwill
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortised but 
is tested annually for impairment. 
Goodwill arising on the acquisition of a subsidiary represents the excess of the cost of acquisition over the Group’s interest in the net fair value 
of the identifiable assets, liabilities and contingent liabilities of the subsidiary at the date of acquisition. Goodwill is initially recognised as an asset 
at cost and is subsequently measured at cost less any accumulated impairment losses. On disposal of a subsidiary, the attributable amount 
of goodwill is included in the determination of the profit or loss on disposal.
Other intangible assets
Expenditure on internally generated goodwill and brands is recognised in the income statement as an expense as incurred.
Other intangible assets that are acquired by the Group are stated at fair value less accumulated amortisation and less accumulated 
impairment losses.
Amortisation
Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of intangible assets unless such lives 
are indefinite. Intangible assets with an indefinite useful life and goodwill are systematically tested for impairment at each balance sheet date. 
Other intangible assets are amortised from the date they are available for use. The estimated useful lives are as follows:
 patents and trademarks  10–15 years
2.6 Research and development
Expenditure on research activities is recognised in the income statement as an expense as incurred.
2.7 Revenue recognition
The Group’s income consists of licence fees, milestone and option payments, grant income and fees from research and development 
collaborations. Income is measured at the fair value of the consideration received or receivable.
Licence fees, option and milestone payments are recognised in full on the date that they are contractually receivable in those circumstances where:
 the amounts are not time related; 
 the amounts are not refundable;
 the licensee has unrestricted rights to exploit the technology within the terms set by the licence; and
 the Group has no further contractual duty to perform any future services. 
Where such fees or receipts require future performance or financial commitments on behalf of the Group, the revenue is recognised pro rata 
to the services or commitments being performed. Funds received that have not been recognised are treated as deferred revenue and recognised 
in trade and other payables.
Revenues from work or other research and testing carried out for third parties are recognised when the work to which they relate has been performed.
Government grants are dealt with as per Note 2.8 below.
All time related receipts in respect of annual licence fees or similar technology access fees are recognised as revenue on a straight-line basis 
over the period of the underlying contract.
2.8 Government grants
Government grants towards the cost of staff employed in research and development activities are recognised as revenue over the periods 
necessary to match them with the related costs. Grants amounting to £334,029 were recognised as revenue in the year ended 31 December 2010 
(2009: £527,129).
Government grants towards the cost of plant and equipment are treated as a reduction in the cost of the asset to which they relate. There were 
no such grants for the year ended 31 December 2010 (2009: £nil).
There were no unfulfilled conditions or contingencies attaching to these grants.
Notes to the financial statements continued
year ended 31 December 2010 Silence Therapeutics plc Annual report and accounts 2010
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Review of the year Corporate governance Financial statements
2. Principal accounting policies continued
2.9 Foreign currency translation
Silence’s consolidated Financial Statements are presented in Sterling (£), which is also the functional currency of the parent company. 
The individual Financial Statements of each Group entity are presented in the currency of the primary economic environment in which the 
entity operates (its functional currency).
In preparing the Financial Statements of the individual entities, transactions in currencies other than the entity’s functional currency (foreign currencies) 
are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary items denominated in 
foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated 
in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. 
Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the profit or loss 
for the period. When a gain or loss on a non-monetary item is recognised directly in equity, any exchange component of that gain or loss is also 
recognised directly in equity. When a gain or loss on a non-monetary item is recognised in profit or loss, any exchange component of that gain 
or loss is also recognised in profit or loss. 
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations (including comparatives) 
are expressed in Sterling using exchange rates prevailing on the balance sheet date. Income and expense items (including comparatives) are 
translated at the average exchange rates for the period. Exchange differences arising, if any, are recognised in equity. Cumulative translation 
differences are recognised in profit or loss in the period in which the foreign operation is disposed of.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation 
and translated at the closing rate.
2.10 Defined contribution pension funds
The Group pays contributions related to salary to certain UK employees’ individual pension schemes. The pension cost charged against profits 
represents the amount of the contributions payable to the schemes in respect of the accounting period. No separate provision is made in respect 
of non-UK employees.
2.11 Property, plant and equipment
The Group holds no property assets.
All plant and equipment is stated in the accounts at its cost of acquisition less a provision for depreciation.
Depreciation is charged to write off the cost less estimated residual values of plant and equipment on a straight-line basis over their estimated 
useful lives. All plant and equipment is estimated to have useful economic lives of between three and five years. Estimated useful economic lives 
and residual values are reviewed each year and amended if necessary.
2.12 Other intangible assets and research and development activities
Intellectual property rights
Other intangible assets include both acquired and internally developed intellectual property used in research and operations. These assets 
are stated at cost less amortisation. 
Acquired intellectual property rights are capitalised on the basis of the costs incurred to acquire the specific rights.
Internally generated intellectual property rights are recognised as intangible assets, stated at cost incurred to establish and maintain those 
rights, and are subject to the same subsequent measurement method as externally acquired intellectual property. However, until completion 
of the development project, the assets are subject to impairment testing only as described below. Amortisation commences upon completion 
of the asset. Costs capitalised relate to patent prosecution expenses paid to third parties.
Amortisation is applied to write off the cost less residual value of the intangible assets on a straight-line basis over their estimated useful life. 
The principal rates used are 6.7% and 10.0% per annum. Amortisation is included within research and development costs. Silence Therapeutics plc Annual report and accounts 2010
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2. Principal accounting policies continued
2.12 Other intangible assets and research and development activities continued
Capitalisation of research and development costs
Costs associated with research activities are treated as an expense in the period in which they are incurred.
Costs that are directly attributable to the development phase of an internal project will only be recognised as intangible assets provided they 
meet the following requirements:
 an asset is created that can be separately identified;
  the technical feasibility exists to complete the intangible asset so that it will be available-for-sale or use and the Group has the intention 
and ability so to do;
 it is probable that the asset created will generate future economic benefits either through internal use or sale;
 sufficient technical, financial and other resources are available for completion of the asset; and
 the expenditure attributable to the intangible asset during its development can be reliably measured.
Careful judgement by the Group’s management is applied when deciding whether recognition requirements for development costs have 
been met. This is necessary as the economic success of any product development is uncertain and may be subject to future technical problems 
at the time of recognition. Judgements are based on the information available at each balance sheet date. 
T o date, no development costs have been capitalised in respect of the internal projects other than costs directly associated with arising intellectual 
property rights on the grounds that the costs to date are either for the research phase of the projects or, if relating to the development phase, 
then the work so far does not meet the recognition criteria set out above. 
2.13 Impairment testing of goodwill, other intangible assets and property, plant and equipment
At each balance sheet date, the Group assesses whether there is any indication that the carrying value of any asset may be impaired. If any such 
indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is 
not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating 
unit to which the asset belongs.
In the case of goodwill and any intangible asset with either an indefinite useful life or which is not yet available for use, the Group tests for 
impairment at each balance sheet date.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows 
(cash-generating units). Goodwill is allocated to those cash-generating units that are expected to benefit from synergies of the related 
business combination and represent the lowest level within the Group at which management controls the related cash flows.
Individual assets or cash-generating units that include goodwill and other intangible assets with an indefinite useful life, or those not yet 
available for use, are tested for impairment at least annually. All other individual assets or cash-generating units are tested for impairment 
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount exceeds its recoverable 
amount. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell, and value in use, based on an 
internal discounted cash flow evaluation. Impairment losses recognised for cash-generating units to which goodwill has been allocated 
are credited initially to the carrying amount of goodwill. Any remaining impairment loss is charged pro rata to the other assets in the  
cash-generating unit. 
