silence therapeutics plc 
annual report and financial statements 2012
silence therapeutics plc annual report and financial statements 2012
3 shortlands 
hammersmith 
london w6 8da
tel  44 0333 988 0140 
email  mailsilencetherapeuticscom
silencetherapeuticscom about us
contents
silence therapeutics is a global leader in 
the discovery development and delivery  
of novel rnai therapeutics for the treatment 
of serious diseases
rna interference a nobel prize winning 
technology is one of the most exciting  
areas of drug discovery today
business review
ifc about us
01 silence therapeutics at a glance
02  chairman’s statement
04  chief executive’s review
06  financial review
corporate governance
08  board of directors
10 company information and advisers
11  directors’ report
16 directors’ responsibilities  
for the financial statements
financial statements
17  independent auditor’s report
18  consolidated income statement
18  consolidated statement of 
comprehensive income
19  consolidated balance sheet
20  consolidated statement of changes in equity
21  company balance sheet
22  company statement of changes in equity
23  cash flow statements
24  notes to the financial statements
visit us online
silencetherapeuticscom
printed on hello silk the pulp used in this product is bleached using a totally 
chlorine free process tcf or elemental chlorine free process ecf and is  
produced in a mill that is certified to iso14001 environmental management 
standards this paper is from responsible sources
designed and produced by  
wwwlyonsbennettcom silence therapeutics plc  
annual report and financial statements 2012
01
wwwsilencetherapeuticscom
business review corporate governance financial statements
silence therapeutics at a glance
highlights
gene silencing
•	 synthetic	sirna	that	can	silence	any	gene
•	 patented	form	of	sirna	tested	in	humans
•	 over	300	patients	treated	to	date	no	evidence	of	
adverse	effects	or	immune	response	
delivery of gene silencing sirna
•	 own	delivery	systems	that	do	not	require	
immune	suppression
•	 safety	and	tolerability	demonstrated
•	 34	patients	treated	in	phase	i	with	atuplex	
delivery	system
•	 t wo	further	preclinical	delivery	systems	dacc	
for	the	lung	and	dbtc	for	the	liver 	both	at	
preclinical	stage
current own clinical asset atu027
•	 aturnai	silencing	pkn3		atuplex		atu027
•	 acts	by	preventing	the	spread	of	cancer
•	 t o	be	used	in	combination	with	conventional	tumour	
killing	drugs
•	 currently	in	human	testing	in	combination	with	a	
chemotherapy	agent	gemcitabine	
preclinical programmes
•	 eight	programmes
•	 oncology	and	non‑oncology
research and development engine
•	 rnai		delivery		expertise	and	testing	facilities	 	
	development	programme
•	 potential	to	quickly	enter	into	the	clinic	at	a	
relatively	low	cost	
•	 developing	pipeline	to	showcase	the	strength	of	
our	technology
cash resources
•	 £260m	of	cash	in	the	bank	following	april	2013	
fund	raising
during the year
•	 management	reorganisation	and	cost	restructuring	
•	 completion	 of	 phase	 i	 trial	 in	 atu027	 with	 no	 serious	
adverse	effects	or	immune	response	deemed	to	be	
directly	related	to	atu027
•	 cash	raised	through	equity	placings	totalling	
£107m	before	expenses
•	 assets	 using	 silence	 technology	 continue	 to	 progress
post year‑end events
•	 in	april	2013	patient	dosing	started	for	atu027	
in	combination	with	a	chemotherapy	agent	
gemcitabine
•	 in	april	2013	£190m	gross	funds	were	raised	
through	an	equity	placing	to	fund	two	further	phase	
1b	trials	and	progress	preclinical	development	in	
non‑cancer	targets silence therapeutics plc  
annual report and financial statements 2012
02
wwwsilencetherapeuticscom
jerry randall 
chairman
“rnai therapeutics 
are succeeding”
2012	has	been	a	year	of	significant	positive	change	
and	development	for	silence	helped	by	key	long‑term	
supportive	shareholders	we	have	been	able	to	
restructure	the	company	and	provide	a	significant	
runway	of	cash	to	enable	the	company	to	both	progress	
its	atu027	clinical	asset	and	to	broaden	its	preclinical	
pipeline	the	transformation	of	silence	from	a	
technology	company	to	a	product	company	continues	
and	we	are	evaluating	opportunities	to	match	and	
exploit	our	expertise	in	preclinical	development
clinical development
our	development	strategy	with	our	sirnas	makes	drug	
development	significantly	cheaper 	quicker	and	more	
efficient	than	traditional	drug	development
•	 broad applicability the	ability	to	target	any	gene
•	 specificity 	the	ability	to	block	only	selected	genes	
without	interfering	with	others
•	 simplicity 	after	identification	of	the	gene	target	
path	to	phase	i	is	relatively	simple	and	well	defined	
this	is	in	contrast	to	traditional	development	where	
there	is	a	risk	of	off‑target	effects	multiple	cycles	
of	optimisation	and	design	before	a	drug	candidate	
is	identified	for	phase	i	study 	additionally 	relative	
to	other	oligonucleotide‑based	technologies	our	
technology	has	the	potential	to	be	used	at	much	
lower	doses
during	2012	we	completed	the	phase	i	clinical	study	
for	atu027	which	we	believe	has	anti‑metastatic	
effects	a	total	of	34	patients	were	treated	and	the	
excellent	safety	and	tolerability	observed	in	the	study	
underpins	our	technology 	atu027	is	believed	to	
block	the	extravasation	and	intravasation	of	cancer	
cells	necessary	for	the	spread	of	cancer 	this	activity	
represents	a	novel	cancer	treatment	paradigm	versus	
many	other	anti‑cancer	drugs	which	target	tumours	
directly 	the	potential	for	atu027	when	used	with	
conventional	anti‑cancer	drugs	is	a	very	exciting	
proposition	for	us
the	next	stage	for	atu027	is	a	phase	ibiia	trial	
that	combines	atu027	with	a	chemotherapy	agent	
in	pancreatic	cancer 	our	preclinical	work	on	this	
combination	has	demonstrated	a	reduction	in	total	
tumour	burden	including	visible	metastatic	spread	
w e	were	given	ethical	committee	approval	for	this	
phase	ibiia	early	in	2013	for	this	trial	and	dosed	the	
first	patient	in	april	2013
w e	are	evaluating	further	studies	for	atu027	in	
combination	with	other	chemotherapy	agents	in	a	
variety	of	tumour	types	w e	plan	to	initiate	further	
programmes	and	will	provide	updates	in	due	course	
we are transforming silence from a technology company to a product 
company and developing a clinical capability that will match and exploit 
our expertise in preclinical development
chairman’s statement silence therapeutics plc  
annual report and financial statements 2012
03
wwwsilencetherapeuticscom
business review corporate governance financial statements
in	addition	to	this	exciting	clinical	programme	we	are	
evaluating	preclinical	opportunities	in	areas	that	begin	
to	take	us	outside	oncology 	to	showcase	the	strength	
of	our	technology 	as	well	as	take	advantage	of	various	
accelerated	clinical	and	regulatory	pathways	these	
programmes	may	make	use	of	our	dbtc	and	dacc	
delivery	systems	targeted	towards	the	liver	and	lung	
endothelium	respectively 
our	partner	quark	pharmaceuticals	quark	continues	
to	make	progress	in	the	two	projects	covered	under	
our	licence	agreements	pfe‑4523655	in	diabetic	
macular	oedema	under	a	licensing	agreement	between	
quark	and	pfizer	and	qpi‑1002	in	delayed	graft	
function	post	kidney	transplantation	under	an	option	
agreement	between	quark	and	novartis	the	results	of	
these	studies	if	they	warrant	continued	development	by	
pfizer	and	novartis	respectively 	could	yield	milestone	
income	for	us	in	2014	to	2015	if	these	molecules	are	
commercialised	we	would	be	entitled	to	further	income	
in	the	form	of	royalties	
operations
during	2012	we	were	able	to	significantly	restructure	
the	head	office	costs	in	london	reducing	the	costs	and	
ensuring	more	of	our	cash	resources	are	focused	on	
developing	the	assets	of	the	company 	at	the	same	time	
we	have	added	the	appropriate	personnel	to	support	our	
progression	into	a	product	company 
the	development	team	in	berlin	headed	by	dr	klaus	
giese	has	continued	to	make	significant	progress	with	
our	pipeline	and	technology	assets	and	i	am	excited	
about	the	developments	and	their	future	potential	
in	february	2012	thomas	christely	resigned	as	
chief	executive	and	left	the	company 	in	august	
t ony	sedgwick	chief	executive	max	herrmann	
chief	financial	officer	and	annette	clancy 	 	
non‑executive	director 	left	the	company 
ali	mortazavi	joined	us	as	director	of	corporate	
strategy	in	august	2012	t im	freeborn	as	finance	
director	in	october	2012	and	i	remain	chairman	ali	
brings	a	wealth	of	experience	in	the	capital	markets	as	
well	as	small	cap	companies	and	has	been	instrumental	
in	the	development	of	silence	since	he	has	joined	
t im	has	a	wealth	of	experience	in	the	financial	markets	
and	as	an	analyst	and	qualified	accountant	he	has	
already	undertaken	significant	streamlining	of	the	
finance	function
mike	khan	became	a	non‑executive	director	in	
september	and	chief	medical	officer	in	january	2013
w e	also	welcome	annie	cheng	to	the	board	as	
director	of	corporate	development	she	has	14	years	
of	experience	in	the	healthcare	industry 	in	equity	
research	and	consulting	while	in	equity	research	
she	covered	a	wide	range	of	european	and	us	
healthcare	product	stocks	as	a	consultant	annie	
advised	a	number	of	biotechnology	companies	in	
corporate	development	and	communications	with	the	
investment	community 	
capital raising
during	2012	we	have	continued	to	receive	strong	
support	from	key	shareholders	and	undertook	two	
capital	raisings	£57m	before	expenses	in	july 	and	
£50m	before	expenses	in	november 	in	addition	
as	announced	in	april	2013	a	further	£190m	before	
expenses	was	raised	post	year	end	these	capital	
raisings	have	demonstrated	the	continued	strong	
support	post	year	end	of	our	existing	key	shareholders	
and	some	significant	new	investors	on	behalf	of	
the	board	of	the	company	i	would	like	to	thank	our	
shareholders	for	their	continued	support	and	input	to	
the	development	of	silence	in	2012	and	into	the	future	
as	a	board	we	are	committed	to	maximising	the	value	
of	the	company	and	hence	the	value	to	shareholders
looking forward
thanks	to	the	work	in	the	last	twelve	months	by	the	
whole	team	and	key	shareholders	of	the	company 	
silence	is	progressing	in	its	transformation	into	a	
product	company	using	our	expertise	in	chemical	
modifications	of	sirna	and	delivery	technologies	 	
at	the	same	time	the	field	of	rna‑based	therapeutics	
continues	to	see	positive	developments	which	in	our	
view 	validates	our	strategic	direction	
as	a	board	we	are	incredibly	excited	about	2013	
and	beyond	as	we	look	to	translate	our	preclinical	
excellence	today	into	clinical	results	and	products	in	
the	future	w e	look	forward	very	positively	to	2013	and	
the	development	of	our	pipeline	and	business	and	to	
translating	that	into	growth	in	shareholder	value
jerry randall 
chairman
28	may	2013 silence therapeutics plc  
annual report and financial statements 2012
04
wwwsilencetherapeuticscom
“we will use our technology to 
change patient lives for the 
better and in the process 
build shareholder value”
ali mortazavi
chief	executive
new	technologies	enable	the	development	of	new	
medicines	that	change	lives	dramatically	for	the	better 	
for	example	five‑year	relative	survival	rate	for	cancer	
increased	to	69	in	1999	to	2005	from	50	in	1975	to	
1977	by	supporting	companies	that	made	a	difference	
for	patients	investors	in	these	companies	were	
rewarded	in	2012	european	small‑cap	biotechnology	
stocks	were	up	over	40	according	to	ernst		y oung’ s	
2013	biotechnology	industry	report
silence	therapeutics	as	one	of	the	few	companies	with	
intellectual	property	and	know‑how	in	the	emerging	
oligonucleotide	therapeutics	platform	now	has	an	
opportunity	to	become	a	fully	fledged	biotechnology	
company	in	the	tradition	of	the	previous	waves	of	
biotechnology	pioneers	
our	team	of	scientists	who	have	been	with	us	since	the	
inception	of	the	company 	created	a	powerful	platform	
technology	from	which	new	drugs	can	be	developed	to	
treat	previously	unaddressable	conditions	
the	drug	development	industry	remains	an	attractive	
investment	opportunity	due	to	demographic	trends	
although	this	path	is	not	without	challenges	w e	
believe	our	success	is	contingent	on	developing	drugs	
that	truly	make	a	difference	to	patients	w e	are	in	the	
process	of	acquiring	the	capabilities	to	enable	us	to	
make	appropriate	clinical	development	decisions	for	the	
benefit	of	patients	and	shareholders
in	the	next	year 	we	look	forward	to	sharing	with	you	
a	research	and	development	plan	and	timelines	for	
delivering	key	development	milestones	
leveraging the strengths of our technology
the	core	technology	of	silence	therapeutics	enables	the	
development	of	novel	molecular	entities	that	“silence”	or	
inactivate	genes	it	is	inspired	by	a	naturally	occurring	
process	called	rna	interference	rnai	this	process	is	
triggered	by	a	short	double	stranded	oligonucleotide	
known	as	short	interfering	rna	sirna	in	cells	where	
the	target	gene	is	expressed	and	when	such	expression	
is	undesirable	
our	scientists	improved	on	nature	by	chemically	
modifying	a	natural	sirna	to	create	a	proprietary	
form	of	sirna	molecule	known	as	aturnai	these	
molecules	have	been	demonstrated	to	be	more	stable	
and	less	immunostimulatory	than	unmodified	sirnas	
making	aturnai	desirable	as	drugs	molecules	
additionally 	our	scientists	developed	technology	
that	preferentially	delivers	aturnai	to	the	vascular	
endothelium	atuplex	the	lung	endothelium	dacc	
and	the	liver	dbtc
in	contrast	to	conventional	drugs	that	can	access	a	
limited	proportion	of	disease	targets	we	believe	our	
technology	can	be	used	to	address	the	overexpression	of	
any	gene	as	such	our	technology	may	be	able	to	help	
more	patients	and	treat	more	diseases	
given	the	properties	of	our	technology 	we	believe	it	
would	be	most	powerful	when	used	to	address	diseases	
with	established	and	well‑studied	links	between	
the	expression	of	a	specific	gene	or	the	production	
of	a	specific	protein	and	a	disease	more	of	these	
opportunities	should	come	to	light	as	gene	sequencing	
technology	advances	
i am pleased to be appointed chief executive of silence therapeutics 
transitioning from my prior role at the company as director of corporate 
strategy with the completion of the atu027 phase i study and a 
strengthened cash position silence therapeutics is now ready to embark 
on the next step in a road well‑trodden by the pioneers of the biotechnology 
industry such as amgen and biogen
chief executive’s review silence therapeutics plc  
annual report and financial statements 2012
05
wwwsilencetherapeuticscom
business review corporate governance financial statements
pursuing new clinical development projects
our	technology	provides	many	clinical	development	
opportunities	w e	have	a	responsibility	to	patients	
and	shareholders	to	pursue	projects	with	the	highest	
chance	of	success	t o	do	so	we	will	adhere	to	the	
following	simple	principles
•	 decision enabling experiments we 	 will 	 do 	 studies 	 that	
enable 	 gono 	 go 	 decisions 	 where 	 the 	 benchmark 	 for	
“go” 	 is 	 prospectively 	 defined 	 and 	 we 	 will 	 stop 	 projects 	
that 	 are 	 not 	 worth 	 doing 	 as 	 soon 	 as 	 practicable
•	 efficacy signals early we 	 will 	 target 	 conditions	
where 	 it 	 is 	 possible 	 to 	 know 	 early 	 whether 	 the 	 drug	
works 	 for 	 example 	 where 	 clinical 	 outcome 	 would 	 be	
obvious 	 in 	 small 	 uncontrolled 	 studies 	 or 	 where 	 there	
are 	 well‑accepted 	 surrogate 	 endpoints 	 for 	 clinical	
outcome 	 importantly  	 early 	 efficacy 	 signals 	 may 	
enable 	 accelerated 	 path 	 to 	 approval 	 for 	 the 	 benefit 	 of 	
patients 	 and 	 value 	 creation 	 for 	 shareholders
•	 found patient population we	are	better	able	to	
help	patients	if	they	are	already	known	to	treating	
physicians	because	their	diseases	are	obvious	
enough	that	they	seek	medical	help	or	their	diseases	
are	screened	routinely
•	 in target tissues we	will	pursue	diseases	where	the	
undesirable	gene	expression	and	protein	production	
are	in	the	vascular	endothelium	lung	endothelium	
liver 	or	wherever	else	our	technology	can	take	us	in	
the	future
•	 necessary before	we	embark	on	any	clinical	
development	project	we	will	establish	the	necessary	
efficacy	and	safety	parameters	for	a	new	drug	that	
will	be	meaningful	to	patients	in	light	of	existing	
options	and	more	advanced	potential	therapies	
the	target	profile	will	inform	our	study	design	
so	we	can	know	as	early	as	possible	whether	our	
drug	can	make	a	difference	to	patients	clear	
characterisation	of	unmet	medical	needs	may	also	
allow	us	to	take	advantage	of	certain	accelerated	
regulatory	pathways
•	 elucidated biology we	plan	to	pursue	disease	where	
the	link	between	the	undesirable	gene	expression	
and	disease	is	already	well‑studied	preferably	by	
multiple	independent	groups
how atu027 fits into our future portfolio
currently  	 we 	 have 	 one 	 clinical 	 stage 	 project 	 atu027 	 an	
aturnai 	 against 	 pkn3 	 delivered 	 by 	 atuplex 	 to 	 the	
vascular 	 endothelium 	 by 	 acting 	 against 	 pkn3 	 in 	 the	
vascular 	 endothelium 	 it 	 is 	 hypothesised 	 that 	 metastatic	
spread 	 would 	 decrease 	 thereby 	 slowing 	 progression 	 and	
improving 	 survival 	 rates 	 of 	 cancer 	 patients
w e	have	demonstrated	the	safety	of	atu027	in	
34	patients	in	2012	we	completed	a	phase	i	
monotherapy 	one‑month	safety	study	of	atu027	in	
a	variety	of	solid	tumour	patients	
the	phase	i	study	showed	that	none	of	the	34	patients	
experienced	a	serious	adverse	event	directly	associated	
with	atu027	
the	next	logical	step	in	the	development	of	atu027	is	to	
combine	its	presumed	ability	to	stop	cancer	spread	with	
chemotherapy	agents	that	kill	tumours	to	better	clarify	
atu027’ s	efficacy	profile	when	used	as	intended	in	
april	2013	we	initiated	dosing	of	cancer	patients	with	
the	chemotherapy	agent	gemcitabine	in	combination	
with	atu027	as	such	further	studies	are	being	
planned	we	will	pay	special	attention	to	cancers	where	
patients	experience	spread	of	disease	or	death	within	
a	relatively	short	period	of	time	even	on	best	current	
available	therapy 	
if	successful	atu027	could	help	cancer	patients	at	
risk	from	developing	metastasis	thereby	slowing	
progression	of	disease	and	improve	survival	
demonstration	of	these	effects	will	ultimately	require	
sizable	randomised	controlled	trials	using	progression	
free	survival	or	overall	survival	as	endpoints	at	this	
time	the	early	indicators	of	efficacy	that	are	normally	
available	to	drugs	with	tumour	killing	properties	eg	
tumour	regression	are	not	available	to	atu027	given	
its	mechanism	of	action	therefore	we	consider	atu027	
to	be	a	high‑risk	but	high‑reward	opportunity 
w e	will	therefore	be	looking	to	balance	the	
pipeline	appropriately 
enabling infrastructure
w ith	its	solid	scientific	foundation	silence	is	well	
positioned	to	develop	impactful	new	treatments	for	
patients	that	would	also	generate	shareholder	value	
the	next	stage	of	our	development	will	require	
further	expertise
w e	have	identified	two	near ‑term	needs	for	
the	company
•	 run	clinical	trials	in	a	cost‑efficient	way	to	reach	
value	inflection	points	early
•	 identify	diseases	where	there	is	a	significant	medical	
need	and	the	required	target	profile	for	new	drugs
w e	have	taken	steps	to	recruit	the	appropriate	
personnel	to	address	the	aforementioned	needs	
conclusion
the	next	year	will	be	critical	for	silence	therapeutics	
in	its	transition	to	a	drug	development	company 	
including	an	update	on	our	clinical	development	plan	
i	look	forward	to	providing	you	with	further	updates	
throughout	the	year 	
ali mortazavi
chief	executive	
28	may	2013 silence therapeutics plc  
annual report and financial statements 2012
06
wwwsilencetherapeuticscom
the fund raisings in 2012 totalled £107m before expenses 
a further £190m before expenses was raised post year end 
and will allow the company to significantly advance both 
its clinical and preclinical programmes
revenue
revenue	generated	during	the	year	reduced	by	£05m	
to	£02m	
research and development expenditure
research	and	development	expenses	during	the	year	
remained	unchanged	at	£34m	2011	£34m	and	
comprised	the	expenditure	on	both	our	clinical	and	
preclinical	development	programmes
administrative expenses
administrative	expenses	during	the	year	also	
remained	virtually	unchanged	at	£26m	2011	£27m	
a	cost	reduction	programme	was	undertaken	in	
london	during	the	summer	period	but	due	to	
associated	one	off	costs	the	benefit	of	these	will	not	
be	seen	until	2013	and	future	years
impairment of intangible assets
the	impairment	charge	of	£205m	2011	£nil	
related	to	the	impairment	of	goodwill	write	down	of	
intangibles	and	trade	payables
restructuring charge
there	was	no	restructuring	charge	in	the	current	year	
2011	£05m
financial income
financial	income	during	the	year	was	lower	mainly	due	
to	lower	average	cash	balances	during	the	year 
tim freeborn
finance	director
“silence significantly improved its 
cash position through a number 
of cash raisings and undertook 
cost restructuring which will 
benefit the company in 2013 
and beyond”
financial review silence therapeutics plc  
annual report and financial statements 2012
07
wwwsilencetherapeuticscom
business review corporate governance financial statements
taxation
no	corporation	tax	was	payable	in	either	2012	or	2011
liquidity cash cash equivalents  
and money market investments 
the	group’ s	cash	position	at	year	end	was	£89m	at	the	
end	of	2011	silence	had	cash	of	£37m	a	total	of	
£103m	after	expenses	was	raised	during	2012	through	
placings	and	open	offers	which	involved	the	issue	of	
1089088220	shares	at	05p	and	200000000	shares	
at	25p
the	net	cash	outflow	from	operating	activities	in	
2012	was	£49m	2011	£51m	against	an	operating	
loss	of	£263m	2011	£58m	which	reflects	the	
impairment	charge	
t rade	and	other	receivables	at	year	end	were	£02m	
2011	£02m	and	trade	and	other	payables	were	£10m	
at	year	end	2011	£13m	
goodwill	at	year	end	was	£73m	2011	£283m	
following	a	reassessment	after	the	closure	of	intradigm	
in	the	us
tim freeborn
finance	director	and	company	secretary
28	may	2013 silence therapeutics plc  
annual report and financial statements 2012
08
wwwsilencetherapeuticscom
board of directors
1
3
5
2
4
1	 jerry	randall
2	 ali	mortazavi
3	 t im	freeborn
4	 mike	khan
5	 david	mack silence therapeutics plc  
annual report and financial statements 2012
09
wwwsilencetherapeuticscom
business review corporate governance financial statements
jerry randall aca
chairman
mr	randall	is	an	entrepreneur	with	interests	in	
a	number	of	business	areas	he	was	appointed	
chairman	of	the	board	in	february	2010	following	
the	resignation	of	iain	ross	currently	mr	randall	is	
founder	and	chief	executive	officer	of	v enture	life	
group	a	private	international	specialty	healthcare	
company	focusing	on	the	concerns	of	aging	until	
november	2009	he	was	chief	financial	officer	of	
sinclair	pharmaceuticals	plc	which	he	joined	in	2000	
as	part	of	a	management	buy‐in	team	prior	to	this	
mr	randall	worked	in	corporate	finance	and	was	
previously	involved	in	two	other	buy‐ins	he	acted	as	
adviser	to	both	private	and	quoted	companies	between	
1993	and	2000	in	both	the	capacity	of	nominated	
adviser	and	in	practice	with	kpmg	during	this	
period	he	was	involved	in	a	number	of	flotations	and	
transactions	on	the	official	list	unlisted	securities	
market	and	the	alternative	investment	market	as	well	
as	raising	private	equity 	mr	randall	is	a	qualified	
chartered	accountant	and	member	of	the	institute	
of	directors	
ali mortazavi
chief executive
mr	mortazavi	has	over	17	years	of	experience	in	
financial	services	he	started	his	career	as	a	t echnology	
analyst	at	duncan	lawrie	then	credit	l yonnais	
securities	in	2001	he	co‑founded	evolution	securities	
and	ran	the	principal	trading	and	market	making	arm	
leaving	in	2008	he	has	extensive	experience	in	small	
companies	and	has	significant	stakes	in	uk	listed	
technologybiotech	ventures	
tim freeborn ba aca
finance director and company secretary
mr	freeborn	joined	the	company	in	august	2012	and	
became	full	time	in	october 	previously	he	was	head	of	
research	at	xcap	securities	and	an	analyst	at	evolution	
securities	after	qualifying	as	a	chartered	accountant	
he	left	practice	to	become	a	journalist	for	twelve	
years	he	worked	in	the	daily	mail	city	office	covering	
biotech	electronics	and	real	estate	
michael khan bsc mbbs phd frcp
director and chief medical officer 
dr	khan	is	an	associate	professor	of	medicine	at	the	
university	of	w arwick	and	a	consultant	physician	at	
university	hospitals	he	is	a	highly	cited	researcher	
and	experienced	clinician	with	a	long	track	record	
in	metabolic	medicine	and	cancer	biology	research	
as	well	as	in	the	running	of	clinical	trials	he	has	
written	several	books	on	diabetes	cholesterol	problems	
and	cancer	biology	and	teaches	postgraduates	and	
undergraduates	in	medicine	and	biological	sciences	in	
these	areas	he	and	co‑workers	have	made	important	
contributions	to	further	the	understanding	of	
cancer	cell	biology	and	diabetes	and	are	working	on	
identifying	novel	tissue‑based	biomarkers	for	colorectal	
cancer	and	the	development	of	novel	diagnostic	tools	
he	is	a	fellow	of	the	royal	college	of	physicians	of	
london	and	a	member	of	the	association	of	physicians	
hear t ‑uk	and	diabetes	uk	and	has	acted	as	an	
expert	adviser	to	numerous	national	and	international	
organisations	in	both	the	public	and	private	sectors
david mack phd
nonexecutive director
dr	mack	is	a	director	at	alta	partners	where	he	led	the	
investment	in	angiosyn	as	a	director	and	acting	ceo	
acquired	by	pfizer	in	2005	he	joined	intradigm’ s	
board	in	may	2006	and	served	on	that	board	until	the	
merger	with	silence	therapeutics	he	is	currently	
on	the	board	of	directors	of	aerie	pharmaceuticals	
ceregene	and	proacta	prior	to	alta	dr	mack	
co‑founded	and	served	as	v ice	president	of	genomics	
research	at	eos	biotechnology	acquired	by	protein	
design	labs	in	2003	from	1995	to	1997	he	served	
at	affymetrix	as	head	of	cancer	biology	where	he	
oversaw	the	development	and	application	of	dna	array	
technology	in	the	areas	of	oncology	and	inflammation	
he	was	also	a	pivotal	member	of	the	polymerase	chain	
reaction	pcr	invention	group	at	cetus	now	chiron	
in	the	mid	1980s	dr	mack	received	his	phd	in	1992	
from	the	university	of	chicago		 silence therapeutics plc  
annual report and financial statements 2012
10
wwwsilencetherapeuticscom
company information and advisers
secretary
t im	freeborn	
registered office
22	melton	street
london	nw1	2bw
registered number 
02992058
nominated advisers
nplus1 singer advisory ltd
one	bartholomew	lane
london	ec2n	2ax
registrars
capita irg plc
northern	house
w oodsome	park
fenay	bridge
huddersfield	hd8	0la
auditor
kpmg audit plc
15	canada	square	
london	e14	5gl silence therapeutics plc  
annual report and financial statements 2012
11
wwwsilencetherapeuticscom
business review corporate governance financial statements
directors’ report
the	directors	present	their	report	and	the	financial	statements	for	the	year	ended	31	december	2012
principal activities
the	group	is	focused	on	the	development	of	rnai	therapeutics	which	incorporates	its	structural	chemistry	and	
delivery	technologies	the	group’ s	lead	product	atu027	is	currently	in	a	phase	ib2a	clinical	trial	
review of the business and future developments
the	chairman’ s	statement	provides	details	of	the	group’ s	progress	during	the	year	against	all	its	performance	
targets	the	chief	executive’ s	review	describes	research	and	development	activity	during	the	year	as	well	
as	outlining	future	planned	developments	details	of	the	financial	performance	including	comments	on	the	
cash	position	and	research	and	development	expenditure	are	given	in	the	financial	review 	the	group’ s	key	
performance	indicators	are	the	cash	position	in	relation	to	cash	flow 	the	expenditure	on	research	and	development	
activities	and	the	development	milestones	reached	together	with	the	signing	of	research	collaborations	and	
licences	to	bring	in	both	development	partners	and	revenues	
health safety and environment
the	directors	are	committed	to	ensuring	the	highest	standards	of	health	and	safety 	both	for	their	employees	and	
for	the	communities	within	which	the	group	operates	the	directors	are	also	committed	to	minimising	the	impact	
of	the	group’ s	operations	on	the	environment	for	example	the	group	has	implemented	paper	recycling	at	its	
head	office
employees
the	directors	are	committed	to	continuing	involvement	and	communication	with	employees	on	matters	affecting	
both	employees	and	the	company 	management	conducts	regular	meetings	with	all	employees	on	site
subsequent events
