91 Milton Park
Abingdon
Oxfordshire
OX14 4RY
United Kingdom
Tel: +44 (0)1235 443 939 Fax: +44 (0)1235 443 999 vastox.com
VASTox plc Annual Report and Accounts
For the year ended 31 January 2007 VASTox plc Annual Report and Accounts For the year ended 31 January 2007 Contents
01	 Highlights 	 2006/07
02	 VASTox 	 at	 a	 Glance
04	 Chairman’s 	 Review
06	 Chief 	 Executive	 Officer’s	 Statement
10	 Financial 	 Review
12	 Expertise 	 and	 Technology
16	 Drug 	 Discovery
19	 Pharmaceutical 	 Services
20	 Board 	 of	 Directors
22	 Directors’ 	 Report	 and	 Business	 Review
25	 Corporate 	 Governance	 Report
27	 Directors’ 	 Remuneration	 Report
33	 Statement 	 of	 Directors’	 Responsibilities
34	 	Independent	 Auditors’	 Report	 to	 the	 Shareholders	 of	 VASTox	 plc
35	 Consolidated 	 Profit	 and	 Loss	 Account
35	 	Consolidated	 Statement	 of	 Total	 Recognised	 Gains	 and	 Losses
36	 Consolidated 	 Balance	 Sheet
37	 Company 	 Balance	 Sheet
38	 Consolidated 	 Cash	 Flow	 Statement
39	 Notes 	 to	 the	 Financial	 Statements
54	 Notice 	 of	 Annual	 General	 Meeting
55	 Notes 	 to	 Members
56	 Company 	 Information
VASTox is a leading UK 
biotechnology company with  
a broad drug pipeline, two  
world-leading technology platforms 
and an innovative business  
model to generate sustainable  
value for shareholders. 
The	 cover	 and	 front	 section	 of	 this	 report	 have	 been	 printed	 on	 9lives	 80.	 9lives	 80	 is	 produced	 with	 80%	 recovered	 fibre	 comprising	 10%	 packaging	 waste,	 60%	 de-inked	 waste	 fibre	 	 and	 20%	 virgin	 TCF	 fibre	 (totally	 chlorine	 free)	 sourced	 from	 sustainable	 forests.	 The	 back	 section	 of	 this	 report	 has	 been	 printed	 on	 9Lives	 Offset	 which	 is	 manufactured	 from	 100%	 recycled	 fibre. 01 vastox.com
Highlights
2006/07
Financial Highlights
Revenues increased by 95% to £1.0 million (2005/06: £0.5 million)
R&D investment up to £2.9 million (2005/06: £1.0 million)
Post-tax loss up to £3.0 million (2005/06: £1.1 million)
Successful placing in February 2006 raised £10.4 million before expenses
Cash of £18.3 million at 31 January 2007 (2005/06: £12.6 million)
Operational Highlights (during 2006/07 and post year end)
Drug discovery and development, and pharmaceutical services capabilities  
enhanced through three strategic acquisitions:
DanioLabs Ltd – £15 million, payable in shares (March 2007)
Dextra Laboratories Ltd – £1.5 million, payable in shares (March 2007)
Key assets of MNL Pharma Ltd – £240,000 (December 2006)
Drug pipeline significantly strengthened through acquisitions and internal  
development and now includes:
Two clinical phase candidates acquired in area of neuro-disorders
Four preclinical candidates in neuromuscular and ophthalmic diseases,  
and oncology
Preclinical and discovery programmes progressing in range of core and  
other therapeutic areas (including oncology and regenerative medicine)
Two long-term collaboration deals signed worth a combined total of £650,000  
(February 2007)
Royalty deal signed in carbohydrate drug development worth $450,000 and  
5% of product sales (May 2007)
Strengthening of Board of Directors and Executive management through key 
appointments
Summit plc proposed as new company name to reflect the ambitions of the  
enlarged Group
•
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+
95%
	 Revenue	 	 2006/07: 	 £1.0m
	 (2005/06: 	 £0.5m)
£
18.3 m
	 Cash	 	 (2005/06: 	 £12.6m)
£
2.9 m
	 R&D	 investment	 	 (2005/06: 	 £1.0m) Parkinson’s Disease (Sialorrhoea)
Parkinson’s Disease (Seborrhoea); Acne
Duchenne Muscular Dystrophy (VOX C1100)
Spinal Muscular Atrophy
MS; Epilepsy; Cognition
Tuberculosis (NAT)
Glaucoma
Age-related Macular Degeneration
Oncology (VOX14400)
Iminosugar opportunities
Osteoarthritis (BMP)
Cachexia; UNMASC; Wnt
CORE OTHER
DISCOVERY LEAD 
OPTIMISATION
PRECLINICAL CLINICAL
Phase I Phase II Phase III
02 VASTox	 plc  Annual Report and Accounts 2006/07
V AST ox
At a Glance
V ASTox	 is	 a	 leading	 UK	 biotechnology	 company	 that	 uses	 two	 innovative	 technology	 platforms	 to	 discover	 and	 develop	 proprietary	 new	 drugs	 targeting	 serious	 diseases	 with	 unmet	 medical	 need	 and	 provide	 high-value	 drug	 discovery	 services	 to	 the	 pharmaceutical	 industry.
VASTox	 has	 a	 broad	 and	 diverse	 pipeline 
of proprietary clinical and preclinical drug candidates 
targeting indications in neuro-disorders, infectious 
diseases, cancer and regenerative medicine. These 
programmes will be commercialised at the optimum time 
to generate near- and long-term value through a variety  
of licensing and partnership routes. 
VASTox’s	 technology	 platforms
have the potential to dramatically increase the efficiency and 
lower the cost of drug discovery and development. VASTox 
combines world-leading expertise in both carbohydrate and 
medicinal chemistry with high-volume, high-content 
screening using its market leading zebrafish and fruitfly 
technologies (chemical genomics) to generate whole 
organism data that are highly predictive of the efficacy  
and toxicity of potential drug compounds in humans. ABERYSTWYTH
12 Employees
  Phytochemistry drug discovery
OXFORD
  67 Employees
  Corporate & commercial headquarters
  Drug discovery & services
CAMBRIDGE
  37 Employees
  Zebrash drug discovery & services
READING
  17 Employees
  Dextra Laboratories
  Carbohydrate services & commercial scale-up
03 vastox.com
VASTox	 operates state-of-the-art	 facilities
in Oxford, Cambridge, Aberystwyth and Reading,  
and employs over 130 people.The company is quoted  
on the AIM market of the London Stock Exchange – 
symbol: VOX.
VASTox	 is	 generating immediate	 revenues
to support internal discovery programmes by  
marketing its drug discovery technology platforms  
to pharmaceutical partners on a collaborative 
or fee-for-service basis. 04 VASTox	 plc  Annual Report and Accounts 2006/07
Chairman’s Review
Dr Barry Price
It	 gives	 me	 great	 pleasure	 to	 present	 	 my	 first	 annual	 report	 as	 Chairman	 of	 V ASTox	 plc.
2006/07	 has	 been	 a	 crucial	 period	 for	 VASTox	 and	 one	 in	 which	 we	 believe	 the	 Company	 has	 reached	 a	 new	 stage	 of	 development	 and	 growing	 maturity,	 having	 advanced	 out	 of	 its	 start-up	 phase.	 This	 transformation	 has	 been	 achieved	 both	 through	 impressive	 organic	 growth	 and	 through	 a	 focused	 acquisition	 strategy	 during	 this	 period.
Our main objective is to create value. As a 
leading drug discovery and development 
company, the acquisitions in March 2007 
of the UK companies – DanioLabs Ltd 
(Cambridge) and Dextra Laboratories Ltd 
(Reading) plus the earlier acquisition of key 
assets of MNL Pharma Ltd (Aberystwyth) 
provide VASTox with world leadership in 
zebrafish chemical genomics and 
carbohydrate chemistry as we endeavour 
to deliver on this objective.
The Company now has substantial assets 
that it aims to leverage in different ways to 
deliver sustainable growth and maximise 
shareholder value. We believe that we 
have made great strides in this direction  
to date and that our strengthened position 
will now lead to further opportunities to 
accelerate growth in the future. 
In summary, the Company has made 
great advances in developing its drug 
pipeline, enhancing its drug discovery 
and development capabilities, adding 
expertise and experience at board, 
management and scientific levels,  
and boosting revenue growth of its 
pharmaceutical services.
A significant impact of the activities we 
have undertaken is the building of an 
exciting pipeline of clinical, preclinical 
and discovery stage drug candidates 
across a range of therapeutic areas  
with high unmet medical need. 
Programmes in VASTox’s core areas of 
expertise at this stage, include neuro-
disorders and infectious diseases and  
are where we can call on considerable 
scientific and development knowledge to 
add value to our programmes. Currently, 
we have lead candidates in clinical 
development targeting the symptoms  
of Parkinson’s disease and preclinical 
programmes in Duchenne muscular 
dystrophy (DMD) and Spinal muscular 
atrophy (SMA). The Company’s 
differentiating expertise in these areas  
will be used to develop candidates to  
an optimal point before licensing or 
partnering out. By retaining a high  
equity stake in the future value of these 
programmes, we are also looking to 
generate significant long-term returns  
for shareholders.
Programmes outside our core areas, 
including cancer, ophthalmology and 
regenerative medicine (stem cells), 
represent opportunities for attractive 
early deals to realise near-term value 
whilst retaining a stake in the longer-term 
potential. One potential out-licensing 
opportunity is likely to be with our  
lead anticancer preclinical candidate 
VOX14400, which we are planning to 
enter into Phase I clinical trials in the  
first half of 2008. 
Underpinning the development of our 
pipeline as well as providing increasing 
revenues, are VASTox’s proprietary 
chemical genomics and substantial 
chemistry capabilities. These capabilities 
have been significantly enhanced in 
terms of expertise, staff, facilities 
and capacity following the recent 
acquisitions. Furthermore, they have 
provided us with existing business, 
immediate revenue streams and access 
to a wider customer network.
People
The Company made a number of 
important changes to the Board and 
senior management during the year as 
we reviewed the skills necessary to lead 
a dynamic and fast-growing company. 
We have brought in high-quality people 
with a wealth of skills, particularly in  
drug discovery, development and 
commercialisation, all of which will be 
crucial for the Company’s future growth.
In addition, through the acquisitions 
VASTox has rapidly expanded to employ 
more than 100 highly skilled scientists 
across four UK sites. We are also very 
pleased to have retained the key 
scientific founders of the acquired 
businesses and look forward to their 
continued contribution to the business. 
I would just like to take this opportunity 
to thank Professor Stephen Davies  
who stepped down as Chairman in 
September 2006. Steve, as founding 
Chairman of VASTox, has made  
a significant contribution to the  
Company’s direction and success,  
and we are very pleased that he will 
continue to provide valuable input as  
a Non-executive Director. 05 vastox.com
I would also like to welcome to the Board, 
Dr Colin Wall, Dr Andrew Richards and 
George Elliott, CA. Colin has 40 years’  
of commercial experience including 
significant board-level experience  
at a number of public and private 
companies and was appointed as  
Senior Independent Non-executive 
Director. He replaces founding director 
John Montgomery who stepped down 
last year with our thanks and best wishes. 
Andrew joins as a Non-executive Director 
and will bring a tremendous wealth of 
experience of the biotechnology sector  
to VASTox, while George brings us wide-
ranging financial and commercial expertise 
in high growth technology companies.
Financial	 performance
The financial performance of the Company 
continues to be strong; the Company has 
nearly doubled revenues to £1 million from 
its pharmaceutical business compared 
with last year. Investment in research 
increased to £2.9 million, losses are 
£3.0 million, and cash is £18.3 million. The 
Company continues to maintain a strong 
focus on financial discipline and expects 
to continue its growth and development  
in all areas in 2007.
Name	 change	 to	 Summit	 plc
Based on the progress the Company has 
made over the past couple of years and 
its long-term development plans, we are 
very pleased to propose a new name  
for the Company: Summit plc. We are 
proposing this name as it encapsulates 
the desire and ambitions of the Company 
while also providing an identity that has 
the flexibility to accommodate future 
growth and development within the 
business. This name change is subject  
to shareholder approval, which will be 
sought at the Company’s Annual General 
Meeting, to be held on 19 July 2007.
 
Summary	 and	 outlook
Since I joined VASTox in September 
2006, I have been greatly impressed with 
the Company’s ambitions, enthusiasm 
and maturity, the quality of its people, and 
the strength and potential of its drug 
discovery and development capabilities. 
The transforming events that have 
happened over the past 18 months have 
put VASTox in a strong position to 
capitalise on this potential in the near-, 
mid- and long-term. We are looking 
forward with confidence to the challenges 
that the next year will bring to continue 
the rapid growth of the business. 
Finally, I would like to thank all VASTox 
employees for their dedication and 
contribution to the business and look 
forward to an exciting and productive  
year ahead.
Barry	 Price,	 PhD
Chairman 
11 June 2007
January	 2003
VASTox was founded out of Oxford 
University and rapidly developed  
into one of the UK’s leading 
biotechnology companies.
October	 2004
Listed on the AIM section of the 
London Stock Exchange (AIM: VOX).
Company	 history
February	 2006
Raised funds to capitalise on  
the promising results of the drug 
discovery programme targeting  
the fatal genetic disease, Duchenne 
muscular dystrophy.
December	 2006
Acquired key assets of UK 
biotechnology company MNL  
Pharma to strengthen carbohydrate 
chemistry capabilities.
March	 2007
Acquired DanioLabs and Dextra 
Laboratories to strengthen  
drug pipeline and create  
world-leading technology  
platforms in zebrafish chemical 
genomics and carbohydrate  
chemistry. 06 VASTox	 plc  Annual Report and Accounts 2006/07
V ASTox	 has	 made	 excellent	 progress	 	 during	 the	 past	 18	 months	 executing	 on	 	 its	 dual	 strategy	 of	 discovering	 and	 developing	 	 proprietary	 new	 drugs	 and	 providing	 	 profitable	 drug	 discovery	 services	 to	 the	 	 pharmaceutical	 industry.
A	 number	 of	 defining	 events	 that	 have	 happened	 during	 the	 past	 18	 months	 have	 put	 VASTox	 in	 a	 strong	 position	 	 to	 maximise	 the	 benefits	 of	 its	 unique	 approach	 to	 create	 significant	 value	 	 for	 shareholders.
The	 key	 events	 of	 the	 period	 include:
Progress	 in	 all	 proprietary	 programmes,	 including:
Duchenne	 muscular	 dystrophy:	 Preclinical	 candidate	 selected	 	 in	 May	 2007	 and	 EMEA	 Orphan	 Drug	 designation	 granted	 to	 programme
Spinal	 muscular	 atrophy:	 compounds	 identified	 with	 in vivo	 activity
Tuberculosis:	 compounds	 identified	 that	 kill	 Mycobacterium 
tuberculosis
Achieving	 excellent	 performance	 	 of	 the	 pharmaceutical	 services	 business	 with	 revenues	 nearly	 doubling	 to	 £1	 million	 The	 creation	 of	 a	 high-quality	 executive	 management	 team	 and	 Board	 of	 Directors	 with	 experience	 and	 enthusiasm	 to	 drive	 the	 Company’s	 future	 growth
Acquisitions	 of	 DanioLabs	 Ltd,	 Dextra	 Laboratories	 Ltd	 and	 the	 key	 assets	 of	 MNL	 Pharma	 Ltd	 to	 accelerate	 the	 Company’s	 strategy	 and	 development	 in	 all	 areas	 of	 	 its	 business.	 •
•
•
•
•
•
•
Transforming	 VASTox
The acquisitions VASTox has made  
during 2006/07 are a synergistic fit with 
our existing drug programmes, drug 
discovery and development expertise  
and significantly, provide us with world 
leadership in two drug discovery platform 
technologies. Additionally, we benefit from 
an immediate, positive impact on revenues 
and an expanded customer base. 
The addition of DanioLabs both broadens 
our drug discovery pipeline and creates 
the largest and most sophisticated 
zebrafish chemical genomics platform  
in the world. Dextra and MNL Pharma 
both bring differentiating carbohydrate 
chemistry expertise and make us world 
leaders in this emerging and exciting area 
of drug discovery.
A key focus of the management team in 
the coming months is to ensure the rapid 
integration of the acquired businesses 
such that VASTox can capitalise on the 
enhanced capabilities and efficiencies  
of the enlarged Group.
As a consequence of the year’s 
activities, we are proposing to change 
the Company’s name from VASTox plc  
to Summit plc (subject to shareholder 
approval at the Company’s AGM on  
19 July 2007). The Board believes that  
a new identity is required to truly reflect 
the aspirations of the new enlarged 
business. VASTox as a name 
represented the origins of the Company 
but it refers to only one aspect of our 
business: zebrafish toxicology services. 
While this technology is still an important 
part of out business, we felt the 
Company has outgrown this name,  
and has also become misleading with 
commercial clients. The proposed new 
name and identity presents not only a 
more mature corporate image but also 
provides the flexibility for the Company 
to grow and develop, which is essential in 
meeting the future needs of our business.
Enhancing	 our	 drug	 pipeline	 As mentioned earlier, an important result 
of this corporate activity has been to 
broaden and enhance the Company’s 
drug discovery and development 
pipeline. Through progress made in our 
existing drug discovery programmes and 
the new programmes acquired following 
the deals with DanioLabs and MNL 
Pharma, VASTox now has an exciting 
portfolio of clinical, preclinical and 
discovery stage drug candidates across  
a range of serious diseases with a high 
unmet medical need. 
While our drug programmes span a range 
of therapeutic areas, our core focus is on 
discovering and developing new therapies 
targeting neuro-disorders and infectious 
diseases. We have focused on these 
specific therapeutic areas as we believe 
we have differentiating expertise based  
on our scientific knowledge in these areas, 
through our key staff, scientific advisors, 
founders and collaborators. It is our 
intention to invest in the infrastructure of 
these programmes with the objective of 
developing them to the optimal stage prior to 
seeking attractive partnering opportunities.
The depth of our drug pipeline combined 
with our approach towards partnering 
deals is anticipated to improve for our 
Chief Executive Officer’s Statement
Dr Steven Lee PROGRAMMES
TECHNOLOGY  
PLATFORMS
MEDIUM/LONGER 
TERM VALUE
IMMEDIATE VALUE
VASTOX BUSINESS “ENGINE”
Assess
 Identify
 Add Value Generate revenues
6-12 MONTH 
TARGET
Create
 Acquire
07 vastox.com
investors the risk-reward ratio 
traditionally associated with biotech 
companies as it is VASTox’s intention to 
seek early and mid stage deals in many 
programmes before they enter pivotal 
and costly Phase III clinical trials.
Core	 programmes
During the year, VASTox has increased 
its interest and expertise in the area of 
neuro-disorders and now has a range  
of clinical and preclinical programmes  
in this area. 
VASTox has two candidates in Phase I 
clinical trials for treating neurodegenerative 
symptoms associated with Parkinson’s 
disease. These were acquired from 
DanioLabs. The first programme is 
focused on sialorrhoea (excessive saliva 
production) and is expected to advance 
into Phase II clinical trials by the second 
half of 2007. The second clinical 
candidate targets seborrhoea, which 
results in Parkinson’s patients suffering 
from poor skin conditions, and this 
programme is expected to move into 
Phase II clinical trials during the second 
half of 2008. VASTox also anticipates  
this programme to find value in the  
multi-million pound acne market.
In addition, exciting progress has been 
made in the discovery programme 
targeting the fatal neuromuscular 
disease, Duchenne muscular dystrophy 
and in May 2007 this led to the selection 
of a lead candidate, VOX C1100, to 
advance into preclinical development. 
Earlier investigations leading to this 
significant achievement have been 
supported through the raising of  
£10.4 million in February 2006.
Based on this progress, the European 
Medicines Agency (EMEA) will grant 
Orphan Drug status to any clinical 
candidates to emerge from the 
programme. This designation will allow 
VASTox to fast-track any candidates 
through the clinical stages of 
development, which will reduce costs 
and accelerate the time taken for a 
desperately needed drug to reach 
the market.
Our discovery programme targeting  
the rare genetic neuromuscular disorder 
Spinal muscular atrophy (SMA) is also 
making excellent progress. SMA is the 
leading genetic cause of mortality in 
infants and toddlers worldwide and the 
Company has identified a number of “hit” 
compounds that improve the symptoms 
of SMA when tested in VASTox’s in vivo 
fruitfly screen designed to model the 
disease. This particular programme 
demonstrates the value of our drug 
discovery approach as these “hits”  
were identified within 18 months of  
the programme starting, and a lead 
preclinical compound is now being 
sought. We are also preparing to 
apply for Orphan Drug designation 
for this programme.
VASTox’s excellence and expertise in 
neuromuscular diseases was further 
recognised by the EU when the 
Company joined the TREAT-NMD 
network, a European network of 
leading researches, clinicians and 
charities focused on developing  
new medicines, which is funded by  
a €10 million EU grant. 
In the core area of anti-infectives, 
VASTox’s first programme is targeting 
tuberculosis (TB), a resurgent disease 
with serious global health implications. 