2.14 Investments in subsidiaries
Investments in subsidiaries comprise shares in the subsidiaries and loans from the Company. Investment in shares of the subsidiaries are 
stated at cost less provisions for impairment which recognition and subsequent measurement is at amortised cost. 
2.15 Financial instruments
Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group becomes a party to the contractual 
provisions of the instrument.
Financial assets can be divided into the following categories: loans and receivables; financial assets at fair value through profit or loss; 
available-for-sale financial assets; and held-to-maturity investments. Financial assets are assigned to the different categories by management 
on initial recognition, depending on the purpose for which the instruments were acquired. The designation of financial assets is re-evaluated 
at every reporting date at which a choice of classification or accounting treatment is available.
De-recognition of financial instruments occurs when the rights to receive cash flows from investments expire or are transferred and substantially 
all of the risks and rewards of ownership have been transferred. An assessment for impairment is undertaken at least at each balance sheet 
date whether or not there is objective evidence that a financial asset or a group of financial assets is impaired.
Notes to the financial statements continued
year ended 31 December 2010 Silence Therapeutics plc Annual report and accounts 2010
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Review of the year Corporate governance Financial statements
2. Principal accounting policies continued
2.15 Financial instruments continued
Trade receivables
Trade receivables are measured at initial recognition at fair value plus, if appropriate, directly attributable transaction costs and are subsequently 
measured at amortised cost using the effective interest method. Appropriate allowances for estimated irrecoverable amounts are recognised 
in profit or loss when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the 
asset’s carrying amount and the present value of estimated future cash flows discounted at an effective interest rate computed at initial recognition.
Loans receivable
Loans receivable are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise 
when the Group or Company provides money directly to a debtor with no intention of trading the receivables. Loans receivable are measured 
at initial recognition at fair value plus, if appropriate, directly attributable transaction costs and are subsequently measured at amortised cost 
using the effective interest method, less provision for impairment. Any change in their value is recognised in profit or loss.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits that are readily convertible to a known amount of cash and are 
subject to an insignificant risk of change in value.
Financial liabilities and equity
Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements 
entered into and the definitions of a financial liability and an equity instrument. A financial liability is a contractual obligation to either deliver 
cash or another financial asset to another entity or to exchange a financial asset or financial liability with another entity, including obligations 
which may be settled by the Group using its equity instruments. An equity instrument is any contract that evidences a residual interest in the 
assets of the Group after deducting all of its liabilities. The accounting policies adopted for specific financial liabilities and equity instruments 
are set out below.
Financial liabilities
At initial recognition, financial liabilities are measured at their fair value plus, if appropriate, any transaction costs that are directly attributable 
to the issue of the financial liability. After initial recognition, all financial liabilities are measured at amortised cost using the effective interest method.
Equity instruments
Equity instruments issued by the Group are recorded at the proceeds received net of direct issue costs.
2.16 Operating leases
Leases where substantially all the risks and rewards of ownership remain with the lessor are accounted for as operating leases and are accounted 
for on a straight-line basis over the term of the lease and charged to the income statement.
2.17 Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable that the Group will be required 
to settle that obligation. Provisions are measured at the Directors’ best estimate of the expenditure required to settle the obligation at the balance 
sheet date and are discounted to present value where the effect is material. 
2.18 Share-based payments
The Group issues equity-settled share-based payments to certain employees and advisers. Equity-settled share-based payments are measured 
at fair value (excluding the effect of non market-based vesting conditions) at the date of grant. The fair value so determined is expensed on 
a straight-line basis over the vesting period, based on the Group’s estimate of the number of shares that will eventually vest and adjusted for 
the effect of non market-based vesting conditions. The value of the change is adjusted to reflect expected and actual levels of award vesting, 
except where failure to vest is as a result of not meeting a market condition. Cancellations of equity instruments are treated as an acceleration 
of the vesting period and any outstanding charge is recognised in full immediately. Fair value is measured using a binomial pricing model. 
The key assumptions used in the model have been adjusted, based on management’s best estimate, for the effects of non-transferability, 
exercise restrictions and behavioural considerations.
2.19 Equity 
Share capital is determined using the nominal value of shares that have been issued.
The share premium account includes any premiums received on the initial issuing of the share capital. Any transaction costs associated 
with the issuing of shares are deducted from the share premium account, net of any related income tax benefits.
The merger reserve represents the difference between the nominal value and the market value at the date of issue of shares issued 
in connection with the acquisition by the Group of an interest in over 90% of the share capital of another company.
Equity-settled share-based payments are credited to a share-based payment reserve as a component of equity until related options 
or warrants are exercised.
Foreign currency translation differences are included in the translation reserve.
Retained loss includes all current and prior period results as disclosed in the income statement. Silence Therapeutics plc Annual report and accounts 2010
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34
2. Principal accounting policies continued
2.20 Taxation
The tax credit recognised in the income statement represents the sum of the tax currently payable or receivable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the income statement because 
it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. 
The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Tax receivable arises from the UK legislation regarding the treatment of certain qualifying research and development costs, allowing for the 
surrender of tax losses attributable to such costs in return for a tax rebate.
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the Financial Statements and the corresponding 
tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are 
generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable 
profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the 
temporary difference arises from initial recognition of goodwill or from the initial recognition (other than in a business combination) of other 
assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests 
in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary 
difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that 
sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax 
is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also 
dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and 
when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on 
a net basis.
2.21 Critical accounting judgements and key sources of estimation uncertainty
In the process of applying the entity’s accounting policies, management makes estimates and assumptions that have an effect on the amounts 
recognised in the Financial Statements. Although these estimates are based on management’s best knowledge of current events and actions, 
actual results may ultimately differ from those estimates.
The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant 
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are those relating to: 
 the capitalisation or otherwise of development expenditure;
 the ability of the Group to operate as a going concern;
 the carrying value of the Company’s investment in its subsidiaries;
 the future recoverability of goodwill and other intangible assets; and 
 the corresponding review for impairment of those assets.
The Group expends considerable sums on its development projects, with its total research and development costs for 2010 amounting 
to £5,821,212 (2009: £5,073,333). The Board has decided not to capitalise any development costs to date as it would not be able to prove 
reliably that such costs could be recovered due to the risk factors involved. Therefore, all such costs have been treated as expenses as they 
were incurred. Any decision to treat part of those costs as capital items could have a significant impact on the Group’s results and balance sheet. 
As explained in Note 2.3 on page 29, the accounts are drawn up on the going concern basis which assumes that the Group will be able to access 
sufficient funds to continue to operate for the foreseeable future. If the accounts were to be drawn up on the basis that this assumption was not 
valid then there could be material changes to the carrying values of both assets and liabilities.
The Group’s main activities are carried out by subsidiary companies which are financed by ongoing investment by the parent company. 
These investments are carried in the books of the parent company at cost less provisions for impairment. The carrying value at 31 December 2010 
is £50,615,307 (2009: £23,494,482). The key assumptions concerning the carrying value of the investments in, and loans to, subsidiaries relate 
to the continuing progress of the research and development programmes. As noted below, there are a number of risks and uncertainties around 
those assumptions and the crystallisation of any of those risks could have a significant impact on the assessment of the carrying value of the 
investment shown in the accounts of the parent company.
Goodwill is carried in the accounts at a value of £28,346,276 at 31 December 2010 (2009: £8,130,972). The movement in the year primarily 
relates to the purchase of Intradigm Corporation.
Notes to the financial statements continued
year ended 31 December 2010 Silence Therapeutics plc Annual report and accounts 2010
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35
Review of the year Corporate governance Financial statements
2. Principal accounting policies continued
2.21 Critical accounting judgements and key sources of estimation uncertainty continued
Other intangible assets have a carrying value at 31 December 2010 of £945,391 (2009: £736,117) and details of the movement in the year, 
the capitalisation and amortisation policy and the basis of the impairment review are set out in Note 13.