a	description	of	subsequent	events	is	set	out	in	note	25	to	the	financial	statements
results and dividends
the	group	recorded	a	loss	for	the	year	before	taxation	of	£263m	2011	£57m	further	details	are	given	in	the	
preceding	financial	review 	the	group	is	not	yet	in	a	position	to	pay	a	dividend	and	the	loss	for	both	periods	has	
been	added	to	the	retained	loss
financial and non‑financial key performance indicators “kpis”
the	directors	consider	cash	and	research	and	development	spend	to	be	the	group’ s	financial	kpis	at	the	current	
stage	of	the	company’ s	development	these	are	detailed	in	the	financial	review 	the	directors	consider	that	the	
most	important	non‑financial	kpis	relate	to	the	number	of	drugs	in	development	by	stage	of	development	and	the	
number	of	pharmaceutical	collaborations	both	of	which	are	detailed	in	the	chief	executive’ s	review 
directors
the	directors	who	served	at	any	time	during	the	year	were
	 job	title	 	 	 	 	 appointed		 resigned	
j	randall		 chairman	 	
d	mack		 non‑executive	 	
t	christely		 chief	executive	 	 	 	 	 9	february	
a	clancy		 non‑executive	 	 	 	 	 	 2	august
m	herrmann		 finance	 	 	 	 	 	 2	august
t	sedgwick		 chief	executive	 	 	 	 9	february		 2	august	
a	mortazavi		 chief	executive	 	 	 	 2	august		
t	freeborn		 finance	 	 	 	 	 8	october		
m	khan		 chief	medical	officer	 	 	 	 18	september		
the	interests	of	the	directors	in	the	share	options	of	the	company	are	set	out	in	note	18	to	the	financial	statements	 silence therapeutics plc  
annual report and financial statements 2012
12
wwwsilencetherapeuticscom
directors’ report continued
substantial interests
at	31	december	2012	the	company	had	been	informed	of	the	following	substantial	interests	of	over	3	in	the	
issued	share	capital	of	the	company
	 	 	 	 	 number	 percentage	of	 	
	 	 	 	 	 issued		 share	capital
robert	keith	 	 	 	 	 488325844	 261
ora	guernsey	limited	 	 	 	 	 374000000	 	200	
henderson	global	investors	 	 	 	 	 160000000	 85	
richard	griffiths	 	 	 	 	 125746105	 67
ali	mortazavi		 	 	 	 	 82400000	 44
corporate governance
the 	 board 	 meets 	 regularly 	 and 	 has 	 ultimate 	 responsibility 	 for 	 the 	 management 	 of 	 the 	 group 	 and 	 sub‑committees	
comprising 	 of 	 executive 	 and 	 non‑executive 	 directors 	 who 	 meet 	 as 	 and 	 when 	 required 	 to 	 deal 	 with 	 remuneration 	 and	
audit 	 matters
committee structure
remuneration	audit	nominations	jerry	randall	chair	and	david	mack	
remuneration committee
the	board	of	directors	has	considered	the	remuneration	committee’ s	proposals	in	respect	of	the	remuneration	of	
the	directors	and	senior	executives	and	has	accepted	them	without	substantial	revision
audit committee
the	board	seeks	to	present	a	balanced	and	understandable	assessment	of	the	group’ s	position	and	prospects	in	all	
half	year 	final	and	price‑sensitive	reports	and	information	required	to	be	presented	by	statute
the	audit	committee	comprises	the	chairman	and	one	non‑executive	director	and	its	terms	of	reference	include	
keeping	under	review	the	scope	and	results	of	the	external	audit	and	its	cost‑effectiveness	the	committee	reviews	
the	independence	and	objectivity	of	the	external	auditors	kpmg	audit	plc	including	the	nature	and	extent	of	any	
non‑audit	services	supplied	by	them	to	the	group	
our	auditor 	kpmg	audit	plc	has	instigated	an	orderly	wind	down	of	its	business	the	board	has	decided	to	put	
kpmg	llp 	the	successor	firm	forward	to	be	appointed	as	auditors	and	a	resolution	concerning	their	appointment	
will	be	put	to	the	forthcoming	agm	of	the	company	on	26	june	2013
shareholder communications
the	company	uses	its	corporate	website	silence‑therapeuticscom	to	ensure	that	the	latest	announcements	press	
releases	and	published	financial	information	are	available	to	all	shareholders	and	other	interested	parties
the	agm	is	used	to	communicate	with	both	institutional	shareholders	and	private	investors	and	all	shareholders	
are	encouraged	to	participate	separate	resolutions	are	proposed	on	each	issue	so	that	they	can	be	given	proper	
consideration	and	there	is	a	resolution	to	approve	the	annual	report	and	financial	statements	the	company	counts	
all	proxy	votes	and	will	indicate	the	level	of	proxies	lodged	on	each	resolution	after	it	has	been	dealt	with	by	a	
show	of	hands
the	directors	who	held	office	at	the	date	of	approval	of	this	directors’	report	confirm	that	so	far	as	they	are	each	
aware	there	is	no	relevant	audit	information	of	which	the	company’ s	auditors	are	unaware	and	each	director	has	
taken	all	the	steps	that	they	ought	to	have	taken	as	a	director	to	make	themselves	aware	of	any	relevant	audit	
information	and	to	establish	that	the	company’ s	auditors	are	aware	of	that	information silence therapeutics plc  
annual report and financial statements 2012
13
wwwsilencetherapeuticscom
business review corporate governance financial statements
risk factors
the 	 group’ s 	 principal 	 activity 	 is 	 biotechnology 	 research 	 and 	 development 	 as 	 with 	 any 	 business 	 in 	 this 	 sector  	 there	
are 	 risks 	 and 	 uncertainties 	 relevant 	 to 	 the 	 group’ s 	 business 	 certain 	 of 	 these 	 risk 	 factors 	 affect 	 the 	 majority 	 of	
businesses 	 some 	 are 	 common 	 to 	 businesses 	 in 	 the 	 biotechnology 	 sector 	 and 	 others 	 are 	 more 	 specific 	 to 	 the 	 group
risks common to most businesses
•	 failure	to	maintain	legal	and	regulatory	compliance
•	 new	accounting	standards	causing	a	material	adverse	impact	on	reported	financial	results
•	 failure	to	balance	product	portfolio	against	market	projections	and	demands
•	 increasing	cost	and	decreasing	availability	of	insurance
•	 lack	of	control	over	external	economic	factors	affecting	business
•	 unforeseen	events	which	would	be	classified	as	force	majeure	eg	fire	flood	loss	of	utilities
•	 inability	to	access	sufficient	resources	to	trade	as	a	going	concern	
risks applicable to the biotechnology sector and the group
clinical and regulatory risk
•	 the	nature	of	pharmaceutical	development	is	such	that	drug	candidates	may	not	be	successful	due	to	an	
inability	to	demonstrate	in	a	timely	manner	the	necessary	safety	and	efficacy	in	a	clinical	setting	to	the	
satisfaction	of	appropriate	regulatory	bodies	such	as	the	food	and	drug	administration	fda	in	the	us	and	
the	european	medicines	agency	ema	in	europe	the	group	will	have	limited	control	over	the	type	and	cost	of	
trial	required	to	obtain	regulatory	approval	
•	 the	group	will	rely	on	third	parties	to	conduct	clinical	trials	if	these	third	parties	do	not	successfully	carry	out	
their	contractual	duties	or	meet	expected	deadlines	the	programmes	of	the	group	may	be	delayed	or	the	group	
may	not	be	able	to	obtain	regulatory	approval	for	its	products	any	failure	or	delay	of	projects	in	development	
or	clinical	trials	could	have	an	adverse	effect	on	the	business
•	 with	the	prime	focus	of	the	group	being	on	such	a	new	area	of	technology 	there	can	be	no	assurance	that	the	
group’ s	products	will	receive	and	maintain	regulatory	approval
product development risk
•	 the	group	is	involved	at	the	leading	edge	of	a	revolutionary	technology 	w ithin	the	pharmaceutical	sector	
more	drugs	fail	in	development	than	progress	to	market	and	there	is	no	guarantee	that	the	group	will	be	able	
to	successfully	develop	this	new	technology	or	bring	any	of	the	drug	candidates	it	is	developing	to	market	
further 	the	drugs	that	the	group	does	bring	to	market	may	not	be	commercially	successful
•	 the	group	has	no	track	record	of	successful	development	and	registration	of	any	product	and	will	need	to	
acquire	or	gain	access	to	relevant	additional	expertise
•	 in	order	to	progress	the	group’ s	product	development	plans	it	may	be	desirable	or	necessary	to	find	
collaborators	on	certain	projects	the	group	cannot	guarantee	that	it	will	be	able	to	find	and	maintain	suitable	
collaborators	under	acceptable	terms	or	that	once	found	such	collaborators	will	devote	sufficient	resources	to	
the	collaboration	to	make	it	commercially	successful
•	 the	group’ s	suppliers	may	encounter	unexpected	difficulties	in	the	design	and	construction	of	manufacturing	
processes	and	the	scale‑up	of	production	to	viable	commercial	levels	or	may	otherwise	be	unable	to	supply	
materials	to	the	group	in	a	timely	manner
•	 competition	for	talented	employees	in	the	biotechnology	sector	may	lead	to	increased	costs	or	decreased	
availability	of	staff	as	a	result	the	group	may	be	unable	to	recruit	or	retain	certain	important	employees	this	
could	weaken	the	group’ s	scientific	and	management	capabilities	and	could	delay	or	halt	the	development	of	
products	and	technologies
competition risk
•	 rnai	technology	is	attracting	increased	interest	and	with	that	is	increased	competition	competitors	in	the	
sector	may	have	greater	financial	human	and	other	resources	and	more	experience	to	develop	competing	
products	or	technology
•	 many	companies	are	trying	to	develop	competing	technologies	and	one	or	more	of	these	may	restrict	the	
potential	commercial	success	of	the	group’ s	products	or	render	them	obsolete
•	 increasing	competition	may	also	have	an	adverse	effect	on	the	timing	or	scale	of	commercialisation	of	the	
group’ s	technology silence therapeutics plc  
annual report and financial statements 2012
14
wwwsilencetherapeuticscom
directors’ report continued
risk factors continued
risks applicable to the biotechnology sector and the group continued
intellectual property risk
•	 intellectual	property	issues	from	challenges	by	others	or	lack	of	protection	for	its	own	products	may	negatively	
impact	the	group	other	companies	may	have	or	develop	intellectual	property	that	restricts	the	group’ s	freedom	
of	use	or	imposes	high	additional	costs	to	obtain	licences	
•	 the	group	may	be	unable	to	successfully	establish	and	protect	its	intellectual	property	which	is	significant	to	
the	group’ s	competitive	position
•	 the	group’ s	intellectual	property	may	become	invalid	or	expire	before	its	products	are	successfully	
commercialised
•	 the	group	may	be	unable	to	successfully	protect	its	competitive	position	through	the	establishment	and	
enforcement	of	intellectual	property	the	lack	of	sufficient	intellectual	property	protection	for	the	group’ s	
technologies	may	have	a	material	adverse	effect	on	its	commercial	success	in	particular 	there	can	be	no	
assurance	that	the	group’ s	patent	and	other	intellectual	property 	applications	will	be	granted	or	that	its	
granted	intellectual	property	including	any	granted	in	future	further	to	those	applications	are	or	will	be	valid	
or	of	sufficiently	broad	scope	to	provide	commercially	meaningful	protection	against	third	party	competition	
the	group’ s	competitors	may	also	have	or	acquire	in	future	substantially	equivalent	technologies	to	those	on	
which	the	group	does	or	will	depend	or	otherwise	design	around	the	group’ s	intellectual	property
•	 other	companies	may	have	or	acquire	intellectual	property	that	restricts	the	group’ s	freedom	to	operate	or	
imposes	high	additional	costs	for	the	group	in	obtaining	licences	and	there	can	be	no	assurance	that	the	group	
will	be	able	to	design	around	such	intellectual	property	or	obtain	relevant	licences	on	commercially	acceptable	
terms	if	at	all
•	 the	group	may	incur	substantial	costs	in	enforcing	its	intellectual	property 	and	in	bringing	and	prosecuting	
opposition	or	interference	actions	to	seek	to	prevent	third	parties	from	obtaining	patent	or	other	protection	
the	group	may	incur	substantial	costs	in	defending	against	such	actions	there	can	be	no	guarantee	that	such	
actions	will	be	successful	for	the	group
•	 the	patent	landscape	in	the	field	of	rnai	is	complex	and	the	group	is	aware	of	the	issuance	and	the	pendency	
of	patents	and	patent	applications	in	europe	the	us	and	in	other	jurisdictions	that	are	owned	by	third	parties	
and	that	purport	to	cover	structurally‑defined	classes	of	sirnas	and	their	uses	this	patent	landscape	is	in	flux	
with	ongoing	oppositions	litigations	and	continuing	prosecution	before	patent	offices	around	the	world	and	
the	directors	cannot	be	certain	that	sirna	claims	issued	to	third	parties	to	date	or	in	the	future	will	not	restrict	
the	group’ s	freedom	to	operate
•	 in	addition	there	are	many	issued	and	pending	patents	that	claim	various	aspects	of	oligonucleotide	chemistry	
that	the	directors	may	need	to	apply	to	the	group’ s	sirna	drug	candidates	there	are	also	many	issued	patents	
that	claim	genes	or	portions	of	genes	that	may	be	relevant	for	sirna	drugs	we	wish	to	develop	there	are	
further	many	issued	and	pending	patents	that	claim	various	aspects	of	nucleic	acid	delivery	systems	that	the	
directors	may	need	to	licence	in	order	to	deliver	the	group’ s	sirna	drug	candidates	topically	or	systemically	to	
the	appropriate	target	tissues	thus	it	is	possible	that	one	or	more	third	parties	may	hold	or	later	will	hold	
patent	rights	to	which	the	group	will	need	a	licence	if	those	parties	refuse	to	grant	the	group	a	licence	to	such	
patent	rights	on	reasonable	terms	the	group	may	not	be	able	to	perform	research	with	or	market	products	
covered	by	these	patents
•	 the	group	also	relies	on	trade	secrets	know‑how	and	technology 	which	are	not	protected	by	patents	to	
maintain	its	competitive	position	if	any	trade	secret	know‑how	or	other	technology	not	protected	by	a	patent	
were	to	be	disclosed	to	or	independently	developed	by	a	competitor 	the	group’ s	business	and	financial	condition	
could	be	materially	adversely	affected
retention of key personnel
•	 the	group’ s	success	is	largely	dependent	on	the	personal	efforts	and	abilities	of	the	group’ s	existing	senior	
management	the	loss	of	key	employees	or	advisers	or	the	inability	to	attract	or	retain	other	qualified	
employees	or	advisers	could	have	a	material	adverse	effect	on	the	group’ s	results	operations	and	financial	
condition silence therapeutics plc  
annual report and financial statements 2012
15
wwwsilencetherapeuticscom
business review corporate governance financial statements
financial risk
•	 there	are	very	high	costs	of	product	development	where	products	have	lead	times	to	market	of	many	years
•	 the	lack	of	a	substantial	recurrent	revenue	stream	and	the	significant	resources	needed	for	ongoing	investment	
in	its	research	and	development	pipeline	require	the	group	to	gain	access	to	additional	funding	from	licensing	
capital	markets	or	elsewhere	there	can	be	no	assurances	that	such	funding	will	be	achieved	on	favourable	
terms	if	at	all	
•	 additional	funding	will	be	required	to	give	the	group	time	to	reach	profitability 	if	the	group	is	unable	to	raise	
those	funds	there	may	be	insufficient	finance	for	product	development	or	operations	and	consequent	delay 	
reduction	or	elimination	of	development	programmes	could	result
•	 the	group	has	a	small	portfolio	of	products	success	or	failure	with	individual	products	could	have	a	
significant	impact	on	the	share	price	this	in	turn	may	make	it	difficult	for	the	group	to	continue	funding	
its	development	programme
•	 the	group	may	be	unable	to	secure	adequate	insurance	at	an	acceptable	cost
•	 the	group	has	operations	in	the	uk	and	germany	and	therefore	the	group	will	be	exposed	to	risks	associated	
with	foreign	currency	exchange	rates	and	fluctuation	therein
this	list	should	not	be	considered	an	exhaustive	statement	of	all	potential	risks	and	uncertainties
going concern
the	financial	statements	have	been	prepared	on	a	going	concern	basis	that	assumes	that	the	group	will	continue	in	
operational	existence	for	the	foreseeable	future
the	group	had	a	net	cash	inflow	for	2012	of	£52m	and	at	31	december	2012	had	cash	balances	of	£89m	
following	the	fundraising	announced	on	10	april	during	which	a	further	£190m	of	cash	was	raised	based	on	
current	forecasts	the	cash	on	hand	at	the	date	of	this	report	will	support	operations	into	2016	
political and charitable donations
the	group	made	no	political	or	charitable	donations	during	2012	2011	£nil	
payment of creditors
it	is	the	group’ s	policy	to	make	payments	to	creditors	in	accordance	with	individually	agreed	terms	generally	
within	30	days	either	of	the	invoice	date	or	from	the	end	of	the	month	the	invoice	was	received	using	the	method	
set	out	in	the	companies	act	the	ratio	for	the	group	of	trade	creditors	at	the	year	end	to	total	costs	was	42	days	
2011	49	days	
on	behalf	of	the	board
jerry randall
chairman	
28	may	2013
	
	 silence therapeutics plc  
annual report and financial statements 2012
16
wwwsilencetherapeuticscom
directors’ responsibilities for the financial statements
the	directors	are	responsible	for	preparing	the	annual	report	and	financial	statements	in	accordance	with	
applicable	law	and	regulations	company	law	requires	the	directors	to	prepare	financial	statements	for	each	
financial	year 	as	required	by	the	aim	rules	of	the	london	stock	exchange	they	are	required	to	prepare	the	group	
financial	statements	in	accordance	with	international	financial	reporting	standards	“ifrs”	as	adopted	by	the	
eu	“eu‑ifrs”	and	applicable	law	and	have	elected	to	prepare	the	parent	company	financial	statements	on	the	
same	basis	
under	company	law	the	directors	must	not	approve	the	financial	statements	unless	they	are	satisfied	that	they	
give	a	true	and	fair	view	of	the	state	of	affairs	of	the	group	and	parent	company	and	of	their	profit	or	loss	for	
that	period	
in	preparing	each	of	the	group	and	parent	company	financial	statements	the	directors	are	required	to
•	 select	suitable	accounting	policies	and	then	apply	them	consistently
•	 make	judgements	and	estimates	that	are	reasonable	and	prudent
•	 state	whether	they	have	been	prepared	in	accordance	with	ifrs	as	adopted	by	the	eu
•	 prepare	 the	 financial	 statements	 on	 the	 going	 concern	 basis	 unless	 it	 is	 inappropriate	 to	 presume	 that	 the	 group	
and	the	parent	company	will	continue	in	business
the	directors	are	responsible	for	keeping	adequate	accounting	records	that	are	sufficient	to	show	and	explain	
the	parent	company’ s	transactions	and	disclose	with	reasonable	accuracy	at	any	time	the	financial	position	of	the	
parent	company	and	enable	them	to	ensure	that	its	financial	statements	comply	with	the	companies	act	2006	
they	have	general	responsibility	for	taking	such	steps	as	are	reasonably	open	to	them	to	safeguard	the	assets	of	
the	group	and	to	prevent	and	detect	fraud	and	other	irregularities
the	directors	are	responsible	for	the	maintenance	and	integrity	of	the	corporate	and	financial	information	
included	on	the	company’ s	website	legislation	in	the	uk	governing	the	preparation	and	dissemination	of	financial	
statements	may	differ	from	legislation	in	other	jurisdictions
tim freeborn
finance	director
28	may	2013 w e	are	evaluating	further	studies	for	atu027	in	
combination	with	other	chemotherapy	agents	in	a	
variety	of	tumour	types	w e	plan	to	initiate	further	
programmes	and	will	provide	updates	in	due	course	
in	addition	to	this	exciting	clinical	program	we	are	
evaluating	preclinical	opportunities	in	areas	that	begin	
to	take	us	outside	oncology 	showcase	the	strength	of	
our	technology 	as	well	as	take	advantage	of	various	
accelerated	clinical	and	regulatory	pathways	these	
programs	may	make	use	of	our	dbtc	and	dacc	
delivery	systems	targeted	towards	the	liver	and	lung	
endothelium	respectively 
finally 	we	are	pleased	to	report	our	partner	quark	
pharmaceuticals	quark	continues	to	make	progress	
in	the	two	projects	covered	under	our	license	
agreements	pfe‑4523655	in	diabetic	macular	edema	
under	a	licensing	agreement	between	quark	and	
pfizer	and	qpi‑1002	in	delayed	graft	function	post	
kidney	transplantation	under	an	option	agreement	
between	quark	and	novartis		the	results	of	these	
studies	if	they	warrant	continued	development	by	
pfizer	and	novartis	respectively 	could	yield	milestone	
payments	for	us	in	2014	to	2015		if	these	molecules	
are	commercialised	we	would	be	entitled	to	further	
economics	in	the	form	of	royalties		
operations
during	2012	we	were	able	to	significantly	restructure	
the	head	office	costs	in	london	reducing	the	costs	
and	ensuring	more	of	our	cash	resources	are	focussed	
on	developing	the	assets	of	the	company 		at	the	same	
time	we	have	added	the	appropriate	personnel	to	
support	our	progression	into	a	product	company 
the	development	team	in	berlin	headed	by	dr	klaus	
gieise	has	continued	to	make	significant	progress	with	
our	pipeline	and	technology	assets	and	i	am	excited	
about	the	developments	and	their	future	potential	
in	july	2012	t ony	sedgwick	chief	executive	officer	
and	max	herrmann	chief	financial	officer	left	the	
company 	
ali	mortazavi	joined	us	as	director	of	corporate	
strategy 	t im	freeborn	as	finance	director 	and	i	
moved	from	non‑executive	to	executive	chairman		ali	
brings	a	wealth	of	experience	in	the	capital	markets	as	
well	as	small	cap	companies	and	has	been	instrumental	
in	the	development	of	silence	since	he	has	joined	t im	
has	a	wealth	of	experience	in	the	financial	markets	
and	as	an	analyst	and	qualified	accountant	he	has	
already	undertaken	significant	streaming	of	the	finance	
function	
ali	is	now	moving	to	the	position	of	chief	executive	
officer 	and	i	am	sure	he	will	continue	to	shape	and	
develop	silence	as	he	has	done	already	in	his	short	time	
with	us	
capital raising
during	2012	we	have	continued	to	receive	strong	
support	from	key	shareholders	and	undertook	two	
capital	raisings	£57	million	before	expenses	in	july 	
and	£50	million	before	expenses	in	november 	in	
addition	as	announced	in	april	2013	a	further	£19	
million	before	expenses	was	raised		these	capital	
raisings	have	demonstrated	the	continued	strong	
support	of	our	existing	key	shareholders	and	also	
now	some	significant	new	investors	on	behalf	of	
the	board	of	the	company	i	would	like	to	thank	our	
shareholders	for	their	continued	support	and	input	to	
the	development	of	silence	in	2012	and	into	the	future	
as	a	board	we	are	committed	to	maximising	the	value	
of	the	company	and	hence	the	value	to	shareholders
looking forward
thanks	to	the	work	in	the	last	12	months	by	the	whole	
team	and	key	shareholders	of	the	company 	silence	
is	progressing	in	its	transformation	into	a	product	
company	using	our	expertise	in	chemical	modifications	
of	sirna	and	delivery	technologies		at	the	same	time	
the	field	of	rna‑based	therapeutics	continues	to	see	
positive	developments	which	in	our	view 	validates	the	
approach				
as	a	board	we	are	incredibly	excited	about	2013	
and	beyond	as	we	look	to	translate	our	preclinical	
excellence	today	into	clinical	results	and	products	
w e	look	forward	very	positively	to	2013	and	the	
development	of	our	pipeline	and	business	and	to	
translating	that	into	true	growth	in	shareholder	value
jerry randall 
non‑executive	chairman
•	may	2013
silence therapeutics plc  
annual report and financial statements 2012
17
wwwsilencetherapeuticscom
business review corporate governance financial statements
get 
signature
silence therapeutics plc  
annual report and financial statements 2012
17
wwwsilencetherapeuticscom
business review corporate governance financial statements
independent auditor’s report
to the members of silence therapeutics plc
w e	have	audited	the	financial	statements	of	silence	therapeutics	plc	for	the	year	ended	31	december	2012	set	out	
on	pages	18	to	48	the	financial	reporting	framework	that	has	been	applied	in	their	preparation	is	applicable	law	
and	international	financial	reporting	standards	ifrs	as	adopted	by	the	eu	and	as	regards	the	parent	company	
financial	statements	as	applied	in	accordance	with	the	provisions	of	the	companies	act	2006	
this	report	is	made	solely	to	the	company’ s	members	as	a	body 	in	accordance	with	chapter	3	of	part	16	of	the	
companies	act	2006	our	audit	work	has	been	undertaken	so	that	we	might	state	to	the	company’ s	members	those	
matters	we	are	required	to	state	to	them	in	an	auditor’ s	report	and	for	no	other	purpose	t o	the	fullest	extent	
permitted	by	law 	we	do	not	accept	or	assume	responsibility	to	anyone	other	than	the	company	and	the	company’ s	
members	as	a	body 	for	our	audit	work	for	this	report	or	for	the	opinions	we	have	formed	
respective responsibilities of directors and auditor 
as	explained	more	fully	in	the	directors’	responsibilities	statement	set	out	on	page	16	the	directors	are	responsible	
for	the	preparation	of	the	financial	statements	and	for	being	satisfied	that	they	give	a	true	and	fair	view 	our	
responsibility	is	to	audit	and	express	an	opinion	on	the	financial	statements	in	accordance	with	applicable	
law	and	international	standards	on	auditing	uk	and	ireland	those	standards	require	us	to	comply	with	the	
auditing	practices	board’ s	ethical	standards	for	auditors	
scope of the audit of the financial statements 
a	description	of	the	scope	of	an	audit	of	financial	statements	is	provided	on	the	financial	reporting	council’ s	
website	at	www frcorgukauditscopeukprivate
opinion on financial statements 
in	our	opinion	
•	 the	financial	statements	give	a	true	and	fair	view	of	the	state	of	the	group’ s	and	of	the	parent	company’ s	affairs	
as	at	31	december	2012	and	of	the	group’ s	loss	for	the	year	then	ended	
•	 the	group	financial	statements	have	been	properly	prepared	in	accordance	with	ifrs	as	adopted	by	the	eu	
•	 the	parent	company	financial	statements	have	been	properly	prepared	in	accordance	with	ifrs	as	adopted	by	
the	eu	and	as	applied	in	accordance	with	the	provisions	of	the	companies	act	2006	and	
•	 the	financial	statements	have	been	prepared	in	accordance	with	the	requirements	of	the	companies	act	2006	
opinion on other matter prescribed by the companies act 2006 
in	our	opinion	the	information	given	in	the	directors’	report	for	the	financial	year	for	which	the	financial	
statements	are	prepared	is	consistent	with	the	financial	statements	
matters on which we are required to report by exception 
w e	have	nothing	to	report	in	respect	of	the	following	matters	where	the	companies	act	2006	requires	us	to	report	
to	you	if	in	our	opinion	
•	 adequate	accounting	records	have	not	been	kept	by	the	parent	company 	or	returns	adequate	for	our	audit	have	
not	been	received	from	branches	not	visited	by	us	or	
•	 the	parent	company	financial	statements	are	not	in	agreement	with	the	accounting	records	and	returns	or	
•	 certain	disclosures	of	directors’	remuneration	specified	by	law	are	not	made	or	
•	 we	have	not	received	all	the	information	and	explanations	we	require	for	our	audit	
richard broadbelt 
senior	statutory	auditor
for	and	on	behalf	of	kpmg	audit	plc 	
statutory	auditor	 	
chartered	accountants	 	
15	canada	square	london	e14	5gl
28	may	2013 we are transforming silence from a technology company to a product 
company and developing a clinical capability that will match and exploit 
our expertise in preclinical development
2012	has	been	a	year	of	significant	positive	change	
and	development	for	silence		w ith	the	support	of	key	
long	term	supportive	shareholders	we	have	been	able	
to	restructure	the	company	and	provide	a	significant	
runway	of	cash	to	enable	the	company	to	both	progress	
its	atu027	clinical	asset	and	to	broaden	its	preclinical	
pipeline	the	transformation	of	silence	from	a	
technology	company	to	a	product	company	continues	
and	we	are	evaluating	opportunities	to	match	and	
exploit	our	expertise	in	preclinical	development
in	the	last	18	months	we	have	seen	clinical	progress	
for	rna‑based	drugs	in	development	including
•	 completion	of	our	atu027	phase	i	trial	showing	
safety	and	tolerability	in	man
•	 data	showing	aln‑ttr02	can	robustly	knockdown	
relevant	serum	protein	in	july	2012
•	 data	showing	eteplirsen	has	a	clinical	impact	in	
patients	in	october	2012
•	 approval	of	the	first	gene	silencing	drug	kynamro	
in	the	us	in	january	2013
•	 progression	into	the	clinic	of	microrna	mimetic	
mrx34	in	april	2013
silence	is	well	positioned	to	take	advantage	of	this	
return	of	positive	sentiment	as	it	builds	its	clinical	and	
preclinical	pipeline	and	broadens	it	to	include	areas	
outside	of	oncology 
clinical development
our	development	strategy	with	our	sirnas	makes	drug	
development	significantly	cheaper 	quicker	and	more	
efficient	than	traditional	drug	development
•	 broad	applicability	the	ability	to	target	any	gene
•	 specificity	the	ability	to	block	only	selected	genes	
without	interfering	with	others
•	 simplicity	after	identification	of	the	gene	target	
path	to	phase	i	is	relatively	simple	and	well	defined	
this	is	in	contrast	to	traditional	development	where	
there	is	a	risk	of	off‑target	effects	multiple	cycles	
of	optimisation	and	design	before	a	drug	candidate	
is	identified	for	phase	i	study 		additionally 	relative	
to	other	oligonucleotide‑based	technologies	our	
technology	has	the	potential	to	be	used	at	much	lower	
doses
during	2012	we	completed	the	phase	i	clinical	study	