Currently, the TB programme is in the 
early discovery phases and has made 
good progress during the year with 
several promising compounds identified 
as being active against the bacteria that 
cause TB. These ‘hit’ compounds are 
now being investigated further. IMMEDIATE REVENUES IMMEDIATE REVENUES
BIOLOGY
zebrash
CORE
PROGRAMMES
Neuro-disorders:
Parkinson’s Disease
DMD
SMA
Infectious diseases:
TB
OTHER 
PROGRAMMES
Immunomodulator:
Cancer
Allergy
Adjuvant
Osteoarthritis
Cancer
TECHNOLOGY
PLATFORMS
MEDIUM &
LONG TERM
REVENUES
CHEMISTRY 
carbohydrates
08 VASTox	 plc  Annual Report and Accounts 2006/07
Other	 programmes
Our remaining programmes are currently 
targeting cancer, ophthalmic diseases 
and regenerative medicine (stem cells), 
and we have three programmes at the 
preclinical stage of development.
One of our most advanced non-core 
programmes, VOX14400, was initially 
developed by MNL Pharma and has the 
potential to target and treat various types 
of solid tumours as well as a number  
of other indications. We are actively 
seeking a development partner to 
progress this candidate.
The programmes in ophthalmic diseases 
are targeting glaucoma and age-related 
macular degeneration and are in the 
preclinical stages of development.  
Both programmes were acquired  
from DanioLabs.
Pharmaceutical	 services
While our drug pipeline is where our long-
term value lies, a core element of our dual 
business model is the development of two 
powerful drug discovery and development 
technology platforms. These not only 
underpin our ability to develop and fuel  
our own pipeline, but also enable us to 
generate revenues by providing elements 
of the technology platforms to partners in 
the pharmaceutical sector for their own 
drug discovery purposes. 
Our service offering is an increasingly 
profitable part of the Company’s business, 
generating revenues of £1 million in 2006/07 , 
nearly double the revenues of 2005/06. 
The wider pharmaceutical industry 
increasingly is recognising the value our 
Chief Executive Officer’s Statement continued
Dr Steven Lee
unique capabilities bring to drug discovery 
programmes as we provided discovery 
services to over 25 clients during the year.
 
This business is expected to grow 
significantly in 2007 owing to the 
strengthening of our capabilities in all 
areas through the integration of the 
assets from the acquired companies. 
This will provide the enlarged Company 
with immediate access to complementary 
expertise and high-quality facilities as  
well as existing contracts and revenue 
streams, and access to a significantly 
broader customer base.
Furthermore, these acquisitions are 
expected to support and accelerate our 
strategy of developing longer-term, higher- 
value drug discovery and development 
partnerships with pharmaceutical 
companies. Indeed, in 2007 we have 
already signed three such agreements 
totalling over £800,000 in upfront payments 
and research funding milestones with one 
of the deals including a 5% royalty fee on 
product sales. Over the course of the next 
12 months, we will be working hard to 
develop further relationships of this nature 
based on the benefits our unique range of 
capabilities can offer partners. 09 vastox.com
Our	 unique	 drug	 discovery	 and	 development	 capabilities
The fundamentals of our business and of 
our ability to create value are based on 
our world-leading chemical genomics 
and carbohydrate technology platforms. 
During the year, each platform has  
been significantly strengthened both 
organically and through the recent 
acquisitions we have made.
Chemical	 genomics
Chemical genomics refers to the analysis 
and understanding of the effect that 
drug-like molecules have on whole 
organisms. VASTox has developed an 
industry leading chemical genomics 
technology platform that makes use  
of two extensively studied organisms: 
zebrafish and fruitflies.
This technology enables us to rapidly 
screen libraries of drug-like compounds 
to provide information not just on 
potential efficacy but also on the safety 
of lead compounds. This capability is 
extremely valuable as it can accelerate 
the early stages of the discovery process 
thereby reducing overall costs.
The acquisition of DanioLabs shows  
the belief and commitment VASTox has  
in zebrafish chemical genomics and  
the huge potential benefits that we  
believe this technology brings to the  
drug discovery process. This strategic 
move has created the World’s leading 
company in chemical genomics using this 
versatile and highly relevant organism by 
providing additional zebrafish screening 
technologies and capacity and further 
novel models of human disease. 
Chemistry	 capabilities
We also recognise that chemistry plays 
an essential role in the development of 
new pharmaceuticals. Our chemistry 
capabilities enable us to generate libraries 
of proprietary drug-like compounds for 
screening, to develop “hit” compounds 
into leads and to optimise their structure 
and performance. 
We already have excellent medicinal 
chemistry in-house and the integration  
of Dextra Laboratories and MNL Pharma 
significantly enhances our carbohydrate 
chemistry expertise and capabilities as 
VASTox emerges as the global leader in 
this high-value, complex and currently 
under exploited area of chemistry. 
Management
A key objective over the past  
12 months for VASTox has been to 
create a high quality management  
team with development and  
commercial experience, contacts,  
and enthusiasm to drive the Company’s 
ambitious growth plans forward.
As such, VASTox made several key 
appointments to the Board and 
Executive management team during the 
year: Dr Richard Storer joined as Chief 
Scientific Officer; Darren Millington, 
ACMA, was appointed Chief Financial 
Officer; and James Taylor joined as  
Chief Commercial Officer. These 
appointments add considerable  
sector experience in the important  
areas of preclinical and clinical drug 
development, commercialisation, 
licensing and growth company finance. 
Summary	 and	 outlook
The past 18 months have been 
extremely busy and eventful for VASTox. 
This activity has transformed the 
business into an exciting drug discovery 
and development company that offers 
the prospect of rapidly developing new 
drugs for serious diseases. Through 
internal growth and acquisition, VASTox 
has created a broad and diverse pipeline 
of drug candidates from discovery to 
clinical stages of development, and two 
strong technology platforms to support 
and advance these programmes. 
Furthermore, the revenue growth we have 
seen from our services offering and its 
increasing industry validation confirms 
the confidence we have in our approach 
to deliver value to customers and 
partners in the pharmaceutical sector.
 
We anticipate a busy year in 2007/08, 
integrating the new components of our 
business, but we believe we have many 
of the right elements in place to begin 
capitalising on the combined strength  
of the enlarged Company to create 
significant value for our shareholders.
Finally, I would like to thank the efforts of 
all involved with the continued growth and 
development of VASTox and look forward 
to reporting further progress in the future.
Steven	 Lee	 PhD
Chief Executive Officer
11 June 2007 10 VASTox	 plc  Annual Report and Accounts 2006/07
Financial Review
Darren Millington
Our	 financial	 results	 for	 the	 year	 ended	 	 31	 January	 2007	 reflect	 the	 increased	 investment	 in	 our	 drug	 development	 pipeline,	 in	 particular	 our	 commitment	 to	 advancing	 	 our	 DMD	 programme.	 Total	 R&D	 costs	 have	 increased	 to	 £2.94	 million	 this	 year	 (£1.03	 million	 	 in	 2005/06).	 As	 described	 in	 the	 Chief	 Executive	 Officer’s	 statement,	 we	 were	 able	 to	 accelerate	 our	 Duchenne	 muscular	 dystrophy	 (DMD)	 programme	 as	 a	 result	 of	 a	 successful	 fund-raising	 in	 February	 2006,	 which	 raised	 	 £9.97	 million	 after	 expenses.	 These	 additional	 funds	 have	 allowed	 us	 	 to	 recruit	 specialist	 staff	 and	 build	 laboratories	 dedicated	 to	 the	 	 DMD	 programme.
Business	 performance
Revenues
Total revenues for the year ended  
31 January 2007 were £1.03 million 
(2005/06: £0.53 million). This 95% 
increase illustrates the increasing  
market demand for our unique chemical 
genomics expertise and chemistry 
capabilities. Gross margins increased to 
71% (2005/06: 56%), reflecting the high-
value nature of the work we do for clients.
Losses
VASTox made a loss of £2.99 million  
for the year compared with a loss of 
£1.06 million in the previous year. The 
increased loss was due to increased 
investment in R&D and an increase in 
overhead and facility costs. Overhead 
costs have also increased due to non-
cash charges of depreciation, amortisation 
and FRS 20 (“Share based payment”). 
The FRS 20 charge requires companies 
to make a charge for the fair value of 
share options in issue. For the year 
2006/07 this charge was £0.4 million 
(2005/06: £0.07 million). It is the 
recognition of the share based payment 
charge in the 2005/06 results which led 
to a restatement. The basic and diluted 
loss per share for the Group was 8.24p, 
compared with 3.39p for 2005/06.
Taxation
The Group continues to benefit from 
Research and Development tax credits 
and, as it is loss making, elects to  
take the cash equivalent amount.  
The tax credit of £0.49 million relates  
to a refund under the UK Research  
and Development tax credit claim 
(2005/06: £0.16 million).
Cashflow and financing
Our year-end cash and short term 
deposits were £18.3 million (2005/06: 
£12.6 million). The Group raised £9.97 
million in cash net of expenses (2005/06: 
Nil) through the sale of new ordinary 
shares. Interest received increased from 
£0.58 million to £0.87 million, due to the 
increase in average funds held during 
the year as well as higher interest rates. 
Net cash outflow during the year from 
operating activities was £3.21 million 
(2005/06: £1.45 million), principally due 
to the increase in R&D expenditure.
Financial	 Highlights
•		 Turnover	 up	 95%	 to	 	 £1.03	 million	 (2005/06:	 	 £0.53	 million)
•		 Gross	 margins	 up	 to	 70.6%	 (2005/06:	 56. 1 %)
•		 Research	 and	 development	 investment	 up	 to	 £2.94	 million	 (2005/06:	 £1 .03	 million)
•		 Fully-subscribed	 placing	 raised	 £10.4	 million	 of	 new	 capital	 before	 expenses 0
5
10
15
20
Cash
(£million)
2006 2005 2007
0
0.5
1.0
1.5
3.0
2.0
2.5
Loss
(£million)
2006 2005 2007
0
0.2
0.4
0.6
1.2
0.8
1.0
Turnover
(£million)
2006 2005 2007
0
0.5
1.0
1.5
3.0
2.0
2.5
R&D
(£million)
2006 2005 2007
11 vastox.com
IFRS
The accounts prepared for the year 
ended 31 January 2007 will be the last 
produced under UK Generally Accepted 
Accounting Practice (GAAP). In common 
with all AIM-quoted companies, VASTox 
will produce its results for the year 
ending 31 January 2008 under 
International Financial Reporting 
Standards (IFRS). The first financial 
results reported under IFRS will be 
presented in the Group’s unaudited 
interim results for the six month period 
ending 31 July 2007. The Group has 
completed an impact assessment for the 
translation to IFRS and has reviewed the 
VASTox financial results for the areas 
likely to change most significantly. The 
Group’s plan to transfer from UK GAAP 
to IFRS is monitored regularly by the 
Group’s Audit Committee and reported 
to the Board.
Post	 balance	 sheet	 events
Following the year-end, the Group 
announced on 22 March 2007 the 
acquisition of DanioLabs Ltd and  
Dextra Laboratories Ltd. The Group 
acquired the entire share capital of  
both companies for £15.0 million and  
£1.5 million respectively, financed 
through the placing of 12.9 million  
new ordinary shares in VASTox plc.
Darren	 Millington,	 ACMA
Chief Financial Officer 
11 June 2007 UNIQUE 
DISCOVERY
MODELS
REPROFILING/
DEVELOPMENT
CAPABILITY
DRUG 
DISCOVERY
PROCESS
DISEASE
PATHWAYS
INNOVATIVE DRUG
DISCOVERY
ZEBRAFISH BIOLOGY PLATFORM
BIOANALYSIS AUTOMATION
12 VASTox	 plc  Annual Report and Accounts 2006/07
V ASTox’s	 in-house	 drug	 discovery	 and	 development	 capabilities	 combine	 a	 world-class	 expertise	 in	 carbohydrate	 and	 medicinal	 chemistry	 with	 high-volume,	 high-content	 biological	 screening	 (chemical	 genomics)	 using	 its	 proprietary	 zebrafish	 and	 fruitfly	 technologies.	 The	 Company	 uses	 these	 two	 technology	 platforms	 to	 support	 and	 advance	 its	 own	 drug	 discovery	 and	 development	 programmes,	 while	 also	 generating	 near-term	 revenues	 by	 providing	 this	 unique	 range	 of	 services	 to	 third-party	 pharmaceutical	 and	 biotechnology	 companies	 for	 their	 drug	 discovery	 efforts.
VASTox further benefits from the advice 
and guidance of its founders and a 
scientific advisory board comprising 
world-leading authorities on chemistry, 
biology, genetics and medicine. 
Following its recent acquisitions of 
DanioLabs, Dextra and the key assets  
of MNL Pharma, VASTox now operates 
state-of-the-art facilities in Oxford, 
Cambridge, Aberystwyth and Reading.
With attrition rates in drug R&D at 98% 
and the cost of developing a successful 
product standing at approximately  
£500 million, VASTox firmly believes its 
technology platforms will strengthen 
both its own pipeline and those of the 
wider pharmaceutical industry while 
reducing the cost of development.
Chemical	 genomics
Chemical genomics refers to the analysis 
and understanding of the effect that  
small drug-like molecules have on 
biological pathways in the context  
of whole organisms. 
VASTox has developed an industry 
leading chemical genomics technology 
that makes use of two extensively studied 
organisms: zebrafish (Danio rerio) and 
fruitflies (Drosophila melanogaster). 
There are several key advantages that 
this approach has for drug discovery  
and development, including:
Very well characterised genetics  
and developmental processes.
Acknowledged to be extremely  
useful for developing relevant  
models of human disease and in  
the evaluation and interrogation  
of pathways directly relavent to  
human disease.
•
•
Expertise and T echnology BRAIN
TAIL
EYE
PIGMENTATION EAR FINS
BLOOD VESSELS
JAW
HEART
LIVER GUT
KIDNEY
ZEBRAFISH: KEY ORGANS
Actual size approximately 1mm
13 vastox.com
Small size and rapid reproductive and 
development cycles mean that large 
numbers of zebrafish or fruitflies can 
be screened simultaneously using 
small amounts of compound in a  
high-throughput manner to produce 
statistically significant data.
Rapid screening of compounds for 
therapeutic activity, lead identification 
and target validation.
Rapid in vivo evaluation of 
compounds for safety and toxicity, 
which is highly predictive for toxicity  
in mammals.
Drug reprofiling or repositioning, i.e. 
identifying new uses or indications for 
already marketed drugs or those that 
were abandoned during development, 
but that have well studied human 
safety and pharmacokinetic profiles, 
and therefore represent a reduced 
clinical development risk.
Zebrafish:	 the	 early	 stage	 advantage
Following the recent acquisition of 
DanioLabs, VASTox is now the market 
leader in the use of zebrafish in the 
discovery and development of new 
medicines and has the largest, most 
advanced zebrafish facilities in the world.
An important advantage the zebrafish 
provides in drug discovery is the 
provision of highly valuable, in vivo whole 
organism data from the very earliest 
stages of the discovery process. In 
•
•
•
•
traditional drug discovery, the first 
living organism screen a potential drug 
candidate is exposed to is in the later 
stages of preclinical development and 
human clinical trials, once millions of 
pounds have been invested in the 
programme. In recent years a number  
of high-profile drug candidates have 
suffered from late stage failures or even 
withdrawal from the market due to 
unforeseen adverse side effects.
VASTox believes its zebrafish technology 
can help mitigate this risk and the 
associated cost of these failures. Due to 
the vertebrate’s genetic similarity with 
humans whereby all key organs are 
conserved, the zebrafish permits 
VASTox’s scientists to understand how 
any drug candidate will interact with an 
entire living system and acts as a test  
for predictive and safety toxicology. 
Therefore the Company has developed  
a wide range of industry validated 
toxicology screens, known as the “vivo™” 
screens, to assess compound safety and 
potential side effects in the areas of:
Acute toxicity
Cardiotoxicity (heart)
Hepatotoxicity (liver)
Myelotoxicity (blood)
•
•
•
• KEY RECOGNITION COMPOUND: 
SUGARS
SUGARS ARE FUNDAMENTAL TO LIFE
CARBOHYDRATE CHEMISTRY PLATFORM
CARBOHYDRATE 
DRUG
NATURALLY OCCURRING SOURCE OF DRUGS
(ABERYSTWYTH) (READING) (OXFORD)
NATURAL PRODUCTS SYNTHESIS CLINICAL SCALE-UP
VASTox DEXTRA VASTox
14 VASTox	 plc  Annual Report and Accounts 2006/07
Embryo toxicology
Cardiac rate and rhythms
Drug-drug interactions
Gut motility
Visual function
Locomotor effects
Bone demineralisation
By using these screens at an early stage 
of drug discovery, VASTox can improve 
the chances of drugs making it through 
the human stages of clinical trials and 
being successful in the market. This 
technology also has the potential to 
reduce the number of higher animals 
used in testing.
Carbohydrate	 chemistry
Sugars or carbohydrates are fundamental 
to the existence of life and the increasing 
awareness of this important biological 
function is providing the opportunity  
for the development of a host of novel, 
carbohydrate based therapeutics. 
VASTox are at the forefront of this 
research and are manipulating what  
were once considered poor medicinal 
chemistry targets into drug-like molecules 
by numerous sophisticated processes 
and techniques.
To support the development of novel 
carbohydrate drugs, the Company has 
assembled a powerful carbohydrate 
technology platform that supports both 
its own drug development programmes 
•
•
•
•
•
•
•
and is also offered to third parties on a 
collaborative or fee-for-service basis.
The Company has strengthened this 
capability through the recent 
acquisitions of Dextra and key assets  
of MNL Pharma. As a result, VASTox 
now has a world-leading carbohydrate 
chemistry capability with three 
dedicated state-of-the-art facilities in 
Oxford, Aberystwyth and Reading. 
VASTox is further strengthening the 
carbohydrate platform through 
development of a GMP compliant facility 
at its Reading site, which will allow the 
Company to supply sufficient material to 
support drug programmes from discovery 
through to Phase II clinical trials.
VASTox applies its extensive knowledge 
of carbohydrate chemistry in two areas:
Custom	 synthesis of small molecules 
and larger, more complex carbohydrate 
sugars, and the creation of novel 
compound libraries for pharmaceutical 
screening.
Prodrugs to address issues such as 
improvement of therapeutic index, 
bioavailability, controlled release 
delivery and stability, through 
chemical modification of carbohydrate 
side groups.
•
•
Expertise and T echnology continued 15 vastox.com
Compound	 libraries
VASTox’s chemistry expertise has 
enabled it to generate extensive libraries 
of proprietary drug-like molecules. These 
libraries are being screened against a 
range of disease indications to identify 
molecules with potential therapeutic 
activity in the indications of interest.
These high-quality libraries comprise 
primarily carbohydrate-based 
compounds, including:
Several hundred naturally occurring 
and synthetic imino sugars, which  
are simple and highly water-soluble 
molecules with favourable 
pharmacokinetic properties for  
drug screening
1200 Non-imino sugars (Phytopure
®
 
library), which have been isolated from 
plants and demonstrated desirable 
drug-like properties
Access to several hundred rare  
and complex carbohydrate  
molecules through Dextra’s specialist 
catalogue business.
Medicinal	 chemistry
Medicinal chemistry is concerned  
with the invention, discovery, design, 
identification and preparation of 
biologically active compounds, the study 
of their metabolism, the interpretation  
of their mode of action at the molecular 
level and the construction of structure-
activity relationships.
•
•
•
This capability is clearly of great 
importance in the process of discovering 
and developing new drugs and forms 
both a significant part of VASTox’s internal 
development capabilities and a high-value 
revenue-generating service offering. 
VASTox’s team of highly skilled medicinal 
chemists has significant industrial 
experience and provides the Company 
with a broad range of essential 
capabilities including hit-seeking,  
hit-to-lead and lead optimisation.
VASTox’s Oxford laboratories are 
equipped to the highest standards and 
are supported by in-house Nuclear 
Magnetic Resonance (NMR) and Liquid 
Chromotography Mass Spectrometry 
(LCMS) capabilities, allowing the 
chemistry group to undertake all 
services within one facility. Parkinson’s Disease (Sialorrhoea)
Parkinson’s Disease (Seborrhoea); Acne
Duchenne Muscular Dystrophy (VOX C1100)
Spinal Muscular Atrophy
MS; Epilepsy; Cognition
Tuberculosis (NAT)
Glaucoma
Age-related Macular Degeneration
Oncology (VOX14400)
Iminosugar opportunities
Osteoarthritis (BMP)
Cachexia; UNMASC; Wnt
CORE OTHER
DISCOVERY LEAD 
OPTIMISATION
PRECLINICAL CLINICAL
Phase I Phase II Phase III
16 VASTox	 plc  Annual Report and Accounts 2006/07
Drug Discovery
V ASTox’s	 long-term	 value	 lies	 in	 its	 ability	 to	 discover	 and	 develop	 proprietary	 new	 drugs.	 The	 Company	 	 has	 built	 a	 broad	 and	 diverse	 pipeline	 of	 proprietary	 clinical	 and	 preclinical	 stage	 drug	 candidates	 targeting	 serious	 disease	 indications	 including	 neuro-disorders,	 infectious	 diseases,	 cancer,	 ophthalmic	 diseases	 and	 regenerative	 medicine.
VASTox	 has	 created	 an	 exciting	 pipeline	 of	 drug	 candidates	 through	 a	 combination	 of	 strategic	 acquisitions	 and	 the	 in-house	 development	 of	 promising	 research	 programmes	 acquired	 from	 academia	 where	 a	 clear	 rationale	 for	 the	 treatment	 of	 	 a	 particular	 disease	 has	 already	 	 been	 established.	 VASTox divides its drug discovery 
programmes into two: Core therapeutics 
areas and other programmes. A Core 
therapeutic area of research is one 
in which VASTox has a differentiating 
expertise and capability based on 
scientific knowledge of key staff, the 
Scientific Advisory Board and advisors. 