The key assumptions concerning the carrying value, or otherwise, for both the goodwill and other intangible assets relate to the continuing progress 
of the Group’s research and development programmes, which are subject to risks common to all biotechnology businesses. These risks include 
the impact of competition in the specific areas of development, the potential failure of the projects in development or clinical trials and the possible 
inability to progress projects due to regulatory, manufacturing or intellectual property issues or the lack of available funds or other resources. 
Furthermore, the crystallisation of any of these risks could have a significant impact on the assessment of the value of both goodwill and other 
intangible assets.
3. Revenue
Revenue in the year was from licence, grant and service fees generated by both European and US operations. The analysis of revenues 
by geographical destination is:
           2010 2009 
           £ £
Europe           711,572 1,601,796
North America          655,513 —
Asia/Pacific          998,792 121,493
           2,365,877 1,723,289
Revenue is earned from milestones £407,628 (2009: £nil); license fees £1,624,220 (2009: £1,196,160); and grants £334,029 (2009: £527,129).
4. Segment reporting
For 2009 and 2010, the Group operated in two specific technology fields, that of RNAi therapeutics and immunotherapy. These activities were 
carried out in separate operating subsidiaries with certain centralised functions carried out at Group level. These are the three reporting areas 
used by the Board in its management of the entity and as such of the Group’s reportable segments.
Due to the nature of its licensing activities, the Group’s revenues in any one year often derive from a small number of customers that change 
year by year. During 2010, £998,792 (or 42% of Group revenues) arose from a single customer with £533,037 (23%) coming from a second 
customer. During 2009, the comparative figures for those two customers were £74,338 (4%) and £763,900 (44%), respectively.
In 2010, non-current assets situated in the US and Germany were £20,897,053 (2009: £nil) and £8,682,227 (2009: £9,242,488), respectively. 
There were no non-current assets situated in the UK in 2010 (2009: £1,277).
Segment profit used by the Board in its assessment of the entity is profit before tax. 
Business segments
         RNAi  Group Consolidated 
         Therapeutics Immunotherapy unallocated data 
2010         £ £ £ £
Revenue from external customers      2,365,877 — — 2,365,877
Operating loss        (6,318,992) (19,434) (2,319,847) (8,658,273)
Interest income        26,283 46,427 22,633 95,343
Interest expense        (61,231) (94) (1,970) (63,295)
Segment (loss)/profit for the year before taxation     (6,522,990) 26,899 (2,299,183) (8,795,274)
Segment assets        31,621,394 5,471 2,329,326 33,956,191
Segment liabilities        1,428,671 8,000 249,845 1,686,516
Costs to acquire property, plant and equipment     30,834 — — 30,834
Costs to acquire intangible assets      259,980 — — 259,980
Depreciation and amortisation       322,016 1,277 — 323,293
Income tax income        — — — —
Charge for non-cash expenses: share-based payments charge     391,571 — 267,447 659,018
Segment non-current assets       29,579,280 — — 29,579,280 Silence Therapeutics plc Annual report and accounts 2010
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36
4. Segment reporting continued
Business segments continued
         RNAi   Group Consolidated 
         Therapeutics Immunotherapy unallocated data 
2009         £ £ £ £
Revenue from external customers      1,422,289 301,000 — 1,723,289
Revenue from other operating segments      — — 246,373 246,373
Operating (loss)/profit       (5,278,476) 205,598 (2,481,537) (7,554,415)
Interest income        1,360 773 43,971 46,104
Segment (loss)/profit for the year before taxation     (5,277,116) 206,371 (2,437,566) (7,508,311)
Segment assets        10,397,568 161,103 435,631 10,994,302
Segment liabilities        1,525,419 40,670 537,055 2,103,144
Costs to acquire property, plant and equipment     36,648 — — 36,648
Costs to acquire intangible assets      188,494 — — 188,494
Depreciation and amortisation       367,977 2,974 — 370,951
Income tax income        — 37,714 — 37,714
Charge for non-cash expenses: share-based payments charge     343,677 — 318,027 661,704
Segment non-current assets        9,242,488 1,277 — 9,243,765
The operations, segment assets and liabilities of the RNAi Therapeutics segment are located in Germany and the US. The operations segment 
assets and liabilities of the remaining two segments are located in the UK. 
5. Operating loss 
This is stated after charging:
           2010 2009 
           £ £
Depreciation of property, plant and equipment       141,689 150,293
Amortisation of intangibles         181,604 220,658
Share-based payments charge         659,018 661,704
Auditor’s remuneration:
 – Group audit fee – KPMG Audit Plc        40,000 —
 – Group audit fee – Grant Thornton UK LLP        — 50,340
 – audit of subsidiaries pursuant to legislation        25,000 12,000
 – taxation          11,000 —
 – other services pursuant to legislation        2,500 —
Operating lease payments on offices        546,181 295,756
Fees payable to auditors other than the auditor of the Company amounted to £nil (2009: £22,017).
Taxation services consist of tax compliance services. No information on auditor remuneration in respect of the Company has been given 
as the Group accounts are required to give on a Group basis the disclosures required by regulation.
6. Directors and staff costs
Staff costs, including Directors’ remuneration, during the year were as follows:
           2010 2009 
           £ £
Wages and salaries          3,531,703 2,561,158
Termination benefits          867,676 —
Social security costs          638,555 317,458
Charge in respect of share-based payments        659,018 661,704
Pension costs          16,375 17,500
           5,713,327 3,557,820
The average number of employees, including both Executive and Non-executive Directors, during the year was 49 (2009: 43). 
Apart from the Directors, the average number of employees of the parent company was 1 (2009: 2).
Notes to the financial statements continued
year ended 31 December 2010 Silence Therapeutics plc Annual report and accounts 2010
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37
Review of the year Corporate governance Financial statements
6. Directors and staff costs continued
Management remuneration paid and other benefits supplied to the Directors during the year were as follows:
       Monetary  Total  2009 Total 
      Salary value of Termination excluding  2010 excluding 2009 
      and fees
1
 benefits
2
 pay pension Pensions pensions Pensions
P Haworth     189,676 6,711 — 189,676 — — —
J A P Randall     55,000 — — 55,000 — 30,000 —
M Herrmann     120,000 — — 120,000 12,000 — —
J M Davies
3
     147,403 1,147 148,958 297,508 4,375 141,257 17,500
A Clancy      30,000 — — 30,000 — 30,000 —
D C U’Prichard     30,000 — — 30,000 — 30,000 —
I G Ross
3
     135,000 — 120,200 255,200 — 240,000 —
J L Curnock Cook
4
     — — 15,000 15,000 — 30,000 —
H R P Reynolds
4
     — — 15,000 15,000 — 30,000 —
B O Wetzel
4
     — — 15,000 15,000 — 30,000 —
      707,079 7,858 314,158 1,022,384 16,375 561,257 17,500
1 No bonuses will be paid to Directors in respect of the year ended 31 December 2010.
2 Executive Directors’ benefits include private health insurance.
3 J L Curnock Cook, H R P Reynolds and B O Wetzel resigned as Directors of the Company with effect from 5 January 2010.
4 J M Davies and I G Ross resigned as Directors of the Company with effect from 27 February 2010.
Details of share options granted to Directors are detailed in Note 19.
Included in the amounts shown above are payments to third parties amounting to £nil for the services of certain Directors (2009: £120,000).
The Directors of the Group are the same as the key management personnel, as defined by IAS 24 “Related Party Transactions”. 