for	atu027	which	we	believe	has	anti‑metastatic	
effects		a	total	of	34	patients	were	treated	and	the	
excellent	safety	and	tolerability	observed	in	the	study	
underpins	our	technology 	atu027	is	believed	to	
block	the	extravasation	and	intravasation	of	cancer	
cells	necessary	for	the	spread	of	cancer 		this	activity	
represents	a	novel	cancer	treatment	paradigm	versus	
many	other	anti‑cancer	drugs	which	target	tumour	
directly 		the	potential	for	atu027	when	used	with	
conventional	anti‑cancer	drugs	is	a	very	exciting	
proposition	for	us
the	next	stage	for	atu027	is	a	phase	ibiia	trial	that	
combines	atu027	with	a	chemotherapy	agent	our	
preclinical	work	on	this	combination	has	demonstrated	
a	reduction	in	total	tumour	burden	including	visible	
metastatic	spread		w e	were	given	ethical	committee	
approval	for	this	phase	ibiia	early	in	2013	for	this	
trial	and	dosed	the	first	patient	in	april	2013
chairman’s statement
silence therapeutics plc  
annual report and financial statements 2012
18
wwwsilencetherapeuticscom
“rnai therapeutics are 
succeeding”
jerry randall 
non‑executive	chairman
consolidated income statement
year ended 31 december 2012
silence therapeutics plc  
annual report and financial statements 2012
18
wwwsilencetherapeuticscom
	 				 year ended 	 y ear	ended	 	
	 				 31 december 	 31	december 	
	 				 2012 	 2011 	
	 	 	 	 note	 £000s 	 £000s
revenue	 			 3	 163 	 694
research	and	development	costs	 	 	 	 	 3378 	 3361
gross	loss	 		 	 	 		 3215 	 2667
restructuring	charge	 	 	 	 	 —	 472
impairment		 	 	 	 5	 20486 —
administrative	expenses	 	 	 	 	 2613 	 2647
operating	loss		 		 	 	 5	6		 26314 	 5786
finance	income	 	 	 	 7	 18 	 57
gain	on	sale	of	assets	 	 	 	 	 12	5
finance	expense	 	 	 	 	 —	 13
loss for the period before tax	 				 26284 	 5737
t axation	credit	for	the	period	 	 	 	 8	 —	—
retained loss for the period after taxation  
attributable to equity holders  transferred to reserves 			 26284 	 5737
loss per ordinary equity share basic and diluted 	 	 	 9		 27p 		 12p
the	accompanying	accounting	policies	and	notes	form	an	integral	part	of	these	financial	statements
	 			 year ended 	 y ear	ended 	
	 			 31 december	 31	december 	
	 				 2012 	 2011 	
	 				 £	£
loss	for	the	period	after	taxation	 	 	 	 26284 	 5737
other	comprehensive	income	 	 	 	
exchange	differences	arising	on	consolidation		 of	foreign	operations	 	 	 714	5
total comprehensive income for the period 			 26998 	 5732
the	accompanying	accounting	policies	and	notes	form	an	integral	part	of	these	financial	statements
consolidated statement of comprehensive income
year ended 31 december 2012 w e	are	evaluating	further	studies	for	atu027	in	
combination	with	other	chemotherapy	agents	in	a	
variety	of	tumour	types	w e	plan	to	initiate	further	
programmes	and	will	provide	updates	in	due	course	
in	addition	to	this	exciting	clinical	program	we	are	
evaluating	preclinical	opportunities	in	areas	that	begin	
to	take	us	outside	oncology 	showcase	the	strength	of	
our	technology 	as	well	as	take	advantage	of	various	
accelerated	clinical	and	regulatory	pathways	these	
programs	may	make	use	of	our	dbtc	and	dacc	
delivery	systems	targeted	towards	the	liver	and	lung	
endothelium	respectively 
finally 	we	are	pleased	to	report	our	partner	quark	
pharmaceuticals	quark	continues	to	make	progress	
in	the	two	projects	covered	under	our	license	
agreements	pfe‑4523655	in	diabetic	macular	edema	
under	a	licensing	agreement	between	quark	and	
pfizer	and	qpi‑1002	in	delayed	graft	function	post	
kidney	transplantation	under	an	option	agreement	
between	quark	and	novartis		the	results	of	these	
studies	if	they	warrant	continued	development	by	
pfizer	and	novartis	respectively 	could	yield	milestone	
payments	for	us	in	2014	to	2015		if	these	molecules	
are	commercialised	we	would	be	entitled	to	further	
economics	in	the	form	of	royalties		
operations
during	2012	we	were	able	to	significantly	restructure	
the	head	office	costs	in	london	reducing	the	costs	
and	ensuring	more	of	our	cash	resources	are	focussed	
on	developing	the	assets	of	the	company 		at	the	same	
time	we	have	added	the	appropriate	personnel	to	
support	our	progression	into	a	product	company 
the	development	team	in	berlin	headed	by	dr	klaus	
gieise	has	continued	to	make	significant	progress	with	
our	pipeline	and	technology	assets	and	i	am	excited	
about	the	developments	and	their	future	potential	
in	july	2012	t ony	sedgwick	chief	executive	officer	
and	max	herrmann	chief	financial	officer	left	the	
company 	
ali	mortazavi	joined	us	as	director	of	corporate	
strategy 	t im	freeborn	as	finance	director 	and	i	
moved	from	non‑executive	to	executive	chairman		ali	
brings	a	wealth	of	experience	in	the	capital	markets	as	
well	as	small	cap	companies	and	has	been	instrumental	
in	the	development	of	silence	since	he	has	joined	t im	
has	a	wealth	of	experience	in	the	financial	markets	
and	as	an	analyst	and	qualified	accountant	he	has	
already	undertaken	significant	streaming	of	the	finance	
function	
ali	is	now	moving	to	the	position	of	chief	executive	
officer 	and	i	am	sure	he	will	continue	to	shape	and	
develop	silence	as	he	has	done	already	in	his	short	time	
with	us	
capital raising
during	2012	we	have	continued	to	receive	strong	
support	from	key	shareholders	and	undertook	two	
capital	raisings	£57	million	before	expenses	in	july 	
and	£50	million	before	expenses	in	november 	in	
addition	as	announced	in	april	2013	a	further	£19	
million	before	expenses	was	raised		these	capital	
raisings	have	demonstrated	the	continued	strong	
support	of	our	existing	key	shareholders	and	also	
now	some	significant	new	investors	on	behalf	of	
the	board	of	the	company	i	would	like	to	thank	our	
shareholders	for	their	continued	support	and	input	to	
the	development	of	silence	in	2012	and	into	the	future	
as	a	board	we	are	committed	to	maximising	the	value	
of	the	company	and	hence	the	value	to	shareholders
looking forward
thanks	to	the	work	in	the	last	12	months	by	the	whole	
team	and	key	shareholders	of	the	company 	silence	
is	progressing	in	its	transformation	into	a	product	
company	using	our	expertise	in	chemical	modifications	
of	sirna	and	delivery	technologies		at	the	same	time	
the	field	of	rna‑based	therapeutics	continues	to	see	
positive	developments	which	in	our	view 	validates	the	
approach				
as	a	board	we	are	incredibly	excited	about	2013	
and	beyond	as	we	look	to	translate	our	preclinical	
excellence	today	into	clinical	results	and	products	
w e	look	forward	very	positively	to	2013	and	the	
development	of	our	pipeline	and	business	and	to	
translating	that	into	true	growth	in	shareholder	value
jerry randall 
non‑executive	chairman
•	may	2013
silence therapeutics plc  
annual report and financial statements 2012
19
wwwsilencetherapeuticscom
business review corporate governance financial statements
get 
signature
silence therapeutics plc  
annual report and financial statements 2012
19
wwwsilencetherapeuticscom
business review corporate governance financial statements
consolidated balance sheet
at 31 december 2012
	 				 31 december 	 31	december 	
	 				 2012 	 2011 	
	 	 	 	 note	 £000s 	 £000s
non‑current assets    
property 	plant	and	equipment		 	 	 	 10	 157 	 225
goodwill	 	 	 	 11	 7333 	 28342
other	intangible	assets	 	 	 	 12	 526 	 971
	 				 8016 	 29538
current assets	 			
t rade	and	other	receivables	 	 	 	 14	 148 	 174
investments	held	for	sale		 	 	 	 	 2	 37
cash	and	cash	equivalents	 	 	 	 15	 8909 	 3688
	 				 9059 	 3899
current liabilities	 			
t rade	and	other	payables	 	 	 	 16	 959 	 1260
total assets less current liabilities 					 16116 	 32177
net assets 	 				 16116 	 32177
capital and reserves attributable to the company’s equity holders    
share	capital	 	 	 	 18	 1872 	 5771
capital	reserves	 	 	 	 20	 94849 	 81141
t ranslation	reserve	 	 	 	 	 2323 	 3037
retained	loss	 	 	 	 	 82928 	 57772
total equity 	 				 16116 	 32177
the	financial	statements	were	approved	by	the	board	on	28	may	2013
tim freeborn
finance	director
the	accompanying	accounting	policies	and	notes	form	an	integral	part	of	these	financial	statements
	 we are transforming silence from a technology company to a product 
company and developing a clinical capability that will match and exploit 
our expertise in preclinical development
2012	has	been	a	year	of	significant	positive	change	
and	development	for	silence		w ith	the	support	of	key	
long	term	supportive	shareholders	we	have	been	able	
to	restructure	the	company	and	provide	a	significant	
runway	of	cash	to	enable	the	company	to	both	progress	
its	atu027	clinical	asset	and	to	broaden	its	preclinical	
pipeline	the	transformation	of	silence	from	a	
technology	company	to	a	product	company	continues	
and	we	are	evaluating	opportunities	to	match	and	
exploit	our	expertise	in	preclinical	development
in	the	last	18	months	we	have	seen	clinical	progress	
for	rna‑based	drugs	in	development	including
•	 completion	of	our	atu027	phase	i	trial	showing	
safety	and	tolerability	in	man
•	 data	showing	aln‑ttr02	can	robustly	knockdown	
relevant	serum	protein	in	july	2012
•	 data	showing	eteplirsen	has	a	clinical	impact	in	
patients	in	october	2012
•	 approval	of	the	first	gene	silencing	drug	kynamro	
in	the	us	in	january	2013
•	 progression	into	the	clinic	of	microrna	mimetic	
mrx34	in	april	2013
silence	is	well	positioned	to	take	advantage	of	this	
return	of	positive	sentiment	as	it	builds	its	clinical	and	
preclinical	pipeline	and	broadens	it	to	include	areas	
outside	of	oncology 
clinical development
our	development	strategy	with	our	sirnas	makes	drug	
development	significantly	cheaper 	quicker	and	more	
efficient	than	traditional	drug	development
•	 broad	applicability	the	ability	to	target	any	gene
•	 specificity	the	ability	to	block	only	selected	genes	
without	interfering	with	others
•	 simplicity	after	identification	of	the	gene	target	
path	to	phase	i	is	relatively	simple	and	well	defined	
this	is	in	contrast	to	traditional	development	where	
there	is	a	risk	of	off‑target	effects	multiple	cycles	
of	optimisation	and	design	before	a	drug	candidate	
is	identified	for	phase	i	study 		additionally 	relative	
to	other	oligonucleotide‑based	technologies	our	
technology	has	the	potential	to	be	used	at	much	lower	
doses
during	2012	we	completed	the	phase	i	clinical	study	
for	atu027	which	we	believe	has	anti‑metastatic	
effects		a	total	of	34	patients	were	treated	and	the	
excellent	safety	and	tolerability	observed	in	the	study	
underpins	our	technology 	atu027	is	believed	to	
block	the	extravasation	and	intravasation	of	cancer	
cells	necessary	for	the	spread	of	cancer 		this	activity	
represents	a	novel	cancer	treatment	paradigm	versus	
many	other	anti‑cancer	drugs	which	target	tumour	
directly 		the	potential	for	atu027	when	used	with	
conventional	anti‑cancer	drugs	is	a	very	exciting	
proposition	for	us
the	next	stage	for	atu027	is	a	phase	ibiia	trial	that	
combines	atu027	with	a	chemotherapy	agent	our	
preclinical	work	on	this	combination	has	demonstrated	
a	reduction	in	total	tumour	burden	including	visible	
metastatic	spread		w e	were	given	ethical	committee	
approval	for	this	phase	ibiia	early	in	2013	for	this	
trial	and	dosed	the	first	patient	in	april	2013
chairman’s statement
silence therapeutics plc  
annual report and financial statements 2012
20
wwwsilencetherapeuticscom
“rnai therapeutics are 
succeeding”
jerry randall 
non‑executive	chairman
silence therapeutics plc  
annual report and financial statements 2012
20
wwwsilencetherapeuticscom
consolidated statement of changes in equity
year ended 31 december 2012
	 	 share	 capital	 t ranslation	 retained	 		
	 	 capital		 reserves	 reserve	 loss	 t otal	
	 	 £000s	 £000s	 £000s	 £000s	 £000s
at	1	january	2011	 	 2799	 80269	 3032	 53831	 32269
recognition	of	share‑based	payments	 	 —	 120	 —	 —	 120
t ransfer	upon	 	 	
–	lapse	of	vested	options	in	the	year	 	 —	 1796	 —	 1796	 —
–	issued	warrants	in	the	year	 	 —	 1	 —	 —	 1
shares	issued	in	period	net	of	expenses	 	 2972	 2547	 —	 —	 5519
t ransactions	with	owners		 	 2972	 872	 —		 1796	 5640
loss	for	the	year	to	31	december	2011	 	 —	 —	 —	 5737	 5737
other comprehensive income
exchange	differences	arising	on	 	
consolidation	of	foreign	operations	 	 —	 —	 5	 —	 5
at	31	december	2011	 	 5771	 81141	 3037	 57772	 32177
recognition	of	share‑based	payments	 	 —	 656	 —	 —	 656
t ransfer	to	capital	redemption	reserve		 	 5194	 5194	 —	 —	 —
t ransfer	upon	 	 	 	 	
–	lapse	of	vested	options	in	period	 	 —	 1128	 —	 1128	 —
shares	issued	in	period	net	of	expenses	 	 1295	 8986	 —	 —	 10281
t ransactions	with	owners		 	 3899	 13708	 —	 1128	 10937
loss	for	the	year	to	31	december	2012	 	 —	 —	 —	 26284	 26284
other comprehensive income	 					
exchange	differences	arising	on	 	
consolidation	of	foreign	operations	 	 —	 —	 714	 —	 714
at 31 december 2012  1872 94849 2323 82928 16116 w e	are	evaluating	further	studies	for	atu027	in	
combination	with	other	chemotherapy	agents	in	a	
variety	of	tumour	types	w e	plan	to	initiate	further	
programmes	and	will	provide	updates	in	due	course	
in	addition	to	this	exciting	clinical	program	we	are	
evaluating	preclinical	opportunities	in	areas	that	begin	
to	take	us	outside	oncology 	showcase	the	strength	of	
our	technology 	as	well	as	take	advantage	of	various	
accelerated	clinical	and	regulatory	pathways	these	
programs	may	make	use	of	our	dbtc	and	dacc	
delivery	systems	targeted	towards	the	liver	and	lung	
endothelium	respectively 
finally 	we	are	pleased	to	report	our	partner	quark	
pharmaceuticals	quark	continues	to	make	progress	
in	the	two	projects	covered	under	our	license	
agreements	pfe‑4523655	in	diabetic	macular	edema	
under	a	licensing	agreement	between	quark	and	
pfizer	and	qpi‑1002	in	delayed	graft	function	post	
kidney	transplantation	under	an	option	agreement	
between	quark	and	novartis		the	results	of	these	
studies	if	they	warrant	continued	development	by	
pfizer	and	novartis	respectively 	could	yield	milestone	
payments	for	us	in	2014	to	2015		if	these	molecules	
are	commercialised	we	would	be	entitled	to	further	
economics	in	the	form	of	royalties		
operations
during	2012	we	were	able	to	significantly	restructure	
the	head	office	costs	in	london	reducing	the	costs	
and	ensuring	more	of	our	cash	resources	are	focussed	
on	developing	the	assets	of	the	company 		at	the	same	
time	we	have	added	the	appropriate	personnel	to	
support	our	progression	into	a	product	company 
the	development	team	in	berlin	headed	by	dr	klaus	
gieise	has	continued	to	make	significant	progress	with	
our	pipeline	and	technology	assets	and	i	am	excited	
about	the	developments	and	their	future	potential	
in	july	2012	t ony	sedgwick	chief	executive	officer	
and	max	herrmann	chief	financial	officer	left	the	
company 	
ali	mortazavi	joined	us	as	director	of	corporate	
strategy 	t im	freeborn	as	finance	director 	and	i	
moved	from	non‑executive	to	executive	chairman		ali	
brings	a	wealth	of	experience	in	the	capital	markets	as	
well	as	small	cap	companies	and	has	been	instrumental	
in	the	development	of	silence	since	he	has	joined	t im	
has	a	wealth	of	experience	in	the	financial	markets	
and	as	an	analyst	and	qualified	accountant	he	has	
already	undertaken	significant	streaming	of	the	finance	
function	
ali	is	now	moving	to	the	position	of	chief	executive	
officer 	and	i	am	sure	he	will	continue	to	shape	and	
develop	silence	as	he	has	done	already	in	his	short	time	
with	us	
capital raising
during	2012	we	have	continued	to	receive	strong	
support	from	key	shareholders	and	undertook	two	
capital	raisings	£57	million	before	expenses	in	july 	
and	£50	million	before	expenses	in	november 	in	
addition	as	announced	in	april	2013	a	further	£19	
million	before	expenses	was	raised		these	capital	
raisings	have	demonstrated	the	continued	strong	
support	of	our	existing	key	shareholders	and	also	
now	some	significant	new	investors	on	behalf	of	
the	board	of	the	company	i	would	like	to	thank	our	
shareholders	for	their	continued	support	and	input	to	
the	development	of	silence	in	2012	and	into	the	future	
as	a	board	we	are	committed	to	maximising	the	value	
of	the	company	and	hence	the	value	to	shareholders
looking forward
thanks	to	the	work	in	the	last	12	months	by	the	whole	
team	and	key	shareholders	of	the	company 	silence	
is	progressing	in	its	transformation	into	a	product	
company	using	our	expertise	in	chemical	modifications	
of	sirna	and	delivery	technologies		at	the	same	time	
the	field	of	rna‑based	therapeutics	continues	to	see	
positive	developments	which	in	our	view 	validates	the	
approach				
as	a	board	we	are	incredibly	excited	about	2013	
and	beyond	as	we	look	to	translate	our	preclinical	
excellence	today	into	clinical	results	and	products	
w e	look	forward	very	positively	to	2013	and	the	
development	of	our	pipeline	and	business	and	to	
translating	that	into	true	growth	in	shareholder	value
jerry randall 
non‑executive	chairman
•	may	2013
silence therapeutics plc  
annual report and financial statements 2012
21
wwwsilencetherapeuticscom
business review corporate governance financial statements
get 
signature
silence therapeutics plc  
annual report and financial statements 2012
21
wwwsilencetherapeuticscom
business review corporate governance financial statements
company balance sheet
at 31 december 2012
	 				 31 december 	 31	december 	
	 				 2012 	 2011 	
	 	 	 	 note	 £000s 	 £000s
non‑current assets    
property 	plant	and	equipment	 	 	 	 10		 2	3
investment	in	subsidiaries		 	 	 	 13	 34204 	 54218
	 				 34206 	 54221
current assets	 			
t rade	and	other	receivables	 	 	 	 14	 39 	 79
cash	and	cash	equivalents	 	 	 	 15	 8463 	 3323
	 				 8502 	 3402
current liabilities	 			
t rade	and	other	payables	 	 	 	 16	 153 	 182
total assets less current liabilities  				 42555 	 57441
net assets 	 				 42555 	 57441
capital and reserves attributable  to the company’s equity holders				
share	capital	 	 	 	 18	 1872 	 5771
capital	reserves	 	 	 	 20	 94665 	 80957
retained	loss		 	 	 	 	 53982 	 29287
total equity		 				 42555 	 57441
the	financial	statements	were	approved	by	the	board	on	28	may	2013
tim freeborn
finance	director
the	accompanying	accounting	policies	and	notes	form	an	integral	part	of	these	financial	statements 	
company	number	02992058
	
						
						
						
						
						
						
						
						 we are transforming silence from a technology company to a product 
company and developing a clinical capability that will match and exploit 
our expertise in preclinical development
2012	has	been	a	year	of	significant	positive	change	
and	development	for	silence		w ith	the	support	of	key	
long	term	supportive	shareholders	we	have	been	able	
to	restructure	the	company	and	provide	a	significant	
runway	of	cash	to	enable	the	company	to	both	progress	
its	atu027	clinical	asset	and	to	broaden	its	preclinical	
pipeline	the	transformation	of	silence	from	a	
technology	company	to	a	product	company	continues	
and	we	are	evaluating	opportunities	to	match	and	
exploit	our	expertise	in	preclinical	development
in	the	last	18	months	we	have	seen	clinical	progress	
for	rna‑based	drugs	in	development	including
•	 completion	of	our	atu027	phase	i	trial	showing	
safety	and	tolerability	in	man
•	 data	showing	aln‑ttr02	can	robustly	knockdown	
relevant	serum	protein	in	july	2012
•	 data	showing	eteplirsen	has	a	clinical	impact	in	
patients	in	october	2012
•	 approval	of	the	first	gene	silencing	drug	kynamro	
in	the	us	in	january	2013
•	 progression	into	the	clinic	of	microrna	mimetic	
mrx34	in	april	2013
silence	is	well	positioned	to	take	advantage	of	this	
return	of	positive	sentiment	as	it	builds	its	clinical	and	
preclinical	pipeline	and	broadens	it	to	include	areas	
outside	of	oncology 
clinical development
our	development	strategy	with	our	sirnas	makes	drug	
development	significantly	cheaper 	quicker	and	more	
efficient	than	traditional	drug	development
•	 broad	applicability	the	ability	to	target	any	gene
•	 specificity	the	ability	to	block	only	selected	genes	
without	interfering	with	others
•	 simplicity	after	identification	of	the	gene	target	
path	to	phase	i	is	relatively	simple	and	well	defined	
this	is	in	contrast	to	traditional	development	where	
there	is	a	risk	of	off‑target	effects	multiple	cycles	
of	optimisation	and	design	before	a	drug	candidate	
is	identified	for	phase	i	study 		additionally 	relative	
to	other	oligonucleotide‑based	technologies	our	
technology	has	the	potential	to	be	used	at	much	lower	
doses
during	2012	we	completed	the	phase	i	clinical	study	
for	atu027	which	we	believe	has	anti‑metastatic	
effects		a	total	of	34	patients	were	treated	and	the	
excellent	safety	and	tolerability	observed	in	the	study	
underpins	our	technology 	atu027	is	believed	to	
block	the	extravasation	and	intravasation	of	cancer	
cells	necessary	for	the	spread	of	cancer 		this	activity	
represents	a	novel	cancer	treatment	paradigm	versus	
many	other	anti‑cancer	drugs	which	target	tumour	
directly 		the	potential	for	atu027	when	used	with	
conventional	anti‑cancer	drugs	is	a	very	exciting	
proposition	for	us
the	next	stage	for	atu027	is	a	phase	ibiia	trial	that	
combines	atu027	with	a	chemotherapy	agent	our	
preclinical	work	on	this	combination	has	demonstrated	
a	reduction	in	total	tumour	burden	including	visible	
metastatic	spread		w e	were	given	ethical	committee	
approval	for	this	phase	ibiia	early	in	2013	for	this	
trial	and	dosed	the	first	patient	in	april	2013
chairman’s statement
silence therapeutics plc  
annual report and financial statements 2012
22
wwwsilencetherapeuticscom
“rnai therapeutics are 
succeeding”
jerry randall 
non‑executive	chairman
silence therapeutics plc  
annual report and financial statements 2012
22
wwwsilencetherapeuticscom
company statement of changes in equity
year ended 31 december 2012
	 	 	 share	 capital	 retained	 		
	 	 	 capital		 reserves	 loss	 t otal	
	 	 	 £000s	 £000s	 £000s	 £000s
at	1	january	2011	 	 	 2799	 80085	 30189	 52695
recognition	of	share‑based	payments	 	 	 —	 120	 —	 120
t ransfer	to	capital	redemption	reserve		 	 	 —	 —	 —	 —
–	lapse	of	vested	options	in	period	 	 	 —	 1796	 1796	 —
shares	and	warrants	issued	in	period	net	of	expenses	 	 2972	 2548	 —	 5520
t ransactions	with	owners		 	 	 2972	 872	 1796	 5640
loss	for	the	year	to	31	december	2011	 	 	 —	 —	 894	 894
at	31	december	2011	 	 	 5771	 80957	 29287	 57441
recognition	of	share‑based	payments	 	 	 —	 656	 —	 656
t ransfer	to	capital	redemption	reserve		 	 	 5194	 5194	 —	 —
–	lapse	of	vested	options	in	period	 	 	 —	 1128	 1128	 —
shares	and	warrants	issued	in	period	net	of	expenses	 	 1295	 8986	 —	 10281
t ransactions	with	owners		 	 	 3899	 13708	 1128	 10937
loss	for	the	year	to	31	december	2012	 	 	 —	 —	 25823	 25823
at 31 december 2012   1872 94665 53982 42555 w e	are	evaluating	further	studies	for	atu027	in	
combination	with	other	chemotherapy	agents	in	a	
variety	of	tumour	types	w e	plan	to	initiate	further	
programmes	and	will	provide	updates	in	due	course	
in	addition	to	this	exciting	clinical	program	we	are	
evaluating	preclinical	opportunities	in	areas	that	begin	
to	take	us	outside	oncology 	showcase	the	strength	of	
our	technology 	as	well	as	take	advantage	of	various	
accelerated	clinical	and	regulatory	pathways	these	
programs	may	make	use	of	our	dbtc	and	dacc	
delivery	systems	targeted	towards	the	liver	and	lung	
endothelium	respectively 
finally 	we	are	pleased	to	report	our	partner	quark	
pharmaceuticals	quark	continues	to	make	progress	
in	the	two	projects	covered	under	our	license	
agreements	pfe‑4523655	in	diabetic	macular	edema	
under	a	licensing	agreement	between	quark	and	
pfizer	and	qpi‑1002	in	delayed	graft	function	post	
kidney	transplantation	under	an	option	agreement	
between	quark	and	novartis		the	results	of	these	
studies	if	they	warrant	continued	development	by	
pfizer	and	novartis	respectively 	could	yield	milestone	
payments	for	us	in	2014	to	2015		if	these	molecules	
are	commercialised	we	would	be	entitled	to	further	
economics	in	the	form	of	royalties		
operations
during	2012	we	were	able	to	significantly	restructure	
the	head	office	costs	in	london	reducing	the	costs	
and	ensuring	more	of	our	cash	resources	are	focussed	
on	developing	the	assets	of	the	company 		at	the	same	
time	we	have	added	the	appropriate	personnel	to	
support	our	progression	into	a	product	company 
the	development	team	in	berlin	headed	by	dr	klaus	
gieise	has	continued	to	make	significant	progress	with	
our	pipeline	and	technology	assets	and	i	am	excited	
about	the	developments	and	their	future	potential	
in	july	2012	t ony	sedgwick	chief	executive	officer	
and	max	herrmann	chief	financial	officer	left	the	
company 	
ali	mortazavi	joined	us	as	director	of	corporate	
strategy 	t im	freeborn	as	finance	director 	and	i	
moved	from	non‑executive	to	executive	chairman		ali	
brings	a	wealth	of	experience	in	the	capital	markets	as	
well	as	small	cap	companies	and	has	been	instrumental	
in	the	development	of	silence	since	he	has	joined	t im	
has	a	wealth	of	experience	in	the	financial	markets	
and	as	an	analyst	and	qualified	accountant	he	has	
already	undertaken	significant	streaming	of	the	finance	
function	
ali	is	now	moving	to	the	position	of	chief	executive	
officer 	and	i	am	sure	he	will	continue	to	shape	and	
develop	silence	as	he	has	done	already	in	his	short	time	
with	us	
capital raising
during	2012	we	have	continued	to	receive	strong	
support	from	key	shareholders	and	undertook	two	
capital	raisings	£57	million	before	expenses	in	july 	
and	£50	million	before	expenses	in	november 	in	
addition	as	announced	in	april	2013	a	further	£19	
million	before	expenses	was	raised		these	capital	
raisings	have	demonstrated	the	continued	strong	
support	of	our	existing	key	shareholders	and	also	
now	some	significant	new	investors	on	behalf	of	
the	board	of	the	company	i	would	like	to	thank	our	
shareholders	for	their	continued	support	and	input	to	
the	development	of	silence	in	2012	and	into	the	future	
as	a	board	we	are	committed	to	maximising	the	value	
of	the	company	and	hence	the	value	to	shareholders
looking forward
thanks	to	the	work	in	the	last	12	months	by	the	whole	
team	and	key	shareholders	of	the	company 	silence	
is	progressing	in	its	transformation	into	a	product	
company	using	our	expertise	in	chemical	modifications	
of	sirna	and	delivery	technologies		at	the	same	time	
the	field	of	rna‑based	therapeutics	continues	to	see	
positive	developments	which	in	our	view 	validates	the	
approach				
as	a	board	we	are	incredibly	excited	about	2013	
and	beyond	as	we	look	to	translate	our	preclinical	
excellence	today	into	clinical	results	and	products	
w e	look	forward	very	positively	to	2013	and	the	
development	of	our	pipeline	and	business	and	to	
translating	that	into	true	growth	in	shareholder	value
jerry randall 
non‑executive	chairman
•	may	2013
silence therapeutics plc  
annual report and financial statements 2012
23
wwwsilencetherapeuticscom
business review corporate governance financial statements
get 
signature
silence therapeutics plc  
annual report and financial statements 2012
23
wwwsilencetherapeuticscom
business review corporate governance financial statements
cash flow statements
for the year ended 31 december 2012
	 group		 company	
	 			
	 		 2012 	 2011	 2012 	 2011 	
	 		 £000s 	 £000s	 £000s 	 £000s
cash flow from operating activities       
loss before tax	 		 26284 	 5737	 25823 	 893
impairment	of	intangibles	 	 	 20486 	 —	 —	—
depreciation	charges	 	 	 63 	 91	 1 —
amortisation	charges		 	 189 	 214	 —	—
gain	on	sale	of	property 	plant	and	equipment		 	 12 	 6	 —	—
	 charge	for	the	year	in	respect	of	share‑based	payments		 656 	 121	 579 	 28
charge	for	warrants		 	 	 32 	 —	 32	—
foreign	exchange	charge	on	intragroup	loan	 	 —	 —	 200	—
increasereduction	in	impairment	provision	 	
against	investment	in	subsidiary	 	 	 —	 —	 24135	3
finance	income		 	 	 18 	 56	 15 	 284
finance	expense		 	 	 —	 13	 —	—
	 		 4888 	 5360	 891 	 1146
decreaseincrease	in	trade	and	other	receivables	 	 17 	 667	 40 	 33
decreaseincrease	in	inventory	 	 	 —	 27	 —	—
increasedecrease	in	trade	and	other	payables		 	 5 	 431	 29 	 68
cash	absorbed	by	operation		 	 	 4876 	 5097 880 	 1247
interest	paid		 	 	 —	 13	 —	—
net cash outflow from operating activities 		 4876 	 5110	 880 	 1247
cash flow from investing activities      
assets	held	for	sale	–	proceeds	cost	 	 	 39 	 6	 —	—
	 proceeds	from	sale	of	property 	plant	and	equipment		 	 15 	 10	 —	—
addition	to	loan	in	subsidiaries	 	 	 —	 —	 4243 	 3513
interest	received		 	 	 15 	 27	 15 	 285
addition	to	property 	plant	and	equipment		 	 	 3 	 27	 —	 4
addition	to	intangible	assets		 	 199 	 248	 —	—
net cash used ingenerated from investing activities			 133 	 244	 4228 	 3232