Consequently, to maximise the potential 
of these programmes, VASTox invests 
 in the infrastructure of the programmes 
with the objective of creating significant 
additional value. The programmes will 
either be developed internally via partnering 
or through lucrative licensing deals whereby 
the Company retains a higher equity share 
of the future value of the programme. It  
is these Core areas of research that will 
generate longer-term value for shareholders. 
The other drug programmes are of  
equal importance to VASTox. These 
programmes will be across a range of 
therapeutic areas and will be acquired  
on a more opportunistic basis. Using its 
unique drug discovery technology platform  
VASTox will add value and develop these 
programmes to a level where they become 
attractive licensing opportunities. The 
Company expects to generate sizeable 
near-term returns for shareholders whilst 
also retaining a stake in the longer-term 
potential of the programme. 
The Company will continue to evaluate new 
programmes from academia as a potential 
rich source of promising new candidates 
for further commercial development.
Neuro-disorders
Neurodegenerative diseases
VASTox’s lead clinical drug candidates 
were acquired from DanioLabs in March 
2007 and target some of the symptoms of  17 vastox.com
Parkinson’s and other neurodegenerative 
diseases that occur as a result of the 
deterioration in function of neuronal (nerve) 
cells. The compounds in development 
were discovered through drug reprofiling 
programmes where they were found to 
prevent or reverse the degeneration process 
occurring in these conditions. In Europe and 
the US alone, Parkinson’s disease affects 
over 2.5 million people with the global 
market estimated to be worth £3 billion.
VASTox’s lead clinical candidate is a small 
molecule drug in Phase I clinical trials for 
the treatment of sialorrhoea (excessive 
salivation or drooling) in patients suffering 
with neurodegenerative diseases. This 
programme is expected to advance into 
Phase II clinical trials during the second 
half of 2007. 
VASTox has a small molecule candidate in 
Phase I clinical trials for the treatment of 
seborrhoea (excessive sebum production) 
in patients suffering with neurodegenerative 
diseases. It also has indications for people 
suffering with chronic acne. The current 
clinical trial is due to conclude towards  
the end of 2007 and VASTox expects to 
progress this candidate into Phase II 
development during 2008.
VASTox also has early stage research 
programmes, which use innovative 
disease models using the Company’s 
zebrafish chemical genomics platform,  
in the areas of epilepsy, multiple 
sclerosis and cognitive disorders.
Neuromuscular diseases (NMD) 
The primary focus of VASTox’s drug 
discovery research in the area of 
neuromuscular diseases is Duchenne 
muscular dystophy (DMD), a devastating 
genetic disease that affects over 30,000 
patients in the developed world and is 
generally fatal by the age of 25 years. 
The Company has identified a novel  
lead series of compounds that reverse 
the effects of the defective dystrophin 
production mechanism that causes 
DMD by up-regulating or increasing  
the production of a similar protein  
called utrophin.
Following the raising of £10.4 million in 
February 2006 to support the DMD 
programme, VASTox is advancing the lead 
series of compounds through preclinical 
development and selected a lead 
preclinical candidate in May 2007 . In June 
2006, Orphan Drug status was awarded 
by the European Medicines Agency 
(EMEA) and will enable clinical and 
regulatory development stages to be fast-
tracked and potentially reduce the time to 
market by three to four years.
In addition, VASTox provided a grant  
to the UK muscular dystrophy charity, 
Parent Project UK (PPUK), to support 
the development and management of  
its DMD patient registry, which will be 
crucial in preparing and recruiting for  
the clinical trials.
A second NMD programme targeting the 
rare genetic disorder Spinal muscular 
atrophy (SMA) is also progressing well. 
SMA causes a progressive loss of motor 
neurons in the spinal cord leading to 
severe muscle atrophy and is the leading 
genetic cause of mortality in infants and 
toddlers worldwide, affecting 1 in 6,000 
newborns. There are an estimated 50,000 
SMA sufferers in the developed world.
The Company has identified a number 
of “hit” compounds that improve the 
symptoms of SMA when tested in 
VASTox’s in vivo fruitfly screen designed 
to model the disease. VASTox is 
currently optimising these compounds in 
order to select a candidate in late 2008 
to take forward into clinical trials.
In 2006, VASTox was recognised as a 
neuromuscular centre of excellence by the 
EU when the Company joined a network 
called TREAT-NMD, which comprises of 
leading researchers, clinicians and charities 
to develop therapies for neuromuscular 
disorders. The network is funded with a  
€10 million grant from the EU.
VASTox continues to evaluate new 
research opportunities in other 
neuromuscular diseases. 
Infectious	 diseases
Tuberculosis
Tuberculosis (TB) remains a huge global 
health issue. Currently one third of the 
world’s population is suspected to be 
infected with TB and there have been  
no novel medicines for this disease for 
over 30 years. VASTox’s drug discovery 
programme is aiming to identify potential 
clinical candidates against TB, including 
the ever increasing number of multi- 
drug resistant strains. The Company’s 
programme targets N-acetyl transferase 
(NAT), an enzyme implicated in the 
growth of the bacteria that causes TB, 
M. tuberculosis. Following in-house 
screening of compound libraries, 
VASTox scientists have already shown  18 VASTox	 plc  Annual Report and Accounts 2006/07
that small molecules that inhibit  
this enzyme are also active against  
M. tuberculosis with several hit compounds 
identified that kill the bacteria. VASTox will 
develop these over the next 18 months 
with the objective of selecting a candidate 
for preclinical development
Other	 programmes
Oncology
VASTox’s lead anticancer candidate  
is VOX14400 and was acquired in 
December 2006 from MNL Pharma. 
VOX14400 is an immunomodulator with a 
novel mechanism of action that stimulates 
the immune system without activating 
toxic inflammatory responses. Preclinical 
development of VOX14400 is due to be 
completed in the first half of 2008 and 
Phase I clinical trials targeting several solid 
tumour types are scheduled to commence 
in the second half of the year. Aside from 
cancer, VOX14400 also has potential 
indications against allergy and as an 
adjuvant for vaccines, both multi-billion 
pound therapeutic areas.
In April 2006, VASTox initiated a drug 
discovery programme focused on a 
signalling pathway for cancer, known as 
Wnt. This pathway is widely recognised 
within the scientific community to be a 
good cancer target because it is active  
in the developing embryo when cells  
are required to constantly grow and 
differentiate. The pathway is normally 
inactive in adults and only switched  
on again in cancers.
VASTox has developed a unique screening 
model in fruitflies where the Wnt pathway 
is identical to that in humans and a crucial 
step in the regulation of the Wnt pathway is 
impaired leading to uncontrolled cell 
growth. The Company is currently 
screening its libraries of proprietary drug-
like molecules through this model in order 
to identify compounds that counteract the 
effect of the defective protein.
In addition, VASTox has become a 
partner in a new European consortium  
that will undertake research towards 
developing new treatments for cancer 
targeting cancer stem cells (CSCs). The 
research programme, called Targeting 
Cancer Stem Cells for Therapy, will be 
backed by a €2 million grant from the 
European Commission under the Sixth 
Framework Programme. In recent years, 
CSCs have been identified as being an 
important factor in cancer due to their 
ability to both initiate and sustain tumour 
growth. However, there is currently no 
specific treatment that targets CSCs.
VASTox will work in partnership with  
five leading research organisations  
from across Europe to identify the  
CSCs that cause tumour growth, and 
thereby generate new drug targets  
with the ultimate objective of developing 
new cancer therapies. 
Ophthalmology
VASTox has two preclinical research 
programmes investigating treatments  
for glaucoma and age-related macular 
degeneration (AMD). In glaucoma, a 
serious eye disorder affecting 67 million 
people worldwide, VASTox is working  
on treatments that modulate intraocular 
pressure and also have a direct effect on 
the optic nerve. In AMD, the commonest 
cause of eye degeneration and blindness 
in the western world, the patient suffers 
from loss of central vision and VASTox is 
focused on treating the underlying cause 
of the disease. These two programmes 
are progressing through the preclinical 
stages of development and are 
anticipated to enter into clinical trials  
by the end of 2008. 
Regenerative medicine
VASTox has two early stage research 
programmes in regenerative medicine: 
bone repair and stem cells. In bone 
repair, the Company is investigating  
the bone morphogenetic protein (BMP) 
signalling pathway and, in particular,  
its role in osteoarthritis. VASTox will  
use zebrafish models to screen its 
compound libraries for small molecules 
that disrupt the BMP pathway and 
generate lead compounds with efficacy  
in the treatment of osteoarthritis.
In September 2006, following the award 
of a grant for £910,000 from the UK 
Department of Trade and Industry, 
VASTox initiated an 18-month 
collaborative research programme, 
entitled Understanding the Molecular 
Activation of Stem Cells (UNMASC). The 
programme will screen small molecules 
in zebrafish and fruitflies to identify 
compounds that affect stem cell fate (e.g. 
division, proliferation and behaviour). 
These hits can then be developed for use 
in a wide range of regenerative therapies 
for diseases such as Crohn’s disease, 
Parkinson’s disease and cancer. 
VASTox will undertake the research in 
collaboration with leading academics at 
the University of Oxford, supported by 
the UK Medical Research Council.
Drug Discovery continued 19 vastox.com
The	 success	 of	 VASTox’s	 pharmaceutical	 services	 business	 	 is	 such	 that	 it	 is	 already	 generating	 significant	 revenues,	 which	 it	 reinvests	 into	 drug	 discovery	 programmes.	 During	 2006/07,	 VASTox	 worked	 with	 over	 25	 pharmaceutical	 and	 life	 sciences	 companies	 and	 nearly	 doubled	 turnover	 to	 £1	 million	 compared	 to	 the	 previous	 year.	 	 These	 service	 deals	 further	 validate	 the	 power	 of	 VASTox’s	 world-leading	 technology	 platforms.	 This business is expected to grow 
significantly in 2007 owing to the 
strengthening of its capabilities in all areas 
through the acquisition and integration of 
DanioLabs, Dextra Laboratories and the 
key assets of MNL Pharma. The impact  
of these additions to the new enlarged 
Company will be to provide further 
immediate complementary expertise and 
high-quality facilities as well as existing 
contracts and revenue streams, and 
access to a significantly broader 
customer base. For example, in zebrafish 
chemical genomics, VASTox can count 
five of the ten largest pharmaceutical 
companies in the world as clients.
VASTox offers chemical genomics drug 
discovery services from its two world- 
class zebrafish facilities in Oxford and 
Cambridge whilst the core of the 
carbohydrate services business 
operates out of its subsidiary group, 
Dextra Laboratories, in Reading.
The key pharmaceutical services 
VASTox offers are designed to shorten 
discovery timelines and to reduce 
attrition rates in the drug discovery and 
development process, and include:
target identification
disease pathway interrogation
disease models
drug reprofiling
predictive toxicology
carbohydrate and medicinal 
chemistry, and 
GMP capability in carbohydrate 
chemistry (mid 2007)
Furthermore, as industry recognition  
of the benefits and value of VASTox’s 
unique pharmaceutical service offering 
grows, the Company is looking to  
higher- value and longer-term research 
partnerships in the future.
In February 2007, following the 
successful completion of several pilot 
projects, the Company initiated its first 
new collaboration of this type, with the 
multinational pharmaceutical company 
Rottapharm S.p.A. 
In the 12-month collaboration with 
Rottapharm, VASTox will generate  
a zebrafish screening model for 
osteoarthritis, which will test potential  
drug candidates and therefore  
accelerate Rottapharm’s unique discovery 
programme in this area. In addition, 
VASTox will provide predictive safety and 
toxicology testing using its proprietary 
“vivo™” technology platform, which will 
ensure, early in the discovery process, that 
only high-quality compounds are selected.
•
•
•
•
•
•
•
A second deal also signed in February 
2007 will use VASTox’s medicinal 
chemistry expertise and experience in  
a 10-month research collaboration to 
support one of the unnamed client’s 
drug discovery programmes. 
Combined, these collaborations will 
generate revenues of nearly €1 million  
for VASTox over the duration of the 
programmes and represent a step-up in 
magnitude of deal value to the Company.
Case study
VASTox offers its innovative technology 
platforms and drug discovery expertise 
to the wider pharmaceutical and life 
science industries to help advance their 
drug programmes whilst generating 
immediate revenues for the business. 
During the past year, VASTox has 
completed studies which have 
validated the power the Company’s 
technologies bring to the drug 
discovery process. 
One example was a joint study  
with three leading pharmaceutical 
companies, Roche, Bayer-Schering 
and Merz, which tested known 
compounds in VASTox’s zebrafish 
screens for teratogenicity, an effect  
in humans that would cause 
malformations in a developing  
embryo. The compounds were blind 
tested with the results proving to be 
highly predictive for this toxic effect. 
Pharmaceutical Services
V ASTox	 operates	 a	 hybrid	 business	 model.	 	 This	 model	 enables	 the	 Company	 to	 use	 its	 two	 technology	 platforms	 in	 chemistry	 and	 chemical	 genomics	 in	 its	 internal	 drug	 discovery	 research	 while	 also	 offering	 this	 unique	 range	 of	 services	 to	 third	 party	 pharmaceutical	 and	 biotechnology	 companies	 for	 their	 drug	 discovery	 efforts.	 20 VASTox	 plc  Annual Report and Accounts 2006/07
1.	 Barry	 Price,	 PhD
Non-executive Chairman
Dr Price (63) joined VASTox as Non-
executive Chairman in September 2006 
and brings to the Company a wealth  
of industry and board-level expertise  
in the pharmaceutical and life sciences 
industries. Previously, he spent 28 years 
with the Glaxo Group of companies  
and held several executive positions 
including Managing Director of 
Glaxochem Ltd. Since 1996, Dr Price 
has been a Non-executive Director of 
Shire plc and during his time in the 
position, he has seen Shire develop  
into one of the UK’s largest life science 
companies. Dr Price is also currently 
Chairman of BioWisdom Ltd and 
Antisoma plc and in recent years has 
held directorships at Chiroscience plc, 
Celltech Group plc and Pharmagene plc.
2.	 Steven	 Lee,	 PhD
Chief Executive Officer
Dr Lee (40) joined VASTox as CEO in 
September 2004. Prior to this, he held  
a number of senior commercial and 
business development roles with major  
UK biotechnology companies including 
British Biotech plc, PA Consulting 
Group, Chiroscience Group plc and 
Datamonitor plc. From 2001 until 2004, 
Dr Lee was Executive Director of Life 
Sciences at the commercialisation 
specialists IP2IPO Ltd (now IP Group 
plc). He has also acted as a consultant 
on product strategy to major 
pharmaceutical companies including 
Zeneca, Glaxo Wellcome, Novartis and 
Johnson & Johnson. Dr Lee holds a PhD 
in parasite epidemiology from Kings 
College London.
3.	 Darren	 Millington,	 ACMA
Chief Financial Officer &  
Company Secretary
Mr Millington (31) joined VASTox in April 
2005 as Head of Finance and Company 
Secretary. He was subsequently 
appointed to the Board of Directors as 
Chief Financial Officer in May 2006 and 
retains his position as the Company 
Secretary. He is a Chartered 
Management Account. Having worked  
in the Audit and Advisory Divisions  
at Arthur Andersen (later acquired by 
Deloitte & Touche), he joined IP2IPO Ltd 
(now IP Group plc) as Group Financial 
Controller. Mr Millington holds a Masters 
degree in Theoretical Physics from the 
University of London.
4.	 Richard	 Storer,	 DPhil
Chief Scientific Officer
Dr Storer (60) was appointed to the 
Board of Directors as Chief Scientific 
Officer in May 2006. During his 30-year 
career within the pharmaceutical industry, 
he has overseen the progression of 
several discovery programmes into 
clinical development with several 
subsequently being launched to market 
including the blockbuster products Epivir 
and Relenza. His formative years were 
spent at GlaxoWellcome before moving 
to BioChem Pharma Inc. (now part of 
Shire plc) as Senior Director of Chemistry 
prior to joining Idenix Pharmaceuticals 
as Senior Vice President of Chemistry. In 
1996, Dr Storer received the Canadian 
Prix Galien for the discovery of 3TC 
(Epivir) and is a Fellow of the Royal 
Society of Chemistry.
5.	 James	 Taylor
Chief Commercial Officer
Mr Taylor (46) joined the Board of 
Directors at VASTox as Chief Commercial 
Officer in July 2006, bringing more than 
20 years of commercial business 
experience from his career in life 
sciences. Before joining VASTox,  
Mr Taylor was Vice President of Business 
Development at the drug discovery 
company Cellzome Inc. where he was 
responsible for the commercialisation of 
the Company’s complex drug discovery 
technology and the licensing of early 
stage discovery programmes. Previously, 
he was the Biotechnology Commercial 
Manager at ICI Biologicals before being 
promoted to Head of Strategy and 
Business Development for AstraZeneca’s 
plant biotechnology business. Mr Taylor 
is also a Non-executive Director of  
the UK biotechnology company  
Karus Therapeutics Ltd.
Board of Directors
1 2 3 4
5 21 vastox.com
6.	 Professor	 Stephen	 Davies
Non-executive Director
Professor Davies (57) co-founded 
VASTox in January 2003. He was 
Chairman of VASTox until September 
2006 and guided the Company through 
a successful flotation and the formative 
years of the Company’s development. In 
1992, Prof. Davies founded the spin-out 
companies Oxford Asymmetry and 
Oxford Diversity which later combined 
for the IPO of Oxford Asymmetry 
International. This subsequently merged 
in 2000 with Evotec for £316 million. He 
has been professor at Oxford University 
for over 20 years and was elected to the 
Waynflete Chair of Chemistry in 2006, 
one of the most prestigious academic 
posts in UK science. In addition, Prof.
Davies has received numerous awards 
for his contribution to organic chemistry.
7.	 Sir	 Brian	 Richards
Non-executive Director
Sir Brian Richards (74) was appointed 
Non-executive Director of VASTox in 
October 2005. Sir Brian is vastly 
experienced within the pharmaceutical 
and biotechnology industries and is 
currently Chairman of Alizyme plc, 
Cozart plc and Lipoxen plc. He also  
co-founded British Biotech Ltd, serving 
as Executive Chairman until 1993 and 
has held non-executive chairmanships 
or directorships in several UK and 
international biotechnology companies. 
He received a CBE in 1990 and was 
Knighted in 1997 in recognition of his 
services to the biotechnology industry.
8.	 David	 Norwood
Non-executive Director
Mr Norwood (38), is Executive Chairman  
of IP Group plc (formerly IP2IPO Ltd), the 
AIM-listed technology commercialisation 
specialists. He has a wide range  
of experience in early- and mid- 
stage technology companies as an 
investor, adviser and a director. In  
1999, Mr Norwood founded IndexIT, a 
technology advisory consultancy, which 
was acquired by Beeson Gregory in 
2000. He was a Director of Beeson 
Gregory and later, Evolution Group plc. 
He has been a foreign exchange trader 
and an investment analyst with  
Bankers Trust, Duncan Lawrie and 
Williams de Bröe.
9.	 Colin	 Wall,	 PhD
Non-executive Director
Dr Wall (57) was appointed to the 
VASTox Board as the Senior 
Independent Non-executive Director in 
September 2006 and also chairs the 
Company’s Remuneration Committee. 
He has a PhD in Forensic Chemistry and 
subsequently worked with Blue Circle 
Industries as Head of Cement Chemistry 
and in venture capital before founding 
his own company, Copley Wall & 
Associates in 1991 of which he is 
currently Chairman. He is also Chairman 
of Elvström Sobstad (UK) Ltd and is a 
Non-executive Director of Elvström  
Salis A/S. 
10.	 Andrew	 Richards,	 PhD
Non-executive Director
Dr Richards (47) was appointed to  
the VASTox Board as a Non-executive 
Director in March 2007 following the 
acquisition of DanioLabs Ltd. As a 
biotechnology entrepreneur, he founded 
Chiroscience in 1992 and was an 
Executive Director until its merger with 
Celltech in 1999. Currently Dr Richards  
is a Director at Vectura plc, BioWisdom 
Ltd, Theradeas Ltd, Cancer Research 
Technology Ltd (the commercial arm  
of CR-UK), Babraham Bioscience 
Technology Ltd and is Chairman of 
Geneservice. He is also a founding 
member of the Cambridge Angels,  
a founding investor in LibraryHouse, a 
member of the Council of UEA and  
a Director of the Bioindustry Association 
(BIA). Dr Richards is a Cambridge 
graduate with a PhD in Enzyme Chemistry.
11.	 George	 Elliott,	 CA
Non-executive Director
Mr Elliott (54) joined the VASTox Board  
of Directors in April 2007. For seven 
years, Mr Elliott served as Chief Financial 
Officer and Finance Director of the 
international technology company, 
Wolfson Microelectronics plc. Previously 
he was Business Development Director 
at McQueen International Ltd (now 
SYKES), where he was responsible for 
strategic sales and marketing. Mr Elliott, 
formerly a partner of Grant Thornton, is a 
Chartered Accountant and has a degree 
in Accountancy and Finance from Heriot-
Watt University. 