7. Finance income
The finance income comprises:
           2010 2009 
           £ £
Bank interest receivable         37,565 46,104
Exchange differences         57,778 —
Total           95,343 46,104
8. Taxation
There was no tax charge in the year. The credit for the prior year is made up as follows:
           2010 2009 
           £ £
Corporate taxation on the results for the year: 
 – UK           — —
 – non-UK          — —
Adjustment in respect of prior years (UK)        — 37,714
Taxation credit for the year         — 37,714 Silence Therapeutics plc Annual report and accounts 2010
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38
8. Taxation continued
A reconciliation of the tax credit appearing in the income statement to the tax credit that would result from applying the standard rate of tax to 
the results for the year is:
           2010 2009 
           £ £
Loss per accounts          (8,795,274) (7,508,311)
Tax credit at the standard rate of UK corporation tax of 28% (2009: 28%)     2,462,677 2,102,327
Effect of overseas tax rate (Germany and US)        430,853 116,983
Impact of costs disallowable for tax purposes       (489,261) (495,490)
Impact of income not taxable         (50,117) 41,578
Deferred tax in respect of temporary differences       711 181
Impact of unrelieved tax losses not recognised       (2,354,863) (1,765,579)
Sub-total           — —
Adjustment to that relief in respect of prior periods       — 37,714
Taxation credit for the year         — 37,714
Estimated tax losses of £72.3m (2009: £46.0m) are available for relief against future profits.
The deferred tax asset not provided for in the accounts based on the estimated tax losses and the treatment of the equity-settled share-based 
payments, net of any other temporary differences, is approximately £24.75m (2009: £12.79m).
The rate of UK corporation tax is expected to be 26% in 2011 and will then reduce by 1% each year until it reaches 23%.
9. Loss per share
The calculation of the loss per share is based on the loss for the financial year after taxation of £8,795,274 (2009: £7,470,597) and on the 
weighted average of 278,303,966 (2009: 134,640,515) ordinary shares in issue during the year. 
The options outstanding at 31 December 2010 and 31 December 2009 are considered to be non-dilutive in that their conversion into ordinary 
shares would not increase the net loss per share. Consequently, there is no diluted loss per share to report for either year.
10. Business combinations
Acquisitions in the current period 
On 5 January 2010, the Company acquired the entire issued share capital of Intradigm Corporation, a company also engaged in the development 
of RNAi-based therapeutics, by issuance of 79,640,668 ordinary shares representing consideration of £16,903,732. The fair value of each share 
was 21.225p, based on the average mid-price of the shares over the preceding 10 days. Additional consideration for the acquisition included 1,138,817 
immediately vesting options, which were issued to executives of Intradigm Corporation on completion of the deal.
The total cost of acquisition includes the components stated below:
            £
Purchase price settled in shares          16,903,732
Value of options issued to Intradigm Corporation executives       101,035
Total cost of acquisition          17,004,767
Notes to the financial statements continued
year ended 31 December 2010 Silence Therapeutics plc Annual report and accounts 2010
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39
Review of the year Corporate governance Financial statements
10. Business combinations continued
Acquisitions in the current period continued
The carrying amount and fair value of the assets and liabilities acquired are as follows:
           Carrying Fair 
           amount value 
           £ £
Property, plant and equipment         265,744 265,744
Other intangible assets         — 162,622
Trade and other receivables         169,450 169,450
Cash and short-term deposits         746,108 746,108
Trade and other payables         (2,151,095) (2,151,087)
Short-term borrowings         (1,876,407) (1,876,407)
Deferred revenue          (423,142) (423,142)
Fair value of net liabilities acquired         (3,106,712)
Goodwill arising on acquisition          20,111,479
            17,004,767
The carrying value of goodwill arising on acquisition reflects the position Intradigm Corporation occupies in the high profile field of RNAi therapeutics, 
the synergies expected to arise from the combination with the Company, already a leader in the field, and the strengthened management team 
resulting from the acquisition. 
Reconciliation of goodwill
            £
Goodwill brought forward at 1 January 2010         8,130,972
Goodwill on acquisition          20,111,479
Translation adjustment          103,825
Total            28,346,276
If the acquisition had been completed on the first day of the financial year, no significant additional revenue and no significant operating loss 
would have been recognised in the Group results. The inclusion of Intradigm Corporation from 5 January 2010 to 31 December 2010 contributed 
£239,395 to revenues and £3,469,368 to the net loss of the Group.
Acquisition related costs
In 2010, the Group incurred acquisition related costs of £70,000 related to the merger with Intradigm Corporation (2009: £1,010,137). These costs 
have been included in administrative expenses in the Group’s consolidated statement of comprehensive income.
Issue of shares in conjunction with the Intradigm Corporation acquisition
In conjunction with the acquisition of Intradigm Corporation, on 5 January 2010 the Company raised £14.36m in cash net of expenses. 
The fundraising was conducted by way of a placing and subscription of 65,217,392 new ordinary shares of 1p each at a price of 23p 
per share. The nominal value of these shares was £652,174.
Repayment of loan
On 4 June 2010, the Group repaid all amounts outstanding on its short-term loan with Silicon Valley Bank. The loan had been taken out 
by Intradigm Corporation prior to its acquisition by Silence Therapeutics and was due for repayment on 31 December 2010. Silence Therapeutics plc Annual report and accounts 2010
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40
11. Property, plant and equipment
            Equipment 
            and furniture 
            total 
Group            £
Cost
At 1 January 2009           4,085,886
Additions           36,648
Disposals           (181,616)
Translation adjustment          (222,242)
At 31 December 2009          3,718,676
Additions through business combinations         719,348
Additions           30,834
Disposals           (752,975)
Translation adjustment          (147,940)
At 31 December 2010          3,567,943
Depreciation
At 1 January 2009           3,549,977
Charge for the year            150,293
Eliminated on disposal          (162,039)
Translation adjustment          (196,231)
At 31 December 2009          3,342,000
Acquisition of Intradigm          453,604
Charge for the year            141,689
Eliminated on disposal          (517,458)
Translation adjustment          (139,505)
At 31 December 2010          3,280,330
Net book value 
As at 31 December 2009          376,676
As at 31 December 2010          287,613
Notes to the financial statements continued
year ended 31 December 2010 Silence Therapeutics plc Annual report and accounts 2010
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Review of the year Corporate governance Financial statements
12. Goodwill
The carrying amount of goodwill is attributable to the acquisition of Silence Therapeutics AG in 2005 and Intradigm Corporation in 2010.
           2010 2009 
           £ £
 Balance at start of year         8,130,972 8,611,087
Acquisition of Intradigm         20,111,479 —
Translation adjustment         103,825 (480,115)
Balance at end of year         28,346,276 8,130,972
In accordance with IAS 36 “Impairment of Assets”, the carrying value of goodwill has been assessed comparing its carrying value to its 
recoverable amount. The recoverable amount has been calculated by the Directors as being the fair value less costs to sell. 
To arrive at fair value less costs to sell, the Directors have performed risk adjusted discounted cash flow analysis of the RNAi therapeutics 
business area, the cash-generating-unit that encompasses Silence Therapeutics AG and Intradigm Corporation. Based on the net present 
value of these discounted cash flows the Board considers there is no need to impair the carrying value of goodwill. The acquisition of Intradigm 
resulted in additional goodwill of £20,111,479 being recognised by the Group. The Directors believe that this amount of goodwill is supported 
by the future potential of the RNAi therapeutics business area as described above. The enlarged Group is one of the strongest players in the 
RNAi therapeutics arena. The Directors believe that significant synergies have been created by combining the strength of Silence’s intellectual 
property in structural chemistry (AtuRNAi) with Intradigm’s exclusive license to the Zamore Design Rules from University of Massachusetts. 