cash flow from financing activities       
proceeds	from	issue	of	share	capital		 	 	 10248 	 5519	 10248 	 5519
increase in cash and cash equivalents 		 	 5240 	 165	 5140 	 1040
cash and cash equivalent at start of year  	 3688 	 3567	 3323 	 2283
net	increase	in	the	year	 	 	 5240 	 165	 5140 	 1040
effect	of	exchange	rate	fluctuations	on	cash	held		 	 19 	 44	 —	—
cash and cash equivalent at end of year  	 	 	8909 	 	3688		 8463 	 3323
the	accompanying	accounting	policies	and	notes	form	an	integral	part	of	these	financial	statements we are transforming silence from a technology company to a product 
company and developing a clinical capability that will match and exploit 
our expertise in preclinical development
2012	has	been	a	year	of	significant	positive	change	
and	development	for	silence		w ith	the	support	of	key	
long	term	supportive	shareholders	we	have	been	able	
to	restructure	the	company	and	provide	a	significant	
runway	of	cash	to	enable	the	company	to	both	progress	
its	atu027	clinical	asset	and	to	broaden	its	preclinical	
pipeline	the	transformation	of	silence	from	a	
technology	company	to	a	product	company	continues	
and	we	are	evaluating	opportunities	to	match	and	
exploit	our	expertise	in	preclinical	development
in	the	last	18	months	we	have	seen	clinical	progress	
for	rna‑based	drugs	in	development	including
•	 completion	of	our	atu027	phase	i	trial	showing	
safety	and	tolerability	in	man
•	 data	showing	aln‑ttr02	can	robustly	knockdown	
relevant	serum	protein	in	july	2012
•	 data	showing	eteplirsen	has	a	clinical	impact	in	
patients	in	october	2012
•	 approval	of	the	first	gene	silencing	drug	kynamro	
in	the	us	in	january	2013
•	 progression	into	the	clinic	of	microrna	mimetic	
mrx34	in	april	2013
silence	is	well	positioned	to	take	advantage	of	this	
return	of	positive	sentiment	as	it	builds	its	clinical	and	
preclinical	pipeline	and	broadens	it	to	include	areas	
outside	of	oncology 
clinical development
our	development	strategy	with	our	sirnas	makes	drug	
development	significantly	cheaper 	quicker	and	more	
efficient	than	traditional	drug	development
•	 broad	applicability	the	ability	to	target	any	gene
•	 specificity	the	ability	to	block	only	selected	genes	
without	interfering	with	others
•	 simplicity	after	identification	of	the	gene	target	
path	to	phase	i	is	relatively	simple	and	well	defined	
this	is	in	contrast	to	traditional	development	where	
there	is	a	risk	of	off‑target	effects	multiple	cycles	
of	optimisation	and	design	before	a	drug	candidate	
is	identified	for	phase	i	study 		additionally 	relative	
to	other	oligonucleotide‑based	technologies	our	
technology	has	the	potential	to	be	used	at	much	lower	
doses
during	2012	we	completed	the	phase	i	clinical	study	
for	atu027	which	we	believe	has	anti‑metastatic	
effects		a	total	of	34	patients	were	treated	and	the	
excellent	safety	and	tolerability	observed	in	the	study	
underpins	our	technology 	atu027	is	believed	to	
block	the	extravasation	and	intravasation	of	cancer	
cells	necessary	for	the	spread	of	cancer 		this	activity	
represents	a	novel	cancer	treatment	paradigm	versus	
many	other	anti‑cancer	drugs	which	target	tumour	
directly 		the	potential	for	atu027	when	used	with	
conventional	anti‑cancer	drugs	is	a	very	exciting	
proposition	for	us
the	next	stage	for	atu027	is	a	phase	ibiia	trial	that	
combines	atu027	with	a	chemotherapy	agent	our	
preclinical	work	on	this	combination	has	demonstrated	
a	reduction	in	total	tumour	burden	including	visible	
metastatic	spread		w e	were	given	ethical	committee	
approval	for	this	phase	ibiia	early	in	2013	for	this	
trial	and	dosed	the	first	patient	in	april	2013
chairman’s statement
silence therapeutics plc  
annual report and financial statements 2012
24
wwwsilencetherapeuticscom
“rnai therapeutics are 
succeeding”
jerry randall 
non‑executive	chairman
silence therapeutics plc  
annual report and financial statements 2012
24
wwwsilencetherapeuticscom
notes to the financial statements
year ended 31 december 2012
1 general information
11 group
silence	therapeutics	plc	“silence	therapeutics”	or	“the	company”	and	its	subsidiaries	together	“the	group”	are	
primarily	involved	in	the	research	and	development	of	novel	pharmaceutical	products	silence	therapeutics	plc	
a	public	limited	company	incorporated	and	domiciled	in	england	is	the	group’ s	ultimate	parent	company 	the	
address	of	silence	therapeutics’	registered	office	is	22	melton	street	london	nw1	2ep	and	the	principal	place	of	
business	is	3	shortlands	london	w6	8da
12 company income statement
the	company	has	taken	advantage	of	section	408	of	the	companies	act	2006	and	has	not	included	its	own	income	
statement	in	these	financial	statements	the	loss	for	the	financial	year	dealt	within	the	accounts	of	the	company 	
including	provision	against	the	investments	in	subsidiary	companies	were	as	follows
	 				 2012 	 2011 	
	 				 £000s 	 £000s
		 					25823 	 894	
2 principal accounting policies
21 basis of preparation
both	the	parent	company	and	the	group	financial	statements	have	been	prepared	in	accordance	with	the	
companies	act	2006	and	international	financial	reporting	standards	ifrs	as	adopted	by	the	eu	under	the	
historical	cost	convention	the	accounting	policies	set	out	below	have	unless	otherwise	stated	been	applied	
consistently	to	all	periods	presented	in	these	consolidated	financial	statements	the	accounts	are	prepared	in	
pounds	sterling	and	presented	to	the	nearest	thousand	pounds
the	following	standards	or	interpretations	have	not	yet	been	adopted	by	the	group	the	group	does	not	currently	
believe	the	adoptions	of	these	standards	or	interpretations	would	have	a	material	impact	on	the	consolidated	
results	or	financial	position	of	the	group
•	 ias	1	amendment	presentation	of	financial	statements	amends	how	components	of	other	comprehensive	
income	are	presented	the	amendments	require	the	grouping	of	items	of	other	comprehensive	income	into	items	
that	might	be	reclassified	to	the	income	statement	in	subsequent	periods	and	items	that	will	not	be	reclassified	
to	the	income	statement	in	subsequent	periods
•	 ifrs	7	amendment	financial	instruments	disclosures	amends	disclosure	requirements	to	require	
information	about	all	recognised	financial	instruments	that	are	set	off	in	accordance	with	paragraph	42	of	
ias	32
•	 ifrs	9	financial	instruments	not	yet	endorsed	by	the	eu	the	primary	impact	of	which	is	to	remove	the	
multiple	classification	and	measurement	models	for	financial	assets	required	by	ias	39	and	introduce	a	model	
that	has	only	two	classification	categories	amortised	cost	and	fair	value
•	 ifrs	10	consolidated	financial	statements	replaces	the	guidance	of	control	and	consolidation	in	ias	27	and	sic	
12	consolidation	–	special	purpose	entities	the	core	principle	that	a	consolidated	entity	presents	a	parent	and	
its	subsidiaries	as	if	they	were	a	single	entity	remains	unchanged	as	do	the	mechanics	of	consolidation
•	 ifrs	12	disclosure	of	interests	in	other	entities	requires	enhanced	disclosures	of	the	nature	risks	and	
financial	effects	associated	with	the	group’ s	interests	in	subsidiaries	associates	joint	arrangements	and	
unconsolidated	structured	entities
•	 ias 	 27 	 revised 	 separate 	 financial 	 statements 	 not 	 yet 	 endorsed 	 by 	 the 	 eu 	 makes 	 revisions 	 to 	 the 	 requirements 	
for 	 separate 	 financial 	 statements 	 prepared 	 by 	 a 	 parent 	 or 	 an 	 investor 	 in 	 a 	 joint 	 venture 	 or 	 associate
the	principal	accounting	policies	adopted	are	set	out	below 
22 basis of consolidation
the	group	financial	statements	consolidate	those	of	the	company	and	its	controlled	subsidiary	undertakings	
drawn	up	to	31	december	2012	control	is	achieved	where	the	company	has	the	power	to	govern	the	financial	and	
operating	policies	of	the	entity	so	as	to	obtain	benefits	from	its	activities	the	parent	company	financial	statements	
present	information	about	the	company	as	a	separate	entity	and	not	about	its	group
the	results	of	subsidiaries	acquired	or	disposed	of	during	the	year	are	included	in	the	consolidated	income	
statement	from	the	effective	date	of	acquisition	or	up	to	the	effective	date	of	disposal
where	necessary 	adjustments	are	made	to	the	financial	statements	of	subsidiaries	to	bring	accounting	policies	
into	line	with	those	used	for	reporting	the	operations	of	the	group	all	intra‑group	transactions	balances	income	
and	expenses	are	eliminated	on	consolidation	 w e	are	evaluating	further	studies	for	atu027	in	
combination	with	other	chemotherapy	agents	in	a	
variety	of	tumour	types	w e	plan	to	initiate	further	
programmes	and	will	provide	updates	in	due	course	
in	addition	to	this	exciting	clinical	program	we	are	
evaluating	preclinical	opportunities	in	areas	that	begin	
to	take	us	outside	oncology 	showcase	the	strength	of	
our	technology 	as	well	as	take	advantage	of	various	
accelerated	clinical	and	regulatory	pathways	these	
programs	may	make	use	of	our	dbtc	and	dacc	
delivery	systems	targeted	towards	the	liver	and	lung	
endothelium	respectively 
finally 	we	are	pleased	to	report	our	partner	quark	
pharmaceuticals	quark	continues	to	make	progress	
in	the	two	projects	covered	under	our	license	
agreements	pfe‑4523655	in	diabetic	macular	edema	
under	a	licensing	agreement	between	quark	and	
pfizer	and	qpi‑1002	in	delayed	graft	function	post	
kidney	transplantation	under	an	option	agreement	
between	quark	and	novartis		the	results	of	these	
studies	if	they	warrant	continued	development	by	
pfizer	and	novartis	respectively 	could	yield	milestone	
payments	for	us	in	2014	to	2015		if	these	molecules	
are	commercialised	we	would	be	entitled	to	further	
economics	in	the	form	of	royalties		
operations
during	2012	we	were	able	to	significantly	restructure	
the	head	office	costs	in	london	reducing	the	costs	
and	ensuring	more	of	our	cash	resources	are	focussed	
on	developing	the	assets	of	the	company 		at	the	same	
time	we	have	added	the	appropriate	personnel	to	
support	our	progression	into	a	product	company 
the	development	team	in	berlin	headed	by	dr	klaus	
gieise	has	continued	to	make	significant	progress	with	
our	pipeline	and	technology	assets	and	i	am	excited	
about	the	developments	and	their	future	potential	
in	july	2012	t ony	sedgwick	chief	executive	officer	
and	max	herrmann	chief	financial	officer	left	the	
company 	
ali	mortazavi	joined	us	as	director	of	corporate	
strategy 	t im	freeborn	as	finance	director 	and	i	
moved	from	non‑executive	to	executive	chairman		ali	
brings	a	wealth	of	experience	in	the	capital	markets	as	
well	as	small	cap	companies	and	has	been	instrumental	
in	the	development	of	silence	since	he	has	joined	t im	
has	a	wealth	of	experience	in	the	financial	markets	
and	as	an	analyst	and	qualified	accountant	he	has	
already	undertaken	significant	streaming	of	the	finance	
function	
ali	is	now	moving	to	the	position	of	chief	executive	
officer 	and	i	am	sure	he	will	continue	to	shape	and	
develop	silence	as	he	has	done	already	in	his	short	time	
with	us	
capital raising
during	2012	we	have	continued	to	receive	strong	
support	from	key	shareholders	and	undertook	two	
capital	raisings	£57	million	before	expenses	in	july 	
and	£50	million	before	expenses	in	november 	in	
addition	as	announced	in	april	2013	a	further	£19	
million	before	expenses	was	raised		these	capital	
raisings	have	demonstrated	the	continued	strong	
support	of	our	existing	key	shareholders	and	also	
now	some	significant	new	investors	on	behalf	of	
the	board	of	the	company	i	would	like	to	thank	our	
shareholders	for	their	continued	support	and	input	to	
the	development	of	silence	in	2012	and	into	the	future	
as	a	board	we	are	committed	to	maximising	the	value	
of	the	company	and	hence	the	value	to	shareholders
looking forward
thanks	to	the	work	in	the	last	12	months	by	the	whole	
team	and	key	shareholders	of	the	company 	silence	
is	progressing	in	its	transformation	into	a	product	
company	using	our	expertise	in	chemical	modifications	
of	sirna	and	delivery	technologies		at	the	same	time	
the	field	of	rna‑based	therapeutics	continues	to	see	
positive	developments	which	in	our	view 	validates	the	
approach				
as	a	board	we	are	incredibly	excited	about	2013	
and	beyond	as	we	look	to	translate	our	preclinical	
excellence	today	into	clinical	results	and	products	
w e	look	forward	very	positively	to	2013	and	the	
development	of	our	pipeline	and	business	and	to	
translating	that	into	true	growth	in	shareholder	value
jerry randall 
non‑executive	chairman
•	may	2013
silence therapeutics plc  
annual report and financial statements 2012
25
wwwsilencetherapeuticscom
business review corporate governance financial statements
get 
signature
silence therapeutics plc  
annual report and financial statements 2012
25
wwwsilencetherapeuticscom
business review corporate governance financial statements
23 going concern
the	financial	statements	have	been	prepared	on	a	going	concern	basis	that	assumes	that	the	group	will	continue	in	
operational	existence	for	the	foreseeable	future
the	group	had	a	net	cash	inflow	for	2012	of	£52m	after	expenses	and	at	31	december	2012	had	cash	balances	of	
£89m	since	the	year	end	the	company	has	raised	a	further	£187m	after	expenses	from	investors	the	directors	
have	reviewed	the	working	capital	requirements	of	the	group	for	the	next	twelve	months	and	are	confident	that	
these	can	be	met	
the	directors	consider	that	the	continued	adoption	of	the	going	concern	basis	is	appropriate	and	the	accounts	do	
not	reflect	any	adjustments	that	would	be	required	if	they	were	to	be	prepared	on	any	other	basis
the	directors	having	prepared	cash	flow	forecasts	believe	that	existing	cash	resources	together	with	additional	
funds	provided	by	equity	fundraisings	grants	milestone	payments	and	licence	fees	will	provide	sufficient	funds	
for	the	group	to	continue	its	research	and	development	programmes	and	to	remain	in	operation	for	at	least	twelve	
months	from	the	date	of	approval	of	these	financial	statements	
the	group’ s	business	activities	together	with	the	factors	likely	to	affect	its	future	development	performance	and	
position	are	set	out	in	the	chief	executive’ s	review	on	pages	4	and	5	the	financial	position	of	the	group	its	cash	
flows	and	liquidity	position	are	as	set	out	in	the	financial	review	on	pages	6	and	7
24 business combinations
there	were	no	business	activities	as	defined	by	ifrs	3	revised	during	2011	or	2012
business	combinations	which	occurred	in	2010	are	accounted	for	by	applying	the	acquisition	method	described	
in	ifrs	3	revised	as	at	the	acquisition	date	which	is	the	date	on	which	control	is	transferred	to	the	group	in	
arriving	at	the	cost	of	acquisition	the	fair	value	of	the	shares	issued	by	the	company	is	taken	to	be	the	bid	price	of	
those	shares	at	the	date	of	the	issue	where	this	figure	exceeds	the	nominal	value	of	the	shares	the	excess	amount	
is	treated	as	an	addition	to	the	merger	reserve	
acquisitions on or after 1 january 2010
for	acquisitions	on	or	after	1	january	2010	the	group	measures	goodwill	at	the	acquisition	date	as
•	 the	fair	value	of	the	consideration	transferred	plus	
•	 the	recognised	amount	of	any	non‑controlling	interests	in	the	acquiree	plus
•	 the	fair	value	of	the	existing	equity	interest	in	the	acquiree	less
•	 the	net	recognised	amount	generally	fair	value	of	the	identifiable	assets	acquired	and	liabilities	assumed	
•	 when	the	excess	is	negative	a	bargain	purchase	gain	is	recognised	immediately	in	the	income	statement
•	 costs	related	to	the	acquisition	other	than	those	associated	with	the	issue	of	debt	or	equity	securities	are	
expensed	as	incurred
any	contingent	consideration	payable	is	recognised	at	fair	value	at	the	acquisition	date	if	the	contingent	
consideration	is	classified	as	equity 	it	is	not	remeasured	and	settlement	is	accounted	for	within	equity 	otherwise	
subsequent	changes	to	the	fair	value	of	the	contingent	consideration	are	recognised	in	the	income	statement
on	a	transaction‑by‑transaction	basis	the	group	elects	to	measure	non‑controlling	interests	either	at	its	fair	
value	or	at	its	proportionate	interest	in	the	recognised	amount	of	the	identifiable	net	assets	of	the	acquiree	at	the	
acquisition	date
acquisitions before 1 january 2010
for	acquisitions	which	occurred	before	1	january	2010	goodwill	represents	the	excess	of	the	cost	of	the	
acquisition	over	the	group’ s	interest	in	the	recognised	amount	generally	fair	value	of	the	identifiable	assets	
liabilities	and	contingent	liabilities	of	the	acquiree	when	the	excess	was	negative	a	bargain	purchase	gain	was	
recognised	immediately	in	the	income	statement
t ransaction	costs	other	than	those	associated	with	the	issue	of	debt	or	equity	securities	that	the	group	incurred	
in	connection	with	business	combinations	were	capitalised	as	part	of	the	cost	of	the	acquisition we are transforming silence from a technology company to a product 
company and developing a clinical capability that will match and exploit 
our expertise in preclinical development
2012	has	been	a	year	of	significant	positive	change	
and	development	for	silence		w ith	the	support	of	key	
long	term	supportive	shareholders	we	have	been	able	
to	restructure	the	company	and	provide	a	significant	
runway	of	cash	to	enable	the	company	to	both	progress	
its	atu027	clinical	asset	and	to	broaden	its	preclinical	
pipeline	the	transformation	of	silence	from	a	
technology	company	to	a	product	company	continues	
and	we	are	evaluating	opportunities	to	match	and	
exploit	our	expertise	in	preclinical	development
in	the	last	18	months	we	have	seen	clinical	progress	
for	rna‑based	drugs	in	development	including
•	 completion	of	our	atu027	phase	i	trial	showing	
safety	and	tolerability	in	man
•	 data	showing	aln‑ttr02	can	robustly	knockdown	
relevant	serum	protein	in	july	2012
•	 data	showing	eteplirsen	has	a	clinical	impact	in	
patients	in	october	2012
•	 approval	of	the	first	gene	silencing	drug	kynamro	
in	the	us	in	january	2013
•	 progression	into	the	clinic	of	microrna	mimetic	
mrx34	in	april	2013
silence	is	well	positioned	to	take	advantage	of	this	
return	of	positive	sentiment	as	it	builds	its	clinical	and	
preclinical	pipeline	and	broadens	it	to	include	areas	
outside	of	oncology 
clinical development
our	development	strategy	with	our	sirnas	makes	drug	
development	significantly	cheaper 	quicker	and	more	
efficient	than	traditional	drug	development
•	 broad	applicability	the	ability	to	target	any	gene
•	 specificity	the	ability	to	block	only	selected	genes	
without	interfering	with	others
•	 simplicity	after	identification	of	the	gene	target	
path	to	phase	i	is	relatively	simple	and	well	defined	
this	is	in	contrast	to	traditional	development	where	
there	is	a	risk	of	off‑target	effects	multiple	cycles	
of	optimisation	and	design	before	a	drug	candidate	
is	identified	for	phase	i	study 		additionally 	relative	
to	other	oligonucleotide‑based	technologies	our	
technology	has	the	potential	to	be	used	at	much	lower	
doses
during	2012	we	completed	the	phase	i	clinical	study	
for	atu027	which	we	believe	has	anti‑metastatic	
effects		a	total	of	34	patients	were	treated	and	the	
excellent	safety	and	tolerability	observed	in	the	study	
underpins	our	technology 	atu027	is	believed	to	
block	the	extravasation	and	intravasation	of	cancer	
cells	necessary	for	the	spread	of	cancer 		this	activity	
represents	a	novel	cancer	treatment	paradigm	versus	
many	other	anti‑cancer	drugs	which	target	tumour	
directly 		the	potential	for	atu027	when	used	with	
conventional	anti‑cancer	drugs	is	a	very	exciting	
proposition	for	us
the	next	stage	for	atu027	is	a	phase	ibiia	trial	that	
combines	atu027	with	a	chemotherapy	agent	our	
preclinical	work	on	this	combination	has	demonstrated	
a	reduction	in	total	tumour	burden	including	visible	
metastatic	spread		w e	were	given	ethical	committee	
approval	for	this	phase	ibiia	early	in	2013	for	this	
trial	and	dosed	the	first	patient	in	april	2013
chairman’s statement
silence therapeutics plc  
annual report and financial statements 2012
26
wwwsilencetherapeuticscom
“rnai therapeutics are 
succeeding”
jerry randall 
non‑executive	chairman
silence therapeutics plc  
annual report and financial statements 2012
26
wwwsilencetherapeuticscom
notes to the financial statements continued
year ended 31 december 2012
2 principal accounting policies continued
25 goodwill and other intangible assets
goodwill
goodwill	is	stated	at	cost	less	any	accumulated	impairment	losses	goodwill	is	allocated	to	cash‑generating	units	
and	is	not	amortised	but	is	tested	annually	for	impairment	
goodwill	arising	on	the	acquisition	of	a	subsidiary	represents	the	excess	of	the	cost	of	acquisition	over	the	group’ s	
interest	in	the	net	fair	value	of	the	identifiable	assets	liabilities	and	contingent	liabilities	of	the	subsidiary	at	the	
date	of	acquisition	goodwill	is	initially	recognised	as	an	asset	at	cost	and	is	subsequently	measured	at	cost	less	
any	accumulated	impairment	losses	on	disposal	of	a	subsidiary 	the	attributable	amount	of	goodwill	is	included	in	
the	determination	of	the	profit	or	loss	on	disposal
other intangible assets
expenditure	on	internally	generated	goodwill	and	brands	is	recognised	in	the	income	statement	as	an	expense	as	
incurred
other	intangible	assets	that	are	acquired	by	the	group	are	stated	at	fair	value	less	accumulated	amortisation	and	
less	accumulated	impairment	losses
amortisation
amortisation	is	charged	to	the	income	statement	on	a	straight‑line	basis	over	the	estimated	useful	lives	of	
intangible	assets	unless	such	lives	are	indefinite	intangible	assets	with	an	indefinite	useful	life	and	goodwill	are	
systematically	tested	for	impairment	at	each	balance	sheet	date	other	intangible	assets	are	amortised	from	the	
date	they	are	available	for	use	the	estimated	useful	lives	are	as	follows
patents	and	trademarks	 10‑15	years
26  research and development
expenditure	on	research	activities	is	recognised	in	the	income	statement	as	an	expense	as	incurred
27 revenue recognition
the	group’ s	income	consists	of	licence	fees	milestone	and	option	payments	grant	income	and	fees	from	research	
and	development	collaborations	income	is	measured	at	the	fair	value	of	the	consideration	received	or	receivable
licence	fees	option	and	milestone	payments	are	recognised	in	full	on	the	date	that	they	are	contractually	
receivable	in	those	circumstances	where
•	 the	amounts	are	not	time	related	
•	 the	amounts	are	not	refundable
•	 the	licensee	has	unrestricted	rights	to	exploit	the	technology	within	the	terms	set	by	the	licence
•	 the	group	has	no	further	contractual	duty	to	perform	any	future	services	
where	such	fees	or	receipts	require	future	performance	or	financial	commitments	on	behalf	of	the	group	the	
revenue	is	recognised	pro	rata	to	the	services	or	commitments	being	performed	funds	received	that	have	not	been	
recognised	are	treated	as	deferred	revenue	and	recognised	in	trade	and	other	payables
revenues	from	work	or	other	research	and	testing	carried	out	for	third	parties	are	recognised	when	the	work	to	
which	they	relate	has	been	performed	
government	grants	are	dealt	with	as	per	note	28	below 
all	time	related	receipts	in	respect	of	annual	licence	fees	or	similar	technology	access	fees	are	recognised	as	
revenue	on	a	straight‑line	basis	over	the	period	of	the	underlying	contract
28 government grants
government	grants	towards	the	cost	of	staff	employed	in	research	and	development	activities	are	recognised	as	
revenue	over	the	periods	necessary	to	match	them	with	the	related	costs	no	government	grants	were	recognised	
as	revenue	in	the	year	ended	31	december	2012	2011	£nil
government	grants	towards	the	cost	of	plant	and	equipment	are	treated	as	a	reduction	in	the	cost	of	the	asset	to	
which	they	relate	there	were	no	such	grants	for	the	year	ended	31	december	2012	2011	£nil w e	are	evaluating	further	studies	for	atu027	in	
combination	with	other	chemotherapy	agents	in	a	
variety	of	tumour	types	w e	plan	to	initiate	further	
programmes	and	will	provide	updates	in	due	course	
in	addition	to	this	exciting	clinical	program	we	are	
evaluating	preclinical	opportunities	in	areas	that	begin	
to	take	us	outside	oncology 	showcase	the	strength	of	
our	technology 	as	well	as	take	advantage	of	various	
accelerated	clinical	and	regulatory	pathways	these	
programs	may	make	use	of	our	dbtc	and	dacc	
delivery	systems	targeted	towards	the	liver	and	lung	
endothelium	respectively 
finally 	we	are	pleased	to	report	our	partner	quark	
pharmaceuticals	quark	continues	to	make	progress	
in	the	two	projects	covered	under	our	license	
agreements	pfe‑4523655	in	diabetic	macular	edema	
under	a	licensing	agreement	between	quark	and	
pfizer	and	qpi‑1002	in	delayed	graft	function	post	
kidney	transplantation	under	an	option	agreement	
between	quark	and	novartis		the	results	of	these	
studies	if	they	warrant	continued	development	by	
pfizer	and	novartis	respectively 	could	yield	milestone	
payments	for	us	in	2014	to	2015		if	these	molecules	
are	commercialised	we	would	be	entitled	to	further	
economics	in	the	form	of	royalties		
operations
during	2012	we	were	able	to	significantly	restructure	
the	head	office	costs	in	london	reducing	the	costs	
and	ensuring	more	of	our	cash	resources	are	focussed	
on	developing	the	assets	of	the	company 		at	the	same	
time	we	have	added	the	appropriate	personnel	to	
support	our	progression	into	a	product	company 
the	development	team	in	berlin	headed	by	dr	klaus	
gieise	has	continued	to	make	significant	progress	with	
our	pipeline	and	technology	assets	and	i	am	excited	
about	the	developments	and	their	future	potential	
in	july	2012	t ony	sedgwick	chief	executive	officer	
and	max	herrmann	chief	financial	officer	left	the	
company 	
ali	mortazavi	joined	us	as	director	of	corporate	
strategy 	t im	freeborn	as	finance	director 	and	i	
moved	from	non‑executive	to	executive	chairman		ali	
brings	a	wealth	of	experience	in	the	capital	markets	as	
well	as	small	cap	companies	and	has	been	instrumental	
in	the	development	of	silence	since	he	has	joined	t im	
has	a	wealth	of	experience	in	the	financial	markets	
and	as	an	analyst	and	qualified	accountant	he	has	
already	undertaken	significant	streaming	of	the	finance	
function	
ali	is	now	moving	to	the	position	of	chief	executive	
officer 	and	i	am	sure	he	will	continue	to	shape	and	
develop	silence	as	he	has	done	already	in	his	short	time	
with	us	
capital raising
during	2012	we	have	continued	to	receive	strong	
support	from	key	shareholders	and	undertook	two	
capital	raisings	£57	million	before	expenses	in	july 	
and	£50	million	before	expenses	in	november 	in	
addition	as	announced	in	april	2013	a	further	£19	
million	before	expenses	was	raised		these	capital	
raisings	have	demonstrated	the	continued	strong	
support	of	our	existing	key	shareholders	and	also	
now	some	significant	new	investors	on	behalf	of	
the	board	of	the	company	i	would	like	to	thank	our	
shareholders	for	their	continued	support	and	input	to	
the	development	of	silence	in	2012	and	into	the	future	
as	a	board	we	are	committed	to	maximising	the	value	
of	the	company	and	hence	the	value	to	shareholders
looking forward
thanks	to	the	work	in	the	last	12	months	by	the	whole	
team	and	key	shareholders	of	the	company 	silence	
is	progressing	in	its	transformation	into	a	product	
company	using	our	expertise	in	chemical	modifications	
of	sirna	and	delivery	technologies		at	the	same	time	
the	field	of	rna‑based	therapeutics	continues	to	see	
positive	developments	which	in	our	view 	validates	the	
approach				
as	a	board	we	are	incredibly	excited	about	2013	
and	beyond	as	we	look	to	translate	our	preclinical	
excellence	today	into	clinical	results	and	products	
w e	look	forward	very	positively	to	2013	and	the	
development	of	our	pipeline	and	business	and	to	
translating	that	into	true	growth	in	shareholder	value
jerry randall 
non‑executive	chairman
•	may	2013
silence therapeutics plc  
annual report and financial statements 2012
27
wwwsilencetherapeuticscom
business review corporate governance financial statements
get 
signature
silence therapeutics plc  
annual report and financial statements 2012
27
wwwsilencetherapeuticscom
business review corporate governance financial statements
29 foreign currency translation
silence	therapeutics’	consolidated	financial	statements	are	presented	in	sterling	£	which	is	also	the	functional	
currency	of	the	parent	company 	the	individual	financial	statements	of	each	group	entity	are	presented	in	the	
currency	of	the	primary	economic	environment	in	which	the	entity	operates	its	functional	currency
in	preparing	the	financial	statements	of	the	individual	entities	transactions	in	currencies	other	than	the	entity’ s	
functional	currency	foreign	currencies	are	recorded	at	the	rates	of	exchange	prevailing	on	the	dates	of	the	
transactions	at	each	balance	sheet	date	monetary	items	denominated	in	foreign	currencies	are	retranslated	at	