6 8 10 11
7 9 22 VASTox	 plc  Annual Report and Accounts 2006/07 VASTox	 plc  Annual Report and Accounts 2006/07
Directors’ Report and Business Review
For the year ended 31 January 2007
The directors present their report and the audited financial statements for VASTox plc (“VASTox”) and its subsidiaries  
(the “VASTox Group” or “the Group”) for the year ended 31 January 2007.
Principal	 activities
The principal activity of the Group is proprietary drug discovery in areas of unmet medical need and the provision of chemical 
genomics services.
Directors
The directors who served during the period were:
Executive
Steven Lee, PhD Chief Executive Officer
Richard Storer, DPhil Chief Scientific Officer, appointed 26 April 2006
Darren Millington, ACMA Chief Financial Officer, appointed 9 May 2006
James Taylor Chief Commercial Officer, appointed 12 July 2006
Non-executive
Barry Price, PhD Chairman, appointed 26 September 2006
Professor Stephen Davies Non-executive Director (was Chairman until 26 September 2006)
John Montgomery Non-executive Director, resigned 26 September 2006
David Norwood Non-executive Director
Sir Brian Richards Non-executive Director
Colin Wall, PhD Non-executive Director, appointed 26 September 2006
On the 22 March 2007 VASTox appointed Andrew Richards as Non-executive Director.
On the 19 April 2007 VASTox appointed George Elliott as a Non-executive Director.
Details of the directors’ interests, share options and service contracts are shown in the directors’ remuneration report.
The Company maintained directors’ and officers’ liability insurance cover throughout the period.
Biographical details of the directors are available on pages 20 and 21.
Principal	 risks	 and	 uncertainties
Intellectual property
In common with all drug development companies, VASTox faces the risk that the intellectual property rights necessary to exploit 
R&D efforts may not be adequately secured or defended. The Group’s intellectual property may also become obsolete before the 
products and services can be fully commercialised. 
R&D risk
There is always a risk that drugs under development will fail for a number of possible reasons. Potential drugs could fail to show 
reproducible results in clinical trials, produce unacceptable side effects that do not outweigh any clinical benefit or be uneconomic  
to develop. 23 vastox.com
Regulatory risk
Drug development is a highly regulated activity with multiple agencies working to ensure that clinical trials and new drugs are safe 
and effective. It can be difficult to predict the exact requirements of regulatory bodies in different jurisdictions. Clinical or regulatory 
issues can lead to delays in drug development which take significant time and investment to resolve.
Commercial risk
The Group’s two platform technologies in chemical genomics and carbohydrate chemistry may be superseded by direct 
competitors. Alternative technologies could be developed that undermine the Group’s services business or make our current 
technologies uneconomic for the market.
Financial risk
The successful development of the Group’s drug programmes requires financial investment which can come from revenues, 
commercial partners or investors. Failure to generate additional funding from any these sources may lead to postponement of drug 
programmes and a reduction in R&D operations.
Results	 and	 dividends
The consolidated profit and loss account for the year is set out on page 35. The Group’s loss for the financial year after taxation was 
£2,999,371 (2005/06: loss of £1,061,453).
The directors do not recommend the payment of a dividend.
Charitable	 and	 political	 donations
The Group made no charitable or political donations during the year (2005/06: nil).
Financial information
The Group produces detailed budgets and cash flow projections twice yearly for approval by the Board. Detailed management 
accounts are produced on a monthly basis for review and comment by the Board. Significant variances from budget are investigated 
promptly. Sales forecasts are produced on a weekly basis for review by the Executive Management Committee.
Financial	 Key	 Performance	 Indicators	 (“KPIs”)
The directors consider cash, revenues and R&D spend to be the Group’s KPIs. These are detailed in the financial review on 
pages 10 and 11.
Supplier	 payment	 policy
It is the Group’s policy to settle debts with its creditors on a timely basis, taking best advantage of the terms and conditions offered  
by each supplier. At 31 January 2007, the number of creditor days outstanding for the Group was 51 days (2005/06: 32 days). The 
Company had no trade creditors at 31 January 2007 or 31 January 2006. 24 VASTox	 plc  Annual Report and Accounts 2006/07
Directors’ Report and Business Review continued
For the year ended 31 January 2007
Financial	 instruments	 and	 management	 of	 liquid	 resources
The Group’s principal financial instrument comprises cash, and this is used to finance the Group’s operations. The Group has 
various other financial instruments such as trade creditors that arise directly from its operations. The Group has a policy, which has 
been consistently followed, of not trading in financial instruments. The Group places deposits surplus to short-term working capital 
requirements with a range of reputable UK-based banks and building societies. These balances are placed at fixed rates of deposit 
with maturities between one month and six months. The Group’s treasury policy is reviewed annually.
Substantial	 shareholdings
On 18 May 2007 the Company had been notified of the following holdings of more than 3% or more of the issued share capital of  
the Company.
       Number of 
       shares held %
Professor Stephen Davies       6,060,600 12.21
Morstan Nominees Ltd       4,265,000 8.59
IP2IPO Ltd       4,040,400 8.14
Professor Kay Davies       3,838,380 7.73
The First Cambridge Gateway General       2,957,162 5.96
Chase Nominees Ltd       1,970,578 3.97
Merifin Capital NV       1,498,389 3.02
Annual	 General	 Meeting
Accompanying this report is the notice of the Annual General Meeting together with the notes on the proposed resolutions. The 
meeting will be held at 9.30am on 19 July 2007 at the offices of Huntsworth plc, 8th Floor, 26 Finsbury Square, London, EC2A 1SF.
Auditors
BDO Stoy Hayward LLP has expressed its willingness to continue in office as auditors for the year. A resolution to reappoint it will be 
proposed at the forthcoming Annual General Meeting.
All the current directors have taken all steps that they ought to have taken to make themselves aware of any information needed by 
the Company’s auditors for the purposes of their audit and to establish that the auditors are aware of that information. The directors 
are not aware of any relevant audit information of which the auditors are unaware.
By order of the Board
Darren	 Millington,	 ACMA
Company Secretary
11 June 2007 25 vastox.com
The Combined Code
The Group supports the principles of good corporate governance and follows the Combined Code on corporate governance where 
its recommendations are appropriate for a group of VASTox’s size. As an AIM-quoted company, the Group is not required to comply 
with the requirements of the Combined Code. As such, this section provides general information on the Group’s adoption of 
corporate governance but does not constitute full compliance with the Combined Code.
Board of directors
The Group is controlled on behalf of its shareholders by the Board of directors which currently comprises four executive directors 
and seven non-executive directors.
The Board is responsible to shareholders for the proper management of the Group and meets formally at least 10 times a year  
to set the overall direction and strategy of the Group, to review scientific, operational and financial performance and to advise on 
management appointments. All key operational and investment decisions are subject to Board approval. The Company Secretary 
is responsible for ensuring that Board procedures are followed and applicable rules and regulations are complied with.
The roles of Chief Executive Officer and Chairman are separate and there is a clear division of their responsibilities.
Of the seven non-executive directors, five are considered by the Board to be independent (Barry Price, Brian Richards, Colin Wall, 
Andrew Richards and George Elliott). The Board considers that all of the non-executive directors are of sufficient competence and 
calibre to add strength and objectivity to the Board.
The Senior Independent Director is Colin Wall.
Directors are subject to election by shareholders at the first opportunity after their appointment and a third are subject to re-election 
at each annual general meeting.
Committees of the Board
Audit Committee
The Audit Committee comprises Stephen Davies, David Norwood and Brian Richards, who is Chairman. The Chief Executive 
Officer and Chief Financial Officer attend by invitation only. The Committee oversees the monitoring of the Group’s internal controls, 
accounting policies and financial reporting and provides a forum for dialogue with the external auditors. It also reviews the scope 
and results of the external audit. The committee reviews all material non-audit engagements and reports to the Board on the 
auditors’ objectivity and independence.
The Audit Committee meets at least twice a year with the external auditors. 
Remuneration Committee
The Remuneration Committee comprises Stephen Davies, Brian Richards and Colin Wall, who is Chairman. Other directors can 
attend the meeting by invitation. The Remuneration Committee is responsible for reporting to the Board on the performance of the 
executive directors and the appropriate level and structure of remuneration. The Remuneration Committee recommends service 
contracts and remuneration levels based on advice from specialist independent consultants.
The directors’ remuneration report is presented on pages 27 to 32.
Nomination Committee
The Nomination Committee comprises Brian Richards, Colin Wall and is chaired by Barry Price. Other directors can attend the 
meeting by invitation. The Nomination Committee meets at least once per year and is responsible for reviewing the size, structure 
and balance of the Board. The committee is also responsible for succession planning for both executive and non-executive 
directors.
The terms of reference for all committees are available on request from the Company Secretary.
Corporate Governance Report
For the year ended 31 January 2007
vastox.com 26 VASTox plc  Annual Report and Accounts 2006/07
Attendance at Board meetings and committees
The directors attended the following Board meetings and committees during the period:
Attendance     Board Remuneration Nomination Audit
Barry Price – appointed 26 September 2006    4/4 – – –
Steven Lee     10/10 – 3/3 –
Richard Storer – appointed 26 April 2006    8/8 – – –
Darren Millington – appointed 9 May 2006    7/7 – – –
James Taylor – appointed 12 July 2006     6/6 – – –
Stephen Davies     10/10 6/6 3/3 2/2
John Montgomery – resigned 26 September 2006    4/6 2/4 1/3 1/2
David Norwood     7/10 3/6 1/3 1/2
Brian Richards     8/10 2/6 1/3 1/1
Colin Wall – appointed 26 September 2006    3/4 2/2 – –
Board performance and evaluation
Directors are subject to election by shareholders at the first opportunity after their appointment, and to re-election thereafter at 
intervals of no more than three years. The Board has a process for evaluation of its own performance, that of its committees and 
individual directors, including the Chairman. These evaluations are carried out at least annually.
Risk management and internal control
The entire Board is responsible for managing the risks of the Group and employs senior employees with appropriate knowledge and 
skills to effectively manage the operational and financial risks of the business.
VASTox has an organisational structure with clearly defined lines of reporting and responsibility. The structure is reviewed regularly 
to ensure appropriate levels of delegation and authority. All Group employees are required to adhere to specified codes of conduct, 
policies and procedures.
Although the Company does not have an internal audit function, the Board has reviewed the effectiveness of internal financial, 
operational and compliance controls during the year and is satisfied that these have been followed during the period.
Relationship with shareholders
The Board recognises the importance of effective and constructive dialogue with the Company’s shareholders. The Group 
communicates to investors through its interim and annual results, press releases and presentations at conferences, the Company’s 
website vastox.com and through general meetings. The Board also meets regularly with analysts and institutional investors 
throughout the year. Private investors are welcome to contact the Company and attend the Annual General Meeting. All 
shareholders will have at least 21 days’ notice of the Annual General Meeting at which the directors will be available to discuss 
aspects of the Group’s performance and question management in more detail. The Senior Independent Director is available to 
shareholders if contact through the normal channels is inappropriate or has failed to resolve concerns.
Corporate Governance Report continued
For the year ended 31 January 2007 27 vastox.com
Unaudited information
Although as an AIM-listed company, VASTox is not obliged to comply with the provisions of the Remuneration Report Regulations 
2002, as part of the Board’s commitment to good governance the Company has prepared this Remuneration Report in line with that 
required companies listed on the main market.
Remuneration Committee
The Remuneration Committee (the “Committee”) is responsible for:
 Establishing and recommending to the Board the policy for executive remuneration;
 Determining, on behalf of the Board and shareholders, the level and structure of remuneration packages of the executive 
directors and selected senior executives;
 Reviewing the structure of share schemes, and the policy for remuneration across the wider organisation.
The remuneration arrangements for the Chairman and Non-executive Directors are determined by the Board as a whole.  
Non-executive Director remuneration is agreed by the Chairman and Chief Executive Officer. No director is involved in  
discussions relating to his own remuneration. 
The members of the Committee during the year were:
Colin Wall (Chairman from 26 September 2006)
Sir Brian Richards
Professor Stephen Davies (Chairman until 26 September 2006)
The committee meets at least four times a year and met six times during the year. A table of attendance records is given on page 26.
During the year the Committee received guidance on executive remuneration from the Non-executive Chairman and the Chief 
Executive Officer, except on matters relating to their own remuneration. The Committee also consulted with specialist consultants 
who have been appointed by the Committee to provide independent, external advice.
Remuneration policy
The Remuneration Committee sets the remuneration philosophy which aims to align executive director and senior management 
remuneration with shareholders’ interests and to attract and retain the best talent for the benefit of the Group. During the year,  
the Committee carried out a full review of VASTox’s executive remuneration arrangements to ensure they are competitive and 
appropriate for a company of VASTox’s size and structure, and that policy reflects current best practice. As a result of this review,  
the Committee has adopted a new remuneration policy involving:
 competitive base salaries broadly anchored around median; and
  total remuneration packages that follow the fortunes of the Company as closely as possible.
Consistent with this policy, salaries are benchmarked against the median for UK companies of comparable size and sector. 
Performance-related incentives are targeted at upper quartile levels for outstanding performance to produce a highly leveraged 
package if the Company’s growth objectives are attained. The Company is committed to the principle of paying for performance at all levels 
within the organisation.
The new policy will result in decreased remuneration for below average performance and increased remuneration for above average 
performance, and will rebalance the mix of incentives towards long term performance.
Elements of executive director remuneration
The remuneration of executive directors during the year 2006/07 comprised the following:
 base salary
 annual performance bonus
 share options
 pension contribution
 other benefits
Basic salary
Basic salaries are reviewed annually and revised salaries take effect from November each year. The review process is managed by 
the Remuneration Committee with reference to market salary data provided by independent remuneration consultants and each 
executive’s performance and contribution to the Company during the year.
As a result of the review, the Committee will, in future, assess the market competitiveness of pay primarily in terms of total 
remuneration, with less emphasis on base salary. 
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Directors’ Remuneration Report
For the year ended 31 January 2007 28 VASTox plc  Annual Report and Accounts 2006/07
Directors’ Remuneration Report continued
For the year ended 31 January 2007
Bonuses
During the year bonuses were payable at the discretion of the Committee in recognition of outstanding personal performance.
Annual bonuses for the year to 31 January 2008 and for subsequent years will be based on achievement of stretching Company 
financial and strategic targets and personal performance objectives. Maximum opportunities will be 50% and 100% of salary for 
executive directors and the Chief Executive respectively.
Share options
The Company believes that share options continue to be an appropriate mechanism to incentivise staff and allow valued employees 
to share in the success of the Company.
Executive directors are awarded share options at the discretion of the Remuneration Committee. All share options are granted at the 
closing mid-market value of the Company’s ordinary shares on the day prior to grant. Option awards made to date generally vest in 
three equal portions on the first, second and third anniversaries after grant. Going forward, the Committee intends to adopt an 
annual option award policy, whereby executives will be eligible to receive an annual award of options of up to 100% of salary. The 
extent to which these options vest will be based on three-year relative total shareholder return (“TSR”) performance as compared to 
the FTSE techMARK mediscience Index. TSR is defined as the return on investment a shareholder receives over a specified period 
of time, including any change in share price and dividends received. Threshold vesting (33% of an award) would require VASTox’s 
TSR to equal the Index and full vesting would require VASTox’s TSR to out-perform the Index TSR by at least 20% p.a.
All employees are generally offered share options under the Company’s EMI share option scheme after 12 months’ service.  
Option awards for employees are recommended by the executive directors and approved by the Remuneration Committee.
Pension
The Group operates a defined contribution pension scheme which is available to all employees. The assets of the scheme are held 
separately from those of the Company in independently administered funds.
Other benefits
All staff are eligible for life assurance and private medical insurance after a three month probationary period.
In exceptional circumstances, the Company may offer a relocation allowance to new directors or key employees.
The Company does not offer a company car allowance for any member of staff.
Executive directors’ service contracts and termination provisions
The Company’s policy in entering into service contracts with executive directors is to offer a contract that enables the recruitment 
and retention of high calibre leaders and to protect the Company against sudden departure, particularly to competitor companies. 
The service contracts of executive directors are approved by the Remuneration Committee and are one-year rolling contracts.  
The service contract may be terminated by either party giving 12 months’ notice to the other. It is also the Company’s policy that 
termination payments should not exceed the director’s current salary, benefits and bonus entitlements for the notice period.  
The details of the directors’ contracts are summarised below:
     Date of contract Notice period
Steven Lee     1 September 2004  12 months
Richard Storer     26 April 2006  12 months
Darren Millington      9 May 2006  12 months
James Taylor      12 July 2006 12 months 29 vastox.com
New incentive arrangements
In summary, the Committee has agreed to:
 Award bonuses that will be subject to achievement of stretching Company financial and strategic targets and personal 
performance objectives (as described above).
  Continue to grant options under the executive share option scheme, and adopt an annual award policy of up to 100% of salary. 
The extent to which these options vest would be based on three-year relative TSR performance relative to the FTSE techMARK 
mediscience Index. Threshold (33% vesting) would require VASTox’s TSR to equal the Index. Full vesting would require VASTox’s 
TSR to out-perform the Index TSR by at least 20% p.a.
  Allow executives to commit some or all of their bonus into VASTox shares, with the opportunity to earn a match of up to 3 for 1 for 
meeting challenging three-year absolute TSR targets.
  Introduce a share ownership guideline of 1x basic salary for executive directors. If at any time the guideline is not met, executives 
would have to retain at least 50% of shares vesting under any equity scheme.
New option scheme
  The key features of the new option scheme are as follows:
  Annual grants of fair market value options vesting on three-year TSR relative to the FTSE techMARK mediscience Index.
 No options vest if VASTox’s TSR is below the Index TSR.
 33% of options vest if VASTox’s TSR equals the Index TSR.
 100% of options vest if VASTox’s TSR out-performs the Index TSR by at least 20% p.a.
 Pro rata vesting in between.
 Initially the Company is proposing annual grants of up to 1x of salary. Grant levels will be reviewed from time to time, taking 
account of total remuneration versus the market. However, the Company would not expect to change the grant sizes each year.
The Committee believes long-term TSR relative to a sector index is an objective measure of the Company’s success that is strongly 
aligned with shareholders’ interests. It is proposed that the Committee reviews the continued validity of the comparator index at the 
beginning of each performance cycle.
New bonus co-investment plan
In line with the desire to see VASTox executives holding shares in the Company, the Committee wishes to encourage executives  
to commit a portion of their earned annual bonus into VASTox shares. To support this, the Company will introduce a voluntary bonus  
co-investment plan that would provide an opportunity to earn up to three matching shares for each invested share based on three-
year TSR. The Company believes TSR is the most appropriate measure of VASTox’s overall performance at this time.
The key features of the new bonus co-investment plan are as follows:
 Voluntary commitment or purchase of up to 100% of any earned annual bonus into VASTox shares.
 Invested shares to be held for a period of three years.
 Opportunity to earn up to three matching shares for each invested share based on stretching three-year TSR targets.
 Number of matching shares for the first cycle to be based on a straight line from a 1 for 1 match for TSR of 10% p.a.  
to a 3 for 1 match for TSR of at least 30% p.a.
 Matching shares to be forfeited if an executive resigns or withdraws their investment within three years of the start of the  
performance period.
 Dividends to be accrued over the performance period and paid at the time of vesting, on shares that vest.
Non-executive directors’ service contracts and remuneration
The remuneration of the non-executive directors is determined by the Board as a whole, with regard to market comparatives. 
Independent advice is sought to ensure parity is maintained with similar businesses. The basic annual fee for non-executive 
directors was increased during the year in line with market comparatives and commensurate with the growth in the size of the 
Company. The basic annual fee for non-executives is £27 ,500 with an additional £3,000 for fulfilling a committee chairman or Senior 
Independent non-executive role. The Chairman’s basic fee was also increased to £66,000, with no additional committee fees.
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Directors’ Remuneration Report continued
For the year ended 31 January 2007
In order to align the interests of non-executives with shareholders and executives, the Company has decided to introduce a non-
executive share ownership requirement of 25% of cumulative net fees. Non-executives have the option to receive up to all of their fee 
in VASTox shares. Non-executives must receive at least 25% of their fee in VASTox shares and are not permitted to sell shares until 
the guideline is met.
The non-executive directors do not receive any pension, bonus or share option benefits from the Company. The contracts of the  
non-executive directors are reviewed by the Board annually. Current contracts are summarised below:
 Date of contract
Barry Price  26 September 2006
Stephen Davies  17 February 2003
David Norwood  17 February 2003
Brian Brichards  7 October 2005
Colin Wall  26 September 2006
Andrew Richards  22 March 2007
George Elliott        19 April 2007
Non-executives have contracts that have a term of three years, but can be terminated without notice by either party.
Performance graph
The graph below shows a comparison between the Company’s total shareholder return performance compared with the 
companies in the techMARK mediscience index of the London Stock Exchange. The graph covers the period from the Company’s 
admission to AIM on 14 October 2004 to 31 January 2007 and shows the relative value of £100 invested in VASTox and the AIM 
index from this date. The directors have selected the techMARK mediscience index as a comparison as it contains a number of 
companies of similar size and/or operating in VASTox’s sector.
The market price of the Company’s shares at 31 January 2007 was 133.5p. During the year from 1 February 2006, the market price 
of the Company’s shares has ranged from 125p to 194p.