Therefore, the Group is now better placed to secure licensing revenue from pharmaceutical partners.
The recoverable amount of the RNAi therapy business has been calculated with reference to its value in use. The key assumptions of this 
calculation are shown below:
            2010
 Period on which management approved forecasts are based       2022
Growth rate applied beyond approved forecast period        n/a
Discount rate           9%
Terminal valuation multiple (price/earnings)         15x
Probability of success of Phase I compound         10%
Probability of success of Phase II compound         20%
Management has used an approved forecast period of greater than five years because of the long-term nature of revenue streams from 
clinical development stage pharmaceutical drug candidates. 
The terminal valuation used is based on the current average price/earnings ratio for profitable biotechnology companies. 
The discount rate used is based on the current discount rate used by professionals to value publicly traded equities and corporate market-specific risk. 
Silence has applied industry standard attrition rates to risk adjust products in clinical development. 
Sensitivity analysis has been conducted on both the discount rate and sales assumptions used to calculate net present value (NPV) of the 
RNAi therapeutics business area. A 25% reduction in sales estimates for all products in development still left an NPV in excess of the carrying 
value of the business area as did an increase in the discount rate used of 13%. 
In prior years, the fair value less costs to sell methodology was applied by management to assess the carrying value of Group goodwill. 
This was based on the current share price at 31 December 2009 to calculate the market capitalisation of the Group. Silence Therapeutics plc Annual report and accounts 2010
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42
13. Other intangible assets
           Internally 
           generated 
           patents and 
           patent 
          Licences applications Total 
          £ £ £
Cost
At 1 January 2009         2,634,888 878,665 3,513,553
Additions         416 188,078 188,494
Translation adjustment        (146,921) (54,233) (201,154)
At 31 December 2009        2,488,383 1,012,510 3,500,893
Additions acquired through business combinations      162,622 — 162,622
Additions         152,005 107,975 259,980
Translation adjustment        (113,640) (47,260) (160,900)
At 31 December 2010        2,689,370 1,073,225 3,762,595
Amortisation
At 1 January 2009         2,454,922 245,935 2,700,857
Charge for the year          100,433 120,225 220,658
Translation adjustment        (139,675) (17,064) (156,739)
At 31 December 2009        2,415,680 349,096 2,764,776
Charge for the year          53,995 127,609 181,604
Translation adjustment        (112,892) (16,284) (129,176)
At 31 December 2010        2,356,783 460,421 2,817,204
Net book value
As at 31 December 2009        72,703 663,414 736,117
As at 31 December 2010         332,587 612,804 945,391
The licences included above have finite useful lives estimated to be of 10–14 years from date of initial acquisition, over which period the assets 
are amortised. The Group’s internally generated patent costs above represent expenses connected with filings for patent registration in respect 
of technology that has been developed by the Group for use in revenue generating activities. These costs are amortised on a straight-line basis over 
10–14 years, commencing upon the completion of the relevant asset. The charge for amortisation is included within research and development 
costs in the income statement. 
The Group tests for impairment of definite lives intangible assets on a regular basis. If indicators of impairment exist, such as a change of use 
of the asset, a reduction in operating cash flow or a change in technology, the Company compares the discounted cash flows related to the asset 
to the carrying value of the asset. If the carrying value is greater than the discounted cash flow amount, an impairment charge is recorded for 
the amount necessary to reduce the carrying value of the asset to fair value. Fair value for the purpose of the impairment tests is determined 
based on current market value or discounted future cash flows. In determining the fair value, certain assumptions are made concerning, for 
example, estimated cash flow and growth of the Group’s operations. 
The Zamore intellectual property assets have been valued based on a risk-adjusted estimate of future discounted cash flows. At 31 December 2010 
the Zamore intellectual property assets had a net book value of £299,680 (2009: £nil). Additional other intangible assets include intellectual property 
relating to AtuPlex and AtuRNAi technologies which are already subject of commercial licences. These technologies have been valued based 
on estimated future discounted cash flows and had a net book value of £645,711 (2009: £736,117). In 2010, there were no other intangible assets 
in the Company (2009: £nil).
Notes to the financial statements continued
year ended 31 December 2010 Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
43
Review of the year Corporate governance Financial statements
14. Investments
           2010 2009 
Company           £ £
Investment in subsidiary undertakings        50,615,307 23,494,482
The investment in subsidiary undertakings is made up as follows:
          Investment Impairment Net 
          at cost provision total 
          £ £ £
Shares in subsidiary undertakings
At 1 January 2009         19,319,714 (209,991) 19,109,723
Additions         3,746,635 4,514 3,751,149
At 31 December 2009        23,066,349 (205,477) 22,860,872
Additions         23,731,737 2,477 23,734,214
At 31 December 2010        46,798,086 (203,000) 46,595,086
Loans to subsidiary undertakings
At 1 January 2009         23,499,549 (22,692,008) 807,541
Reductions         (310,084) 136,153 (173,931)
At 31 December 2009        23,189,465 (22,555,855) 633,610
Additions         3,236,753 149,858 3,386,611
At 31 December 2010        26,426,218 (22,405,997) 4,020,221
Total investment
As at 31 December 2009        46,255,814 (22,761,332) 23,494,482
As at 31 December 2010        73,224,304 (22,608,997) 50,615,307
Shares in and loans to subsidiary undertakings at 31 December 2009 have been reclassified to reflect a loan amount of £124,393 previously 
treated as shares in subsidiary undertakings.
At 31 December 2010, a non-interest bearing unsecured loan of £22,405,997 from Silence Therapeutics plc to Stanford Rook Ltd was 
outstanding (2009: £22,555,855). A further subordinated 5% interest-bearing loan from Silence Therapeutics to Silence Therapeutics plc AG 
was outstanding (2009: £nil). Included in investments in subsidiary undertakings at 31 December 2009 was an unsecured loan of £633,610. 
Subsidiary companies
The principal activity of all subsidiaries is the research and development of pharmaceutical products.
       Place of     Proportion of 
       incorporation   Principal  ownership 
Name       and operation   technology area  interest
Silence Therapeutics AG     Germany  RNAi therapeutics  100%
Intradigm Corporation     USA  RNAi therapeutics  100%
Stanford Rook Ltd      England  Immunotherapy  100%
Innopeg Ltd      England  Not active  100%
The Company has made additional investments during the year in its operating subsidiaries Silence Therapeutics AG and Intradigm Corporation. 
Silence Therapeutics plc has made an impairment provision against the investment and loans to Stanford Rook Limited and Innopeg Limited to 
the extent that they are deemed to be not recoverable. No impairment provision has been made against the investment in Silence Therapeutics AG 
or Intradigm Corporation as the Directors believe that the fair value exceeds the cost of investment to date. Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
44
15. Trade and other receivables
         Group Company Group Company 
         2010 2010 2009 2009 
         £ £ £ £
Trade receivables        597,952 — 164,871 —
Other receivables        96,732 18,102 197,212 78,818
Prepayments        87,912 27,922 198,107 12,418
         782,596 46,024 560,190 91,236
The Directors consider that the carrying amount of trade and other receivables approximates to their fair value. Trade and other receivables 
were all payable within 90 days. Fair values have been calculated by discounting cash flows at prevailing interest rates. See also Note 25.
No interest is charged on outstanding trade receivables.
16. Cash and cash equivalents
         Group Company Group Company 
         2010 2010 2009 2009 
         £ £ £ £
Cash at bank        3,566,877 2,283,300 1,131,146 358,256
Cash at bank comprises balances held by the Group in current and short-term bank deposits with a maturity of three months or less. 
The carrying amount of these assets approximates to their fair value. The deposits held at bank are treated as cash equivalents under the 
definitions of IAS 7 “Cash Flow Statements”.