the	rates	prevailing	on	the	balance	sheet	date	non‑monetary	items	carried	at	fair	value	that	are	denominated	in	
foreign	currencies	are	retranslated	at	the	rates	prevailing	on	the	date	when	the	fair	value	was	determined	
exchange	differences	arising	on	the	settlement	of	monetary	items	and	on	the	retranslation	of	monetary	items	are	
included	in	the	income	statement	for	the	period	when	a	gain	or	loss	on	a	non‑monetary	item	is	recognised	directly	
in	equity 	any	exchange	component	of	that	gain	or	loss	is	also	recognised	directly	in	equity 	when	a	gain	or	loss	on	
a	non‑monetary	item	is	recognised	in	the	income	statement	any	exchange	component	of	that	gain	or	loss	is	also	
recognised	in	the	income	statement	
for	the	purpose	of	presenting	consolidated	financial	statements	the	assets	and	liabilities	of	the	group’ s	foreign	
operations	including	comparatives	are	expressed	in	sterling	using	exchange	rates	prevailing	on	the	balance	
sheet	date	income	and	expense	items	including	comparatives	are	translated	at	the	average	exchange	rates	for	
the	period	exchange	differences	arising	if	any 	are	recognised	in	equity 	cumulative	translation	differences	are	
recognised	in	profit	or	loss	in	the	period	in	which	the	foreign	operation	is	disposed	of
goodwill	and	fair	value	adjustments	arising	on	the	acquisition	of	a	foreign	operation	are	treated	as	assets	and	
liabilities	of	the	foreign	operation	and	translated	at	the	closing	rate
210 defined contribution pension funds
in	the	first	half	of	2012	the	group	paid	contributions	related	to	salary	to	certain	uk	employees’	individual	pension	
schemes	the	pension	cost	charged	against	profits	represents	the	amount	of	the	contributions	payable	to	the	
schemes	in	respect	of	the	accounting	period	uk	pension	contributions	have	now	ceased	no	separate	provision	is	
made	in	respect	of	non‑uk	employees
211 property plant and equipment
the	group	holds	no	property	assets
all	plant	and	equipment	is	stated	in	the	accounts	at	its	cost	of	acquisition	less	a	provision	for	depreciation
depreciation	is	charged	to	write	off	the	cost	less	estimated	residual	values	of	plant	and	equipment	on	a	
straight‑line	basis	over	their	estimated	useful	lives	all	plant	and	equipment	is	estimated	to	have	useful	economic	
lives	of	between	three	and	five	years	estimated	useful	economic	lives	and	residual	values	are	reviewed	each	year	
and	amended	if	necessary 
212 other intangible assets and research and development activities
intellectual property rights
other	intangible	assets	include	both	acquired	and	internally	developed	intellectual	property	used	in	research	and	
operations	these	assets	are	stated	at	cost	less	amortisation	
acquired 	 intellectual 	 property 	 rights 	 are 	 capitalised 	 on 	 the 	 basis 	 of 	 the 	 costs 	 incurred 	 to 	 acquire 	 the 	 specific 	 rights
internally	generated	intellectual	property	rights	are	recognised	as	intangible	assets	stated	at	cost	incurred	to	
establish	and	maintain	those	rights	and	are	subject	to	the	same	subsequent	measurement	method	as	externally	
acquired	intellectual	property 	however 	until	completion	of	the	development	project	the	assets	are	subject	
to	impairment	testing	only	as	described	below 	amortisation	commences	upon	completion	of	the	asset	costs	
capitalised	relate	to	patent	prosecution	expenses	paid	to	third	parties
amortisation	is	applied	to	write	off	the	cost	less	residual	value	of	the	intangible	assets	on	a	straight‑line	basis	over	
their	estimated	useful	life	the	principal	rates	used	are	67	and	10	per	annum	amortisation	is	included	within	
research	and	development	costs we are transforming silence from a technology company to a product 
company and developing a clinical capability that will match and exploit 
our expertise in preclinical development
2012	has	been	a	year	of	significant	positive	change	
and	development	for	silence		w ith	the	support	of	key	
long	term	supportive	shareholders	we	have	been	able	
to	restructure	the	company	and	provide	a	significant	
runway	of	cash	to	enable	the	company	to	both	progress	
its	atu027	clinical	asset	and	to	broaden	its	preclinical	
pipeline	the	transformation	of	silence	from	a	
technology	company	to	a	product	company	continues	
and	we	are	evaluating	opportunities	to	match	and	
exploit	our	expertise	in	preclinical	development
in	the	last	18	months	we	have	seen	clinical	progress	
for	rna‑based	drugs	in	development	including
•	 completion	of	our	atu027	phase	i	trial	showing	
safety	and	tolerability	in	man
•	 data	showing	aln‑ttr02	can	robustly	knockdown	
relevant	serum	protein	in	july	2012
•	 data	showing	eteplirsen	has	a	clinical	impact	in	
patients	in	october	2012
•	 approval	of	the	first	gene	silencing	drug	kynamro	
in	the	us	in	january	2013
•	 progression	into	the	clinic	of	microrna	mimetic	
mrx34	in	april	2013
silence	is	well	positioned	to	take	advantage	of	this	
return	of	positive	sentiment	as	it	builds	its	clinical	and	
preclinical	pipeline	and	broadens	it	to	include	areas	
outside	of	oncology 
clinical development
our	development	strategy	with	our	sirnas	makes	drug	
development	significantly	cheaper 	quicker	and	more	
efficient	than	traditional	drug	development
•	 broad	applicability	the	ability	to	target	any	gene
•	 specificity	the	ability	to	block	only	selected	genes	
without	interfering	with	others
•	 simplicity	after	identification	of	the	gene	target	
path	to	phase	i	is	relatively	simple	and	well	defined	
this	is	in	contrast	to	traditional	development	where	
there	is	a	risk	of	off‑target	effects	multiple	cycles	
of	optimisation	and	design	before	a	drug	candidate	
is	identified	for	phase	i	study 		additionally 	relative	
to	other	oligonucleotide‑based	technologies	our	
technology	has	the	potential	to	be	used	at	much	lower	
doses
during	2012	we	completed	the	phase	i	clinical	study	
for	atu027	which	we	believe	has	anti‑metastatic	
effects		a	total	of	34	patients	were	treated	and	the	
excellent	safety	and	tolerability	observed	in	the	study	
underpins	our	technology 	atu027	is	believed	to	
block	the	extravasation	and	intravasation	of	cancer	
cells	necessary	for	the	spread	of	cancer 		this	activity	
represents	a	novel	cancer	treatment	paradigm	versus	
many	other	anti‑cancer	drugs	which	target	tumour	
directly 		the	potential	for	atu027	when	used	with	
conventional	anti‑cancer	drugs	is	a	very	exciting	
proposition	for	us
the	next	stage	for	atu027	is	a	phase	ibiia	trial	that	
combines	atu027	with	a	chemotherapy	agent	our	
preclinical	work	on	this	combination	has	demonstrated	
a	reduction	in	total	tumour	burden	including	visible	
metastatic	spread		w e	were	given	ethical	committee	
approval	for	this	phase	ibiia	early	in	2013	for	this	
trial	and	dosed	the	first	patient	in	april	2013
chairman’s statement
silence therapeutics plc  
annual report and financial statements 2012
28
wwwsilencetherapeuticscom
“rnai therapeutics are 
succeeding”
jerry randall 
non‑executive	chairman
silence therapeutics plc  
annual report and financial statements 2012
28
wwwsilencetherapeuticscom
notes to the financial statements continued
year ended 31 december 2012
2 principal accounting policies continued
212 other intangible assets and research and development activities continued
capitalisation of research and development costs
costs	associated	with	research	activities	are	treated	as	an	expense	in	the	period	in	which	they	are	incurred
costs	that	are	directly	attributable	to	the	development	phase	of	an	internal	project	will	only	be	recognised	as	
intangible	assets	provided	they	meet	the	following	requirements
•	 an	asset	is	created	that	can	be	separately	identified
•	 the	technical	feasibility	exists	to	complete	the	intangible	asset	so	that	it	will	be	available	for	sale	or	use	and	the	
group	has	the	intention	and	ability	so	to	do
•	 it	is	probable	that	the	asset	created	will	generate	future	economic	benefits	either	through	internal	use	or	sale
•	 sufficient	technical	financial	and	other	resources	are	available	for	completion	of	the	asset
•	 the	expenditure	attributable	to	the	intangible	asset	during	its	development	can	be	reliably	measured
careful	judgement	by	the	group’ s	management	is	applied	when	deciding	whether	recognition	requirements	
for	development	costs	have	been	met	this	is	necessary	as	the	economic	success	of	any	product	development	is	
uncertain	and	may	be	subject	to	future	technical	problems	at	the	time	of	recognition	judgements	are	based	on	the	
information	available	at	each	balance	sheet	date	
t o	date	no	development	costs	have	been	capitalised	in	respect	of	the	internal	projects	other	than	costs	directly	
associated	 with	 arising	 intellectual	 property	 rights	 on	 the	 grounds	 that	 the	 costs	 to	 date	 are	 either	 for	 the	 research	
phase	of	the	projects	or 	if	relating	to	the	development	phase	then	the	work	so	far	does	not	meet	the	recognition	
criteria	set	out	above	
213 impairment testing of goodwill other intangible assets and property plant and equipment
at 	 each 	 balance 	 sheet 	 date 	 the 	 group 	 assesses 	 whether 	 there 	 is 	 any 	 indication 	 that 	 the 	 carrying 	 value 	 of 	 any 	 asset	
may 	 be 	 impaired 	 if 	 any 	 such 	 indication 	 exists 	 the 	 recoverable 	 amount 	 of 	 the 	 asset 	 is 	 estimated 	 in 	 order 	 to 	 determine	
the 	 extent 	 of 	 the 	 impairment 	 loss 	 if 	 any 	 where 	 it 	 is 	 not 	 possible 	 to 	 estimate 	 the 	 recoverable 	 amount 	 of 	 an 	 individual	
asset 	 the 	 group 	 estimates 	 the 	 recoverable 	 amount 	 of 	 the 	 cash‑generating 	 unit 	 to 	 which 	 the 	 asset 	 belongs
for	the	purposes	of	assessing	impairment	assets	are	grouped	at	the	lowest	levels	for	which	there	are	separately	
identifiable	cash	flows	cash‑generating	units	goodwill	is	allocated	to	those	cash‑generating	units	that	are	
expected	to	benefit	from	synergies	of	the	related	business	combination	and	represent	the	lowest	level	within	the	
group	at	which	management	controls	the	related	cash	flows
individual	assets	or	cash‑generating	units	that	include	goodwill	and	other	intangible	assets	with	an	indefinite	
useful	life	or	those	not	yet	available	for	use	are	tested	for	impairment	at	least	annually 	all	other	individual	assets	
or	cash‑generating	units	are	tested	for	impairment	whenever	events	or	changes	in	circumstances	indicate	that	the	
carrying	amount	may	not	be	recoverable
an 	 impairment 	 loss 	 is 	 recognised 	 for 	 the 	 amount 	 by 	 which 	 the 	 asset’ s 	 or 	 cash‑generating 	 unit’ s 	 carrying 	 amount	
exceeds 	 its 	 recoverable 	 amount 	 the 	 recoverable 	 amount 	 is 	 the 	 higher 	 of 	 fair 	 value 	 reflecting 	 market 	 conditions 	 less 	
costs 	 to 	 sell 	 and 	 value 	 in 	 use 	 based 	 on 	 an 	 internal 	 discounted 	 cash 	 flow 	 evaluation 	 impairment 	 losses 	 recognised 	
for 	 cash‑generating 	 units 	 to 	 which 	 goodwill 	 has 	 been 	 allocated 	 are 	 credited 	 initially 	 to 	 the 	 carrying 	 amount 	 of	
goodwill 	 any 	 remaining 	 impairment 	 loss 	 is 	 charged 	 pro 	 rata 	 to 	 the 	 other 	 assets 	 in 	 the 	 cash‑generating 	 unit	
214 investments in subsidiaries
investments	in	subsidiaries	comprise	shares	in	the	subsidiaries	and	loans	from	the	company 	investments	in	
shares	of	the	subsidiaries	are	stated	at	cost	less	provisions	for	impairment	which	recognition	and	subsequent	
measurement	is	at	amortised	cost	 w e	are	evaluating	further	studies	for	atu027	in	
combination	with	other	chemotherapy	agents	in	a	
variety	of	tumour	types	w e	plan	to	initiate	further	
programmes	and	will	provide	updates	in	due	course	
in	addition	to	this	exciting	clinical	program	we	are	
evaluating	preclinical	opportunities	in	areas	that	begin	
to	take	us	outside	oncology 	showcase	the	strength	of	
our	technology 	as	well	as	take	advantage	of	various	
accelerated	clinical	and	regulatory	pathways	these	
programs	may	make	use	of	our	dbtc	and	dacc	
delivery	systems	targeted	towards	the	liver	and	lung	
endothelium	respectively 
finally 	we	are	pleased	to	report	our	partner	quark	
pharmaceuticals	quark	continues	to	make	progress	
in	the	two	projects	covered	under	our	license	
agreements	pfe‑4523655	in	diabetic	macular	edema	
under	a	licensing	agreement	between	quark	and	
pfizer	and	qpi‑1002	in	delayed	graft	function	post	
kidney	transplantation	under	an	option	agreement	
between	quark	and	novartis		the	results	of	these	
studies	if	they	warrant	continued	development	by	
pfizer	and	novartis	respectively 	could	yield	milestone	
payments	for	us	in	2014	to	2015		if	these	molecules	
are	commercialised	we	would	be	entitled	to	further	
economics	in	the	form	of	royalties		
operations
during	2012	we	were	able	to	significantly	restructure	
the	head	office	costs	in	london	reducing	the	costs	
and	ensuring	more	of	our	cash	resources	are	focussed	
on	developing	the	assets	of	the	company 		at	the	same	
time	we	have	added	the	appropriate	personnel	to	
support	our	progression	into	a	product	company 
the	development	team	in	berlin	headed	by	dr	klaus	
gieise	has	continued	to	make	significant	progress	with	
our	pipeline	and	technology	assets	and	i	am	excited	
about	the	developments	and	their	future	potential	
in	july	2012	t ony	sedgwick	chief	executive	officer	
and	max	herrmann	chief	financial	officer	left	the	
company 	
ali	mortazavi	joined	us	as	director	of	corporate	
strategy 	t im	freeborn	as	finance	director 	and	i	
moved	from	non‑executive	to	executive	chairman		ali	
brings	a	wealth	of	experience	in	the	capital	markets	as	
well	as	small	cap	companies	and	has	been	instrumental	
in	the	development	of	silence	since	he	has	joined	t im	
has	a	wealth	of	experience	in	the	financial	markets	
and	as	an	analyst	and	qualified	accountant	he	has	
already	undertaken	significant	streaming	of	the	finance	
function	
ali	is	now	moving	to	the	position	of	chief	executive	
officer 	and	i	am	sure	he	will	continue	to	shape	and	
develop	silence	as	he	has	done	already	in	his	short	time	
with	us	
capital raising
during	2012	we	have	continued	to	receive	strong	
support	from	key	shareholders	and	undertook	two	
capital	raisings	£57	million	before	expenses	in	july 	
and	£50	million	before	expenses	in	november 	in	
addition	as	announced	in	april	2013	a	further	£19	
million	before	expenses	was	raised		these	capital	
raisings	have	demonstrated	the	continued	strong	
support	of	our	existing	key	shareholders	and	also	
now	some	significant	new	investors	on	behalf	of	
the	board	of	the	company	i	would	like	to	thank	our	
shareholders	for	their	continued	support	and	input	to	
the	development	of	silence	in	2012	and	into	the	future	
as	a	board	we	are	committed	to	maximising	the	value	
of	the	company	and	hence	the	value	to	shareholders
looking forward
thanks	to	the	work	in	the	last	12	months	by	the	whole	
team	and	key	shareholders	of	the	company 	silence	
is	progressing	in	its	transformation	into	a	product	
company	using	our	expertise	in	chemical	modifications	
of	sirna	and	delivery	technologies		at	the	same	time	
the	field	of	rna‑based	therapeutics	continues	to	see	
positive	developments	which	in	our	view 	validates	the	
approach				
as	a	board	we	are	incredibly	excited	about	2013	
and	beyond	as	we	look	to	translate	our	preclinical	
excellence	today	into	clinical	results	and	products	
w e	look	forward	very	positively	to	2013	and	the	
development	of	our	pipeline	and	business	and	to	
translating	that	into	true	growth	in	shareholder	value
jerry randall 
non‑executive	chairman
•	may	2013
silence therapeutics plc  
annual report and financial statements 2012
29
wwwsilencetherapeuticscom
business review corporate governance financial statements
get 
signature
silence therapeutics plc  
annual report and financial statements 2012
29
wwwsilencetherapeuticscom
business review corporate governance financial statements
215 financial instruments
financial	assets	and	financial	liabilities	are	recognised	on	the	group’ s	balance	sheet	when	the	group	becomes	a	
party	to	the	contractual	provisions	of	the	instrument
financial	assets	can	be	divided	into	the	following	categories	loans	and	receivables	financial	assets	at	fair	value	
through	profit	or	loss	available‑for ‑sale	financial	assets	and	held‑to‑maturity	investments	financial	assets	are	
assigned	to	the	different	categories	by	management	on	initial	recognition	depending	on	the	purpose	for	which	the	
instruments	were	acquired	the	designation	of	financial	assets	is	re‑evaluated	at	every	reporting	date	at	which	a	
choice	of	classification	or	accounting	treatment	is	available
de‑recognition	of	financial	instruments	occurs	when	the	rights	to	receive	cash	flows	from	investments	expire	or	
are	transferred	and	substantially	all	of	the	risks	and	rewards	of	ownership	have	been	transferred	an	assessment	
for	impairment	is	undertaken	at	least	at	each	balance	sheet	date	whether	or	not	there	is	objective	evidence	that	a	
financial	asset	or	a	group	of	financial	assets	is	impaired
trade receivables
t rade	receivables	are	measured	at	initial	recognition	at	fair	value	plus	if	appropriate	directly	attributable	
transaction	costs	and	are	subsequently	measured	at	amortised	cost	using	the	effective	interest	method	
appropriate	allowances	for	estimated	irrecoverable	amounts	are	recognised	in	the	income	statement	when	there	is	
objective	evidence	that	the	asset	is	impaired	the	allowance	recognised	is	measured	as	the	difference	between	the	
asset’ s	carrying	amount	and	the	present	value	of	estimated	future	cash	flows	discounted	at	an	effective	interest	
rate	computed	at	initial	recognition
loans receivable
loans	receivable	are	non‑derivative	financial	assets	with	fixed	or	determinable	payments	that	are	not	quoted	in	
an	active	market	they	arise	when	the	group	or	company	provides	money	directly	to	a	debtor	with	no	intention	
of	trading	the	receivables	loans	receivable	are	measured	at	initial	recognition	at	fair	value	plus	if	appropriate	
directly	attributable	transaction	costs	and	are	subsequently	measured	at	amortised	cost	using	the	effective	interest	
method	less	provision	for	impairment	any	change	in	their	value	is	recognised	in	the	income	statement
cash and cash equivalents
cash	and	cash	equivalents	comprise	cash	on	hand	and	demand	deposits	that	are	readily	convertible	to	a	known	
amount	of	cash	and	are	subject	to	an	insignificant	risk	of	change	in	value
financial liabilities and equity
financial	liabilities	and	equity	instruments	issued	by	the	group	are	classified	according	to	the	substance	of	the	
contractual	arrangements	entered	into	and	the	definitions	of	a	financial	liability	and	an	equity	instrument	a	
financial	liability	is	a	contractual	obligation	to	either	deliver	cash	or	another	financial	asset	to	another	entity	or	
to	exchange	a	financial	asset	or	financial	liability	with	another	entity 	including	obligations	which	may	be	settled	
by	the	group	using	its	equity	instruments	an	equity	instrument	is	any	contract	that	evidences	a	residual	interest	
in	the	assets	of	the	group	after	deducting	all	of	its	liabilities	the	accounting	policies	adopted	for	specific	financial	
liabilities	and	equity	instruments	are	set	out	below 
financial liabilities
at	initial	recognition	financial	liabilities	are	measured	at	their	fair	value	plus	if	appropriate	any	transaction	
costs	that	are	directly	attributable	to	the	issue	of	the	financial	liability 	after	initial	recognition	all	financial	
liabilities	are	measured	at	amortised	cost	using	the	effective	interest	method
equity instruments
equity	instruments	issued	by	the	group	are	recorded	at	the	proceeds	received	net	of	direct	issue	costs
216 operating leases
leases	where	substantially	all	the	risks	and	rewards	of	ownership	remain	with	the	lessor	are	accounted	for	as	
operating	leases	and	are	accounted	for	on	a	straight‑line	basis	over	the	term	of	the	lease	and	charged	to	the	income	
statement
217 provisions
provisions	are	recognised	when	the	group	has	a	present	obligation	as	a	result	of	a	past	event	and	it	is	probable	
that	the	group	will	be	required	to	settle	that	obligation	provisions	are	measured	at	the	directors’	best	estimate	
of	the	expenditure	required	to	settle	the	obligation	at	the	balance	sheet	date	and	are	discounted	to	present	value	
where	the	effect	is	material	 we are transforming silence from a technology company to a product 
company and developing a clinical capability that will match and exploit 
our expertise in preclinical development
2012	has	been	a	year	of	significant	positive	change	
and	development	for	silence		w ith	the	support	of	key	
long	term	supportive	shareholders	we	have	been	able	
to	restructure	the	company	and	provide	a	significant	
runway	of	cash	to	enable	the	company	to	both	progress	
its	atu027	clinical	asset	and	to	broaden	its	preclinical	
pipeline	the	transformation	of	silence	from	a	
technology	company	to	a	product	company	continues	
and	we	are	evaluating	opportunities	to	match	and	
exploit	our	expertise	in	preclinical	development
in	the	last	18	months	we	have	seen	clinical	progress	
for	rna‑based	drugs	in	development	including
•	 completion	of	our	atu027	phase	i	trial	showing	
safety	and	tolerability	in	man
•	 data	showing	aln‑ttr02	can	robustly	knockdown	
relevant	serum	protein	in	july	2012
•	 data	showing	eteplirsen	has	a	clinical	impact	in	
patients	in	october	2012
•	 approval	of	the	first	gene	silencing	drug	kynamro	
in	the	us	in	january	2013
•	 progression	into	the	clinic	of	microrna	mimetic	
mrx34	in	april	2013
silence	is	well	positioned	to	take	advantage	of	this	
return	of	positive	sentiment	as	it	builds	its	clinical	and	
preclinical	pipeline	and	broadens	it	to	include	areas	
outside	of	oncology 
clinical development
our	development	strategy	with	our	sirnas	makes	drug	
development	significantly	cheaper 	quicker	and	more	
efficient	than	traditional	drug	development
•	 broad	applicability	the	ability	to	target	any	gene
•	 specificity	the	ability	to	block	only	selected	genes	
without	interfering	with	others
•	 simplicity	after	identification	of	the	gene	target	
path	to	phase	i	is	relatively	simple	and	well	defined	
this	is	in	contrast	to	traditional	development	where	
there	is	a	risk	of	off‑target	effects	multiple	cycles	
of	optimisation	and	design	before	a	drug	candidate	
is	identified	for	phase	i	study 		additionally 	relative	
to	other	oligonucleotide‑based	technologies	our	
technology	has	the	potential	to	be	used	at	much	lower	
doses
during	2012	we	completed	the	phase	i	clinical	study	
for	atu027	which	we	believe	has	anti‑metastatic	
effects		a	total	of	34	patients	were	treated	and	the	
excellent	safety	and	tolerability	observed	in	the	study	
underpins	our	technology 	atu027	is	believed	to	
block	the	extravasation	and	intravasation	of	cancer	
cells	necessary	for	the	spread	of	cancer 		this	activity	
represents	a	novel	cancer	treatment	paradigm	versus	
many	other	anti‑cancer	drugs	which	target	tumour	
directly 		the	potential	for	atu027	when	used	with	
conventional	anti‑cancer	drugs	is	a	very	exciting	
proposition	for	us
the	next	stage	for	atu027	is	a	phase	ibiia	trial	that	
combines	atu027	with	a	chemotherapy	agent	our	
preclinical	work	on	this	combination	has	demonstrated	
a	reduction	in	total	tumour	burden	including	visible	
metastatic	spread		w e	were	given	ethical	committee	
approval	for	this	phase	ibiia	early	in	2013	for	this	
trial	and	dosed	the	first	patient	in	april	2013
chairman’s statement
silence therapeutics plc  
annual report and financial statements 2012
30
wwwsilencetherapeuticscom
“rnai therapeutics are 
succeeding”
jerry randall 
non‑executive	chairman
silence therapeutics plc  
annual report and financial statements 2012
30
wwwsilencetherapeuticscom
notes to the financial statements continued
year ended 31 december 2012
2 principal accounting policies continued
218 sharebased payments
the	group	issues	equity‑settled	share‑based	payments	to	certain	employees	and	advisers	equity‑settled	
share‑based	payments	are	measured	at	fair	value	excluding	the	effect	of	non	market‑based	vesting	conditions	
at	the	date	of	grant	the	fair	value	so	determined	is	expensed	on	a	straight‑line	basis	over	the	vesting	period	
based	on	the	group’ s	estimate	of	the	number	of	shares	that	will	eventually	vest	and	adjusted	for	the	effect	of	non	
market‑based	vesting	conditions	the	value	of	the	change	is	adjusted	to	reflect	expected	and	actual	levels	of	award	
vesting	except	where	failure	to	vest	is	as	a	result	of	not	meeting	a	market	condition	cancellations	of	equity	
instruments	are	treated	as	an	acceleration	of	the	vesting	period	and	any	outstanding	charge	is	recognised	in	full	
immediately 	fair	value	is	measured	using	a	binomial	pricing	model	the	key	assumptions	used	in	the	model	have	
been	adjusted	based	on	management’ s	best	estimate	for	the	effects	of	non‑transferability 	exercise	restrictions	and	
behavioural	considerations	
219 equity 
share	capital	is	determined	using	the	nominal	value	of	shares	that	have	been	issued
the	share	premium	account	includes	any	premiums	received	on	the	initial	issuing	of	the	share	capital	any	
transaction	costs	associated	with	the	issuing	of	shares	are	deducted	from	the	share	premium	account	net	of	any	
related	income	tax	benefits
the	merger	reserve	represents	the	difference	between	the	nominal	value	and	the	market	value	at	the	date	of	issue	
of	shares	issued	in	connection	with	the	acquisition	by	the	group	of	an	interest	in	over	90	of	the	share	capital	of	
another	company 
equity‑settled	share‑based	payments	are	credited	to	a	share‑based	payment	reserve	as	a	component	of	equity	until	
related	options	or	warrants	are	exercised
foreign	currency	translation	differences	are	included	in	the	translation	reserve
retained	loss	includes	all	current	and	prior	period	results	as	disclosed	in	the	income	statement
220 taxation
the	tax	currently	payable	is	based	on	taxable	profit	for	the	year 	t axable	profit	differs	from	profit	as	reported	in	
the	income	statement	because	it	excludes	items	of	income	or	expense	that	are	taxable	or	deductible	in	other	years	
and	it	further	excludes	items	that	are	never	taxable	or	deductible	the	group’ s	liability	for	current	tax	is	calculated	
using	tax	rates	that	have	been	enacted	or	substantively	enacted	by	the	balance	sheet	date
t ax	receivable	arises	from	the	uk	legislation	regarding	the	treatment	of	certain	qualifying	research	and	
development	costs	allowing	for	the	surrender	of	tax	losses	attributable	to	such	costs	in	return	for	a	tax	rebate
deferred 	 tax 	 is 	 recognised 	 on 	 differences 	 between 	 the 	 carrying 	 amounts 	 of 	 assets 	 and 	 liabilities 	 in 	 the 	 financial 	
statements 	 and 	 the 	 corresponding 	 tax 	 bases 	 used 	 in 	 the 	 computation 	 of 	 taxable 	 profit 	 and 	 is 	 accounted 	 for 	 using 	
the 	 balance 	 sheet 	 liability 	 method 	 deferred 	 tax 	 liabilities 	 are 	 generally 	 recognised 	 for 	 all 	 taxable 	 temporary	
differences 	 and 	 deferred 	 tax 	 assets 	 are 	 recognised 	 to 	 the 	 extent 	 that 	 it 	 is 	 probable 	 that 	 taxable 	 profits 	 will 	 be 	
available 	 against 	 which 	 deductible 	 temporary 	 differences 	 can 	 be 	 utilised 	 such 	 assets 	 and 	 liabilities 	 are 	 not	
recognised 	 if 	 the 	 temporary 	 difference 	 arises 	 from 	 initial 	 recognition 	 of 	 goodwill 	 or 	 from 	 the 	 initial 	 recognition	
other 	 than 	 in 	 a 	 business 	 combination 	 of 	 other 	 assets 	 and 	 liabilities 	 in 	 a 	 transaction 	 that 	 affects 	 neither 	 the 	 taxable	
profit 	 nor 	 the 	 accounting 	 profit
deferred	tax	liabilities	are	recognised	for	taxable	temporary	differences	arising	on	investments	in	subsidiaries	and	
associates	and	interests	in	joint	ventures	except	where	the	group	is	able	to	control	the	reversal	of	the	temporary	
difference	and	it	is	probable	that	the	temporary	difference	will	not	reverse	in	the	foreseeable	future
the	carrying	amount	of	deferred	tax	assets	is	reviewed	at	each	balance	sheet	date	and	reduced	to	the	extent	that	it	
is	no	longer	probable	that	sufficient	taxable	profits	will	be	available	to	allow	all	or	part	of	the	asset	to	be	recovered
deferred	tax	is	calculated	at	the	tax	rates	that	are	expected	to	apply	in	the	period	when	the	liability	is	settled	or	the	
asset	realised	deferred	tax	is	charged	or	credited	to	the	income	statement	except	when	it	relates	to	items	charged	
or	credited	directly	to	equity 	in	which	case	the	deferred	tax	is	also	dealt	with	in	equity 
deferred	tax	assets	and	liabilities	are	offset	when	there	is	a	legally	enforceable	right	to	set	off	current	tax	assets	
against	current	tax	liabilities	and	when	they	relate	to	income	taxes	levied	by	the	same	taxation	authority	and	the	
group	intends	to	settle	its	current	tax	assets	and	liabilities	on	a	net	basis w e	are	evaluating	further	studies	for	atu027	in	
combination	with	other	chemotherapy	agents	in	a	
variety	of	tumour	types	w e	plan	to	initiate	further	
programmes	and	will	provide	updates	in	due	course	