This graph shows the value to 31 January 2007 of £100 invested in VASTox plc from when the Company floated on AIM on  
14 October 2004, compared with the techMARK mediscience index over the same period. 31 vastox.com
Directors’ remuneration (forming part of the financial statements)
Audited information
The following information has been audited by the Company’s auditors, BDO Stoy Hayward LLP .
The directors received the following remuneration during the year:
  Salary  Relocation Taxable Pension Total Total 
  and fees Bonuses allowance  benefits contributions 2006/07 2005/06 
Director  £ £ £ £ £ £ £
Executive
Steven Lee   181,250   200,000  –  175  – 381,425   231,626 
Richard Storer
1
   130,577   35,000    7,796   6,562  179,935  – 
Darren Millington
2
   63,065   20,000  –  169   3,854  87,088  –
James Taylor
3
   71,077   5,000   12,000   126   3,500  91,703  –
Non-executive
Barry Price
4
   21,154  – – – – 21,154  – 
Stephen Davies   12,500  – – – – 12,500  – 
John Montgomery
5
   4,167  – – – – 4,167  – 
David Norwood   12,500  – – – – 12,500  – 
Brian Richards   25,000  – – – – 25,000   8,333 
Colin Wall
6
   8,718  – –  – – 8,718  – 
   530,008   260,000   12,000   8,266   13,916   824,190   239,959 
1 Richard Storer was appointed on 26 April 2006 4 Barry Price was appointed on 26 September 2006
2 Darren Millington was appointed on 9 May 2006 5 John Montgomery resigned on 22 September 2006
3 James Taylor was appointed on 12 July 2006 6 Colin Wall was appointed on 26 September 2006
Directors’ share options
Aggregate emoluments disclosed above do not include any amounts for the value of options to acquire ordinary shares in the 
Company granted to or held by the directors. Details of these options are as follows:
 Date At Granted Exercised At Price of 
 of 1 February during during the 31 January per which Expiry 
Director grant 2006 period period 2007 share (p) exercisable date
Steven Lee 2 Sep 04 2,020,000 – – 2,020,000  0.495  Note (i) 2 Sep 14
 2 Dec 05 550,000 – – 550,000 171.5 Note (ii) 2 Dec 15
  2,570,000 – – 2,570,000
Richard Storer 2 May 06 – 540,120 – 540,120 165.0 Note (iii) 2 May 16
 2 May 06 – 59,880 – 59,880  167.0 Note (iv) 2 May 16
  – 600,000 – 600,000
Darren Millington 1 Jul 05 60,000 – – 60,000 169.5 Note (v) 1 Jul 15
 2 Dec 05 90,000 – – 90,000 171.5 Note (v) 2 Dec 15
 2 Nov 06 – 250,000 – 250,000 135.0  Note (v) 2 Nov 16
  150,000 250,000 – 400,000
James Taylor 18 Aug 06 – 300,000 – 300,000 141.0 Note (v) 18 Aug 16
  – 300,000 – 300,000
Notes
(i)  These options were awarded prior to the Company’s flotation at an exercise price equal to the share price at the Company’s formation. All shares have vested.
(ii)  These options vest in the following proportions: 100,000 on award, 100,000 on 2 December 2006; 100,000 on 2 December 2007 and 250,000 on 2 December 
2008. The share options were granted at the closing mid-market value of the shares on 30 November 2005.
(iii)   Vesting in the following proportions: 40,120 on 2 May 2007; 200,000 on 2 May 2008, and 300,000 on 2 May 2009.
(iv)   All share options vest on 2 May 2007.
(v)   These share options vest in three equal proportions on the first, second and third anniversaries of their grant. The share options were granted at the closing  
mid-market price of the shares on the day prior to the award of the options. 32 VASTox plc  Annual Report and Accounts 2006/07
Directors’ shareholdings
The directors who served during the period, together with their beneficial interests in the shares of the Company, are as follows:
       Ordinary  Ordinary 
       shares at shares at 
       31 January  31 January 
Director       2007 2006
Executive
Steven Lee       148,148 148,148
Richard Storer       – –
Darren Millington
1
       1,111 –
James Taylor       – –
Non-executive
Barry Price       – –
Stephen Davies       6,208,748 6,208,748
John Montgomery
2
       1,019,359 1,019,359
David Norwood       – –
Brian Richards       – –
Colin Wall        36,000 –
1 Darren Millington purchased shares prior to becoming a director.
2 John Montgomery resigned from the Board on 26 September 2006.
On behalf of the Board
Colin Wall, PhD
Chairman of Remuneration Committee
11 June 2007
Directors’ Remuneration Report continued
For the year ended 31 January 2007 33 vastox.com
Statement of Directors’ Responsibilities
For the year ended 31 January 2007
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and 
United Kingdom Generally Accepted Accounting Practice. 
United Kingdom company law requires the directors to prepare the financial statements for each financial year which give a true and 
fair view of the state of affairs of the Company and the Group as at the end of the financial year and of the profit or loss of the Group 
for that period. In preparing those 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;
to presume that the Company will continue in business.
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the 
financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 1985. 
They are also responsible for the system of internal control, for safeguarding the assets of the Company and hence for taking 
reasonable steps for the prevention and detection of fraud and other irregularities.
Going concern
After making enquiries the directors have formed a judgement, at the time of approving the financial statements, that there is 
reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future.  
For this reason, the directors continue to adopt the going concern basis in preparing the financial statements.
On behalf of the Board
Steven Lee, PhD
Chief Executive Officer
11 June 2007
•
•
• 34 VASTox plc  Annual Report and Accounts 2006/07
Independent Auditors’ Report to the Shareholders 
of VAST ox plc
We have audited the consolidated and parent company financial statements (the “financial statements”) of VASTox plc for the year 
ended 31 January 2007 which comprise the Consolidated Profit and Loss Account, the Consolidated Statement of Total Recognised 
Gains and Losses, the Consolidated and Parent Company Balance Sheets, the Consolidated Cash Flow Statement and the related 
notes. These financial statements have been prepared under the accounting policies set out therein.
Respective responsibilities of directors and auditors
The directors’ responsibilities for preparing the financial statements in accordance with applicable law and United Kingdom 
Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the Statement of Directors’ 
Responsibilities. Where a company is fully listed there are additional responsibilities contained in the Companies Act 1985 relating  
to the preparation of a Directors’ Remuneration Report, VASTox plc has voluntarily complied with these requirements.
Our responsibility is to audit the financial statements and the part of the Directors’ Remuneration Report to be audited in 
accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true and fair view, whether the financial statements and 
the part of the Directors’ Remuneration Report to be audited have been properly prepared in accordance with the Companies Act 
1985 and whether the information given in the Directors’ Report is consistent with those financial statements. We also report to you 
if, in our opinion, the Company has not kept proper accounting records, if we have not received all the information and explanations 
we require for our audit, or if information specified by law regarding directors’ remuneration and other transactions is not disclosed. 
We read other information contained in the Annual Report and consider whether it is consistent with the audited financial 
statements. The other information comprises only the Directors’ Report, the unaudited part of the Directors’ Remuneration Report, 
the Chairman’s review and the Corporate Governance Report. We consider the implications for our report if we become aware of 
any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any 
other information.
Our report has been prepared pursuant to the requirements of the Companies Act 1985 and for no other purpose. No person is 
entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of the 
Companies Act 1985 or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept 
responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices 
Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial 
statements and the part of the Directors’ Remuneration Report to be audited. It also includes an assessment of the significant 
estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting 
policies are appropriate to the Group’s and Company’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order  
to provide us with sufficient evidence to give reasonable assurance that the financial statements and the part of the Directors’ 
Remuneration Report to be audited are free from material misstatement, whether caused by fraud or other irregularity or error.  
In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements and  
the part of the Directors’ Remuneration Report to be audited.
Opinion
In our opinion:
 the consolidated financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted 
Accounting Practice, of the state of the Group’s affairs as at 31 January 2007 and of its loss for the year then ended;
 the parent company financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted 
Accounting Practice, of the state of the parent Company’s affairs as at 31 January 2007;
 the consolidated and parent company financial statements have been properly prepared in accordance with the Companies Act 1985;
 the part of the Directors’ Remuneration Report described as having been audited has been properly prepared in accordance 
with the provisions of Schedule 7A of the Companies Act 1985; and
the information given in the Directors’ Report is consistent with the financial statements.
BDO Stoy Hayward LLP
Chartered Accountants and Registered Auditors
Southampton
11 June 2007
•
•
•
•
•     
35 vastox.com
	 	 	 	 	 	 	 	 Restated 	 	 	 	 	 	 	 	 2007 	 	 2006 	 	 	 	 	 	 	 Notes	 £	 £
Turnover	 	 	 	 	 	 2	 	 1,033,823 	 	 531,361	 Cost	 of	 sales	 	 	 	 	 	 	 (303,673)	 (233,444)
Gross	 profit	 	 	 	 	 	 	 730,150	 	 	 297,917	 Research	 and	 development	 	 	 	 	 	 	 (2,937,396)	 (1,025,683)
General,	 management	 and	 administration	 	 	 	 	 	 (1,830,292)	 (1,005,366)
Share-based	 payment	 charge	 	 	 	 	 	 	 (403,898)	 (66,626)
Total	 administrative	 expenses	 	 	 	 	 	 	 (5,171,586)	 (2,097,675)
Other	 operating	 income	 	 	 	 	 	 3	 80,357	 	 	 –	 Operating	 loss	 	 	 	 	 	 3	 (4,361,079)	 (1,799,758)
Interest	 receivable	 	 	 	 	 	 	 872,766	 	 	 582,868	 Loss	 on	 ordinary	 activities	 before	 taxation	 	 	 	 	 	 (3,488,313)	 (1,216,890)
Tax	 on	 loss	 on	 ordinary	 activities	 	 	 	 	 	 5	 488,942	 	 	 155,437	 Loss	 on	 ordinary	 activities	 after	 taxation	 	 	 	 	 18	 (2,999,371)	 (1,061,453)
Basic	 and	 diluted	 loss	 per	 ordinary	 share	 	 	 	 	 6	 (8.24p)	 	 (3.39p)
All	 amounts	 relate	 to	 continuing	 activities.
	 	 	 	 	 	 	 	 Restated 	 	 	 	 	 	 	 	 2007	 2006 	 	 	 	 	 	 	 	 £	 £
Loss	 for	 the	 financial	 year	 	 	 	 	 	 (2,999,371)	 (1,061,453)
Prior	 year	 adjustment	 –	 note	 1	 	 	 	 	 	 	 (73,826)	 –	 Total	 gains	 and	 losses	 recognised	 since	 last	 financial	 statements	 	 	 	 	 (3,073,197)	 (1,061,453)
The	 notes	 on	 pages	 39	 to	 53	 form	 part	 of	 these	 financial	 statements.
Consolidated Profit and Loss Account
For the year ended 31 January 2007
Consolidated Statement of T otal  
Recognised Gains and Losses
For the year ended 31 January 2007   
36 VASTox plc	 	 Annual	 Report	 and	 Accounts	 2006/07
  
Consolidated Balance Sheet
For the year ended 31 January 2007
	 	 	 	 	 	 	 31 January	 31 	 January	 	 	 	 	 	 	 	 2007 	 2006 	 	 	 	 	 	 	 Notes	 £	 £
Fixed assets
Intangible	 assets	 	 	 	 	 	 7	 377,668 	 	 28,016	 Tangible	 assets	 	 	 	 	 	 8	 2,624,054 	 	 1,261,082	 	 	 	 	 	 	  3,001,722 	 	 1,289,098	 Current assets
Stock	 	 	 	 	 	 10	 187,444 	 	 27,000	 Debtors	 	 	 	 	 	 11	 1,116,746 	 	 541,300	 Cash	 on	 short	 term	 deposits	 	 	 	 	 	 12	 15,079,702 	 	 11,593,626	 Cash	 at	 bank	 	 	 	 	 	  3,209,392 	 	 1,039,690	 	 	 	 	 	 	 	 19,593,284 	 	 13,201,616	 Creditors: amounts	 falling	 due	 within	 one	 year	 	 	 	 	 13	 (1,427,111)	 (704,833)
Net current assets	 	 	 	 	 	 	 18,166,173 	 	 12,496,783	 Creditors: amounts	 falling	 due	 after	 more	 than	 one	 year	 	 	 	 14	 (597,355)	 (690,812)
Provision for liabilities and charges	 	 	 	 	 	 15	 (100,000)	 	 –	 Net assets	 	 	 	 	 	 	 20,470,540 	 	 13,095,069	 Capital and reserves
Called	 up	 share	 capital	 	 	 	 	 	 16	 3,721,707 	 	 3,131,311	 Share	 premium	 account	 	 	 	 	 	 18  22,327,396 	 	 12,946,848	 Other	 reserves	 	 	 	 	 	 18 (1,942,589)	 (1,942,589)
Share	 based	 payment	 	 	 	 	 	 18	 477,724	 	 	 73,826	 Profit	 and	 loss	 account	 	 	 	 	 	 18	 (4,113,698)	 (1,114,327)
Equity shareholders' funds 	 	 	 	 	 18	 20,470,540	 	 	 13,095,069
The	 notes	 on	 pages	 39	 to	 53	 form	 part	 of	 these	 financial	 statements.
Approved	 by	 the	 Board	 of	 Directors	 and	 authorised	 for	 issue.
Steven Lee, PhD   Darren Millington, ACMA
Chief	 Executive	 Officer	 	 Company	 Secretary
11	 June	 2007	 	 	 11	 June	 2007     
37 vastox.com
	 	 	 	 	 	 	 	 Restated 	 	 	 	 	 	 	 	 31 January	 31 	 January	 	 	 	 	 	 	 	 2007	 2006 	 	 	 	 	 	 	 Notes	 £	 £
Fixed assets
Investments	 	 	 	 	 	 9	 2,497,922	 	 	 2,094,024	 Current assets
Debtors	 –	 due	 after	 more	 than	 one	 year	 	 	 	 	 11	 	 24,194,798 	 	 14,225,887	 Debtors	 –	 due	 within	 one	 year	 	 	 	 	 	 11	 2,033 	 	 –	 	 	 	 	 	 	 	 24,196,831  	 14,225,887	 Net current assets	 	 	 	 	 	 	 	 24,196,831  	 14,225,887	 Net assets	 	 	 	 	 	 	 26,694,753	 	 	 16,319,911	 Capital	 and	 reserves
Called	 up	 share	 capital	 	 	 	 	 	 16	 	 3,721,707 	 	 3,131,311	 Share	 premium	 account	 	 	 	 	 	 18	 22,327,396 	 	 12,946,848	 Share	 based	 compensation	 	 	 	 	 	 18	 477,724 	 	 73,826	 Profit	 and	 loss	 account	 	 	 	 	 	 18	 167,926 	 	 167,926	 Equity shareholders' funds	 	 	 	 	 	 18	 26,694,753	 	 	 16,319,911
The	 notes	 on	 pages	 39	 to	 53	 form	 part	 of	 these	 financial	 statements.
Approved	 by	 the	 Board	 of	 Directors	 and	 authorised	 for	 issue.
Steven Lee, PhD   Darren Millington, ACMA
Chief	 Executive	 Officer	 	 Company	 Secretary
11	 June	 2007	 	 	 11	 June	 2007
Company Balance Sheet
For the year ended 31 January 2007   
38 VASTox plc	 	 Annual	 Report	 and	 Accounts	 2006/07
  
Consolidated Cash Flow Statement
For the year ended 31 January 2007
Reconciliation	 of	 operating	 loss	 to	 net	 cash	 outflow	 from	 operating	 activities.
	 	 	 	 	 	 	 	 Restated 	 	 	 	 	 	 	 	 2007 			 	 	 2006	 	 	 	 	 	 	 	 £	 £
Operating	 loss	 	 	 	 	 	 	 (4,361,079) (1,799,758)
FRS	 20	 charge	 for	 fair	 value	 of	 share	 options	 	 	 	 	  403,898 	 	 66,626	 Depreciation	 charge	 	 	 	 	 	 	 340,180 	 	 127,520	 Amortisation	 charge	 	 	 	 	 	 	 	 36,236	 	 	 7,767	 Increase	 in	 debtors	 	 	 	 	 	 	 (171,071)	 (246,547)
Increase	 in	 stock	 	 	 	 	 	 	 (160,444)	 (27,000)
Increase	 in	 creditors	 	 	 	 	 	 	 706,566 	 	 423,712	 Net cash outflow from operating activities	 	 	 	 	 (3,205,714)	 (1,447,680)
	 	 	 	 	 	 	 2007	 2006 	 	 	 	 	 	 	 Notes	 £	 £
Net cash outflow from operating activities	 	 	 	 	 (3,205,714)	 (1,447,680)
Returns on investments and servicing of finance 
Interest	 received	 	 	 	 	 	 	 	 789,814 	 	 507,652	 Taxation
R&D	 tax	 credit	 received	 	 	 	 	 	 	 167,519 	 	 29,041	 Capital expenditure
Purchase	 of	 tangible	 fixed	 assets	 	 	 	 	 	 	 (1,648,152) (1,357,770)
Purchase	 of	 intangible	 fixed	 assets	 	 	 	 	 	 (70,626)	 (15,783)
	 	 	 	 	 	 	 (1,718,778) (1,373,553)
Acquisitions
Acquisition	 of	 a	 business	 	 	 	 	 	 (255,131)	 	 –	 Cash (outflow) before management	 of liquid resources and financing	 	 	 	 	 	 (4,222,290) (2,284,540)
Management of liquid resources
(Increase)	 decrease	 in	 short	 term	 deposits	 	 	 	 	 (3,486,076)	 	 2,206,374	 Financing
Issue	 of	 ordinary	 share	 capital	 (net	 of	 expenses)	 	 	 	 	 	 	 9,970,944	 	 –	 (Repayment)	 increase	 in	 debt	 during	 the	 year	 	 	 	 	 (92,876)	 	 756,604	 	 	 	 	 	 	  9,878,068 	 	 756,604	 Increase	 in	 cash	 	 	 	 	 	 22	 2,169,702	 	 	 678,438
The	 notes	 on	 pages	 39	 to	 53	 form	 part	 of	 these	 financial	 statements.     
39 vastox.com
1. Principal accounting policies
A	 summary	 of	 the	 principal	 accounting	 policies	 is	 set	 out	 below:
Basis	 of	 preparation
The	 financial	 information	 has	 been	 prepared	 under	 the	 historic	 cost	 convention	 and	 in	 accordance	 with	 applicable	 United	 Kingdom	 accounting	 standards.
The	 accounting	 policies	 used	 in	 preparing	 the	 financial	 statements	 have	 been	 applied	 consistently	 throughout	 all	 periods	 presented	 with	 the	 exception	 of	 FRS	 20	 –	 “Share	 based	 payments”.	 The	 Company	 has	 adopted	 FRS	 20	 for	 the	 first	 time	 for	 the	 year	 ending	 	 31	 January	 2007	 and	 therefore	 restated	 prior	 year	 results	 to	 reflect	 the	 historic	 impact	 of	 this	 charge.	 See	 “Prior	 year	 adjustment”	 below	 for	 further	 details.
Basis	 of	 consolidation
The	 consolidated	 accounts	 incorporate	 the	 financial	 statements	 of	 the	 Company	 and	 its	 subsidiary	 using	 the	 acquisition	 method	 	 of	 accounting.
No	 profit	 and	 loss	 account	 is	 presented	 for	 the	 Company	 as	 permitted	 by	 Section	 230	 of	 the	 Companies	 Act	 1985.	 The	 Company’s	 loss	 for	 the	 year	 was	 £nil	 (2006:	 loss	 of	 £9,831).
Turnover
The	 recognition	 of	 income	 received,	 such	 as	 licence	 fees,	 contract	 research	 fees,	 up	 front	 payments	 and	 milestone	 payments	 is	 dependent	 on	 the	 terms	 of	 the	 arrangement,	 having	 regard	 to	 the	 risks	 and	 rewards	 of	 the	 arrangement,	 and	 the	 existence	 of	 any	 performance	 or	 repayment	 obligations	 with	 any	 third	 party.
VASTox	 recognises	 turnover	 when	 persuasive	 evidence	 of	 an	 arrangement	 exists,	 delivery	 has	 occurred	 or	 services	 have	 been	 rendered,	 the	 fee	 is	 fixed	 and	 determinable	 and	 recoverability	 is	 assured.	 Amounts	 received	 are	 recognised	 immediately	 as	 turnover	 where	 there	 are	 no	 substantial	 risks,	 there	 are	 no	 ongoing	 obligations	 and	 amounts	 received	 are	 not	 refundable.	 Amounts	 are	 deferred	 over	 an	 appropriate	 period	 where	 these	 conditions	 are	 not	 met.
Intangible	 assets	 –	 Research	 and	 development
Research	 and	 development	 expenditure	 is	 written	 off	 to	 the	 profit	 and	 loss	 account	 in	 the	 year	 in	 which	 it	 is	 incurred.	 In	 addition	 to	 direct	 costs,	 a	 proportion	 of	 facility	 costs	 and	 other	 overheads	 is	 allocated	 as	 R&D	 expenditure.	 This	 allocation	 is	 made	 to	 fairly	 reflect	 the	 level	 of	 resources	 engaged	 in	 the	 Group’s	 R&D	 activities.