Although the sums are in a short-term notice account, they are instantly available to the Group but only by breaking the terms of the deposit 
which may incur a minor loss of interest. During the year, the effective rate of interest in notice accounts was 0.75% per annum.
17. Trade and other payables
         Group Company Group Company 
         2010 2010 2009 2009 
         £ £ £ £
Trade payables        345,785 38,441 626,315 522,500
Social security and other taxes       8,644 8,644 24,149 24,149
Deferred revenues        556,105 — 511,766 —
Accruals and other payables       775,982 202,761 940,914 625,192
Amounts due to Group companies      — — — 13,864
         1,686,516 249,846 2,103,144 1,185,705
Trade payables and accruals principally comprise amounts outstanding for trade purchases and continuing costs. The Directors consider that 
the carrying amount of trade and other payables approximates to their fair value. Fair values have been calculated by discounting cash flows 
at prevailing interest rates. See also Note 25.
18. Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the Group:
           2010 2009 
           £ £
Deferred tax liability: 
 – in respect of intangible assets         310,000 214,000
Liability           310,000 214,000
Less: offset of deferred tax asset below        (310,000) (214,000)
           — —
Notes to the financial statements continued
year ended 31 December 2010 Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
45
Review of the year Corporate governance Financial statements
18. Deferred taxation continued
           2010 2009 
           £ £
Deferred tax asset:
 – in respect of available tax losses        23,620,000 11,900,000
 – in respect of share-based payments        1,130,000 890,000
Deferred tax asset          24,750,000 12,790,000
Less:  offset against deferred tax liability        (310,000) (214,000)
  provision against asset          (24,440,000) (12,576,000)
Asset           — —
Due to the uncertainty of future profits, a deferred tax asset was not recognised at 31 December 2010 (2009: £nil).
19. Share capital
           2010 2009 
           £ £
Allotted, called up and fully paid 
279,891,452 (2009: 135,033,392) ordinary shares (par value 1p per share)     2,798,915 1,350,334
The Group has only one class of share. All ordinary shares have equal voting rights and rank pari passu for the distribution of dividends and 
repayment of capital.
Details of the shares issued by the Company during the current and previous years are as follows:
            £
Number of shares in issue at 1 January 2009        119,913,392
Shares issued during 2009: 
 – issue of shares for cash at 18p per share         15,000,000
 – upon the exercise of staff share options at 12.75p per share       100,000
 – upon the exercise of staff share options at 19p per share       20,000
Total issued in year           15,120,000
Number of shares in issue at 31 December 2009        135,033,392
Shares issued during 2010: 
 – issue of shares for cash at 23p per share         65,217,392
 – issue of shares to acquire entire issued share capital of Intradigm at 21.225p per share     79,640,668
Total issued in year           144,858,060
Number of shares in issue at 31 December 2010        279,891,452 Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
46
19. Share capital continued
The Group operates both an Inland Revenue Approved Share Option Scheme and an Unapproved Share Option Scheme. All Directors 
and UK employees are eligible for both schemes. The Group has also granted options to certain Directors and employees under the 
auspices of an Enterprise Management Incentive Scheme. 
At 31 December 2010 there were options outstanding over 24,674,843 (2009: 20,585,547) unissued ordinary shares and no warrants 
outstanding (2009: 925,926) over unissued ordinary shares. 
Details of the options outstanding are as follows:
Exercise date          Number  Exercise price
At any time up to 31 December 2011        213,560 21.23p
At any time up to 27 May 2014         900,000 27.0p
At any time up to 24 July 2015         8,600,000 23.0p
At any time up to 25 July 2016         755,548 12.75p
At any time up to 23 November 2016        1,200,000 43.0p
At any time up to 29 May 2017         80,000 109p
At any time up to 26 July 2017         1,000,000 127p
At any time up to 14 December 2017        580,000 67.75p
At any time up to 6 May 2018         53,333 41.5p
Between 7 May 2011 and 6 May 2018        51,666 41.5p
At any time up to 25 September 2018        410,000 29.5p
Between 26 September 2011 and 25 September 2018       5,000 29.5p
At any time up to 4 December 2018        5,583,330 20p
Between 5 December 2011 and 4 December 2018       1,366,670 20p
At any time up to 4 January 2020         2,154,848 21.23p
Between 5 January 2011 and 4 January 2020        860,445 21.23p
Between 5 January 2012 and 4 January 2020        860,443 21.23p
Total           24,674,843 —
The options held by the Directors at the beginning and end of the year are as detailed on the next page. No Director exercised 
options during 2010.
Notes to the financial statements continued
year ended 31 December 2010 Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
47
Review of the year Corporate governance Financial statements
19. Share capital continued
          At 31 
        At 1 January Lapsed in December  Latest date 
Director        2010 the year 2010 Exercise price of exercise
I G Ross
 – Unapproved Scheme      500,000 — 500,000 27p 27/05/14
 – Unapproved Scheme      4,000,000 — 4,000,000 23p 24/07/15
 – Unapproved Scheme      400,000 — 400,000 43p 23/11/16
 – Unapproved Scheme      1,100,000 — 1,100,000 20p 04/12/18
J M Davies
 – EMI Scheme       200,000 — 200,000 27p 28/05/14
 – Unapproved Scheme      1,300,000 — 1,300,000 23p 24/07/15
 – Unapproved Scheme      200,000 — 200,000 43p 23/11/16
 – Unapproved Scheme      750,000 — 750,000 20p 04/12/18
 – Unapproved Scheme      — — 300,000 21.225p 04/01/20
J L Curnock Cook
 – Unapproved Scheme      250,000 — 250,000 23p 24/07/15
 – Unapproved Scheme      350,000 — 350,000 20p 04/12/18
H R P Reynolds
 – Unapproved Scheme      200,000 — 200,000 27p 27/05/14
 – Unapproved Scheme      250,000 — 250,000 23p 24/07/15
 – Unapproved Scheme      350,000 — 350,000 20p 04/12/18
D C U’Prichard
 – Unapproved Scheme      250,000 — 250,000 23p 24/07/15
 – Unapproved Scheme      350,000 — 350,000 20p 04/12/18
B O Wetzel
 – Unapproved Scheme      250,000 — 250,000 23p 24/07/15
 – Unapproved Scheme      350,000 — 350,000 20p 04/12/18
A Clancy
 – Unapproved Scheme      200,000 — 200,000 29.5p 25/09/18
J A P Randall
 – Unapproved Scheme      200,000 — 200,000 29.5p 25/09/18
P Haworth
 – Unapproved Scheme      — — 1,325,000 21.225p 04/01/20
Total        11,450,000 — 13,075,000 — —
Upon the close of the merger with Intradigm, certain Silence Therapeutics Directors were asked to step down. As part of their separation letters, 
these Directors were made eligible under the plan to exercise their share options through to 31 December 2011.
None of the options granted under any of the schemes have any future performance or qualifying conditions attached to them, other than remaining 
as an employee. The Remuneration Committee did not believe that the inclusion of such conditions for staff or Directors was appropriate at the 
time of granting these options.
The market price of the shares at the year end was 7.79p per share (2009: 18.5p). 
During the year, the minimum and maximum prices were 4.87p and 18.52p per share respectively.