in	addition	to	this	exciting	clinical	program	we	are	
evaluating	preclinical	opportunities	in	areas	that	begin	
to	take	us	outside	oncology 	showcase	the	strength	of	
our	technology 	as	well	as	take	advantage	of	various	
accelerated	clinical	and	regulatory	pathways	these	
programs	may	make	use	of	our	dbtc	and	dacc	
delivery	systems	targeted	towards	the	liver	and	lung	
endothelium	respectively 
finally 	we	are	pleased	to	report	our	partner	quark	
pharmaceuticals	quark	continues	to	make	progress	
in	the	two	projects	covered	under	our	license	
agreements	pfe‑4523655	in	diabetic	macular	edema	
under	a	licensing	agreement	between	quark	and	
pfizer	and	qpi‑1002	in	delayed	graft	function	post	
kidney	transplantation	under	an	option	agreement	
between	quark	and	novartis		the	results	of	these	
studies	if	they	warrant	continued	development	by	
pfizer	and	novartis	respectively 	could	yield	milestone	
payments	for	us	in	2014	to	2015		if	these	molecules	
are	commercialised	we	would	be	entitled	to	further	
economics	in	the	form	of	royalties		
operations
during	2012	we	were	able	to	significantly	restructure	
the	head	office	costs	in	london	reducing	the	costs	
and	ensuring	more	of	our	cash	resources	are	focussed	
on	developing	the	assets	of	the	company 		at	the	same	
time	we	have	added	the	appropriate	personnel	to	
support	our	progression	into	a	product	company 
the	development	team	in	berlin	headed	by	dr	klaus	
gieise	has	continued	to	make	significant	progress	with	
our	pipeline	and	technology	assets	and	i	am	excited	
about	the	developments	and	their	future	potential	
in	july	2012	t ony	sedgwick	chief	executive	officer	
and	max	herrmann	chief	financial	officer	left	the	
company 	
ali	mortazavi	joined	us	as	director	of	corporate	
strategy 	t im	freeborn	as	finance	director 	and	i	
moved	from	non‑executive	to	executive	chairman		ali	
brings	a	wealth	of	experience	in	the	capital	markets	as	
well	as	small	cap	companies	and	has	been	instrumental	
in	the	development	of	silence	since	he	has	joined	t im	
has	a	wealth	of	experience	in	the	financial	markets	
and	as	an	analyst	and	qualified	accountant	he	has	
already	undertaken	significant	streaming	of	the	finance	
function	
ali	is	now	moving	to	the	position	of	chief	executive	
officer 	and	i	am	sure	he	will	continue	to	shape	and	
develop	silence	as	he	has	done	already	in	his	short	time	
with	us	
capital raising
during	2012	we	have	continued	to	receive	strong	
support	from	key	shareholders	and	undertook	two	
capital	raisings	£57	million	before	expenses	in	july 	
and	£50	million	before	expenses	in	november 	in	
addition	as	announced	in	april	2013	a	further	£19	
million	before	expenses	was	raised		these	capital	
raisings	have	demonstrated	the	continued	strong	
support	of	our	existing	key	shareholders	and	also	
now	some	significant	new	investors	on	behalf	of	
the	board	of	the	company	i	would	like	to	thank	our	
shareholders	for	their	continued	support	and	input	to	
the	development	of	silence	in	2012	and	into	the	future	
as	a	board	we	are	committed	to	maximising	the	value	
of	the	company	and	hence	the	value	to	shareholders
looking forward
thanks	to	the	work	in	the	last	12	months	by	the	whole	
team	and	key	shareholders	of	the	company 	silence	
is	progressing	in	its	transformation	into	a	product	
company	using	our	expertise	in	chemical	modifications	
of	sirna	and	delivery	technologies		at	the	same	time	
the	field	of	rna‑based	therapeutics	continues	to	see	
positive	developments	which	in	our	view 	validates	the	
approach				
as	a	board	we	are	incredibly	excited	about	2013	
and	beyond	as	we	look	to	translate	our	preclinical	
excellence	today	into	clinical	results	and	products	
w e	look	forward	very	positively	to	2013	and	the	
development	of	our	pipeline	and	business	and	to	
translating	that	into	true	growth	in	shareholder	value
jerry randall 
non‑executive	chairman
•	may	2013
silence therapeutics plc  
annual report and financial statements 2012
31
wwwsilencetherapeuticscom
business review corporate governance financial statements
get 
signature
silence therapeutics plc  
annual report and financial statements 2012
31
wwwsilencetherapeuticscom
business review corporate governance financial statements
221 critical accounting judgements and key sources of estimation uncertainty
in	the	process	of	applying	the	entity’ s	accounting	policies	management	makes	estimates	and	assumptions	
that	have	an	effect	on	the	amounts	recognised	in	the	financial	statements	although	these	estimates	are	based	
on	management’ s	best	knowledge	of	current	events	and	actions	actual	results	may	ultimately	differ	from	
those	estimates
the	key	assumptions	concerning	the	future	and	other	key	sources	of	estimation	uncertainty	at	the	balance	sheet	
date	that	have	a	significant	risk	of	causing	a	material	adjustment	to	the	carrying	amounts	of	assets	and	liabilities	
within	the	next	financial	year 	are	those	relating	to	
•	 the	capitalisation	or	otherwise	of	development	expenditure
•	 the	ability	of	the	group	to	operate	as	a	“going	concern”
•	 the	carrying	value	of	the	company’ s	investment	in	its	subsidiaries
•	 the	future	recoverability	of	goodwill	and	other	intangible	assets
•	 the	corresponding	review	for	impairment	of	those	assets
the	group	expends	considerable	sums	on	its	development	projects	with	its	total	research	and	development	costs	
for	2012	amounting	to	£34m	2011	£34m	the	board	has	decided	not	to	capitalise	any	development	costs	to	
date	as	it	would	not	be	able	to	prove	reliably	that	such	costs	could	be	recovered	due	to	the	risk	factors	involved	
therefore	all	such	costs	have	been	treated	as	expenses	as	they	were	incurred	any	decision	to	treat	part	of	those	
costs	as	capital	items	could	have	a	significant	impact	on	the	group’ s	results	and	balance	sheet	
as	explained	in	note	23	above	the	accounts	are	drawn	up	on	the	going	concern	basis	which	assumes	that	the	
group	will	be	able	to	access	sufficient	funds	to	continue	to	operate	for	the	foreseeable	future	if	the	accounts	
were	to	be	drawn	up	on	the	basis	that	this	assumption	was	not	valid	then	there	could	be	material	changes	to	the	
carrying	values	of	both	assets	and	liabilities
the	group’ s	main	activities	are	carried	out	by	subsidiary	companies	which	are	financed	by	ongoing	investment	by	
the	parent	company 	these	investments	are	carried	in	the	books	of	the	parent	company	at	cost	less	provisions	for	
impairment	the	carrying	value	at	31	december	2012	is	£342m	2011	£542m	the	key	assumptions	concerning	
the	carrying	value	of	the	investments	in	and	loans	to	subsidiaries	relate	to	the	continuing	progress	of	the	
research	and	development	programmes	as	noted	below 	there	are	a	number	of	risks	and	uncertainties	around	
those	assumptions	and	the	crystallisation	of	any	of	those	risks	could	have	a	significant	impact	on	the	assessment	
of	the	carrying	value	of	the	investment	shown	in	the	accounts	of	the	parent	company 
goodwill	is	carried	in	the	accounts	at	a	value	of	£73m	2011	£283m
other	intangible	assets	have	a	carrying	value	at	31	december	2012	of	£05m	2011	£10m	and	details	of	the	
movement	in	the	year 	the	capitalisation	and	amortisation	policy	and	the	basis	of	the	impairment	review	are	set	out	
in	note	12
the	key	assumptions	concerning	the	carrying	value	or	otherwise	for	both	the	goodwill	and	other	intangible	
assets	relate	to	the	continuing	progress	of	the	group’ s	research	and	development	programmes	which	are	subject	
to	risks	common	to	all	biotechnology	businesses	these	risks	include	the	impact	of	competition	in	the	specific	
areas	of	development	the	potential	failure	of	the	projects	in	development	or	clinical	trials	and	the	possible	inability	
to	progress	projects	due	to	regulatory 	manufacturing	or	intellectual	property	issues	or	the	lack	of	available	funds	
or	other	resources	furthermore	the	crystallisation	of	any	of	these	risks	could	have	a	significant	impact	on	the	
assessment	of	the	value	of	both	goodwill	and	other	intangible	assets
3 revenue
revenue	in	the	year	was	from	licence	grant	and	service	fees	generated	by	both	european	and	us	operations	
the	analysis	of	revenues	by	geographical	destination	is
	 				 2012 	 2011 	
	 				 £000s 	 £000s
europe	 	 	 	 127 	 504
north	america	 	 	 	 	 36 	 14
asiapacific	 	 	 	 	 —	 176
	 				 163 	 694 we are transforming silence from a technology company to a product 
company and developing a clinical capability that will match and exploit 
our expertise in preclinical development
2012	has	been	a	year	of	significant	positive	change	
and	development	for	silence		w ith	the	support	of	key	
long	term	supportive	shareholders	we	have	been	able	
to	restructure	the	company	and	provide	a	significant	
runway	of	cash	to	enable	the	company	to	both	progress	
its	atu027	clinical	asset	and	to	broaden	its	preclinical	
pipeline	the	transformation	of	silence	from	a	
technology	company	to	a	product	company	continues	
and	we	are	evaluating	opportunities	to	match	and	
exploit	our	expertise	in	preclinical	development
in	the	last	18	months	we	have	seen	clinical	progress	
for	rna‑based	drugs	in	development	including
•	 completion	of	our	atu027	phase	i	trial	showing	
safety	and	tolerability	in	man
•	 data	showing	aln‑ttr02	can	robustly	knockdown	
relevant	serum	protein	in	july	2012
•	 data	showing	eteplirsen	has	a	clinical	impact	in	
patients	in	october	2012
•	 approval	of	the	first	gene	silencing	drug	kynamro	
in	the	us	in	january	2013
•	 progression	into	the	clinic	of	microrna	mimetic	
mrx34	in	april	2013
silence	is	well	positioned	to	take	advantage	of	this	
return	of	positive	sentiment	as	it	builds	its	clinical	and	
preclinical	pipeline	and	broadens	it	to	include	areas	
outside	of	oncology 
clinical development
our	development	strategy	with	our	sirnas	makes	drug	
development	significantly	cheaper 	quicker	and	more	
efficient	than	traditional	drug	development
•	 broad	applicability	the	ability	to	target	any	gene
•	 specificity	the	ability	to	block	only	selected	genes	
without	interfering	with	others
•	 simplicity	after	identification	of	the	gene	target	
path	to	phase	i	is	relatively	simple	and	well	defined	
this	is	in	contrast	to	traditional	development	where	
there	is	a	risk	of	off‑target	effects	multiple	cycles	
of	optimisation	and	design	before	a	drug	candidate	
is	identified	for	phase	i	study 		additionally 	relative	
to	other	oligonucleotide‑based	technologies	our	
technology	has	the	potential	to	be	used	at	much	lower	
doses
during	2012	we	completed	the	phase	i	clinical	study	
for	atu027	which	we	believe	has	anti‑metastatic	
effects		a	total	of	34	patients	were	treated	and	the	
excellent	safety	and	tolerability	observed	in	the	study	
underpins	our	technology 	atu027	is	believed	to	
block	the	extravasation	and	intravasation	of	cancer	
cells	necessary	for	the	spread	of	cancer 		this	activity	
represents	a	novel	cancer	treatment	paradigm	versus	
many	other	anti‑cancer	drugs	which	target	tumour	
directly 		the	potential	for	atu027	when	used	with	
conventional	anti‑cancer	drugs	is	a	very	exciting	
proposition	for	us
the	next	stage	for	atu027	is	a	phase	ibiia	trial	that	
combines	atu027	with	a	chemotherapy	agent	our	
preclinical	work	on	this	combination	has	demonstrated	
a	reduction	in	total	tumour	burden	including	visible	
metastatic	spread		w e	were	given	ethical	committee	
approval	for	this	phase	ibiia	early	in	2013	for	this	
trial	and	dosed	the	first	patient	in	april	2013
chairman’s statement
silence therapeutics plc  
annual report and financial statements 2012
32
wwwsilencetherapeuticscom
“rnai therapeutics are 
succeeding”
jerry randall 
non‑executive	chairman
silence therapeutics plc  
annual report and financial statements 2012
32
wwwsilencetherapeuticscom
notes to the financial statements continued
year ended 31 december 2012
4 segment reporting
in	2012	the	group	operated	solely	in	the	specific	technology	fields	of	rnai	therapeutics	these	activities	were	
carried	out	across	the	group	companies	but	operated	as	a	single	business	
due	to	the	nature	of	its	licencing	activities	the	group’ s	revenues	in	any	one	year	often	derive	from	a	small	number	
of	customers	that	change	year	by	year 	during	2012	£007m	or	43	of	group	revenues	2011	£047m	or	68	of	
group	revenues	arose	from	a	single	customer	with	£004m	or	26	of	group	revenues	2011	£100m	or	42	of	
group	revenues	coming	from	a	second	customer 	during	2011	the	comparative	figures	for	those	two	customers	
were	£nil	and	£nil	respectively 
noncurrent assets
	 	 	 	 us	 uk		 germany 	
	 	 	 	 £000s	 £000s	 £000s
as at 31 december 2012    — 2 8014
as	at	31	december	2011	 	 	 	 21224	 3	 8310
segment	profit	used	by	the	board	in	its	assessment	of	the	entity	is	profit	before	tax
business segments
   rnai  group consolidated 
   therapeutics immunotherapy unallocated data 
2012   £000s £000s £000s £000s
revenue	from	external	customers	 	 	 163 — —  163
operating	lossprofit	 	 	 24160 — 2154 26314
interest	income	 	 	 3 — 15 18
interest	expense	 	 	 — — — —
gain	on	sale	of	asset	 	 	 12 — — 12
segment	loss	for	the	year	before	taxation	 	 	 24872 — 1412 26284
segment	assets	 	 	 8570 — 8504 17074
segment	liabilities	 	 	 806 — 153 959
costs	to	acquire	property 	plant	and	equipment	 	 3 — — 3
costs	to	acquire	intangible	assets	 	 	 199 — — 199
depreciation	and	amortisation	 	 	 251 — 1 252
charge	for	non‑cash	expenses	share‑based	payments	charge	 77 — 579 656
segment	non‑current	assets	 	 8016 — — 8016
	 	 	 rnai	 	 group	 consolidated 	
	 	 	 therapeutics	 immunotherapy 	 unallocated	 data 	
2011	 	 	 £000s	 £000s	 £000s	 £000s
revenue	from	external	customers	 	 	 694	 —	 —		 694
operating	lossprofit	 	 	 4821	 1	 964	 5786
interest	income	 	 	 32	 —	 25	 57
interest	expense	 	 	 13	 —	 —	 13
gain	on	sale	of	assets	 	 	 6	 —	 —	 6
segment	loss	for	the	year	before	taxation	 	 	 4797	 1	 939	 5737
segment	assets	 	 	 30032	 —	 3406	 33438
segment	liabilities	 	 	 1078	 —	 182	 1260
costs	to	acquire	property 	plant	and	equipment	 	 23	 —	 4	 27
costs	to	acquire	intangible	assets	 	 	 248	 —	 —	 248
depreciation	and	amortisation	 	 	 305	 —	 —	 305
charge	for	non‑cash	expenses	share‑based	payments	charge		 93	 —	 27	 120
segment	non‑current	assets	 	 	 29535	 —	 3	 29538 w e	are	evaluating	further	studies	for	atu027	in	
combination	with	other	chemotherapy	agents	in	a	
variety	of	tumour	types	w e	plan	to	initiate	further	
programmes	and	will	provide	updates	in	due	course	
in	addition	to	this	exciting	clinical	program	we	are	
evaluating	preclinical	opportunities	in	areas	that	begin	
to	take	us	outside	oncology 	showcase	the	strength	of	
our	technology 	as	well	as	take	advantage	of	various	
accelerated	clinical	and	regulatory	pathways	these	
programs	may	make	use	of	our	dbtc	and	dacc	
delivery	systems	targeted	towards	the	liver	and	lung	
endothelium	respectively 
finally 	we	are	pleased	to	report	our	partner	quark	
pharmaceuticals	quark	continues	to	make	progress	
in	the	two	projects	covered	under	our	license	
agreements	pfe‑4523655	in	diabetic	macular	edema	
under	a	licensing	agreement	between	quark	and	
pfizer	and	qpi‑1002	in	delayed	graft	function	post	
kidney	transplantation	under	an	option	agreement	
between	quark	and	novartis		the	results	of	these	
studies	if	they	warrant	continued	development	by	
pfizer	and	novartis	respectively 	could	yield	milestone	
payments	for	us	in	2014	to	2015		if	these	molecules	
are	commercialised	we	would	be	entitled	to	further	
economics	in	the	form	of	royalties		
operations
during	2012	we	were	able	to	significantly	restructure	
the	head	office	costs	in	london	reducing	the	costs	
and	ensuring	more	of	our	cash	resources	are	focussed	
on	developing	the	assets	of	the	company 		at	the	same	
time	we	have	added	the	appropriate	personnel	to	
support	our	progression	into	a	product	company 
the	development	team	in	berlin	headed	by	dr	klaus	
gieise	has	continued	to	make	significant	progress	with	
our	pipeline	and	technology	assets	and	i	am	excited	
about	the	developments	and	their	future	potential	
in	july	2012	t ony	sedgwick	chief	executive	officer	
and	max	herrmann	chief	financial	officer	left	the	
company 	
ali	mortazavi	joined	us	as	director	of	corporate	
strategy 	t im	freeborn	as	finance	director 	and	i	
moved	from	non‑executive	to	executive	chairman		ali	
brings	a	wealth	of	experience	in	the	capital	markets	as	
well	as	small	cap	companies	and	has	been	instrumental	
in	the	development	of	silence	since	he	has	joined	t im	
has	a	wealth	of	experience	in	the	financial	markets	
and	as	an	analyst	and	qualified	accountant	he	has	
already	undertaken	significant	streaming	of	the	finance	
function	
ali	is	now	moving	to	the	position	of	chief	executive	
officer 	and	i	am	sure	he	will	continue	to	shape	and	
develop	silence	as	he	has	done	already	in	his	short	time	
with	us	
capital raising
during	2012	we	have	continued	to	receive	strong	
support	from	key	shareholders	and	undertook	two	
capital	raisings	£57	million	before	expenses	in	july 	
and	£50	million	before	expenses	in	november 	in	
addition	as	announced	in	april	2013	a	further	£19	
million	before	expenses	was	raised		these	capital	
raisings	have	demonstrated	the	continued	strong	
support	of	our	existing	key	shareholders	and	also	
now	some	significant	new	investors	on	behalf	of	
the	board	of	the	company	i	would	like	to	thank	our	
shareholders	for	their	continued	support	and	input	to	
the	development	of	silence	in	2012	and	into	the	future	
as	a	board	we	are	committed	to	maximising	the	value	
of	the	company	and	hence	the	value	to	shareholders
looking forward
thanks	to	the	work	in	the	last	12	months	by	the	whole	
team	and	key	shareholders	of	the	company 	silence	
is	progressing	in	its	transformation	into	a	product	
company	using	our	expertise	in	chemical	modifications	
of	sirna	and	delivery	technologies		at	the	same	time	
the	field	of	rna‑based	therapeutics	continues	to	see	
positive	developments	which	in	our	view 	validates	the	
approach				
as	a	board	we	are	incredibly	excited	about	2013	
and	beyond	as	we	look	to	translate	our	preclinical	
excellence	today	into	clinical	results	and	products	
w e	look	forward	very	positively	to	2013	and	the	
development	of	our	pipeline	and	business	and	to	
translating	that	into	true	growth	in	shareholder	value
jerry randall 
non‑executive	chairman
•	may	2013
silence therapeutics plc  
annual report and financial statements 2012
33
wwwsilencetherapeuticscom
business review corporate governance financial statements
get 
signature
silence therapeutics plc  
annual report and financial statements 2012
33
wwwsilencetherapeuticscom
business review corporate governance financial statements
5 operating loss 
this	is	stated	after	charging
	 				 2012 	 2011 	
	 				 £000s 	 £000s
depreciation	of	property 	plant	and	equipment	 	 	 	 63 	 91
amortisation	of	intangibles	 	 	 	 	 189 	 214
restructuring	expenses	 	 	 	 	 —	 472
share‑based	payments	charge	 	 	 	 	 656 	 121
auditors’	remuneration	 	
	–	audit	of	these	financial	statements	 	 	 	 	 68 	 48
	–	audit	of	subsidiaries	pursuant	to	legislation	 	 	 	 13 	 17
	–	t axation	 	 	 	 	 8	 11
operating	lease	payments	on	offices	 	 	 	 	 266 	 298
gain	on	sale	of	ppe	 	 	 	 	 12 	 5
t axation	services	consist	of	tax	compliance	services	no	information	on	auditor	remuneration	in	respect	of	the	
company	has	been	given	as	the	group	accounts	are	required	to	give	on	a	group	basis	the	disclosures	required	
by	regulation
impairment
	 					 2012 	
	 	 	 	 	 note	 £000s
goodwill	impairment	 	 	 	 	 12	 	20314
intangible	write	off	 	 	 	 	 13	 	441
t rade	payable	write	off	 	 	 	 	 	 269
exceptional writedown       20486 we are transforming silence from a technology company to a product 
company and developing a clinical capability that will match and exploit 
our expertise in preclinical development
2012	has	been	a	year	of	significant	positive	change	
and	development	for	silence		w ith	the	support	of	key	
long	term	supportive	shareholders	we	have	been	able	
to	restructure	the	company	and	provide	a	significant	
runway	of	cash	to	enable	the	company	to	both	progress	
its	atu027	clinical	asset	and	to	broaden	its	preclinical	
pipeline	the	transformation	of	silence	from	a	
technology	company	to	a	product	company	continues	
and	we	are	evaluating	opportunities	to	match	and	
exploit	our	expertise	in	preclinical	development
in	the	last	18	months	we	have	seen	clinical	progress	
for	rna‑based	drugs	in	development	including
•	 completion	of	our	atu027	phase	i	trial	showing	
safety	and	tolerability	in	man
•	 data	showing	aln‑ttr02	can	robustly	knockdown	
relevant	serum	protein	in	july	2012
•	 data	showing	eteplirsen	has	a	clinical	impact	in	
patients	in	october	2012
•	 approval	of	the	first	gene	silencing	drug	kynamro	
in	the	us	in	january	2013
•	 progression	into	the	clinic	of	microrna	mimetic	
mrx34	in	april	2013
silence	is	well	positioned	to	take	advantage	of	this	
return	of	positive	sentiment	as	it	builds	its	clinical	and	
preclinical	pipeline	and	broadens	it	to	include	areas	
outside	of	oncology 
clinical development
our	development	strategy	with	our	sirnas	makes	drug	
development	significantly	cheaper 	quicker	and	more	
efficient	than	traditional	drug	development
•	 broad	applicability	the	ability	to	target	any	gene
•	 specificity	the	ability	to	block	only	selected	genes	
without	interfering	with	others
•	 simplicity	after	identification	of	the	gene	target	
path	to	phase	i	is	relatively	simple	and	well	defined	
this	is	in	contrast	to	traditional	development	where	
there	is	a	risk	of	off‑target	effects	multiple	cycles	
of	optimisation	and	design	before	a	drug	candidate	
is	identified	for	phase	i	study 		additionally 	relative	
to	other	oligonucleotide‑based	technologies	our	
technology	has	the	potential	to	be	used	at	much	lower	
doses
during	2012	we	completed	the	phase	i	clinical	study	
for	atu027	which	we	believe	has	anti‑metastatic	
effects		a	total	of	34	patients	were	treated	and	the	
excellent	safety	and	tolerability	observed	in	the	study	
underpins	our	technology 	atu027	is	believed	to	
block	the	extravasation	and	intravasation	of	cancer	
cells	necessary	for	the	spread	of	cancer 		this	activity	
represents	a	novel	cancer	treatment	paradigm	versus	
many	other	anti‑cancer	drugs	which	target	tumour	
directly 		the	potential	for	atu027	when	used	with	
conventional	anti‑cancer	drugs	is	a	very	exciting	
proposition	for	us
the	next	stage	for	atu027	is	a	phase	ibiia	trial	that	
combines	atu027	with	a	chemotherapy	agent	our	
preclinical	work	on	this	combination	has	demonstrated	
a	reduction	in	total	tumour	burden	including	visible	
metastatic	spread		w e	were	given	ethical	committee	
approval	for	this	phase	ibiia	early	in	2013	for	this	
trial	and	dosed	the	first	patient	in	april	2013
chairman’s statement
silence therapeutics plc  
annual report and financial statements 2012
34
wwwsilencetherapeuticscom
“rnai therapeutics are 
succeeding”
jerry randall 
non‑executive	chairman
silence therapeutics plc  
annual report and financial statements 2012
34
wwwsilencetherapeuticscom
notes to the financial statements continued
year ended 31 december 2012
6 directors and staff costs
staff	costs	including	directors’	remuneration	during	the	year	were	as	follows
	 				 2012 	 2011 	
	 				 £000s 	 £000s
w ages	and	salaries	 	 	 	 	 1613 	 2258
t ermination	benefits	 	 	 	 	 295 	 472
social	security	costs	 	 	 	 	 378 	 323
charge	in	respect	of	share‑based	payments	 	 	 	 	 656 	 121
pension	costs	 	 	 	 	 26 	 18
		 				 2968 	 3192
the	average	number	of	employees	including	both	executive	and	non‑executive	directors	during	the	year	was	34	
2011	37
apart	from	the	directors	the	average	number	of	employees	of	the	parent	company	was	2	2011	1
management	remuneration	paid	and	other	benefits	supplied	to	the	directors	during	the	year	were	as	follows
	 	 		 	 2012 	 2011	 	
	 			 total  t otal 	
	 	 salary	 t ermination		excluding 2012 	 excluding	 2011 	
	 	 and	fees	 pay pensions 	 pensions 	 pensions	 pensions 	
	 	 £000s	 £000s	 £000s £000s 	 £000s	 £000s
p	haworth		 	 —	 —	 — — 	 336	 —
j	randall	 	 39	 —	 39 	 —	 60	 —
m	herrmann	 	 105	 31	 136 11 	 180	 18
t	christely	 	 18	 211	 229 	 —	 64	 —
a	clancy	 	 15	 —	 15 	 —	 30	 —
d	u’prichard	 	 —	 —	 — — 	 30	 —
t	sedgwick	 	 101	 48	 149 15	—	—
a	mortazavi	 	 4	 —	 4 	 —	—	—
t	freeborn	 	 30	 —	 30 	 —	—	—
m	khan		 	 3	 —	 3 	 —	—	—
	 	 315	 290	 605 26 	 700	 18
no	bonuses	will	be	paid	to	directors	in	respect	of	the	year	ended	31	december	2012
the	directors	of	the	group	are	the	same	as	key	management	personnel	as	defined	by	ias	24	related	party	
t ransactions	
details	of	share	options	granted	to	directors	are	detailed	in	note	19
7  finance income   
the	finance	income	comprises	 	
	 				 2012 	 2011 	
	 				 £000s 	 £000s
bank	interest	receivable		 	 	 	 	 18 	 27
gain	on	security	held	for	resale		 	 	 	 	 —	 30
	 				 18 	 57 w e	are	evaluating	further	studies	for	atu027	in	
combination	with	other	chemotherapy	agents	in	a	
variety	of	tumour	types	w e	plan	to	initiate	further	
programmes	and	will	provide	updates	in	due	course	
in	addition	to	this	exciting	clinical	program	we	are	
evaluating	preclinical	opportunities	in	areas	that	begin	
to	take	us	outside	oncology 	showcase	the	strength	of	
our	technology 	as	well	as	take	advantage	of	various	
accelerated	clinical	and	regulatory	pathways	these	
programs	may	make	use	of	our	dbtc	and	dacc	
delivery	systems	targeted	towards	the	liver	and	lung	
endothelium	respectively 
finally 	we	are	pleased	to	report	our	partner	quark	
pharmaceuticals	quark	continues	to	make	progress	
in	the	two	projects	covered	under	our	license	
agreements	pfe‑4523655	in	diabetic	macular	edema	
under	a	licensing	agreement	between	quark	and	
pfizer	and	qpi‑1002	in	delayed	graft	function	post	
kidney	transplantation	under	an	option	agreement	
between	quark	and	novartis		the	results	of	these	
studies	if	they	warrant	continued	development	by	
pfizer	and	novartis	respectively 	could	yield	milestone	
payments	for	us	in	2014	to	2015		if	these	molecules	
are	commercialised	we	would	be	entitled	to	further	
economics	in	the	form	of	royalties		
operations
during	2012	we	were	able	to	significantly	restructure	
the	head	office	costs	in	london	reducing	the	costs	
and	ensuring	more	of	our	cash	resources	are	focussed	
on	developing	the	assets	of	the	company 		at	the	same	
time	we	have	added	the	appropriate	personnel	to	
support	our	progression	into	a	product	company 
the	development	team	in	berlin	headed	by	dr	klaus	
gieise	has	continued	to	make	significant	progress	with	
our	pipeline	and	technology	assets	and	i	am	excited	
about	the	developments	and	their	future	potential	
in	july	2012	t ony	sedgwick	chief	executive	officer	
and	max	herrmann	chief	financial	officer	left	the	
company 	
ali	mortazavi	joined	us	as	director	of	corporate	
strategy 	t im	freeborn	as	finance	director 	and	i	
moved	from	non‑executive	to	executive	chairman		ali	
brings	a	wealth	of	experience	in	the	capital	markets	as	
well	as	small	cap	companies	and	has	been	instrumental	
in	the	development	of	silence	since	he	has	joined	t im	
has	a	wealth	of	experience	in	the	financial	markets	
and	as	an	analyst	and	qualified	accountant	he	has	
already	undertaken	significant	streaming	of	the	finance	
function	
ali	is	now	moving	to	the	position	of	chief	executive	
officer 	and	i	am	sure	he	will	continue	to	shape	and	
develop	silence	as	he	has	done	already	in	his	short	time	
with	us	
capital raising
during	2012	we	have	continued	to	receive	strong	
support	from	key	shareholders	and	undertook	two	
capital	raisings	£57	million	before	expenses	in	july 	
and	£50	million	before	expenses	in	november 	in	
addition	as	announced	in	april	2013	a	further	£19	
million	before	expenses	was	raised		these	capital	
raisings	have	demonstrated	the	continued	strong	
support	of	our	existing	key	shareholders	and	also	
now	some	significant	new	investors	on	behalf	of	
the	board	of	the	company	i	would	like	to	thank	our	
shareholders	for	their	continued	support	and	input	to	
the	development	of	silence	in	2012	and	into	the	future	
as	a	board	we	are	committed	to	maximising	the	value	
of	the	company	and	hence	the	value	to	shareholders
looking forward
thanks	to	the	work	in	the	last	12	months	by	the	whole	
team	and	key	shareholders	of	the	company 	silence	
is	progressing	in	its	transformation	into	a	product	
company	using	our	expertise	in	chemical	modifications	
of	sirna	and	delivery	technologies		at	the	same	time	
the	field	of	rna‑based	therapeutics	continues	to	see	
positive	developments	which	in	our	view 	validates	the	
approach				
as	a	board	we	are	incredibly	excited	about	2013	
and	beyond	as	we	look	to	translate	our	preclinical	
excellence	today	into	clinical	results	and	products	
w e	look	forward	very	positively	to	2013	and	the	
development	of	our	pipeline	and	business	and	to	
translating	that	into	true	growth	in	shareholder	value
jerry randall 
non‑executive	chairman
•	may	2013