Intangible	 assets	 –	 Goodwill
Goodwill	 arising	 on	 the	 acquisition	 of	 a	 business	 represents	 the	 excess	 of	 any	 fair	 value	 over	 the	 identifiable	 net	 assets	 acquired	 with	 the	 business.	 Goodwill	 is	 recognised	 as	 an	 asset	 and	 written	 off	 over	 a	 20	 year	 period	 on	 a	 straight-line	 basis.	 In	 addition,	 goodwill	 is	 reviewed	 for	 impairment	 annually	 and	 whenever	 there	 is	 an	 indicator	 of	 impairment.
Intangible	 assets	 –	 Patents	 and	 trademarks
Intangible	 fixed	 assets	 are	 stated	 at	 historic	 cost	 less	 amortisation.	 Amortisation	 is	 calculated	 to	 write	 off	 the	 cost	 of	 intangible	 fixed	 assets	 in	 equal	 instalments	 over	 their	 estimated	 useful	 lives	 as	 follows:
Patents	 (once	 awarded)	 	 10	 years
Licences	 	 	 	 Over	 the	 period	 of	 the	 licence	 agreement
Notes to the Financial Statements   
40 VASTox plc	 	 Annual	 Report	 and	 Accounts	 2006/07
  
Notes to the Financial Statements continued
1. Principal accounting policies	 continued
Intellectual	 property
Intellectual	 property	 consists	 of	 patents,	 trademarks	 and	 other	 similarly	 identifiable	 rights.	 Intellectual	 property	 acquired	 separately	 from	 a	 business	 is	 carried	 initially	 at	 cost	 and	 amortised	 on	 a	 straight-line	 basis	 over	 its	 estimated	 useful	 economic	 life	 from	 the	 time	 it	 is	 first	 available	 for	 use.
Depreciation
Tangible	 fixed	 assets	 are	 stated	 at	 historic	 cost	 less	 depreciation.	 Historic	 cost	 comprises	 the	 purchase	 price	 plus	 any	 incidental	 costs	 of	 acquisition	 and	 commissioning.	 Depreciation	 is	 calculated	 to	 write	 off	 the	 cost,	 less	 residual	 value,	 of	 tangible	 fixed	 assets	 in	 equal	 annual	 instalments	 over	 their	 estimated	 useful	 lives	 as	 follows:
Leasehold	 improvements	 	 Over	 the	 period	 of	 the	 remaining	 lease
Computer	 equipment	 	 3-5	 years
Laboratory	 equipment	 	 3-10	 years
Fixtures	 and	 fittings	 	 3-5	 years
Stock
Stocks	 are	 stated	 at	 the	 lower	 of	 cost	 and	 net	 realisable	 value.	 Net	 realisable	 value	 is	 based	 on	 estimated	 selling	 price,	 less	 further	 costs	 expected	 to	 be	 incurred	 on	 completion	 and	 disposal.	 Provision	 is	 made	 for	 obsolete,	 slow-moving	 or	 defective	 	 items	 where	 appropriate.
Operating	 leases
Costs	 in	 respect	 of	 operating	 leases	 are	 charged	 to	 the	 profit	 and	 loss	 account	 on	 a	 straight-line	 basis	 over	 the	 terms	 of	 the	 leases.
Government	 grants
Revenue	 based	 grants	 are	 credited	 to	 the	 profit	 and	 loss	 account	 so	 as	 to	 match	 them	 with	 expenditure	 towards	 which	 they	 are	 intended	 to	 contribute.
Deferred	 taxation
Deferred	 taxation	 is	 recognised	 in	 respect	 of	 all	 timing	 differences	 that	 have	 originated	 but	 not	 reversed	 at	 the	 balance	 sheet	 date	 where	 transactions	 or	 events	 have	 occurred	 at	 that	 date	 that	 will	 result	 in	 an	 obligation	 to	 pay	 more,	 or	 the	 right	 to	 pay	 less,	 or	 to	 receive	 more	 tax,	 with	 the	 exception	 that	 deferred	 tax	 assets	 are	 recognised	 only	 to	 the	 extent	 that	 the	 directors	 consider	 that	 it	 is	 more	 likely	 than	 not	 that	 there	 will	 be	 suitable	 taxable	 profits	 from	 which	 the	 underlying	 timing	 differences	 can	 be	 deducted.	 Deferred	 tax	 is	 measured	 on	 an	 undiscounted	 basis	 at	 the	 tax	 rates	 that	 are	 expected	 to	 apply	 in	 the	 periods	 in	 which	 timing	 differences	 reverse,	 based	 on	 tax	 rates	 and	 laws	 enacted	 or	 substantively	 enacted	 at	 the	 balance	 sheet	 date.
Pensions
The	 Group	 operates	 a	 defined	 contribution	 scheme	 for	 its	 employees.	 The	 amount	 charged	 to	 the	 profit	 and	 loss	 account	 in	 respect	 of	 pension	 costs	 is	 the	 contributions	 payable	 in	 the	 year.	 Differences	 between	 contributions	 payable	 and	 contributions	 actually	 paid	 are	 shown	 as	 either	 accruals	 or	 prepayments	 in	 the	 balance	 sheet.
Share-based	 payments
In	 accordance	 with	 FRS	 20	 –	 “Share	 based	 payment”,	 share	 options	 are	 measured	 at	 fair	 value	 at	 their	 grant	 date.	 The	 fair	 value	 is	 calculated	 using	 the	 Black-Scholes	 formula	 and	 charged	 to	 the	 income	 statement	 on	 a	 straight-line	 basis	 over	 the	 expected	 vesting	 period.	 At	 each	 balance	 sheet	 date,	 the	 Group	 revises	 its	 estimate	 of	 the	 number	 of	 options	 that	 are	 expected	 to	 become	 exercisable.	 The	 share-based	 payment	 charge	 is	 recorded	 separately	 in	 the	 income	 statement.     
41 vastox.com
1. Principal accounting policies continued
Prior	 year	 adjustment
All	 quoted	 UK	 companies	 are	 required	 to	 implement	 accounting	 standard	 FRS	 20	 –	 “Share	 based	 payment”	 for	 financial	 periods	 commencing	 on	 or	 after	 1	 January	 2006.	 This	 standard	 affects	 all	 companies	 that	 issue	 share	 options	 and	 results	 in	 a	 non-cash	 charge	 to	 the	 profit	 and	 loss	 statement	 to	 reflect	 the	 fair	 value	 of	 issued	 share	 options.	 In	 common	 with	 the	 implementation	 of	 all	 accounting	 standards,	 prior	 year	 results	 must	 be	 restated	 as	 if	 the	 accounting	 standard	 had	 always	 been	 in	 force.	 In	 the	 year	 ended	 31	 January	 2007	 the	 charge	 due	 to	 the	 implementation	 of	 FRS	 20	 is	 £403,898,	 and	 31	 January	 2006:	 £66,626.	 This	 restatement	 has	 had	 no	 impact	 on	 net	 assets.
The	 amount	 recognised	 in	 the	 consolidated	 statement	 of	 total	 recognised	 gains	 and	 losses	 reflect	 the	 total	 share	 based	 payment	 charge	 from	 implementing	 FRS	 20	 up	 to	 31	 January	 2006.
The	 investments	 in	 the	 Company’s	 balance	 sheet	 have	 been	 restated	 by	 the	 prior	 year	 adjustment	 of	 £73,826;	 this	 was	 due	 to	 the	 Company	 financing	 the	 share	 based	 payment	 charge.	 2. Segmental and geographical analysis
The	 Group	 operates	 one	 primary	 revenue	 earning	 business,	 which	 is	 the	 provision	 of	 contracted	 chemical	 genomics	 research.	 	 The	 Group	 does	 not	 present	 a	 geographic	 analysis	 of	 turnover	 as	 the	 directors	 believe	 this	 commercial	 information	 would	 be	 seriously	 prejudicial	 for	 shareholders.	 At	 31	 January	 2007	 and	 2006	 all	 the	 net	 assets	 of	 the	 Group	 and	 Company	 were	 located	 	 in	 the	 United	 Kingdom.
3. Operating loss 
Operating	 loss	 is	 stated	 after	 charging/(crediting):
	 	 	 	 	 	 	 2007	 2006 	 	 	 	 	 	 	 	 £	 £
Operating	 leases	 –	 land	 and	 buildings	 	 	 	 	 	 	 337,381 	 	 293,701	 Depreciation	 charge	 	 	 	 	 	 	 	 340,180 	 	 127,520	 Amortisation	 charge	 	 	 	 	 	 	 36,236	 	 	 7,767	 Grant	 income	 	 	 	 	 	 (80,357)	 	 –	 Auditors’ remuneration
–	 for	 audit	 services	 	 	 	 	 	 	 25,000 	 	 20,000	 –	 for	 other	 services	 	 	 	 	 	 	 24,460	 	 	 23,435
Of	 the	 above	 auditors’	 remuneration,	 £5,000	 (2006:	 £5,000)	 relates	 to	 VASTox	 Chemical	 Genomics	 Limited
and	 £20,000	 relates	 to	 VASTox	 plc	 (2006:	 £15,000).
The	 auditors’	 remuneration	 for	 non-audit	 services	 was	 related	 to	 taxation	 audit	 services	 £3,500	 (2006:	 £4,700),	 taxation	 advice	 services	 £850	 (2006:	 £1,000),	 interim	 review	 services	 £7,000	 (2006:	 £4,135),	 share	 option	 advice	 £9,610	 (2006:	 £13,600)	 other	 services	 £3,500	 (2006:	 nil).   
42 VASTox plc	 	 Annual	 Report	 and	 Accounts	 2006/07
  
Notes to the Financial Statements continued
4. Employee numbers and staff costs
The	 average	 number	 of	 employees,	 including	 executive	 directors,	 during	 the	 year	 was:
	 	 	 	 	 	 	 2007	 2006
Technical,	 research	 and	 development	 	 	 	 	 	 	 	 37 	 	 14	 Administration	 and	 overheads	 	 	 	 	 	 	 	 11	 	 	 5	 	 	 	 	 	 	 	 	 48 	 	 19
The	 parent	 company	 had	 no	 employees	 in	 the	 current	 or	 previous	 financial	 years.	 At	 the	 end	 of	 the	 year	 the	 Group	 employed	 73	 staff.
Their	 aggregate	 remuneration	 comprised:
	 	 	 	 	 	 	 	 Restated 	 	 	 	 	 	 	 	 2007	 		 2006	 	 	 	 	 	 	 	 £	 £
Wages	 and	 salaries	 	 	 	 	 	 	 	 1,942,474 	 	 833,973	 Social	 security	 costs	 	 	 	 	 	 	 	 218,217 	 	 96,929	 Pension	 costs	 	 	 	 	 	 	 54,074	 	 	 17,649	 Share	 based	 payment	 	 	 	 	 	 	 	 403,898	 	 	 66,626	 	 	 	 	 	 	 	 	 2,618,663 	 	 1,015,177
In	 respect	 of	 directors’	 remuneration,	 the	 Company	 has	 taken	 advantage	 of	 the	 permission	 in	 paragraph	 1(6)	 of	 Schedule	 6	 to	 the	 Companies	 Act	 1985	 to	 omit	 aggregate	 information	 that	 is	 capable	 of	 being	 ascertained	 from	 the	 detailed	 disclosures	 in	 the	 audited	 section	 of	 the	 Remuneration	 Report	 on	 pages	 31	 and	 32,	 which	 are	 ascribed	 as	 forming	 part	 of	 these	 financial	 statements.
The	 comparative	 year	 2005/06	 the	 directors	 received	 the	 following	 remuneration.
	 	 	 	 	 	 	 	 £
Salary	 fees	 and	 benefits	 	 	 	 	 	 	 	 	 276,825	 Pension	 	 	 	 	 	 	 	 	 1,604	         278,429     
43 vastox.com
5. Taxation 
The	 tax	 credit	 represents:
	 	 	 	 	 	 	 2007	 2006 	 	 	 	 	 	 	 	 £	 £
Prior	 period	 adjustment	 	 	 	 	 	 	 	 16,802 	 	 4,720	 R&D	 tax	 credit	 in	 the	 period	 	 	 	 	 	 	 	 472,140 	 	 150,717	 	 	 	 	 	 	 	 	 488,942	 	 	 155,437
The	 tax	 assessed	 on	 the	 loss	 on	 ordinary	 activities	 for	 the	 period	 is	 lower	 than	 the	 standard	 rate	 of	 corporation	 tax	 in	 the	 	 United	 Kingdom	 of	 19%	 (2006:	 19%).	 The	 differences	 are	 explained	 as	 follows:
	 	 	 	 	 	 	 	 Restated 	 	 	 	 	 	 	 	 2007	 		 2006	 	 	 	 	 	 	 £	 £
Loss	 on	 ordinary	 activities	 before	 taxation	 	 	 	 	 (3,488,313)	 (1,216,890)
Tax	 thereon	 at	 19%	 	 	 	 	 	 (662,779)	 (231,209)
Expenses	 not	 deductible	 for	 tax	 purposes	 	 	 	 	 	 	 89,974 	 	 22,049	 Movement	 in	 short-term	 timing	 differences	 	 	 	 	 	 3,289 	 	 511	 Increase	 in	 losses	 carried	 forward	 to	 future	 periods	 	 	 	 	 	 451,448 	 	 322,192	 Capital	 allowances	 in	 excess	 of	 depreciation	 	 	 	 	 	 (255,709) (232,860)
Difference	 in	 rate	 regarding	 R&D	 tax	 credits	 	 	 	 	 	 88,526 	 	 28,259	 Tax	 relief	 for	 qualifying	 R&D	 expenditure	 	 	 	 	 	 (186,889)	 (59,659)
Prior	 period	 adjustments	 	 	 	 	 	 (16,802)	 (4,720)
	 	 	 	 	 	 (488,942) (155,437)
Unrecognised	 deferred	 tax
The	 deferred	 tax	 liability	 in	 respect	 of	 accelerated	 capital	 allowances	 of	 £488,922	 (2006:	 £232,606)	 has	 been	 offset	 against	 a	 deferred	 tax	 asset	 of	 the	 same	 amount	 in	 relation	 to	 trading	 losses	 carried	 forward.
There	 is	 an	 additional	 unprovided	 deferred	 tax	 asset	 of	 £279,566	 (2006:	 £93,840)	 in	 relation	 to	 the	 trading	 losses	 carried	 forward	 because	 in	 the	 opinion	 of	 the	 directors,	 there	 is	 insufficient	 evidence	 that	 the	 asset	 will	 be	 recovered.   
44 VASTox plc	 	 Annual	 Report	 and	 Accounts	 2006/07
  
Notes to the Financial Statements continued
6. Loss per share calculation
	 	 	 	 	 	 	 	 Restated 	 	 	 	 	 	 	 	 2007	 			 2006
Attributable	 loss	 (£)	 	 	 	 	 	 	 	 2,999,371 	 	 1,061,453	 Weighted	 average	 number	 of	 shares	 in	 issue	 	 	 	 	 	 	 36,420,113  	 31,313,111	 Basic	 and	 diluted	 loss	 per	 share	 (pence)	 	 	 	 	 	 	 8.24 	 	 3.39
The	 calculation	 of	 loss	 per	 share	 is	 based	 on	 the	 weighted	 average	 ordinary	 shares	 in	 issue	 during	 the	 period.	 Since	 the	 Group	 has	 reported	 a	 net	 loss,	 diluted	 loss	 per	 share	 is	 equal	 to	 basic	 loss	 per	 share.
The	 Company	 has	 4,750,184	 share	 options	 in	 issue	 that	 could	 potentially	 dilute	 basic	 earnings	 per	 share	 in	 the	 future.	 They	 have	 not	 been	 included	 in	 the	 calculation	 of	 diluted	 earnings	 per	 share	 because	 they	 are	 antidilutive	 for	 the	 periods	 presented.
7. Intangible assets
	 	 	 	 	 	 Patents 	 and	 	 	 	 	 	 	 licences	 Goodwill	 Total	 	 Group	 	 	 	 	 	 £	 £	 £
Cost
At	 1	 February	 2006	 	 	 	 	 	 	 40,783 	 	 –	 40,783	 Additions	 	 	 	 	 	 	 270,758 	 	 115,130	 385,888	 At 31 January 2007	 	 	 	 	  311,541  115,130 426,671	 Amortisation
At	 1	 February	 2006	 	 	 	 	 	 (12,767)	 –	 (12,767)
Provided	 during	 the	 year	 	 	 	 	 	 (36,236)	 –	 (36,236)
At 31 January 2007	 	 	 	 	 	 (49,003) – (49,003)
Net book value
At 31 January 2007	 	 	 	 	 	 262,538  115,130  377,668	 At	 31	 January	 2006	 	 	 	 	 	 	 28,016 	 	 	 –		 	 28,016
Goodwill	 arose	 on	 the	 acquisition	 on	 13	 December	 2006	 of	 the	 key	 assets	 of	 MNL	 Pharma	 Limited,	 an	 Aberystwyth-based	 drug	 discovery	 company	 that	 went	 into	 administration	 in	 October	 2006.	 It	 is	 the	 view	 of	 the	 directors	 that	 the	 acquisition	 method	 of	 accounting	 is	 the	 most	 appropriate	 way	 to	 record	 the	 transaction.	 The	 consideration	 for	 the	 acquisition	 comprised	 an	 initial	 £240,000	 (plus	 £15,131	 of	 expenses).	 The	 directors	 believe	 that	 this	 is	 appropriately	 allocated	 as	 £55,000	 for	 tangible	 fixed	 assets	 and	 £185,000	 for	 intangible	 assets	 relating	 to	 the	 acquired	 drug	 discovery	 programme.	 Additionally,	 there	 is	 a	 deferred	 consideration	 of	 up	 to	 £1,000,000	 dependent	 on	 successfully	 achieving	 various	 developmental	 and	 regulatory	 milestones.	 Of	 the	 deferred	 consideration,	 the	 Group	 has	 recognised	 a	 £100,000	 provision	 in	 expectation	 that	 the	 first	 milestones	 will	 be	 met	 in	 the	 2007/08	 financial	 year.	 See	 Note	 21	 for	 further	 details.     
45 vastox.com
8. Tangible fixed assets
	 	 	 	 	 Leasehold	 Laboratory	 Office 	 and	 IT	 	 	 	 	 	 improvements	 equipment	 equipment	 Total 	 Group	 	 	 	 	 	 £	 	 	 £	 	 	 £	 	 	 £	 Cost
At	 1	 February	 2006	 	 	 	 	 	 828,849 	 	 	 494,103	 	 	 66,100	 	 	 1,389,052	 Additions	 	 	 	 	 	 927,331 	 	 	 712,062	 	 	 63,759	 	 	 1,703,152	 At 31 January 2007      1,756,180   1,206,165   129,859   3,092,204 
Depreciation
At	 1	 February	 2006	 	 	 	 	 	 (73,247)	 (40,680)	 (14,043)	 (127,970)
Charge	 for	 the	 year	 	 	 	 	 	 (152,994)	 (156,023)	 (31,163)	 (340,180)
At 31 January 2007      (226,241) (196,703) (45,206) (468,150)
Net book value
At	 1	 February	 2006	 	 	 	 	 	 755,602 	 	 	 453,423	 	 	 52,057	 	 	 1,261,082	 At 31 January 2007      1,529,939   1,009,462   84,653   2,624,054
The	 Company	 had	 no	 tangible	 fixed	 assets.
9. Investments
	 	 	 	 	 	 	 	 £
Company
Cost	 and	 net	 book	 value	 at	 1	 February	 2006	 	 	 	 	 	 	 	 	 2,020,198	 	 Prior	 year	 adjustment	 –	 note	 1	 	 	 	 	 	 	 	 	 73,826	 Cost	 and	 net	 book	 value	 at	 1	 February	 2006	 –	 restated	 	 	 	 	 	 	 2,094,024	 Additions	 	 	 	 	 	 	 	 	 403,898	 Cost	 and	 net	 book	 value	 at	 31	 January	 2007	 	 	 	 	 	 	 	 	 2,497,922	 The	 charge	 for	 the	 share	 based	 payment	 was	 financed	 by	 the	 Company.	   
46 VASTox plc	 	 Annual	 Report	 and	 Accounts	 2006/07
  
Notes to the Financial Statements continued
10. Stock
	 Group	 Company
	 	 	 	 	 	 	 2007	 2006	 2007	 2006 	 	 	 	 	 	 £ 	 £	 	 £ 	 £
Stock	 –	 raw	 materials	 	 	 	 	 187,444 	 	 27,000	 	 – 	 	 –	 11. Debtors
	 Group	 Company
	 	 	 	 	 	 	 2007	 2006	 2007	 2006 	 	 	 	 	 	 £	 	 £	 	 £ 	 £
Trade	 debtors	 	 	 	 	 	 282,628 	 	 128,839	 	 –	 	 	 –	 Amounts	 owed	 by	 Group	 	 undertakings	 	 	 	 	 	 – 	 	 –	 	 24,194,798	 	 	 14,225,887	 Corporation	 tax	 recoverable	 	 	 	 	 472,140 	 	 150,717	 	 – 	 	 –	 Other	 debtors	 	 	 	 	 243,316 	 	 71,332	 	 2,033 	 	 –	 Prepayments	 and	 accrued	 	 income	 	 	 	 	 118,662 	 	 190,412	 	 – 	 	 –	 	 	 	 	 	 1,116,746 	 	 541,300	  24,196,831	 	 	 14,225,887
Amounts	 owed	 to	 the	 Company	 by	 Group	 undertakings	 are	 due	 after	 more	 than	 one	 year.