At 31 December 2009, the Group had outstanding warrants over 925,926 shares that were convertible at 27p per share. All warrants lapsed 
unexercised on 24 July 2010. Silence Therapeutics plc Annual report and accounts 2010
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48
20. Capital reserves
         Share  Share-based  
         premium Merger payment  
         account reserve reserve Total 
Group         £ £ £ £
At 1 January 2009        37,967,956 6,140,874 2,901,584 47,010,414
On shares issued in the year:       2,550,000 — — 2,550,000
 – less costs of share issue       (50,000) — — (50,000)
On options in issue during the year      — — 661,704 661,704
On options exercised during the year      15,350 — (4,514) 10,836
On vested options lapsed during the year       — — (372,883) (372,883)
Movement in the year       2,515,350 — 284,307 2,799,657
At 31 December 2009       40,483,306 6,140,874 3,185,891 49,810,071
On shares issued in the year:       14,347,826 16,107,325 — 30,455,151
 – less costs of share issue       (641,687) — — (641,687)
On options in issue during the year      — — 760,053 760,053
On vested options lapsed during the year       — — (2,477) (2,477)
On vested warrants lapsed during the year      — — (111,833) (111,833)
Movement in the year       13,706,139 16,107,325 645,743 30,459,207
At 31 December 2010       54,189,445 22,248,199 3,831,634 80,269,278
Shares of 79,640,668 were issued during the year to acquire 100% ownership of Intradigm Corporation. The premium on the issuance of these 
shares has been added to the merger reserve in accordance with the Companies Act 2006.
         Share  Share-based  
         premium Merger payment  
         account reserve reserve Total 
Company         £ £ £ £
At 1 January 2009        37,967,956 5,956,958 2,901,584 46,826,498
On shares issued in the year:       2,550,000 — — 2,550,000
 – less costs of share issue       (50,000) — — (50,000)
On options in issue during the year      — — 661,704 661,704
On options exercised during the year      15,350 — (4,514) 10,836
On vested options lapsed in the year       — — (372,883) (372,883)
Movement in the year       2,515,350 — 284,307 2,799,657
At 31 December 2009       40,483,306 5,956,958 3,185,891 49,626,155
On shares issued in the year:       14,347,826 16,107,325 — 30,455,151
 – less costs of share issue       (641,687) — — (641,687)
On options in issue during the year      — — 760,053 760,053
On options exercised during the year      — — — —
On vested options lapsed in the year       — — (2,477) (2,477)
On vested warrants lapsed during the year      — — (111,833) (111,833)
Movement in the year       13,706,139 16,107,325 645,743 30,459,207
At 31 December 2010       54,189,445 22,064,283 3,831,634 80,085,362
Due to the size of the retained loss, the Company has no distributable reserves.
The share premium account reflects the premium to nominal value paid on issuing shares less costs relating to the issue. 
The merger reserve was created on the issuance of shares relating to the acquisition of Silence Therapeutics AG. 
The share-based premium reserve reflects the cost to issue share-based compensation, primarily employee stock options.
Notes to the financial statements continued
year ended 31 December 2010 Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
49
Review of the year Corporate governance Financial statements
21. Equity-settled share-based payments
The Company has two share option schemes open to all employees of the Group. Options are exercisable at a price equal to the market price 
of the Company’s shares on the date of grant. 
In the Inland Revenue Approved Scheme the vesting period is three years and should the options remain unexercised they lapse after ten years 
from the date of grant. The options also lapse after six months following the employee leaving the Group. 
Under the Unapproved Share Option Scheme, the options vest at dates set by the Board at the time the option is granted. The options lapse 
after six months following the employee leaving the Group.
As part of the fee structure in respect of the acquisition of Silence Therapeutics AG and the subsequent fundraising in mid-2005, the Group 
issued warrants to its advisers which could be exercised at any time within five years from the date of issue. Most of those warrants have been 
converted into shares; see Note 19 on pages 45 to 47. The remaining warrants expired unexercised on 24 July 2010.
Details of the share options and warrants outstanding at the year end are as follows:
       2010  2009
          Weighted  Weighted 
          average  average 
         Number exercise price Number  exercise price 
Options
Outstanding at the beginning of the year      20,585,547 29.82p 22,058,911 31.69p
Granted during the year       4,089,296 21.225p — —
Lapsed during the year       — — 1,353,364 61.67p
Exercised during the year       — — 120,000 13.79p
Outstanding at the year end       24,674,843 28.40p 20,585,547 29.82p
Exercisable at the year end       21,530,619 29.47p 14,928,553 30.37p
Warrants
Outstanding at the beginning of the year      925,926 27.00p 925,926 27.00p
Granted during the year       — — — —
Lapsed during the year       925,926 27.00p — —
Exercised during the year       — — — —
Outstanding at the year end       — — 925,926 27.00p
Exercisable at the year end       — — 925,926 27.00p
The options outstanding at the year end have a weighted average remaining contractual life of 6.4 years (2009: 7.0 years). The exercise price 
of the options outstanding at the year end range from 12.75p to 127p per share. As part of the fee structure in respect of the acquisition of 
Silence Therapeutics AG and the subsequent fundraising in mid-2005, the Group issued warrants to its advisers which could be exercised 
at any time within five years from the date of issue. Most of those warrants have been converted into shares. The remaining warrants expired 
unexercised on 24 July 2010 (see Note 20 on page 48).
The Group granted 4,089,296 options during the year. The fair values of options granted were calculated using a binomial model and the inputs 
into the model were as follows:
           2010 2009
Weighted average share price         18.75p 30.509p
Weighted average exercise price         21.225p 20.981p
Expected volatility          70% 85–115%
Risk-free rate          4.14% 3.05–4.48%
Expected dividend yield         — —
Expected volatility was determined using as a base the share price movements recorded over the previous four years and taking into account 
any specific factors impacting during that period.
The expected life used in the model has been adjusted, based on management’s best estimate for the effects of non-transferability, exercise 
restrictions and behavioural considerations. 
The Group recognised total charges of £659,018 (2009: £661,704) related to equity-settled share-based payment transactions during the year. Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
50
22. Capital commitments
There were no capital commitments at 31 December 2010 or 31 December 2009.
23. Contingent liabilities
There were no contingent liabilities at 31 December 2010 or at 31 December 2009.
24. Commitments under operating leases
The Group has one operating lease in respect of the office in Redwood City, California, which ends in July 2011. At 31 December 2010, 
the Company did not have any operating lease commitments. There were no commitments under operating leases at 31 December 2009. 
Group non-cancellable operating lease rentals are payable as follows:
           2010  2009  
           £000 £000
Less than one year          29,644 —
Between one and five years         — —
More than five years          — —
25. Financial instruments and risk management
The Group’s financial instruments comprise primarily cash and various items such as trade debtors and trade creditors which arise directly 
from its operations. The main purpose of these financial instruments is to provide working capital for the Group’s operations. The Group does 
not utilise complex financial instruments or hedging mechanisms in respect of its non-Sterling operations. The Group assesses counterparty 
risk on a regular basis. Board approval is required for adoption of any new financial instrument or counterparty. The primary focus of the treasury 
function is preservation of capital. 
Financial assets by category
The categories of financial assets (as defined by IAS 39 “Financial Instruments: Recognition and Measurement”) included in the balance 
sheet and the heading in which they are included are as follows:
         Group Company Group Company 
         2010 2010 2009 2009 
         £ £ £ £
Current assets
Trade and other receivables       694,684 18,102 362,083 78,818
Cash and cash equivalents       3,566,877 2,283,300 1,131,146 358,256
Categorised as loans and receivables      4,261,561 2,301,402 1,493,229 437,074
All amounts are short term and none are past due at the reporting date.
Financial liabilities by category
The categories of financial liabilities (as defined by IAS 39) included in the balance sheet and the heading in which they are included are as follows:
         Group Company Group Company 
         2010 2010 2009 2009 
         £ £ £ £
Current liabilities
Trade and other payables       1,686,516 249,846 1,567,229 1,161,556
Categorised as financial liabilities measured at amortised cost    1,686,516 249,846 1,567,229 1,161,556
All amounts are short term and payable in zero to three months. 