silence therapeutics plc  
annual report and financial statements 2012
35
wwwsilencetherapeuticscom
business review corporate governance financial statements
get 
signature
silence therapeutics plc  
annual report and financial statements 2012
35
wwwsilencetherapeuticscom
business review corporate governance financial statements
8 taxation  
reconciliation	of	income	tax	credit	at	standard	rate	of	uk	corporation	tax	to	the	current	tax	charge
	 				 2012 	 2011 	
	 				 £000s 	 £000s
loss	per	accounts		 	 	 	 	 26284 	 5737
t ax	credit	at	the	standard	rate	of	uk	corporation	tax	of	245	2011	26	 	 6440 	 1492
effect	of	overseas	tax	rate	germany	and	us		 	 	 239 	 312
impact	of	costs	disallowable	for	tax	purposes		 	 	 	 4977 	 113
impact	of	unrelieved	tax	losses	not	recognised	 	 	 	 1702 	 1691
	 				 —	—
estimated	tax	losses	of	£824m	2011	£764m	are	available	for	relief	against	future	profits
the	deferred	tax	asset	not	provided	for	in	the	accounts	on	the	estimated	losses	and	the	treatment	of	the	equity	
settled	share‑based	payments	net	of	any	other	temporary	timing	differences	is	approximately	£265m	£255m	
the	2013	budget	on	20	march	2013	announced	that	the	uk	corporation	tax	rate	will	fall	to	20	by	
2015	a	reduction	in	the	rate	from	24	to	23	effective	from	1	april	2013	was	substantively	enacted	on	
3	july	2012	the	further	reduction	to	21	from	1	april	2014	and	to	20	from	1	april	2015	have	not	been	
substantively	enacted	minimal	impact	is	expected	from	this	change	given	the	group	is	loss	making
9  loss per share
the	calculation	of	the	loss	per	share	is	based	on	the	loss	for	the	financial	year	after	taxation	of	£263m	
2011	loss	£57m	and	on	the	weighted	average	of	984406050	2011	466864698	ordinary	shares	in	issue	
during	the	year 	
the	options	outstanding	at	31	december	2012	and	31	december	2011	are	considered	to	be	non‑dilutive	in	that	
their	conversion	into	ordinary	shares	would	not	increase	the	net	loss	per	share	consequently 	there	is	no	diluted	
loss	per	share	to	report	for	either	year 	
10  property plant and equipment 
equipment and furniture 
	 	 	 	 	 group	 company 	
	 	 	 	 		 £000s	 £000s
cost 
at	1	january	2011	 	 	 	 	 3567	 —
additions	 	 	 	 	 27	 4
disposals	 	 	 	 	 156	 —
t ranslation	adjustment	 	 	 	 	 131	 —
at	31	december	2011	 	 	 	 	 3307	 4
additions	 	 	 	 	 3	 —
disposals	 	 	 	 	 320	 —
t ranslation	adjustment	 	 	 	 	 78	 —
at 31 december 2012     2912 4
depreciation 	
at	1	january	2011	 	 	 	 	 3280	 —
charge	for	the	year	 	 	 	 	 91	 1
eliminated	on	disposal	 	 	 	 	 164	 —
t ranslation	adjustment	 	 	 	 	 125	 —
at	31	december	2011	 	 	 	 	 3082	 1
charge	for	the	year	 	 	 	 	 63	 1
eliminated	on	disposal	 	 	 	 	 317	 —
t ranslation	adjustment	 	 	 	 	 73	 —
at 31 december 2012     2755 2
net book value  
as	at	31	december	2011	 	 	 	 	 225	 3
as at 31 december 2012     157 2 we are transforming silence from a technology company to a product 
company and developing a clinical capability that will match and exploit 
our expertise in preclinical development
2012	has	been	a	year	of	significant	positive	change	
and	development	for	silence		w ith	the	support	of	key	
long	term	supportive	shareholders	we	have	been	able	
to	restructure	the	company	and	provide	a	significant	
runway	of	cash	to	enable	the	company	to	both	progress	
its	atu027	clinical	asset	and	to	broaden	its	preclinical	
pipeline	the	transformation	of	silence	from	a	
technology	company	to	a	product	company	continues	
and	we	are	evaluating	opportunities	to	match	and	
exploit	our	expertise	in	preclinical	development
in	the	last	18	months	we	have	seen	clinical	progress	
for	rna‑based	drugs	in	development	including
•	 completion	of	our	atu027	phase	i	trial	showing	
safety	and	tolerability	in	man
•	 data	showing	aln‑ttr02	can	robustly	knockdown	
relevant	serum	protein	in	july	2012
•	 data	showing	eteplirsen	has	a	clinical	impact	in	
patients	in	october	2012
•	 approval	of	the	first	gene	silencing	drug	kynamro	
in	the	us	in	january	2013
•	 progression	into	the	clinic	of	microrna	mimetic	
mrx34	in	april	2013
silence	is	well	positioned	to	take	advantage	of	this	
return	of	positive	sentiment	as	it	builds	its	clinical	and	
preclinical	pipeline	and	broadens	it	to	include	areas	
outside	of	oncology 
clinical development
our	development	strategy	with	our	sirnas	makes	drug	
development	significantly	cheaper 	quicker	and	more	
efficient	than	traditional	drug	development
•	 broad	applicability	the	ability	to	target	any	gene
•	 specificity	the	ability	to	block	only	selected	genes	
without	interfering	with	others
•	 simplicity	after	identification	of	the	gene	target	
path	to	phase	i	is	relatively	simple	and	well	defined	
this	is	in	contrast	to	traditional	development	where	
there	is	a	risk	of	off‑target	effects	multiple	cycles	
of	optimisation	and	design	before	a	drug	candidate	
is	identified	for	phase	i	study 		additionally 	relative	
to	other	oligonucleotide‑based	technologies	our	
technology	has	the	potential	to	be	used	at	much	lower	
doses
during	2012	we	completed	the	phase	i	clinical	study	
for	atu027	which	we	believe	has	anti‑metastatic	
effects		a	total	of	34	patients	were	treated	and	the	
excellent	safety	and	tolerability	observed	in	the	study	
underpins	our	technology 	atu027	is	believed	to	
block	the	extravasation	and	intravasation	of	cancer	
cells	necessary	for	the	spread	of	cancer 		this	activity	
represents	a	novel	cancer	treatment	paradigm	versus	
many	other	anti‑cancer	drugs	which	target	tumour	
directly 		the	potential	for	atu027	when	used	with	
conventional	anti‑cancer	drugs	is	a	very	exciting	
proposition	for	us
the	next	stage	for	atu027	is	a	phase	ibiia	trial	that	
combines	atu027	with	a	chemotherapy	agent	our	
preclinical	work	on	this	combination	has	demonstrated	
a	reduction	in	total	tumour	burden	including	visible	
metastatic	spread		w e	were	given	ethical	committee	
approval	for	this	phase	ibiia	early	in	2013	for	this	
trial	and	dosed	the	first	patient	in	april	2013
chairman’s statement
silence therapeutics plc  
annual report and financial statements 2012
36
wwwsilencetherapeuticscom
“rnai therapeutics are 
succeeding”
jerry randall 
non‑executive	chairman
silence therapeutics plc  
annual report and financial statements 2012
36
wwwsilencetherapeuticscom
notes to the financial statements continued
year ended 31 december 2012
11  goodwill  
	 				 2012 	 2011 	
	 				 £000s 	 £000s
balance	at	start	of	year	 	 	 	 28342 	 28346
impairment	 	 	 	 	 20314	—
t ranslation	adjustment	 	 	 	 	 695 	 4
balance	at	end	of	year	 	 	 	 	 7333 	 28342
the	carrying	amount	of	goodwill	is	attributable	to	the	acquisition	of	silence	therapeutics	ag	in	2005	and	
intradigm	corporation	in	2010
in	accordance	with	ias	36	impairment	of	assets	the	carrying	value	of	goodwill	has	been	assessed	comparing	its	
carrying	value	to	its	recoverable	amount	the	recoverable	amount	has	been	calculated	by	the	directors	as	being	the	
value	in	use	
t o	arrive	at	the	value	in	use	the	directors	have	performed	risk	adjusted	discounted	cash	flow	analyses	of	the	
rnai	therapy	business	area	in	the	prior	year 	the	goodwill	related	to	silence	therapeutics	ag	and	intradigm	
corporation	was	tested	as	a	single	“cash	generating”	unit
goodwill	was	reassessed	following	the	closure	of	intradigm	in	the	us	this	led	to	an	impairment	of	the	
carrying	value
the	recoverable	amount	of	the	rnai	therapy	business	has	been	calculated	with	reference	to	its	value	in	use	
the	key	assumptions	of	this	calculation	are	shown	below	
	 					 2012
period	on	which	management	approved	forecasts	are	based	 	 	 	 2013 – 2035
growth	rate	applied	beyond	approved	forecast	period	 	 	 	 	 na
discount	rate	 	 	 	 	 16
t erminal	valuation	multiple	priceearnings	 	 	 	 	 nil
management	have	used	an	approved	forecast	period	of	greater	than	five	years	because	of	the	long‑term	nature	of	
revenue	streams	from	clinical	development	stage	pharmaceutical	drug	candidates	the	discount	rate	used	is	based	
on	a	conservative	rate	used	by	professionals	to	value	publicly	traded	equities	and	corporate	market‑specific	risk	
sensitivity	analysis	has	been	carried	out	on	both	the	discount	rate	and	sales	assumptions	used	to	calculate	the	net	
present	value	of	the	goodwill	for	silence	therapeutics	ag	a	25	reduction	in	sales	being	the	key	sensitivity 	still	
gives	a	net	present	value	in	excess	of	the	carrying	value	 w e	are	evaluating	further	studies	for	atu027	in	
combination	with	other	chemotherapy	agents	in	a	
variety	of	tumour	types	w e	plan	to	initiate	further	
programmes	and	will	provide	updates	in	due	course	
in	addition	to	this	exciting	clinical	program	we	are	
evaluating	preclinical	opportunities	in	areas	that	begin	
to	take	us	outside	oncology 	showcase	the	strength	of	
our	technology 	as	well	as	take	advantage	of	various	
accelerated	clinical	and	regulatory	pathways	these	
programs	may	make	use	of	our	dbtc	and	dacc	
delivery	systems	targeted	towards	the	liver	and	lung	
endothelium	respectively 
finally 	we	are	pleased	to	report	our	partner	quark	
pharmaceuticals	quark	continues	to	make	progress	
in	the	two	projects	covered	under	our	license	
agreements	pfe‑4523655	in	diabetic	macular	edema	
under	a	licensing	agreement	between	quark	and	
pfizer	and	qpi‑1002	in	delayed	graft	function	post	
kidney	transplantation	under	an	option	agreement	
between	quark	and	novartis		the	results	of	these	
studies	if	they	warrant	continued	development	by	
pfizer	and	novartis	respectively 	could	yield	milestone	
payments	for	us	in	2014	to	2015		if	these	molecules	
are	commercialised	we	would	be	entitled	to	further	
economics	in	the	form	of	royalties		
operations
during	2012	we	were	able	to	significantly	restructure	
the	head	office	costs	in	london	reducing	the	costs	
and	ensuring	more	of	our	cash	resources	are	focussed	
on	developing	the	assets	of	the	company 		at	the	same	
time	we	have	added	the	appropriate	personnel	to	
support	our	progression	into	a	product	company 
the	development	team	in	berlin	headed	by	dr	klaus	
gieise	has	continued	to	make	significant	progress	with	
our	pipeline	and	technology	assets	and	i	am	excited	
about	the	developments	and	their	future	potential	
in	july	2012	t ony	sedgwick	chief	executive	officer	
and	max	herrmann	chief	financial	officer	left	the	
company 	
ali	mortazavi	joined	us	as	director	of	corporate	
strategy 	t im	freeborn	as	finance	director 	and	i	
moved	from	non‑executive	to	executive	chairman		ali	
brings	a	wealth	of	experience	in	the	capital	markets	as	
well	as	small	cap	companies	and	has	been	instrumental	
in	the	development	of	silence	since	he	has	joined	t im	
has	a	wealth	of	experience	in	the	financial	markets	
and	as	an	analyst	and	qualified	accountant	he	has	
already	undertaken	significant	streaming	of	the	finance	
function	
ali	is	now	moving	to	the	position	of	chief	executive	
officer 	and	i	am	sure	he	will	continue	to	shape	and	
develop	silence	as	he	has	done	already	in	his	short	time	
with	us	
capital raising
during	2012	we	have	continued	to	receive	strong	
support	from	key	shareholders	and	undertook	two	
capital	raisings	£57	million	before	expenses	in	july 	
and	£50	million	before	expenses	in	november 	in	
addition	as	announced	in	april	2013	a	further	£19	
million	before	expenses	was	raised		these	capital	
raisings	have	demonstrated	the	continued	strong	
support	of	our	existing	key	shareholders	and	also	
now	some	significant	new	investors	on	behalf	of	
the	board	of	the	company	i	would	like	to	thank	our	
shareholders	for	their	continued	support	and	input	to	
the	development	of	silence	in	2012	and	into	the	future	
as	a	board	we	are	committed	to	maximising	the	value	
of	the	company	and	hence	the	value	to	shareholders
looking forward
thanks	to	the	work	in	the	last	12	months	by	the	whole	
team	and	key	shareholders	of	the	company 	silence	
is	progressing	in	its	transformation	into	a	product	
company	using	our	expertise	in	chemical	modifications	
of	sirna	and	delivery	technologies		at	the	same	time	
the	field	of	rna‑based	therapeutics	continues	to	see	
positive	developments	which	in	our	view 	validates	the	
approach				
as	a	board	we	are	incredibly	excited	about	2013	
and	beyond	as	we	look	to	translate	our	preclinical	
excellence	today	into	clinical	results	and	products	
w e	look	forward	very	positively	to	2013	and	the	
development	of	our	pipeline	and	business	and	to	
translating	that	into	true	growth	in	shareholder	value
jerry randall 
non‑executive	chairman
•	may	2013
silence therapeutics plc  
annual report and financial statements 2012
37
wwwsilencetherapeuticscom
business review corporate governance financial statements
get 
signature
silence therapeutics plc  
annual report and financial statements 2012
37
wwwsilencetherapeuticscom
business review corporate governance financial statements
12  other intangible assets
	 	 	 	 	 internally 	
	 	 	 	 licences	 generated	 t otal 	
		 	 	 		 £000s	 £000s	 £000s
cost	 			
at	1	january	2011	 	 	 	 2690	 1073	 3763
additions	 	 	 	 134	 114	 248
t ranslation	adjustment	 		 	 	 73	 35	 108
at	31	december	2011	 	 	 	 2751	 1152	 3903
additions	 	 	 	 47	 152	 199
zamore	write	down	 	 	 	 505	 —	 505
t ranslation	adjustment	 	 	 		 59	 30	 89
at 31 december 2012     2234 1274 3508
amortisation    
at	1	january	2011	 	 	 	 2357	 460	 2817
charge	for	the	year	 	 	 	 57	 157	 214
t ranslation	adjustment	 	 	 		 81	 18	 99
at	31	december	2011	 	 	 		 2333	 599	 2932
zamore	write	down		 	 	 	 64	 —	 64
charge	for	the	year	 	 	 	 23	 166	 189
t ranslation	adjustment	 		 	 	 59	 16	 75
at 31 december 2012     2233 749 2982
net book value     
as	at	31	december	2011		 		 	 	 418	 553	 971
as at 31 december 2012    1 525 526
the	licences	included	above	have	finite	useful	lives	estimated	to	be	of	10‑14	years	from	the	date	of	acquisition	over	
which	period	the	licences	are	amortised	the	group’ s	internally	generated	patent	costs	above	represent	expenses	
connected	with	filings	for	patent	registration	in	respect	of	technology	that	has	been	developed	by	the	group	for	use	
in	revenue‑generating	activities	these	costs	are	amortised	on	a	straight‑line	basis	over	10‑14	years	commencing	
upon	the	completion	of	the	asset	the	charge	for	amortisation	is	included	in	the	research	and	development	costs	in	
the	income	statement	
the	group	tests	for	impairment	of	definite	life	intangible	assets	on	a	regular	basis	if	indicators	of	impairment	
exist	such	as	a	change	of	use	of	the	asset	a	reduction	in	operating	cash	flow	or	a	change	in	technology 	the	
company	compares	the	discounted	cash	flows	related	to	the	asset	to	the	carrying	value	of	the	asset	if	the	carrying	
value	is	greater	than	the	discounted	cash	flow	amount	an	impairment	charge	is	recorded	for	the	amount	
necessary	to	reduce	the	carrying	value	of	the	asset	to	fair	value	fair	value	for	the	purpose	of	the	impairment	
tests	is	determined	based	on	current	market	value	or	discounted	future	cash	flows	in	determining	the	fair	value	
certain	assumptions	are	made	concerning	for	example	estimated	cash	flows	and	growth	of	the	group’ s	operations	
intangible	assets	include	intellectual	property	relating	to	atuplex	and	aturnai	technologies	which	are	already	
subject	to	commercial	licences	 we are transforming silence from a technology company to a product 
company and developing a clinical capability that will match and exploit 
our expertise in preclinical development
2012	has	been	a	year	of	significant	positive	change	
and	development	for	silence		w ith	the	support	of	key	
long	term	supportive	shareholders	we	have	been	able	
to	restructure	the	company	and	provide	a	significant	
runway	of	cash	to	enable	the	company	to	both	progress	
its	atu027	clinical	asset	and	to	broaden	its	preclinical	
pipeline	the	transformation	of	silence	from	a	
technology	company	to	a	product	company	continues	
and	we	are	evaluating	opportunities	to	match	and	
exploit	our	expertise	in	preclinical	development
in	the	last	18	months	we	have	seen	clinical	progress	
for	rna‑based	drugs	in	development	including
•	 completion	of	our	atu027	phase	i	trial	showing	
safety	and	tolerability	in	man
•	 data	showing	aln‑ttr02	can	robustly	knockdown	
relevant	serum	protein	in	july	2012
•	 data	showing	eteplirsen	has	a	clinical	impact	in	
patients	in	october	2012
•	 approval	of	the	first	gene	silencing	drug	kynamro	
in	the	us	in	january	2013
•	 progression	into	the	clinic	of	microrna	mimetic	
mrx34	in	april	2013
silence	is	well	positioned	to	take	advantage	of	this	
return	of	positive	sentiment	as	it	builds	its	clinical	and	
preclinical	pipeline	and	broadens	it	to	include	areas	
outside	of	oncology 
clinical development
our	development	strategy	with	our	sirnas	makes	drug	
development	significantly	cheaper 	quicker	and	more	
efficient	than	traditional	drug	development
•	 broad	applicability	the	ability	to	target	any	gene
•	 specificity	the	ability	to	block	only	selected	genes	
without	interfering	with	others
•	 simplicity	after	identification	of	the	gene	target	
path	to	phase	i	is	relatively	simple	and	well	defined	
this	is	in	contrast	to	traditional	development	where	
there	is	a	risk	of	off‑target	effects	multiple	cycles	
of	optimisation	and	design	before	a	drug	candidate	
is	identified	for	phase	i	study 		additionally 	relative	
to	other	oligonucleotide‑based	technologies	our	
technology	has	the	potential	to	be	used	at	much	lower	
doses
during	2012	we	completed	the	phase	i	clinical	study	
for	atu027	which	we	believe	has	anti‑metastatic	
effects		a	total	of	34	patients	were	treated	and	the	
excellent	safety	and	tolerability	observed	in	the	study	
underpins	our	technology 	atu027	is	believed	to	
block	the	extravasation	and	intravasation	of	cancer	
cells	necessary	for	the	spread	of	cancer 		this	activity	
represents	a	novel	cancer	treatment	paradigm	versus	
many	other	anti‑cancer	drugs	which	target	tumour	
directly 		the	potential	for	atu027	when	used	with	
conventional	anti‑cancer	drugs	is	a	very	exciting	
proposition	for	us
the	next	stage	for	atu027	is	a	phase	ibiia	trial	that	
combines	atu027	with	a	chemotherapy	agent	our	
preclinical	work	on	this	combination	has	demonstrated	
a	reduction	in	total	tumour	burden	including	visible	
metastatic	spread		w e	were	given	ethical	committee	
approval	for	this	phase	ibiia	early	in	2013	for	this	
trial	and	dosed	the	first	patient	in	april	2013
chairman’s statement
silence therapeutics plc  
annual report and financial statements 2012
38
wwwsilencetherapeuticscom
“rnai therapeutics are 
succeeding”
jerry randall 
non‑executive	chairman
silence therapeutics plc  
annual report and financial statements 2012
38
wwwsilencetherapeuticscom
notes to the financial statements continued
year ended 31 december 2012
13  investments 
	 				 2012 	 2011 	
company	 	 	 	 	 £000s 	 £000s
investment	in	subsidiary	undertakings	 	 	 	 34204 	 54218
the	investment	in	subsidiary	undertakings	is	made	up	as	follows	 	
	 	 	 	 investment	 impairment	 net 	
	 	 	 	 at	cost	 provision	 total 	
		 	 	 	 £000s	 £000s	 £000s
shares and loans in subsidiary undertakings   
at	31	december	2010	 	 	 	 73224	 22609	 50615
additions	 	 	 	 3606	 3	 3603
at	31	december	2011	 	 	 	 76830	 22612	 54218
additions	 	 	 	 4121	 24135	 20014
at 31 december 2012    80951 46747 34204
at	31	december	2012	a	non‑interest	bearing	unsecured	loan	of	£224m	2011	£224m	was	outstanding	
from	silence	therapeutics	plc	to	stanford	rook	ltd	this	has	been	fully	provided	for	in	both	2011	and	2012	
a	subordinated	5	interest	bearing	loan	from	silence	therapeutics	plc	to	silence	therapeutics	ag	of	£109m	
2011	£69m	was	outstanding	
subsidiary companies
the	principal	activity	of	all	subsidiaries	is	the	research	and	development	of	pharmaceutical	products
	 	 	 	
	 	 	 proportion	of 	
	 place	of	incorporation	 	 ownership 	
name	 and	operation	 principal	technology	area	 interest
silence	therapeutics	ag		 germany		 rnai	therapeutics		 100
intradigm	corporation		 us		 rnai	therapeutics		 100
stanford	rook	ltd		 england		 immunotherapy		 100
innopeg	ltd		 england		 not	active		 100
the	company	has	made	additional	investments	during	the	year	in	its	operating	subsidiaries	silence	therapeutics	
ag	and	intradigm	corporation	silence	therapeutics	plc	has	made	an	impairment	provision	against	the	
investment	and	loans	to	stanford	rook	limited	and	innopeg	limited	to	the	extent	that	they	are	deemed	to	be	
not	recoverable	no	impairment	provision	has	been	made	against	the	investment	in	silence	therapeutics	ag	or	
intradigm	corporation	as	the	directors	believe	that	the	fair	value	exceeds	the	cost	of	investment	to	date
14  trade and other receivables
	 2012 		 2011	
	 			
	 		 group 	 company 	 group	 company 	
	 		 £000s 	 £000s 	 £000s	 £000s
t rade	receivables	 	 	 2 — 	 36	 —
other	receivables	 	 70 20 	 29	 33
prepayments		 	 	 76 19 	 109	 46
t otal	trade	and	other	receivables	 	 	 148 39 	 174	 79
the	directors	consider	that	the	carrying	amount	of	trade	and	other	receivables	approximates	to	their	fair	value	
t rade	and	other	receivables	were	all	payable	within	90	days	fair	values	have	been	calculated	by	discounting	cash	
flows	at	prevailing	interest	rates	
no	interest	is	charged	on	outstanding	receivables w e	are	evaluating	further	studies	for	atu027	in	
combination	with	other	chemotherapy	agents	in	a	
variety	of	tumour	types	w e	plan	to	initiate	further	
programmes	and	will	provide	updates	in	due	course	
in	addition	to	this	exciting	clinical	program	we	are	
evaluating	preclinical	opportunities	in	areas	that	begin	
to	take	us	outside	oncology 	showcase	the	strength	of	
our	technology 	as	well	as	take	advantage	of	various	
accelerated	clinical	and	regulatory	pathways	these	
programs	may	make	use	of	our	dbtc	and	dacc	
delivery	systems	targeted	towards	the	liver	and	lung	
endothelium	respectively 
finally 	we	are	pleased	to	report	our	partner	quark	
pharmaceuticals	quark	continues	to	make	progress	
in	the	two	projects	covered	under	our	license	
agreements	pfe‑4523655	in	diabetic	macular	edema	
under	a	licensing	agreement	between	quark	and	
pfizer	and	qpi‑1002	in	delayed	graft	function	post	
kidney	transplantation	under	an	option	agreement	
between	quark	and	novartis		the	results	of	these	
studies	if	they	warrant	continued	development	by	
pfizer	and	novartis	respectively 	could	yield	milestone	
payments	for	us	in	2014	to	2015		if	these	molecules	
are	commercialised	we	would	be	entitled	to	further	
economics	in	the	form	of	royalties		
operations
during	2012	we	were	able	to	significantly	restructure	
the	head	office	costs	in	london	reducing	the	costs	
and	ensuring	more	of	our	cash	resources	are	focussed	
on	developing	the	assets	of	the	company 		at	the	same	
time	we	have	added	the	appropriate	personnel	to	
support	our	progression	into	a	product	company 
the	development	team	in	berlin	headed	by	dr	klaus	
gieise	has	continued	to	make	significant	progress	with	
our	pipeline	and	technology	assets	and	i	am	excited	
about	the	developments	and	their	future	potential	
in	july	2012	t ony	sedgwick	chief	executive	officer	
and	max	herrmann	chief	financial	officer	left	the	
company 	
ali	mortazavi	joined	us	as	director	of	corporate	
strategy 	t im	freeborn	as	finance	director 	and	i	
moved	from	non‑executive	to	executive	chairman		ali	
brings	a	wealth	of	experience	in	the	capital	markets	as	
well	as	small	cap	companies	and	has	been	instrumental	
in	the	development	of	silence	since	he	has	joined	t im	
has	a	wealth	of	experience	in	the	financial	markets	
and	as	an	analyst	and	qualified	accountant	he	has	
already	undertaken	significant	streaming	of	the	finance	
function	
ali	is	now	moving	to	the	position	of	chief	executive	
officer 	and	i	am	sure	he	will	continue	to	shape	and	
develop	silence	as	he	has	done	already	in	his	short	time	
with	us	
capital raising
during	2012	we	have	continued	to	receive	strong	
support	from	key	shareholders	and	undertook	two	
capital	raisings	£57	million	before	expenses	in	july 	
and	£50	million	before	expenses	in	november 	in	
addition	as	announced	in	april	2013	a	further	£19	
million	before	expenses	was	raised		these	capital	
raisings	have	demonstrated	the	continued	strong	
support	of	our	existing	key	shareholders	and	also	
now	some	significant	new	investors	on	behalf	of	
the	board	of	the	company	i	would	like	to	thank	our	
shareholders	for	their	continued	support	and	input	to	
the	development	of	silence	in	2012	and	into	the	future	
as	a	board	we	are	committed	to	maximising	the	value	
of	the	company	and	hence	the	value	to	shareholders
looking forward
thanks	to	the	work	in	the	last	12	months	by	the	whole	
team	and	key	shareholders	of	the	company 	silence	
is	progressing	in	its	transformation	into	a	product	
company	using	our	expertise	in	chemical	modifications	
of	sirna	and	delivery	technologies		at	the	same	time	
the	field	of	rna‑based	therapeutics	continues	to	see	
positive	developments	which	in	our	view 	validates	the	
approach				
as	a	board	we	are	incredibly	excited	about	2013	
and	beyond	as	we	look	to	translate	our	preclinical	
excellence	today	into	clinical	results	and	products	
w e	look	forward	very	positively	to	2013	and	the	
development	of	our	pipeline	and	business	and	to	
translating	that	into	true	growth	in	shareholder	value
jerry randall 
non‑executive	chairman
•	may	2013
silence therapeutics plc  
annual report and financial statements 2012
39
wwwsilencetherapeuticscom
business review corporate governance financial statements
get 
signature
silence therapeutics plc  
annual report and financial statements 2012
39
wwwsilencetherapeuticscom
business review corporate governance financial statements
15  cash and cash equivalents
cash	at	bank	comprises	balances	held	by	the	group	in	current	and	short‑term	bank	deposits	with	a	maturity	of	
three	months	or	less	the	carrying	amount	of	these	assets	approximates	to	their	fair	value	the	deposits	held	at	
bank	are	treated	as	cash	equivalents	under	the	definitions	of	ias	7	cash	flow	statements	
	 2012 		 2011	
	 			
	 		 group 	 company 	 group	 company 	
	 		 £000s 	 £000s 	 £000s	 £000s
cash	and	cash	equivalents	 	 	 8909 8463 	 3688	 3323
16  trade and other payables 
	 2012 		 2011	
	 			
	 		 group 	 company 	 group	 company 	
	 		 £000s 	 £000s 	 £000s	 £000s
t rade	payables	 	 105 40 	 450	 85
social	security	and	other	taxes	 	 	 275 15 	 392	 20
deferred	revenues	 	 	 343 — 	 418	 —
accruals	and	other	payables		 	 	 236 98 	 —	 77
		 959 153 	 1260	 182
t rade	payables	and	accruals	principally	comprise	amounts	outstanding	for	trade	purchases	and	continuing	costs	
the	directors	consider	that	the	carrying	amount	of	trade	and	other	payables	approximates	to	their	fair	value	
17  deferred tax
the	following	are	the	major	deferred	tax	liabilities	and	assets	recognised	by	the	group
	 				 2012 	 2011 	
	 				 £000s 	 £000s
deferred	tax	liability	 	
–	in	respect	of	intangible	assets	 	 	 	 	 155 	 327
less	offset	of	deferred	tax	asset	below	 	 	 	 	 155 	 327
liability	 	 	 	 	 — 	—
deferred	tax	asset	 	
–	in	respect	of	available	tax	losses	 	 	 	 	 27278 	 24390
–	in	respect	of	share‑based	payments	 	 	 	 276 	 1136
less	offset	against	deferred	tax	liability	 	 	 	 	 155 	 327
	 				 27399 	 25199
–	provision	against	asset	 	 	 	 	 27399 	 25199
asset	 	 	 	 	 —	 	—
due	to	the	uncertainty	of	future	profits	a	deferred	tax	asset	was	not	recognised	at	31	december	2012	2011	£nil we are transforming silence from a technology company to a product 
company and developing a clinical capability that will match and exploit 
our expertise in preclinical development
2012	has	been	a	year	of	significant	positive	change	
and	development	for	silence		w ith	the	support	of	key	
long	term	supportive	shareholders	we	have	been	able	
to	restructure	the	company	and	provide	a	significant	
runway	of	cash	to	enable	the	company	to	both	progress	
its	atu027	clinical	asset	and	to	broaden	its	preclinical	
pipeline	the	transformation	of	silence	from	a	
technology	company	to	a	product	company	continues	
and	we	are	evaluating	opportunities	to	match	and	
exploit	our	expertise	in	preclinical	development
in	the	last	18	months	we	have	seen	clinical	progress	
for	rna‑based	drugs	in	development	including
•	 completion	of	our	atu027	phase	i	trial	showing	
safety	and	tolerability	in	man
•	 data	showing	aln‑ttr02	can	robustly	knockdown	
relevant	serum	protein	in	july	2012
•	 data	showing	eteplirsen	has	a	clinical	impact	in	
patients	in	october	2012
•	 approval	of	the	first	gene	silencing	drug	kynamro	
in	the	us	in	january	2013
•	 progression	into	the	clinic	of	microrna	mimetic	
mrx34	in	april	2013
silence	is	well	positioned	to	take	advantage	of	this	
return	of	positive	sentiment	as	it	builds	its	clinical	and	
preclinical	pipeline	and	broadens	it	to	include	areas	
outside	of	oncology 
clinical development
our	development	strategy	with	our	sirnas	makes	drug	
development	significantly	cheaper 	quicker	and	more	
efficient	than	traditional	drug	development