12. Short-term deposits and investments
	 Group	 Company
	 	 	 	 	 	 	 2007	 2006	 2007	 2006 	 	 	 	 	 	 £	 	 £	 	 £ 	 £
Short-term	 deposits	 with	 bank	 	 	 	 	 15,079,702 	 11,593,626 	  – 	 –	 13. Creditors: Amounts falling due within one year
	 Group	 Company
	 	 	 	 	 	 	 2007	 2006	 2007	 2006 	 	 	 	 	 	 £ 	 £	 	 £ 	 £
Loans	 	 	 	 66,373	 65,792	 – 	 	 –	 	 Trade	 creditors	 	 	 	 1,150,640	 488,423	 – 	 	 –	 Social	 security	 and	 other	 taxes	 	 	 	 79,371	 32,327	 – 	 –	 Accruals	 and	 deferred	 income	 	 	 	 130,727	 118,291	 – 	 –	 	 	 	 	 1,427,111	 704,833	 – 	 	 –	     
47 vastox.com
14. Creditors: Amounts falling due after more than one year
	 Group	 Company
	 	 	 	 	 	 2007	 2006	 2007	 2006 	 	 	 	 	 	 £ 	 £	 	 £ 	 £
Loans	 	 	 	 	 597,355 	 	 690,812	 	 – 	 	 –	 The	 Group	 has	 a	 loan	 commitment	 with	 MEPC	 Limited,	 the	 landlord	 for	 the	 Group’s	 offices	 and	 laboratories.	 The	 loan	 attracts	 no	 interest	 and	 is	 repayable	 over	 the	 term	 of	 the	 Group’s	 lease,	 as	 follows:
	 Group	 Company
	 	 	 	 	 	 	 2007	 2006	 2007	 2006 	 	 	 	 	 	 £ 	 £	 	 £ 	 £
Debt	 due	 within	 one	 year	 	 	 	 	 	 66,373 	 	 65,792	 	 – 	 	 	 –	 Debt	 due	 in	 first	 to	 second	 	 years	 inclusive	 	 	 	 	 	 66,373 	 	 65,792	 Debt	 due	 in	 second	 to	 fifth	 years	 	 inclusive	 	 	 	 	 199,118	 	 	 197,375	 	 – 	 	 –	 Debt	 due	 after	 five	 years	 	 	 	 	 	 331,864 	 	 427,645	 	 – 	 	 	 –	 	 	 	 	 	 	 663,728  	 756,604	 	 – 	 	 –
15. Provision for liabilities and charges
	 	 	 	 	 	 	 	 £
At	 1	 February	 2006	 	 	 	 	 	 	 	 	 –	 Additions	 	 	 	 	 	 	 	 	 100,000	 At	 31	 January	 2007	 	 	 	 	 	 	 	 	 100,000
The	 provision	 for	 liabilities	 refers	 to	 potential	 payments	 that	 may	 fall	 due	 following	 the	 acquisition	 of	 the	 assets	 of	 MNL	 Pharma	 Limited.	 The	 Group	 is	 due	 to	 make	 payments	 dependent	 on	 achieving	 clinical	 development	 milestones	 (note	 21	 provides	 detailed	 information	 on	 the	 potential	 liabilities).	 The	 directors	 are	 of	 the	 opinion	 that	 it	 is	 the	 best	 estimate	 of	 that	 which	 will	 be	 paid	 for	 the	 above	 charge	 based	 on	 their	 assessment	 of	 the	 likely	 progress	 of	 the	 compound	 VOX	 14400.
16. Share capital
	 	 	 	 	 	 	 2007 	 2006 	 	 	 	 	 	 	 	 £	 £
Authorised
Ordinary	 shares	 of	 10p	 each	 	 	 	 	 	 	 	 6,000,000 	 	 5,000,000	 Allotted,	 called	 up	 and	 fully	 paid
37,217,070	 ordinary	 shares	 of	 10p	 each		 	 	 	 	 	 	 3,721,707 	 	 3,131,311
The	 authorised	 share	 capital	 was	 increased	 to	 £6,000,000	 following	 an	 Extraordinary	 General	 Meeting	 held	 on	 22	 March	 2006.
Share	 capital	 increased	 in	 the	 period	 from	 31,313,111	 to	 37,217,070	 due	 to	 the	 placing	 of	 5,903,959	 ordinary	 10p	 shares	 on	 	 27	 February	 2006	 (2005/06:	 nil).	 The	 shares	 rank	 pari	 passu	 with	 existing	 shares.	 The	 equity	 placing	 raised	 gross	 proceeds	 	 of	 £10.45	 million	 (£9.97	 million	 net	 of	 expenses). 	 	 VASTox plc	 	 Annual	 Report	 and	 Accounts	 2006/07 48
Notes to the Financial Statements continued
17. Share option scheme
At	 31	 January	 2007	 the	 outstanding	 share	 options,	 which	 include	 the	 share	 options	 granted	 to	 directors,	 are	 as	 shown	 below:
	 	 	 	 	 	 	 Date 	 from	 	 	 	 	 	 Exercise	 Number 	 of	 which	 Expiry 	 Date	 of	 grant	 	 	 	 	 price 	 (p)	 shares	 exercisable	 date
Approved EMI scheme
30	 Sep	 04	 	 	 	 	 	 135.0 	 	 88,884 	 	 30 	 Sep	 05	 30 	 Sep	 14
17	 Jul	 05	 	 	 	 	 	 169.5 	 	 98,997 	 	 17 	 Jul	 06	 17 	 Jul	 15
2	 Dec	 05	 	 	 	 	 	 171.5 	 	 487,011 	 	 2 	 Dec	 06	 2 	 Dec	 15
22	 May	 06	 	 	 	 	 	 167.0 	 	 59,880 	 	 22 	 May	 07	 22 	 May	 16
18	 Aug	 06	 	 	 	 	 	 141.0 	 	 70,921 	 	 18 	 Aug	 07	 18 	 Aug	 16
13	 Oct	 06	 	 	 	 	 	 136.0 	 	 171,300 	 	 13 	 Oct	 07	 13 	 Oct	 16
28	 Nov	 06	 	 	 	 	 	 136.0 	 	 	 10,000	 	 28 	 Nov	 07	 28 	 Nov	 16
Unapproved scheme
2	 Sep	 04	 	 	 	 	 	 0.5 	 	 2,020,000 	 	 2 	 Sep	 04	 2 	 Sep	 14
17	 Jul	 05	 	 	 	 	 	 169.5	 	 	 1,003	 	 17 	 Jul	 06	 17 	 Jul	 15
2	 Dec	 05	 	 	 	 	 	 171.5 	 	 	 587,989	 	 2 	 Dec	 06	 2 	 Dec	 15
22	 May	 06	 	 	 	 	 	 165.0 	 	 540,120 	 	 22 	 May	 07	 22 	 May	 16
18	 Aug	 06	 	 	 	 	 	 141.0 	 	 229,079 	 	 18 	 Aug	 07	 18 	 Aug	 16
13	 Oct	 06	 	 	 	 	 	 136.0 	 	 135,000 	 	 13 	 Oct	 07	 13 	 Oct	 16
2	 Nov	 06	 	 	 	 	 	 135.0 	 	 250,000 	 	 2 	 Nov	 07	 2 	 Nov	 16
	 	 	 	 	 	 4,750,184	 The	 Group	 has	 no	 legal	 or	 constructive	 obligation	 to	 repurchase	 or	 settle	 the	 options	 in	 cash.	 The	 movement	 in	 the	 number	 of	 share	 options	 is	 set	 out	 below:
	 	 	 	 	 	 2007	 2006
Outstanding	 at	 1	 February	 	 	 	 	 	 	 	 3,283,884	 	 2,109,084	 Granted	 during	 the	 year	 	 	 	 	 	 	 	 1,466,300 	 1,174,800	 Lapsed	 during	 the	 year	 	 	 	 	 	 	 	 – 	 –	 Exercised	 during	 the	 year	 	 	 	 	 	 	 	 – 	 	 –	 Number	 of	 outstanding	 options	 at	 31	 January	 	 	 	 	 	 	 4,750,184 	 3,283,884
As	 at	 31	 January	 2007,	 2,567,217	 share	 options	 were	 capable	 of	 being	 exercised	 (2006:	 76,857).	 The	 options	 outstanding	 at	 	 31	 January	 2007	 had	 a	 weighted	 average	 exercise	 price	 of	 91p	 (2006:	 65p),	 and	 a	 weighted-average	 remaining	 contractual	 life	 of	 	 8.5	 years	 (2006:	 9.0	 years).	 	 	 49 vastox.com
17. Share option scheme continued
Share-based	 payments
The	 Group	 operates	 a	 number	 of	 share-based	 incentive	 schemes	 as	 detailed	 above.	 The	 fair	 value	 per	 award	 granted	 and	 the	 assumptions	 used	 in	 the	 calculations	 are	 as	 follows:
	 	 Type 	 of	 	 Number 	 of	 Exercise 	 	 Share 	 price	 at	 	 Fair 	 value	 	 Award 	 life	 Risk 	 free	 Date	 of	 grant	 	 award	 shares	 price 	 (p)	 grant 	 date	 (p)	 per 	 option	 (p)	 (years)	 rate
2	 Sep	 04	 	 Unapproved	 	 2,020,000	 	 	 0.5	 	 	 0.5	 	 	 –	 	 	 2.1	 	 4.9%	 30	 Sep	 04	 	 EMI	 	 88,884	 	 	 135.0	 	 	 135.0	 	 	 36	 	 	 2.1	 	 4.8%
17	 Jul	 05	 	 EMI	 	 98,997	 	 	 169.5	 	 	 169.5	 	 	 43	 	 	 3.0	 	 4.2%
17	 Jul	 05	 	 Unapproved	 	 1,003	 	 	 169.5	 	 	 169.5	 	 	 43	 	 	 3.0	 	 4.2%
2	 Dec	 05	 	 EMI	 	 487,011	 	 	 171.5	 	 	 168.5	 	 	 41	 	 	 3.0	 	 4.2%
2	 Dec	 05	 	 Unapproved	 	 587,989	 	 	 171.5	 	 	 168.5	 	 	 41	 	 	 3.0	 	 4.2%
22	 May	 06	 	 EMI	 	 59,880	 	 	 167.0	 	 	 167.0	 	 	 44	 	 	 3.0	 	 4.2%
22	 May	 06	 	 Unapproved	 	 540,120	 	 	 165.0	 	 	 167.0	 	 	 45	 	 	 3.0	 	 4.6%
18	 Aug	 06	 	 EMI	 	 70,921	 	 	 141.0	 	 	 135.3	 	 	 33	 	 	 3.0	 	 4.6%
18	 Aug	 06	 	 Unapproved	 	 229,079	 	 	 141.0	 	 	 135.5	 	 	 33	 	 	 3.0	 	 4.6%
13	 Oct	 06	 	 EMI	 	 171,300	 	 	 136.0	 	 	 136.0	 	 	 36	 	 	 3.0	 	 4.6%
13	 Oct	 06	 	 Unapproved	 	 135,000	 	 	 136.0	 	 	 136.0	 	 	 36	 	 	 3.0	 	 4.6%
2	 Nov	 06	 	 Unapproved	 	 250,000	 	 	 135.0	 	 	 135.0	 	 	 35	 	 	 3.0	 	 4.6%
28	 Nov	 06	 	 EMI	 	 10,000	 	 	 136.0	 	 	 136.0	 	 	 36	 	 	 3.0	 	 4.5%
	 	 	 	 4,750,184	 The	 key	 assumptions	 used	 in	 calculating	 the	 share-based	 payments	 are	 as	 follows:
a.	 Black-Scholes	 valuation	 methodology	 was	 used.
b.	 	A	 figure	 of	 18%	 has	 been	 used	 for	 expected	 volatility.	 This	 has	 been	 derived	 from	 historic	 share	 price	 performance,	 weighted	 	 to	 exclude	 periods	 of	 unusually	 high	 volatility.
c.	 	Expected	 dividend	 yield	 is	 nil,	 consistent	 with	 the	 directors’	 view	 that	 the	 Group’s	 model	 is	 to	 generate	 value	 through	 capital	 growth	 rather	 than	 the	 payment	 of	 dividends.
d.	 	The	 risk	 free	 rate	 is	 equal	 to	 the	 prevailing	 UK	 Gilts	 rate	 at	 grant	 date	 that	 most	 closely	 matches	 the	 expected	 term	 of	 	 the	 grant.
e.	 The	 fair	 value	 charge	 is	 spread	 evenly	 over	 the	 expected	 vesting	 period.   
50 VASTox plc	 	 Annual	 Report	 and	 Accounts	 2006/07
  
Notes to the Financial Statements continued
18. Reserves 
	 	 	 	 Share 	 premium	 Share 	 	 Merger	 Share 	 based	 Profit 	 and	 loss	 	 	 	 	 account	 capital	 reserve	 payment	 account 	 	 	 	 	 £	 £	 £	 £	 £
Group
At	 1	 February	 2006	 	 	 	 	 	 12,946,848	 	 3,131,311 	 	 (1,942,589)	 	 –	 	 (1,040,501) 	 Prior	 year	 adjustment	 –	 note	 1	 	 	 	 	 	 	 73,826 	 	 (73,826)
At	 1	 February	 2006	 restated	 	 	 	 	 12,946,848 	 	 3,131,311 	 	 (1,942,589)	 73,826 	 	 (1,114,327) 	 New	 share	 capital	 issued	 	 	 	 	 9,380,548 	 	 590,396 	 	 – 	 	 	 –	 	 	 –	 	 Share	 based	 payment	 	 	 	 	 	 	 	 403,898	 	 	 –	 	 Loss	 for	 the	 year	 	 	 	 	 – 	 	 – 	 	 	 –	 	 	 –	 	 (2,999,371)
At 31 January 2007     22,327,396  3,721,707  (1,942,589) 477,724  (4,113,698)
Company	 At	 1	 February	 2006	 	 	 	 	 	 12,946,848 	 	 	 3,131,311	 	 	 –	 	 	 –	 	 	 167,926	 Prior	 year	 adjustment	 	 	 	 	 – 		 	 	 –		 	 	 –		 	 	 73,826	 	 	 –		 At	 1	 February	 2006	 restated	 	 	 	 	 12,946,848 	 	 	 3,131,311	 	 – 		 	 73,826 	 	 	 167,926	 	 New	 share	 capital	 issued	 	 	 	 	 9,380,548 	 	 	 590,396	 	 – 		 	 	 –		 	 	 –		 	 Share	 based	 payment	 	 	 	 	 – 		 	 	 –		 	 	 –		 	 	 403,898	 	 	 –		 At 31 January 2007     22,327,396   3,721,707  –   477,724   167,926
19. Reconciliation of movement in shareholders’ funds
	 	 	 	 	 	 	 	 Restated 	 	 	 	 	 	 	 	 2007	 				 2006	 	 	 	 	 	 	 	 £	 £
Group
Opening	 shareholders’	 funds	 	 	 	 	 	 13,095,069	 	 14,089,896	 Shares	 issued	 during	 the	 year	 	 	 	 	 	 	 	 590,396	 	 –
Share	 premium	 on	 issued	 shares	 (net	 of	 expenses)	 	 	 	 	 	 9,380,548	 	 –	 Loss	 for	 the	 financial	 year	 	 	 	 	 	 (2,999,371)	 (1,061,453)
Share	 based	 payment	 	 	 	 	 	 	 403,898	 	 66,626
Closing	 shareholders’	 funds	 	 	 	 	 	 	 20,470,540	 13,095,069	 Company
Opening	 shareholders’	 funds	 as	 previously	 stated	 	 	 	 	 	 16,246,085	 16,255,916
Prior	 year	 adjustment	 –	 note	 1	 	 	 	 	 	 	 73,826	 	 	 7,200
Opening	 shareholders	 funds	 –	 restated		 	 	 	 	 	 	 16,319,911 	 	 16,263,116
Shares	 issued	 during	 the	 year	 	 	 	 	 	 	 	 590,396 	 	 –	 Share	 premium	 on	 issued	 shares	 (net	 of	 expenses)	 	 	 	 	 	 9,380,548	 	 	 –	 Share	 based	 payment	 	 	 	 	 	 	 	 403,898	 	 	 66,626
Loss	 for	 the	 financial	 year	 	 	 	 	 	 	 	 – 		 	 (9,831)
Closing	 shareholders’	 funds	 	 	 	 	 	 	 26,694,753	 16,319,911     
51 vastox.com
20. Subsidiaries
	 	 	 	 Country 	 	 Percentage 	 Company	 name	 	 	 	 of 	 incorporation	 shareholding	 	 	 Description
VASTox	 Chemical	 Genomics	 Limited	 	 	 	Great 	 Britain	 100% 	 	 	1,000 	 £1	 ordinary	 shares	 VASTox	 Discovery	 1	 Limited	 	 	 	 	Great 	 Britain	 100%	 	 	 1,000 	 £1	 ordinary	 shares
The	 principal	 activity	 of	 VASTox	 Chemical	 Genomics	 Limited	 is	 the	 provision	 of	 chemical	 genomics	 services	 and	 proprietary	 drug	 discovery.	 VASTox	 Discovery	 1	 Limited	 is	 a	 dormant	 company.
21. Commitments
The	 Group’s	 annual	 commitments	 under	 non-cancellable	 operating	 leases	 are	 as	 follows:
	 Land	 and	 buildings
	 	 	 	 	 	 	 	 2007	 2006 	 Leases	 which	 expire	 	 	 	 	 	 	 £ 	 £
Within	 one	 year	 	 	 	 	 	 	 –  	 	 –		 After	 five	 years	 	 	 	 	 	 	 334,000 	 	 334,000	 	 	 	 	 	 	 	 334,000  	 334,000	 	 	 The	 Company	 has	 no	 annual	 commitments	 under	 non-cancellable	 operating	 leases.
The	 Group	 and	 Company	 had	 no	 capital	 commitments	 at	 31	 January	 2007	 or	 31	 January	 2006.
Other	 commitments
On	 13	 December	 2006,	 VASTox	 Chemical	 Genomics	 (“VCG”)	 acquired	 the	 assets	 of	 MNL	 Pharma	 Limited	 (“MNL ”),	 a	 company	 that	 entered	 into	 administration	 in	 October	 2006.	 VCG	 acquired	 all	 rights	 to	 MNL ’s	 lead	 drug	 candidate	 (previously	 known	 as	 MNLP462a	 and	 now	 known	 as	 VOX14400),	 a	 library	 of	 iminosugars	 and	 all	 assets	 held	 at	 MNL ’s	 Aberystwyth	 facility.	 Under	 the	 terms	 of	 the	 agreement,	 VCG	 is	 committed	 to	 make	 MNL ’s	 former	 shareholder	 payments	 contingent	 on	 achieving	 clinical	 milestones	 for	 VOX14400,	 or	 a	 back-up	 candidate	 emerging	 from	 the	 iminosugar	 library.	 VCG	 is	 obliged	 to	 make	 the	 following	 payments:
£50,000	 upon	 IND	 (“Investigational	 New	 Drug”)	 approval	 (or	 equivalent),
£100,000	 upon	 successful	 completion	 of	 a	 Phase	 I	 trial.
£200,000	 upon	 successful	 completion	 of	 a	 Phase	 IIa	 trial	 (or	 equivalent).
£250,000	 upon	 successful	 completion	 of	 a	 Phase	 IIIa	 trial	 (or	 equivalent).
£400,000	 upon	 regulatory	 approval	 in	 the	 US,	 EU	 or	 Japan.
Royalties	 of	 1.5%	 on	 net	 sales.
Of	 the	 above	 payments,	 £100,000	 has	 been	 provided	 for	 (see	 note	 15).
•
•
•
•
•
•   
52 VASTox plc	 	 Annual	 Report	 and	 Accounts	 2006/07
  
Notes to the Financial Statements continued
22. Analysis and reconciliation of movement in net funds
	 	 	 	 	 1 	 February	 Cash 	 flows	 	 	 31 January	 	 	 	 	 	 2006	 movements	 Non-cash	 2007	 	 	 	 	 	 £	 £	 	 £	 £
Cash	 at	 bank	 	 	 	 	 	 1,039,690 	 	 2,169,702 	 	 – 		 	 3,209,392	 Liquid	 resources	 	 	 	 	 	 11,593,626 	 	 	 3,486,076	 	 – 		 	 15,079,702	 Debt	 due	 within	 1	 year	 	 	 	 	 (65,792)	 	 63,050	 	 (63,631)	 (66,373)
Debt	 due	 after	 1	 year	 	 	 	 	 (690,812)	 	 29,826	 	 	 63,631	 (597,355)
Net	 funds	 	 	 	 	 	 11,876,712 	 	 	 5,748,654	 	 	 –	   17,625,366
	 	 	 	 	 	 	 2007	 2006 	 	 	 	 	 	 	 	 £ 	 £
Increase	 in	 cash	 in	 the	 period	 	 	 	 	 	 	 2,169,702	 	 	 678,438	 Increase	 (decrease)	 in	 liquid	 resources	 	 	 	 	   3,486,076 	 (2,206,374)
Cash	 outflow	 (inflow)	 from	 loan	 finance	 	 	 	 	 	 	 92,876 	 (756,604)
Change	 in	 net	 funds	 resulting	 from	 cash	 flows	 	 	 	 	 	 5,748,654 	 (2,284,540)
Net	 funds	 at	 beginning	 of	 period	 	 	 	 	 	 	 11,876,712  	 14,161,252	 Net	 funds	 at	 end	 of	 period	 	 	 	 	 	 	 	 17,625,366 	 	 11,876,712
Liquid	 resources	 relate	 to	 bank	 deposits	 which	 are	 not	 immediately	 accessible	 within	 24	 hours	 without	 financial	 penalty.