Notes to the financial statements continued
year ended 31 December 2010 Silence Therapeutics plc Annual report and accounts 2010
www.silence-therapeutics.com
51
Review of the year Corporate governance Financial statements
25. Financial instruments and risk management continued
Credit risk
The maximum exposure to credit risk at the reporting date by class of financial asset was:
         Group Company Group Company 
         2010 2010 2009 2009 
         £ £ £ £
Loans and receivables       782,596 46,024 1,750,534 449,492
Capital management
The Group considers its capital to be equal to the sum of its total equity. The Group monitors its capital using a number of key performance 
indicators including cash flow projections, working capital ratios, the cost to achieve preclinical and clinical milestones and potential revenue 
from existing partnerships and ongoing licensing activities. The Group’s objective when managing its capital is to ensure it obtains sufficient 
funding for continuing as a going concern. The Group funds its capital requirements through the issue of new shares to investors, milestone 
and research support payments received from existing licensing partners and potential new licensees. 
Interest rate risk
The nature of the Group’s activities and the basis of funding are such that the Group has significant liquid resources. The Group uses these 
resources to meet the cost of future research and development activities. Consequently, it seeks to minimise risk in the holding of its bank 
deposits while maintaining a reasonable rate of interest. The Group is not financially dependent on the income earned on these resources 
and therefore the risk of interest rate fluctuations is not significant to the business. Nonetheless, the Directors take steps to secure rates 
of interest which generate a return for the Group by depositing sums which are not required to meet the immediate needs of the Group in 
interest-bearing deposits. Other balances are held in interest-bearing, instant access accounts. All deposits are placed with main clearing 
banks to restrict both credit risk and liquidity risk. The deposits are placed for the short term, between one and three months, to provide 
flexibility and access to the funds and to avoid locking into potentially unattractive interest rates. 
Liquidity risk
The Group’s liquid resources are invested having regard to the timing of payments to be made in the ordinary course of the Group’s activities. 
All financial liabilities are payable in the short term (between zero and three months) and the Group maintains adequate bank balances in either 
instant access or short-term deposits to meet those liabilities as they fall due.
Currency risk
The Group operates in a global market with income possibly arising in a number of different currencies, principally in Sterling, US Dollars or Euros. 
The majority of the operating costs are incurred in Euros with the rest predominantly in Sterling. The Group does not hedge potential future income 
since the existence, quantum and timing of such income cannot be accurately predicted.
Financial assets and liabilities denominated in Euros and translated into Sterling at the closing rate were: 
         Group Company Group Company 
         2010 2010 2009 2009 
         £ £ £ £
Financial assets        1,486,612 — 1,141,216 —
Financial liabilities        (674,104) — (890,633) —
Net financial assets        812,508 — 250,583 —
Financial assets and liabilities denominated in US Dollars and translated into Sterling at the closing rate were: 
         Group Company Group Company 
         2010 2010 2009 2009 
         £ £ £ £
Financial assets        555,502 — — —
Financial liabilities        (754,567) — — —
Net financial assets        (199,065) — — — Silence Therapeutics plc Annual report and accounts 2010
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52
25. Financial instruments and risk management continued
The following table illustrates the sensitivity of the net result for the year and the reported financial assets of the Group in regards to the 
exchange rate for Sterling:Euro.
During 2010, the Sterling:Euro exchange rate remained broadly stable. During the year Sterling appreciated by 5% versus the Euro. 
The table shows the impact of a further strengthening or fall of Sterling against the Euro by 20%.
          2010 If Sterling If Sterling 
          As reported  rose 20% fell 20% 
          £ £ £
Group result for the year        (8,795,274) (8,286,336) (9,558,680)
Euro denominated net financial assets       812,508 677,090 1,015,635
Total equity at 31 December 2010       (32,269,675) (31,218,054) (33,847,099)
          2009 If Sterling If Sterling 
          As reported  rose 20% fell 20% 
          £ £ £
Group result for the year        (7,470,597) (6,590,822) (8,790,170)
Euro denominated net financial assets       250,583 208,819 313,228
Total equity at 31 December 2009       8,891,155 7,393,458 12,278,715
The table shows the impact of a further strengthening or fall of Sterling against the US Dollar by 20%.
          2010 If Sterling If Sterling 
          As reported  rose 20% fell 20% 
          £ £ £
Group result for the year        (8,795,274) (8,217,046) (9,662,616)
USD denominated net financial assets       (199,065) (165,887) (248,831)
Total equity at 31 December 2010       (32,269,675) (28,245,300) (38,306,230)
There were no USD denominated financial assets in 2009.
26. Related party transactions
During the year the Company charged a management fee to its subsidiary companies Stanford Rook Limited amounting to £nil (2009: £15,251), 
Silence Therapeutics AG amounting to £100,581 (2009: £231,123) and Intradigm Corporation to £29,237. During the year, Intradigm Corporation 
charged the Company a management fee of £187,612 (2009: £nil). During the year, H R P Reynolds provided professional services to Silence 
Therapeutics of £60,000 in addition to his compensation as a Director.
Related party transactions were made on terms equivalent to those that prevail in arm’s-length transactions. Full details of capital contributions 
and loans made during the year to the Company’s subsidiaries can be found in Note 14. 
27. Subsequent events
On 26 April 2011, commitments were secured from investors to complete a fundraising by way of a placing and open offer. The Company has 
agreed to raise £5.5m before expenses by placing 275,000,000 new ordinary shares at 2p with certain existing and new investors. The placing 
has been fully underwritten by Singer Capital Markets Limited. In addition, the Company is looking to raise up to an additional £1.0m before 
expenses through an open offer of up to 50,380,461 New Ordinary Shares. The fundraising is subject to shareholder approval. A circular will 
be sent to shareholders on 27 April 2011 and a general meeting has been set for 16 May 2011.
Notes to the financial statements continued
year ended 31 December 2010 RNA interference, a Nobel Prize winning technology, is one of the most 
exciting areas of drug discovery today as it can selectively “silence” genes 
linked to the onset of disease, thus leading to the creation of a new class 
of therapeutic products: RNAi therapeutics.
Silence Therapeutics plc (Silence) is 
a leader in the discovery, development 
and delivery of novel RNA interference 
(RNAi) therapeutics for the treatment 
of serious diseases.
A strategic approach...
This strategy is based on:
 1.  Leveraging broad, proprietary RNAi 
technology base to establish multiple 
additional partnerships across a diverse 
range of therapeutic opportunities.
 2.  Continuing development of partnered 
and internal RNAi therapeutic pipeline.
High-value 
partnered and 
internal pipeline
Multiple 
partnerships
Corporate and 
shareholder value
Our approach is designed to best leverage 
our drug development expertise and broad 
RNAi therapeutic platform toward the creation 
of corporate and shareholder value.
Company information and advisers
Secretary
Max Herrmann
Registered office
22 Melton Street 
London NW1 2BW
Registered number 
2992058
Nominated advisers
Singer Capital Markets Ltd
1 Hanover Street 
London W15 1YZ
Registrars
Capita IRG plc
Northern House 
Woodsome Park 
Fenay Bridge 
Huddersfield HD8 0LA
Auditor
KPMG Audit Plc
15 Canada Square  
London E14 5GL Delivering
pipeline progress
Silence Therapeutics plc  
Annual report and accounts 2010
Silence Therapeutics plc
The Royal Institution of Great Britain 
21 Albemarle Street 
London W1S 4BS
Tel:  +44 (0) 20 7491 6520 
Fax:  +44 (0) 20 7491 6521 
Email:  mail@silence-therapeutics.com
www.silence-therapeutics.com
Silence Therapeutics plc Annual report and accounts 2010