23. Financial instruments
The	 Group’s	 principal	 financial	 instrument	 comprises	 cash,	 and	 this	 is	 used	 to	 finance	 the	 Group’s	 operations.	 The	 Group	 has	 various	 other	 financial	 instruments	 such	 as	 trade	 creditors	 that	 arise	 directly	 from	 its	 operations.
The	 Group	 has	 a	 policy,	 which	 has	 been	 consistently	 followed,	 of	 not	 trading	 in	 financial	 instruments.
The	 main	 risk	 arising	 from	 the	 Group’s	 financial	 instruments	 is	 interest	 rate	 risk.	 VASTox	 holds	 no	 derivative	 instruments	 to	 manage	 interest	 rate	 risk;	 instead	 the	 Group	 places	 deposits	 surplus	 to	 short-term	 working	 capital	 requirements	 with	 a	 range	 of	 reputable	 UK-based	 banks	 and	 building	 societies.	 These	 balances	 are	 placed	 at	 fixed	 rates	 of	 deposit	 with	 maturities	 between	 one	 month	 	 and	 six	 months.
The	 Group’s	 cash	 and	 short-term	 deposits	 were	 as	 follows:
	 	 	 	 	 	 	 2007	 2006 	 	 	 	 	 	 	 	 £	 	 £
On	 dated	 deposit	 –	 fixed	 rate	 	 	 	 	 	 	 15,079,702	 	 	 11,593,626	 	 	 On	 short-term	 deposit	 –	 floating	 rate	 	 	 	 	 	 	 107,312	 	 	 1,009,338	 	 On	 current	 account	 	 	 	 	 	 	 3,102,080 	 	 30,352		 	 	 	 	 	 	  18,289,094  	 12,633,316	 The	 interest	 rates	 for	 dated	 deposits	 are	 dependent	 on	 the	 rates	 offered	 by	 the	 Group’s	 borrowers.	 The	 interest	 rate	 for	 short-term	 deposits	 is	 variable	 dependent	 on	 the	 rates	 offered	 by	 the	 Group’s	 bankers.	 During	 the	 year	 to	 31	 January	 2007,	 the	 dated	 deposit	 facility	 returned	 an	 average	 rate	 after	 fees	 of	 5.1%	 (2005/06:	 4.2%).	 Dated	 deposits	 are	 held	 on	 deposit	 for	 periods	 between	 one	 month	 and	 six	 months.	 The	 short-term	 deposit	 facility	 returned	 an	 average	 rate	 after	 fees	 of	 8.8%	 (2005/06:	 6.4%).     
53 vastox.com
24. Related parties
David	 Norwood,	 Non-executive	 Director,	 is	 also	 a	 director	 of	 IP2IPO	 Limited	 which	 holds	 4,040,400	 shares	 of	 VASTox	 plc.
25. Post balance sheet events
On	 22	 March	 2007	 VASTox	 plc	 announced	 the	 acquisition	 of	 DanioLabs	 Limited	 and	 Dextra	 Laboratories	 Limited.
DanioLabs	 Limited	 (“DanioLabs”)	 VASTox	 acquired	 100%	 of	 the	 share	 capital	 of	 DanioLabs	 Limited	 for	 £15.0	 million	 payable	 through	 the	 issue	 of	 11,732,361	 new	 	 10p	 ordinary	 shares,	 cash	 of	 £159,000	 and	 a	 deferred	 issue	 of	 1,173,233	 new	 10p	 ordinary	 shares	 payable	 in	 March	 2008.
Dextra	 Laboratories	 Limited	 (“Dextra”)
VASTox	 acquired	 100%	 of	 the	 share	 capital	 of	 Dextra	 for	 £1.5	 million	 payable	 through	 the	 issue	 of	 1,185,771	 new	 ordinary	 10p	 shares.
On	 19	 February	 2007	 the	 Group	 formed	 a	 wholly-owned	 subsidiary,	 VASTox	 (Wales)	 Limited,	 company	 number	 6116827.	   
54 VASTox plc	 	 Annual	 Report	 and	 Accounts	 2006/07
  
Notice of Annual General Meeting
Notice	 is	 hereby	 given	 that	 the	 Annual	 General	 Meeting	 of	 VASTox	 plc	 (the	 “Company”)	 will	 be	 held	 at	 the	 offices	 of	 Huntsworth	 plc,	 8th	 Floor,	 26	 Finsbury	 Square,	 London,	 EC2A	 1SF	 on	 19	 July	 at	 9.30	 a.m.	 for	 the	 purpose	 of	 considering,	 and	 if	 thought	 fit,	 passing	 the	 following	 resolutions	 of	 which	 resolutions	 1	 to	 11	 (inclusive)	 will	 be	 proposed	 as	 ordinary	 resolutions	 and	 resolutions	 12	 and	 13	 will	 be	 proposed	 as	 special	 resolutions:
Resolution	 1	 	That	 the	 accounts	 for	 the	 year	 ended	 31	 January	 2007	 together	 with	 the	 report	 of	 the	 directors	 and	 auditors	 thereon	 be	 received	 and	 considered.
Resolution	 2	 	That	 BDO	 Stoy	 Hayward	 LLP	 be	 re-appointed	 as	 auditors	 of	 the	 Company	 to	 hold	 office	 until	 the	 conclusion	 of	 the	 next	 general	 meeting	 of	 the	 Company	 before	 which	 statutory	 accounts	 are	 laid	 and	 that	 their	 remuneration	 be	 fixed	 by	 the	 directors	 of	 the	 Company	 from	 time	 to	 time	 (the	 “Directors”).
Resolution	 3	 	That	 Sir	 Brian	 Richards,	 aged	 74,	 who	 is	 retiring	 in	 accordance	 with	 article	 86.1	 of	 the	 Company’s	 articles	 of	 association,	 be	 elected	 as	 a	 director	 of	 the	 Company.
Resolution	 4	 	That	 James	 Taylor,	 who	 was	 appointed	 as	 a	 director	 on	 12	 July	 2006	 and	 is	 retiring	 in	 accordance	 with	 article	 83.1	 of	 the	 Company’s	 articles	 of	 association	 be	 re-elected	 as	 a	 director	 of	 the	 Company.
Resolution	 5	 	That	 Barry	 Price,	 who	 was	 appointed	 as	 a	 director	 on	 26	 September	 2006	 and	 is	 retiring	 in	 accordance	 with	 article	 83.1	 of	 the	 Company’s	 articles	 of	 association	 be	 re-elected	 as	 a	 director	 of	 the	 Company.
Resolution	 6	 	That	 Colin	 Wall,	 who	 was	 appointed	 as	 a	 director	 on	 26	 September	 2006	 and	 is	 retiring	 in	 accordance	 with	 article	 83.1	 of	 the	 Company’s	 articles	 of	 association	 be	 re-elected	 as	 a	 director	 of	 the	 Company.
Resolution	 7	 	That	 Andrew	 Richards,	 who	 was	 appointed	 as	 a	 director	 on	 22	 March	 2007	 and	 is	 retiring	 in	 accordance	 with	 article	 83.1	 of	 the	 Company’s	 articles	 of	 association	 be	 re-elected	 as	 a	 director	 of	 the	 Company.
Resolution	 8	 	That	 George	 Elliott,	 who	 was	 appointed	 as	 a	 director	 on	 19	 April	 2007	 and	 is	 retiring	 in	 accordance	 with	 article	 83.1	 of	 the	 Company’s	 articles	 of	 association	 be	 re-elected	 as	 a	 director	 of	 the	 Company.
Resolution	 9	 	That	 Stephen	 Davies,	 who	 is	 retiring	 by	 rotation	 in	 accordance	 with	 article	 89	 of	 the	 Company’s	 articles	 of	 association	 be	 re-elected	 as	 a	 director	 of	 the	 Company.
Resolution	 10	 	That	 David	 Norwood,	 who	 is	 retiring	 by	 rotation	 in	 accordance	 with	 article	 89	 of	 the	 Company’s	 articles	 of	 association	 be	 re-elected	 as	 a	 director	 of	 the	 Company.
Resolution	 11	 	That	 the	 Directors	 be	 and	 are	 hereby	 generally	 and	 unconditionally	 authorised	 (in	 substitution	 for	 any	 existing	 such	 power	 or	 authority)	 for	 the	 purposes	 of	 section	 80	 of	 the	 Companies	 Act	 1985	 (as	 amended)	 (the	 “Act”)	 to	 exercise	 all	 the	 powers	 of	 the	 Company	 to	 allot	 relevant	 securities	 (within	 the	 meaning	 of	 section	 80(2)	 of	 the	 Act)	 of	 the	 Company	 up	 to	 a	 maximum	 aggregate	 nominal	 amount	 of	 £1,000,000	 (being	 approximately	 the	 authorised	 but	 unissued	 share	 capital	 of	 the	 Company	 as	 at	 29	 May	 2007)	 provided	 that	 this	 authority	 shall	 expire	 (unless	 previously	 renewed,	 varied	 or	 revoked	 by	 the	 Company	 in	 general	 meeting)	 on	 the	 later	 of	 15	 months	 following	 the	 passing	 of	 this	 resolution	 and	 the	 conclusion	 of	 the	 Annual	 General	 Meeting	 of	 the	 Company	 held	 in	 2008	 (the	 “Section	 80	 Period”)	 save	 that	 the	 Company	 may,	 prior	 to	 the	 expiry	 of	 the	 Section	 80	 Period,	 make	 an	 offer	 or	 agreement	 which	 would	 or	 might	 require	 relevant	 securities	 to	 be	 allotted	 after	 the	 Section	 80	 Period	 and	 the	 Directors	 may	 allot	 relevant	 securities	 in	 pursuance	 of	 such	 offer	 or	 agreement	 as	 if	 this	 authority	 had	 not	 expired.
Resolution	 12	 	That,	 subject	 to	 and	 conditional	 upon	 the	 passing	 of	 resolution	 11	 above,	 the	 Directors	 be	 and	 are	 hereby	 empowered	 pursuant	 to	 section	 95(1)	 of	 the	 Act	 (in	 substitution	 for	 any	 existing	 such	 power	 or	 authority)	 to	 allot	 equity	 securities	 (within	 the	 meaning	 of	 section	 94(2)	 of	 the	 Act)	 as	 if	 the	 pre-emption	 provisions	 in	 section	 89(1)	 of	 the	 Act	 and	 any	 pre-emption	 rights	 contained	 within	 the	 Company’s	 articles	 of	 association	 did	 not	 apply	 to	 such	 allotments	 (the	 “Section	 95	 Empowerment”)	 provided	 that	 the	 Section	 95	 Empowerment	 be	 limited	 to	 the	 following	 allotments	 of	 equity	 securities	 as	 follows:
	 (i)	 	the	 allotment	 of	 equity	 securities	 up	 to	 a	 maximum	 nominal	 amount	 of	 £500,000	 (being	 approximately	 10%	 of	 the	 Company’s	 current	 issued	 share	 capital)	 pursuant	 to	 the	 grant	 and	 exercise	 of	 options	 to	 subscribe	 for	 equity	 securities	 in	 the	 Company;	 and
	 (ii)	 	otherwise	 than	 in	 pursuant	 to	 (i)	 above,	 the	 allotment	 of	 equity	 securities	 in	 connection	 with	 an	 offer	 of	 such	 securities	 by	 way	 of	 rights	 to	 holders	 of	 relevant	 equity	 securities	 where	 the	 equity	 securities	 respectively	 attributed	 to	 the	 holders	 of	 all	 equity	 securities	 are	 in	 proportion	 (as	 nearly	 as	 may	 be)	 to	 their	 respective	 holdings	 of	 such	 equity	 securities,	 but	 subject	 to	 such	 exclusions	 or	 other	 arrangements	 as	 the	 Directors	 may	 deem	 necessary	 or	 expedient	 to	 deal	 with	 equity	 securities	 which	 represent	 fractional	 entitlements	 or	     
55 vastox.com
on	 account	 of	 any	 legal	 or	 practical	 problems	 under	 the	 laws	 of	 any	 territory,	 or	 the	 requirements	 of	 any	 regulatory	 body,	 stock	 exchange	 or	 other	 authority	 in	 any	 jurisdiction;	 and
	 (iii)	 	otherwise	 than	 pursuant	 to	 the	 foregoing	 paragraphs	 up	 to	 an	 aggregate	 nominal	 amount	 of	 £500,000	 (being	 approximately	 10%	 of	 the	 Company’s	 current	 issued	 nominal	 share	 capital);	 	 	 	provided	 that	 the	 Section	 95	 Empowerment	 shall	 expire	 (unless	 previously	 renewed,	 varied	 or	 revoked	 by	 the	 Company	 in	 general	 meeting)	 on	 the	 date	 the	 later	 of	 15	 months	 following	 the	 passing	 of	 this	 resolution	 and	 the	 conclusion	 of	 the	 Annual	 General	 Meeting	 of	 the	 Company	 in	 2008	 (the	 “Section	 95	 Period”)	 but	 so	 that	 the	 Company	 may	 at	 any	 time	 prior	 to	 the	 expiry	 of	 the	 Section	 95	 Period	 make	 an	 offer	 or	 agreement	 which	 would	 or	 might	 require	 equity	 securities	 to	 be	 allotted	 pursuant	 to	 these	 authorities	 after	 the	 expiry	 of	 the	 Section	 95	 Period	 and	 the	 Directors	 may	 allot	 equity	 securities	 in	 pursuance	 of	 such	 offer	 or	 agreement	 as	 if	 the	 authorities	 hereby	 conferred	 had	 not	 expired.
Resolution	 13	 That	 the	 Company	 name	 be	 and	 it	 is	 hereby	 changed	 to	 “Summit	 Corporation	 plc”.
The	 Board	 unanimously	 recommends	 shareholders	 to	 vote	 in	 favour	 of	 the	 above	 Resolutions.
By	 order	 of	 the	 Board
	 Darren Millington, ACMA
Company	 Secretary
11	 June	 2007
	 Notes to Members
1.	 	A	 member	 entitled	 to	 attend	 and	 vote	 at	 the	 meeting	 is	 also	 entitled	 to	 appoint	 one	 or	 more	 proxies	 to	 attend	 and,	 on	 a	 poll,	 vote	 instead	 of	 him.	 The	 proxy	 need	 not	 be	 a	 member	 of	 the	 Company.
2.	 	If	 you	 wish	 to	 appoint	 a	 proxy	 other	 than	 the	 Chairman	 of	 the	 meeting,	 cross	 out	 the	 words	 “the	 Chairman	 of	 the	 meeting”	 on	 the	 Proxy	 Form	 and	 write	 the	 full	 name	 and	 address	 of	 your	 proxy	 on	 the	 dotted	 line.	 The	 change	 should	 be	 initialled.
3.	 	In	 the	 absence	 of	 instructions,	 the	 person	 appointed	 proxy	 may	 vote	 or	 abstain	 from	 voting	 as	 he/she	 thinks	 fit	 on	 the	 specified	 resolutions	 and,	 unless	 otherwise	 instructed,	 may	 also	 vote	 or	 abstain	 from	 voting	 on	 any	 other	 matter	 (including	 amendments	 to	 resolutions)	 which	 may	 properly	 come	 before	 the	 meeting.
4.	 	To	 be	 effective,	 the	 enclosed	 Proxy	 Form	 must	 be	 duly	 completed	 and	 deposited	 together	 with	 any	 power	 of	 attorney	 or	 other	 authority	 (if	 any)	 under	 which	 it	 is	 executed	 (or	 notarially	 certified	 or	 authorised	 copy	 of	 such	 power	 or	 authority)	 and	 lodged	 at	 the	 offices	 of	 the	 Company’s	 registrars,	 Capita	 Registrars,	 The	 Registry,	 34	 Beckenham	 Road,	 Beckenham,	 Kent	 BR3	 4TU,	 not	 less	 than	 48	 hours	 before	 the	 time	 fixed	 for	 the	 meeting.	 5.	 	Completion	 and	 return	 of	 the	 Proxy	 Form	 will	 not	 preclude	 a	 shareholder	 from	 attending	 and	 voting	 in	 person	 at	 the	 Meeting.
6.	 	The	 Company,	 pursuant	 to	 regulation	 41	 of	 the	 Uncertificated	 Securities	 Regulations	 2001,	 specifies	 that	 only	 those	 members	 entered	 on	 the	 register	 of	 members	 of	 the	 Company	 at	 close	 of	 business	 on	 17	 July	 2007	 shall	 be	 entitled	 to	 	attend	 and	 vote	 at	 the	 meeting	 or,	 if	 the	 meeting	 is	 adjourned,	 close	 of	 business	 on	 such	 date	 being	 not	 more	 than	 two	 days	 prior	 to	 the	 date	 fixed	 for	 the	 adjourned	 meeting.	 Changes	 to	 entries	 on	 the	 register	 of	 members	 after	 such	 time	 shall	 be	 disregarded	 in	 determining	 the	 right	 of	 any	 person	 to	 attend	 or	 vote	 at	 the	 meeting. 56
  
VASTox plc	 	 Annual	 Report	 and	 Accounts	 2006/07
Company Information
Directors	 B	 Price,	 PhD	 Non-executive	 Chairman
	 S	 Lee,	 PhD	 Chief	 Executive	 Officer
	 R	 Storer,	 DPhil	 Chief	 Scientific	 Officer
	 D	 Millington,	 ACMA	 Chief	 Financial	 Officer
	 J	 Taylor	 Chief	 Commercial	 Officer	 	 Professor	 S	 Davies	 Non-executive	 Director
	 D	 Norwood	 Non-executive	 Director
	 Sir	 B	 Richards	 Non-executive	 Director
	 C	 Wall,	 PhD	 	 Non-executive	 Director
	 A	 Richards,	 PhD	 Non-executive	 Director
	 G	 Elliott,	 CA	 Non-executive	 Director
Company Secretary	 D	 Millington,	 ACMA
Registered office	 91	 Milton	 Park
	 Abingdon
	 Oxfordshire	 OX14	 4RY
Registered number	 05197494	 England	 and	 Wales
Nominated advisers	 Evolution	 Securities	 Limited
and brokers	 100	 Wood	 Street
	 London	 EC2V	 7AN
Public relations	 Citigate	 Dewe	 Rogerson
	 3	 London	 Wall	 Buildings
	 London	 Wall
	 London	 EC2M	 5SY
Auditors	 BDO	 Stoy	 Hayward	 LLP
	 Arcadia	 House
	 Maritime	 Walk
	 Ocean	 Village
	 Southampton	 SO14	 3TL
Registrars	 Capita	 Registrars
	 The	 Registry
	 34	 Beckenham	 Road
	 Beckenham	 BR3	 4TU Contents
01	 Highlights 	 2006/07
02	 VASTox 	 at	 a	 Glance
04	 Chairman’s 	 Review
06	 Chief 	 Executive	 Officer’s	 Statement
10	 Financial 	 Review
12	 Expertise 	 and	 Technology
16	 Drug 	 Discovery
19	 Pharmaceutical 	 Services
20	 Board 	 of	 Directors
22	 Directors’ 	 Report	 and	 Business	 Review
25	 Corporate 	 Governance	 Report
27	 Directors’ 	 Remuneration	 Report
33	 Statement 	 of	 Directors’	 Responsibilities
34	 	Independent	 Auditors’	 Report	 to	 the	 Shareholders	 of	 VASTox	 plc
35	 Consolidated 	 Profit	 and	 Loss	 Account
35	 	Consolidated	 Statement	 of	 Total	 Recognised	 Gains	 and	 Losses
36	 Consolidated 	 Balance	 Sheet
37	 Company 	 Balance	 Sheet
38	 Consolidated 	 Cash	 Flow	 Statement
39	 Notes 	 to	 the	 Financial	 Statements
54	 Notice 	 of	 Annual	 General	 Meeting
55	 Notes 	 to	 Members
56	 Company 	 Information
VASTox is a leading UK 
biotechnology company with  
a broad drug pipeline, two  
world-leading technology platforms 
and an innovative business  
model to generate sustainable  
value for shareholders. 
The	 cover	 and	 front	 section	 of	 this	 report	 have	 been	 printed	 on	 9lives	 80.	 9lives	 80	 is	 produced	 with	 80%	 recovered	 fibre	 comprising	 10%	 packaging	 waste,	 60%	 de-inked	 waste	 fibre	 	 and	 20%	 virgin	 TCF	 fibre	 (totally	 chlorine	 free)	 sourced	 from	 sustainable	 forests.	 The	 back	 section	 of	 this	 report	 has	 been	 printed	 on	 9Lives	 Offset	 which	 is	 manufactured	 from	 100%	 recycled	 fibre. 91 Milton Park
Abingdon
Oxfordshire
OX14 4RY
United Kingdom
Tel: +44 (0)1235 443 939 Fax: +44 (0)1235 443 999 vastox.com
VASTox plc Annual Report and Accounts
For the year ended 31 January 2007 VASTox plc Annual Report and Accounts For the year ended 31 January 2007