•	 broad	applicability	the	ability	to	target	any	gene
•	 specificity	the	ability	to	block	only	selected	genes	
without	interfering	with	others
•	 simplicity	after	identification	of	the	gene	target	
path	to	phase	i	is	relatively	simple	and	well	defined	
this	is	in	contrast	to	traditional	development	where	
there	is	a	risk	of	off‑target	effects	multiple	cycles	
of	optimisation	and	design	before	a	drug	candidate	
is	identified	for	phase	i	study 		additionally 	relative	
to	other	oligonucleotide‑based	technologies	our	
technology	has	the	potential	to	be	used	at	much	lower	
doses
during	2012	we	completed	the	phase	i	clinical	study	
for	atu027	which	we	believe	has	anti‑metastatic	
effects		a	total	of	34	patients	were	treated	and	the	
excellent	safety	and	tolerability	observed	in	the	study	
underpins	our	technology 	atu027	is	believed	to	
block	the	extravasation	and	intravasation	of	cancer	
cells	necessary	for	the	spread	of	cancer 		this	activity	
represents	a	novel	cancer	treatment	paradigm	versus	
many	other	anti‑cancer	drugs	which	target	tumour	
directly 		the	potential	for	atu027	when	used	with	
conventional	anti‑cancer	drugs	is	a	very	exciting	
proposition	for	us
the	next	stage	for	atu027	is	a	phase	ibiia	trial	that	
combines	atu027	with	a	chemotherapy	agent	our	
preclinical	work	on	this	combination	has	demonstrated	
a	reduction	in	total	tumour	burden	including	visible	
metastatic	spread		w e	were	given	ethical	committee	
approval	for	this	phase	ibiia	early	in	2013	for	this	
trial	and	dosed	the	first	patient	in	april	2013
chairman’s statement
silence therapeutics plc  
annual report and financial statements 2012
40
wwwsilencetherapeuticscom
“rnai therapeutics are 
succeeding”
jerry randall 
non‑executive	chairman
silence therapeutics plc  
annual report and financial statements 2012
40
wwwsilencetherapeuticscom
notes to the financial statements continued
year ended 31 december 2012
18  share capital 
	 				 2012 	 2011 	
	 				 £000s 	 £000s
allotted	called	up	and	fully	paid		 	 	 	 	
1871552737	2011	577114517	ordinary	shares	par	value	01p	 	 	 1872 	 5771
the	group	has	only	one	class	of	share	all	ordinary	shares	have	equal	voting	rights	and	rank	pari	passu	for	the	
distribution	of	dividends
details	of	the	shares	issued	by	the	company	during	the	current	and	previous	years	are	as	follows
	
number	of	shares	in	issue	at	1	january	2011	 		 	 	 	 279891452	
shares	issued	during	2011	
–	issue	of	shares	for	cash	at	2p	per	share	 	 	 	 	 	 296693065
–	issue	of	shares	at	1p	per	share	 	 	 	 	 	 530000
t otal	issued	in	year	 	 	 	 	 	 297223065
number of shares in issue at 31 december 2011     577114517
shares	issued	during	2012	
–	issue	of	shares	for	cash	at	05p	 	 	 	 		 1089088220
–	exercise	of	warrants	at	1p		 	 	 	 	 	 4000000
–	issue	of	shares	for	cash	at	25p	 	 	 	 	 	 200000000
options	at	207p	 	 	 	 	 	 1350000
t otal	issued	in	year	 	 	 	 	 	 1294438220
number of shares in issue at 31 december 2012     1871552737
the	group	operates	both	an	inland	revenue	approved	share	option	scheme	and	an	unapproved	share	option	
scheme	all	directors	and	uk	employees	are	eligible	for	both	schemes	the	group	has	also	granted	options	to	
certain	directors	and	employees	under	the	auspices	of	an	enterprise	management	incentive	scheme	and	by	
individual	contract
at	31	december	2012	there	were	options	outstanding	over	164129490	2011	41762447	unissued	ordinary	
shares	and	6830000	2011	462963	warrants	outstanding	over	unissued	ordinary	shares w e	are	evaluating	further	studies	for	atu027	in	
combination	with	other	chemotherapy	agents	in	a	
variety	of	tumour	types	w e	plan	to	initiate	further	
programmes	and	will	provide	updates	in	due	course	
in	addition	to	this	exciting	clinical	program	we	are	
evaluating	preclinical	opportunities	in	areas	that	begin	
to	take	us	outside	oncology 	showcase	the	strength	of	
our	technology 	as	well	as	take	advantage	of	various	
accelerated	clinical	and	regulatory	pathways	these	
programs	may	make	use	of	our	dbtc	and	dacc	
delivery	systems	targeted	towards	the	liver	and	lung	
endothelium	respectively 
finally 	we	are	pleased	to	report	our	partner	quark	
pharmaceuticals	quark	continues	to	make	progress	
in	the	two	projects	covered	under	our	license	
agreements	pfe‑4523655	in	diabetic	macular	edema	
under	a	licensing	agreement	between	quark	and	
pfizer	and	qpi‑1002	in	delayed	graft	function	post	
kidney	transplantation	under	an	option	agreement	
between	quark	and	novartis		the	results	of	these	
studies	if	they	warrant	continued	development	by	
pfizer	and	novartis	respectively 	could	yield	milestone	
payments	for	us	in	2014	to	2015		if	these	molecules	
are	commercialised	we	would	be	entitled	to	further	
economics	in	the	form	of	royalties		
operations
during	2012	we	were	able	to	significantly	restructure	
the	head	office	costs	in	london	reducing	the	costs	
and	ensuring	more	of	our	cash	resources	are	focussed	
on	developing	the	assets	of	the	company 		at	the	same	
time	we	have	added	the	appropriate	personnel	to	
support	our	progression	into	a	product	company 
the	development	team	in	berlin	headed	by	dr	klaus	
gieise	has	continued	to	make	significant	progress	with	
our	pipeline	and	technology	assets	and	i	am	excited	
about	the	developments	and	their	future	potential	
in	july	2012	t ony	sedgwick	chief	executive	officer	
and	max	herrmann	chief	financial	officer	left	the	
company 	
ali	mortazavi	joined	us	as	director	of	corporate	
strategy 	t im	freeborn	as	finance	director 	and	i	
moved	from	non‑executive	to	executive	chairman		ali	
brings	a	wealth	of	experience	in	the	capital	markets	as	
well	as	small	cap	companies	and	has	been	instrumental	
in	the	development	of	silence	since	he	has	joined	t im	
has	a	wealth	of	experience	in	the	financial	markets	
and	as	an	analyst	and	qualified	accountant	he	has	
already	undertaken	significant	streaming	of	the	finance	
function	
ali	is	now	moving	to	the	position	of	chief	executive	
officer 	and	i	am	sure	he	will	continue	to	shape	and	
develop	silence	as	he	has	done	already	in	his	short	time	
with	us	
capital raising
during	2012	we	have	continued	to	receive	strong	
support	from	key	shareholders	and	undertook	two	
capital	raisings	£57	million	before	expenses	in	july 	
and	£50	million	before	expenses	in	november 	in	
addition	as	announced	in	april	2013	a	further	£19	
million	before	expenses	was	raised		these	capital	
raisings	have	demonstrated	the	continued	strong	
support	of	our	existing	key	shareholders	and	also	
now	some	significant	new	investors	on	behalf	of	
the	board	of	the	company	i	would	like	to	thank	our	
shareholders	for	their	continued	support	and	input	to	
the	development	of	silence	in	2012	and	into	the	future	
as	a	board	we	are	committed	to	maximising	the	value	
of	the	company	and	hence	the	value	to	shareholders
looking forward
thanks	to	the	work	in	the	last	12	months	by	the	whole	
team	and	key	shareholders	of	the	company 	silence	
is	progressing	in	its	transformation	into	a	product	
company	using	our	expertise	in	chemical	modifications	
of	sirna	and	delivery	technologies		at	the	same	time	
the	field	of	rna‑based	therapeutics	continues	to	see	
positive	developments	which	in	our	view 	validates	the	
approach				
as	a	board	we	are	incredibly	excited	about	2013	
and	beyond	as	we	look	to	translate	our	preclinical	
excellence	today	into	clinical	results	and	products	
w e	look	forward	very	positively	to	2013	and	the	
development	of	our	pipeline	and	business	and	to	
translating	that	into	true	growth	in	shareholder	value
jerry randall 
non‑executive	chairman
•	may	2013
silence therapeutics plc  
annual report and financial statements 2012
41
wwwsilencetherapeuticscom
business review corporate governance financial statements
get 
signature
silence therapeutics plc  
annual report and financial statements 2012
41
wwwsilencetherapeuticscom
business review corporate governance financial statements
details	of	the	options	outstanding	are	as	follows
exercisable	from	 	 	 	 exercisable	until	 number	 exercise	price	
any	time	until		 	 	 24	july	2015	 	1000000		 	2300	
any	time	until		 	 	 26	july	2016	 	532272		 	1275	
any	time	until		 	 	 24	november	2016	 	400000		 	4300	
any	time	until		 	 	 24	july	2015	 	10000		 	10900	
any	time	until		 	 	 14	december	2017	 	10000		 	10900	
any	time	until		 	 	 	5	december	2018	 	10000		 	10900	
any	time	until		 	 	 26	july	2017	 	500000		 	12700	
any	time	until		 	 	 14	december	2017	 	55000		 	6775	
any	time	until		 	 	 7	may	2018	 	19999		 	4150	
any	time	until		 	 	 25	september	2018	 	215000		 	2950	
any	time	until		 	 	 5	december	2018	 	1722588		 	2000	
any	time	until		 	 	 5	january	2020	 	500000	 	2123	
any	time	until	 	 	 13	october	2021	 	2433334	 180
13	october	2013	 	 	 13	october	2021	 	2541665	 180
13	october	2014	 	 	 13	october	2021	 2433334	 180
27	july	2014	 	 	 27	july	2024	 	9500000		 	050	
in	24	equal	monthly	tranches	ending	1	august	2014	 	 31	july	2024	 	50000000		 	050	
1	august	2014	 	 	 31	july	2024	 	88246298		 	050	
1	january	2015	 	 	 31	december	2024	 	4000000		 	250	
total options outstanding      164129490  
			 we are transforming silence from a technology company to a product 
company and developing a clinical capability that will match and exploit 
our expertise in preclinical development
2012	has	been	a	year	of	significant	positive	change	
and	development	for	silence		w ith	the	support	of	key	
long	term	supportive	shareholders	we	have	been	able	
to	restructure	the	company	and	provide	a	significant	
runway	of	cash	to	enable	the	company	to	both	progress	
its	atu027	clinical	asset	and	to	broaden	its	preclinical	
pipeline	the	transformation	of	silence	from	a	
technology	company	to	a	product	company	continues	
and	we	are	evaluating	opportunities	to	match	and	
exploit	our	expertise	in	preclinical	development
in	the	last	18	months	we	have	seen	clinical	progress	
for	rna‑based	drugs	in	development	including
•	 completion	of	our	atu027	phase	i	trial	showing	
safety	and	tolerability	in	man
•	 data	showing	aln‑ttr02	can	robustly	knockdown	
relevant	serum	protein	in	july	2012
•	 data	showing	eteplirsen	has	a	clinical	impact	in	
patients	in	october	2012
•	 approval	of	the	first	gene	silencing	drug	kynamro	
in	the	us	in	january	2013
•	 progression	into	the	clinic	of	microrna	mimetic	
mrx34	in	april	2013
silence	is	well	positioned	to	take	advantage	of	this	
return	of	positive	sentiment	as	it	builds	its	clinical	and	
preclinical	pipeline	and	broadens	it	to	include	areas	
outside	of	oncology 
clinical development
our	development	strategy	with	our	sirnas	makes	drug	
development	significantly	cheaper 	quicker	and	more	
efficient	than	traditional	drug	development
•	 broad	applicability	the	ability	to	target	any	gene
•	 specificity	the	ability	to	block	only	selected	genes	
without	interfering	with	others
•	 simplicity	after	identification	of	the	gene	target	
path	to	phase	i	is	relatively	simple	and	well	defined	
this	is	in	contrast	to	traditional	development	where	
there	is	a	risk	of	off‑target	effects	multiple	cycles	
of	optimisation	and	design	before	a	drug	candidate	
is	identified	for	phase	i	study 		additionally 	relative	
to	other	oligonucleotide‑based	technologies	our	
technology	has	the	potential	to	be	used	at	much	lower	
doses
during	2012	we	completed	the	phase	i	clinical	study	
for	atu027	which	we	believe	has	anti‑metastatic	
effects		a	total	of	34	patients	were	treated	and	the	
excellent	safety	and	tolerability	observed	in	the	study	
underpins	our	technology 	atu027	is	believed	to	
block	the	extravasation	and	intravasation	of	cancer	
cells	necessary	for	the	spread	of	cancer 		this	activity	
represents	a	novel	cancer	treatment	paradigm	versus	
many	other	anti‑cancer	drugs	which	target	tumour	
directly 		the	potential	for	atu027	when	used	with	
conventional	anti‑cancer	drugs	is	a	very	exciting	
proposition	for	us
the	next	stage	for	atu027	is	a	phase	ibiia	trial	that	
combines	atu027	with	a	chemotherapy	agent	our	
preclinical	work	on	this	combination	has	demonstrated	
a	reduction	in	total	tumour	burden	including	visible	
metastatic	spread		w e	were	given	ethical	committee	
approval	for	this	phase	ibiia	early	in	2013	for	this	
trial	and	dosed	the	first	patient	in	april	2013
chairman’s statement
silence therapeutics plc  
annual report and financial statements 2012
42
wwwsilencetherapeuticscom
“rnai therapeutics are 
succeeding”
jerry randall 
non‑executive	chairman
silence therapeutics plc  
annual report and financial statements 2012
42
wwwsilencetherapeuticscom
notes to the financial statements continued
year ended 31 december 2012
18  share capital continued
the	options	held	by	directors	at	the	beginning	and	the	end	of	the	year	are	as	follows
	 	 1	january	 	 	 	 31 december 	 	 latest	date 	
director	 	 2012	 exercised	 a warded	 lapsed	 2012 	 p	 of	exercise
a clancy       
–	unapproved	scheme	 	 200000	 —	 —	 200000	 —	 2950p	 —
j a p randall       
–	unapproved	scheme	 	 200000	 —	 —	 —	 	200000 		 2950p	 25	sep	18
–	unapproved	scheme	 	 —	 —	 51842399	 —	 51842399 	 050p	 31	jul	24
t christely       
–	unapproved	scheme	 	 1300000	 —	 —	 1300000	 —	 2300p	 —
–	unapproved	scheme	 	 200000	 —	 —	 200000	 —	 4300p	 —
–	unapproved	scheme	 	 500000	 —	 —	 500000	 —	 12700p	 —
–	unapproved	scheme	 	 750000	 —	 —	 750000	 —	 2000p	 —
–	unapproved	scheme	 	 300000	 —	 —	 300000	 —	 2125p	 —
–	unapproved	scheme	 	 9100000	 —	 —	 9100000	 —	 185p	 —
m herrmann       
–	unapproved	scheme	 	 1700000	 1133333	 —	 566667	 —	 207p	 —
–	approved	scheme	 	 1666666	 —	 —	 1666666	 —	 180p	 —
–	unapproved	scheme	 	 1633334	 —	 —	 1633334	 —	 180p	 —
a mortazavi        
–	unapproved	scheme	 	 —	 —	 86403899	 —	 86403899 	 050p	 31	jul	24
t freeborn        
–	unapproved	scheme	 	 —	 —	 9500000	 —	 9500000 	 050p	 27	jul	24
m khan        
–	unapproved	scheme	 	 —	 —	 4000000	 —	 4000000 	 250p	 31	dec	24
total 	 	 17550000	 1133333 	 151746298 	 16216667	 151946298 	 	 	
none	of	the	options	granted	under	any	of	the	schemes	have	any	future	performance	or	qualifying	conditions	
attached	to	them	other	than	remaining	as	an	employee	the	board	did	not	believe	that	the	inclusion	of	such	
conditions	for	staff	or	directors	was	appropriate	at	the	time	of	granting	these	options
the	market	price	of	the	shares	at	the	year	end	was	44p	2011	21p	during	the	year	the	minimum	and	maximum	
prices	were	07p	and	49p	
at	31	december	2012	the	group	had	net	outstanding	warrants	over	3500000	shares	at	10p	which	have	been	
exercised	since	year	end	and	3330000	at	15p	which	are	exercisable	until	11	july	2015 w e	are	evaluating	further	studies	for	atu027	in	
combination	with	other	chemotherapy	agents	in	a	
variety	of	tumour	types	w e	plan	to	initiate	further	
programmes	and	will	provide	updates	in	due	course	
in	addition	to	this	exciting	clinical	program	we	are	
evaluating	preclinical	opportunities	in	areas	that	begin	
to	take	us	outside	oncology 	showcase	the	strength	of	
our	technology 	as	well	as	take	advantage	of	various	
accelerated	clinical	and	regulatory	pathways	these	
programs	may	make	use	of	our	dbtc	and	dacc	
delivery	systems	targeted	towards	the	liver	and	lung	
endothelium	respectively 
finally 	we	are	pleased	to	report	our	partner	quark	
pharmaceuticals	quark	continues	to	make	progress	
in	the	two	projects	covered	under	our	license	
agreements	pfe‑4523655	in	diabetic	macular	edema	
under	a	licensing	agreement	between	quark	and	
pfizer	and	qpi‑1002	in	delayed	graft	function	post	
kidney	transplantation	under	an	option	agreement	
between	quark	and	novartis		the	results	of	these	
studies	if	they	warrant	continued	development	by	
pfizer	and	novartis	respectively 	could	yield	milestone	
payments	for	us	in	2014	to	2015		if	these	molecules	
are	commercialised	we	would	be	entitled	to	further	
economics	in	the	form	of	royalties		
operations
during	2012	we	were	able	to	significantly	restructure	
the	head	office	costs	in	london	reducing	the	costs	
and	ensuring	more	of	our	cash	resources	are	focussed	
on	developing	the	assets	of	the	company 		at	the	same	
time	we	have	added	the	appropriate	personnel	to	
support	our	progression	into	a	product	company 
the	development	team	in	berlin	headed	by	dr	klaus	
gieise	has	continued	to	make	significant	progress	with	
our	pipeline	and	technology	assets	and	i	am	excited	
about	the	developments	and	their	future	potential	
in	july	2012	t ony	sedgwick	chief	executive	officer	
and	max	herrmann	chief	financial	officer	left	the	
company 	
ali	mortazavi	joined	us	as	director	of	corporate	
strategy 	t im	freeborn	as	finance	director 	and	i	
moved	from	non‑executive	to	executive	chairman		ali	
brings	a	wealth	of	experience	in	the	capital	markets	as	
well	as	small	cap	companies	and	has	been	instrumental	
in	the	development	of	silence	since	he	has	joined	t im	
has	a	wealth	of	experience	in	the	financial	markets	
and	as	an	analyst	and	qualified	accountant	he	has	
already	undertaken	significant	streaming	of	the	finance	
function	
ali	is	now	moving	to	the	position	of	chief	executive	
officer 	and	i	am	sure	he	will	continue	to	shape	and	
develop	silence	as	he	has	done	already	in	his	short	time	
with	us	
capital raising
during	2012	we	have	continued	to	receive	strong	
support	from	key	shareholders	and	undertook	two	
capital	raisings	£57	million	before	expenses	in	july 	
and	£50	million	before	expenses	in	november 	in	
addition	as	announced	in	april	2013	a	further	£19	
million	before	expenses	was	raised		these	capital	
raisings	have	demonstrated	the	continued	strong	
support	of	our	existing	key	shareholders	and	also	
now	some	significant	new	investors	on	behalf	of	
the	board	of	the	company	i	would	like	to	thank	our	
shareholders	for	their	continued	support	and	input	to	
the	development	of	silence	in	2012	and	into	the	future	
as	a	board	we	are	committed	to	maximising	the	value	
of	the	company	and	hence	the	value	to	shareholders
looking forward
thanks	to	the	work	in	the	last	12	months	by	the	whole	
team	and	key	shareholders	of	the	company 	silence	
is	progressing	in	its	transformation	into	a	product	
company	using	our	expertise	in	chemical	modifications	
of	sirna	and	delivery	technologies		at	the	same	time	
the	field	of	rna‑based	therapeutics	continues	to	see	
positive	developments	which	in	our	view 	validates	the	
approach				
as	a	board	we	are	incredibly	excited	about	2013	
and	beyond	as	we	look	to	translate	our	preclinical	
excellence	today	into	clinical	results	and	products	
w e	look	forward	very	positively	to	2013	and	the	
development	of	our	pipeline	and	business	and	to	
translating	that	into	true	growth	in	shareholder	value
jerry randall 
non‑executive	chairman
•	may	2013
silence therapeutics plc  
annual report and financial statements 2012
43
wwwsilencetherapeuticscom
business review corporate governance financial statements
get 
signature
silence therapeutics plc  
annual report and financial statements 2012
43
wwwsilencetherapeuticscom
business review corporate governance financial statements
19  equity‑settled share‑based payments 
the	company	has	two	share	option	schemes	open	to	all	employees	of	the	group	options	are	exercisable	at	a	price	
equal	to	the	market	price	of	the	company’ s	shares	on	the	date	of	grant	
in	the	inland	revenue	approved	scheme	the	vesting	period	is	three	years	and	should	the	options	remain	
unexercised	they	lapse	after	ten	years	from	the	date	of	grant	the	options	also	lapse	after	six	months	following	the	
employee	leaving	the	group	
under	the	unapproved	share	option	scheme	the	options	vest	at	dates	set	by	the	board	at	the	time	the	option	is	
granted	the	options	also	lapse	after	six	months	following	the	employee	leaving	the	group	or	twelve	months	in	
the	case	of	options	granted	in	2012
	 2012 		 2011	
	 			
	 			weighted  w eighted 
  		 average 	 	 average 	
	 			 exercise price 	 	 exercise	price 	
	 		 number 	 p 	 number	 p
options	 				
outstanding	at	the	beginning	of	the	year	 	 	41762447 1057 	 24674843	 2840
granted	during	the	year	 	 151746298 055 29725000	 187
lapsed	during	the	year	 	 	28029255 1970 	 12637396	 2487
exercised	during	the	year	 	 	1350000 207 		 —	 —
outstanding	at	the	year	end	 	 	164129490 164 	 41762447	 1057
exercisable	at	the	year	end	 	 	22799859 834 		 11853069	 3118
warrants	 				
outstanding	at	the	beginning	of	the	year	 	 462963 2700	—	—
granted	during	the	year	 	 	10830000 115 	 462963	 2700
lapsed	during	the	year	 	 462963 2700	—	—
exercised	during	the	year	 	 	4000000 100	—	—
outstanding	at	the	year	end	 	 	6830000 124 	 462963		 2700	
exercisable	at	the	year	end	 	 	6866000 124 	 462963		 2700	
the	options	outstanding	at	the	year	end	have	a	weighted	average	remaining	contractual	life	of	112	years	
2011	87	years
the	group	granted	151746298	options	during	the	year 	the	fair	value	of	options	granted	were	calculated	using	a	
binomial	model	and	inputs	into	the	model	were	as	follows
	 				 2012 	 2011
fair	value	at	grant		 	 	 	 139p 	 141p
w eighted	average	share	price	 	 	 	 	 148p 	 192p
w eighted	average	exercise	price	 	 	 	 	 055p 	 187p
expected	volatility		 	 	 	 115 	 100
risk‑free	rate	 	 	 	 	 161‑187 	 149‑153
expected	dividend	yield		 	 	 	 	 nil 	 nil
expected	volatility	was	determined	using	as	a	base	the	share	price	movements	recorded	over	the	previous	four	
years	and	taking	into	account	any	specific	factors	impacting	during	that	period
the	expected	life	used	in	the	model	has	been	adjusted	based	on	management’ s	best	estimate	for	the	effects	of	
non‑transferability 	exercise	restrictions	and	behavioural	considerations	
the	group	recognised	total	charges	of	£07m	2011	£01m	related	to	equity‑settled	share‑based	payment	
transactions	during	the	year 	 we are transforming silence from a technology company to a product 
company and developing a clinical capability that will match and exploit 
our expertise in preclinical development
2012	has	been	a	year	of	significant	positive	change	
and	development	for	silence		w ith	the	support	of	key	
long	term	supportive	shareholders	we	have	been	able	
to	restructure	the	company	and	provide	a	significant	
runway	of	cash	to	enable	the	company	to	both	progress	
its	atu027	clinical	asset	and	to	broaden	its	preclinical	
pipeline	the	transformation	of	silence	from	a	
technology	company	to	a	product	company	continues	
and	we	are	evaluating	opportunities	to	match	and	
exploit	our	expertise	in	preclinical	development
in	the	last	18	months	we	have	seen	clinical	progress	
for	rna‑based	drugs	in	development	including
•	 completion	of	our	atu027	phase	i	trial	showing	
safety	and	tolerability	in	man
•	 data	showing	aln‑ttr02	can	robustly	knockdown	
relevant	serum	protein	in	july	2012
•	 data	showing	eteplirsen	has	a	clinical	impact	in	
patients	in	october	2012
•	 approval	of	the	first	gene	silencing	drug	kynamro	
in	the	us	in	january	2013
•	 progression	into	the	clinic	of	microrna	mimetic	
mrx34	in	april	2013
silence	is	well	positioned	to	take	advantage	of	this	
return	of	positive	sentiment	as	it	builds	its	clinical	and	
preclinical	pipeline	and	broadens	it	to	include	areas	
outside	of	oncology 
clinical development
our	development	strategy	with	our	sirnas	makes	drug	
development	significantly	cheaper 	quicker	and	more	
efficient	than	traditional	drug	development
•	 broad	applicability	the	ability	to	target	any	gene
•	 specificity	the	ability	to	block	only	selected	genes	
without	interfering	with	others
•	 simplicity	after	identification	of	the	gene	target	
path	to	phase	i	is	relatively	simple	and	well	defined	
this	is	in	contrast	to	traditional	development	where	
there	is	a	risk	of	off‑target	effects	multiple	cycles	
of	optimisation	and	design	before	a	drug	candidate	
is	identified	for	phase	i	study 		additionally 	relative	
to	other	oligonucleotide‑based	technologies	our	
technology	has	the	potential	to	be	used	at	much	lower	
doses
during	2012	we	completed	the	phase	i	clinical	study	
for	atu027	which	we	believe	has	anti‑metastatic	
effects		a	total	of	34	patients	were	treated	and	the	
excellent	safety	and	tolerability	observed	in	the	study	
underpins	our	technology 	atu027	is	believed	to	
block	the	extravasation	and	intravasation	of	cancer	
cells	necessary	for	the	spread	of	cancer 		this	activity	
represents	a	novel	cancer	treatment	paradigm	versus	
many	other	anti‑cancer	drugs	which	target	tumour	
directly 		the	potential	for	atu027	when	used	with	
conventional	anti‑cancer	drugs	is	a	very	exciting	
proposition	for	us
the	next	stage	for	atu027	is	a	phase	ibiia	trial	that	
combines	atu027	with	a	chemotherapy	agent	our	
preclinical	work	on	this	combination	has	demonstrated	
a	reduction	in	total	tumour	burden	including	visible	
metastatic	spread		w e	were	given	ethical	committee	
approval	for	this	phase	ibiia	early	in	2013	for	this	
trial	and	dosed	the	first	patient	in	april	2013
chairman’s statement
silence therapeutics plc  
annual report and financial statements 2012
44
wwwsilencetherapeuticscom
“rnai therapeutics are 
succeeding”
jerry randall 
non‑executive	chairman
silence therapeutics plc  
annual report and financial statements 2012
44
wwwsilencetherapeuticscom
notes to the financial statements continued
year ended 31 december 2012
20 capital reserves           
	 share		 	 share‑based	 		 capital 	
	 premium	 merger	 payment	 w arrant	 redemption	 	
	 account		 reserve	 reserve		 reserve	 reserve		 t otal 	
group	 £000s	 £000s	 £000s	 £000s	 £000s	 £000s
at	1	january	2011	 	54189		 	22248		 	3832		 —		 	—	 	80269	
on	shares	issued	in	the	year		 	2974		 —	 —	 —	 —	 	2974	
–	less	cost	of	shares	issued	 427		 —	 —	 —	 —	 427	
on 	 options 	 in 	 issue 	 during 	 the 	 year	 —	 —	 	120		 —	 —	 120	
on	vested	options	lapsed	 	
during	the	year	 —	 —	 1796		 —	 —	 1796	
on	issued	warrants	 	
during	the	year		 —	 —	 —	 	1		 —	 	1	
movement	in	the	year		 	2547		 —	 1676		 1		 —		 	872	
at	31	december	2011	 	56736		 	22248		 	2156		 1	 —		 	81141	
on	shares	issued	in	the	year		 	9219		 —	 —	 —	 —	 	9219
–	less	cost	of	shares	issued		 265		 —	 —	 —	 —	 265
on	transfer	to	capital	 	
redemption	reserve		 —	 —	 —	 —	 	5194		 	5194	
on 	 options 	 in 	 issue 	 during 	 the 	 year	 —	 —	 	656		 —	 —	 	656	
on	vested	options	lapsed	 	
during	the	year	 —	 —	 1128	 —	 —	 1128
on	options	exercised	 	
during	the	year	 24	 —	 24		 —	 —	 —
on	issued	warrants	during	the	year		 —		 —	 —	 	32		 —	 	32
movement	in	the	year		 	8978		 	—	 496		 	32		 	5194		 	13708
at 31 december 2012  65714   22248   1660   33   5194   94849 w e	are	evaluating	further	studies	for	atu027	in	
combination	with	other	chemotherapy	agents	in	a	
variety	of	tumour	types	w e	plan	to	initiate	further	
programmes	and	will	provide	updates	in	due	course	
in	addition	to	this	exciting	clinical	program	we	are	
evaluating	preclinical	opportunities	in	areas	that	begin	
to	take	us	outside	oncology 	showcase	the	strength	of	
our	technology 	as	well	as	take	advantage	of	various	
accelerated	clinical	and	regulatory	pathways	these	
programs	may	make	use	of	our	dbtc	and	dacc	
delivery	systems	targeted	towards	the	liver	and	lung	
endothelium	respectively 
finally 	we	are	pleased	to	report	our	partner	quark	
pharmaceuticals	quark	continues	to	make	progress	
in	the	two	projects	covered	under	our	license	
agreements	pfe‑4523655	in	diabetic	macular	edema	
under	a	licensing	agreement	between	quark	and	
pfizer	and	qpi‑1002	in	delayed	graft	function	post	
kidney	transplantation	under	an	option	agreement	
between	quark	and	novartis		the	results	of	these	
studies	if	they	warrant	continued	development	by	
pfizer	and	novartis	respectively 	could	yield	milestone	
payments	for	us	in	2014	to	2015		if	these	molecules	
are	commercialised	we	would	be	entitled	to	further	
economics	in	the	form	of	royalties		
operations
during	2012	we	were	able	to	significantly	restructure	
the	head	office	costs	in	london	reducing	the	costs	
and	ensuring	more	of	our	cash	resources	are	focussed	
on	developing	the	assets	of	the	company 		at	the	same	
time	we	have	added	the	appropriate	personnel	to	
support	our	progression	into	a	product	company 
the	development	team	in	berlin	headed	by	dr	klaus	
gieise	has	continued	to	make	significant	progress	with	
our	pipeline	and	technology	assets	and	i	am	excited	
about	the	developments	and	their	future	potential	
in	july	2012	t ony	sedgwick	chief	executive	officer	
and	max	herrmann	chief	financial	officer	left	the	
company 	
ali	mortazavi	joined	us	as	director	of	corporate	
strategy 	t im	freeborn	as	finance	director 	and	i	
moved	from	non‑executive	to	executive	chairman		ali	
brings	a	wealth	of	experience	in	the	capital	markets	as	
well	as	small	cap	companies	and	has	been	instrumental	
in	the	development	of	silence	since	he	has	joined	t im	
has	a	wealth	of	experience	in	the	financial	markets	
and	as	an	analyst	and	qualified	accountant	he	has	
already	undertaken	significant	streaming	of	the	finance	
function	
ali	is	now	moving	to	the	position	of	chief	executive	
officer 	and	i	am	sure	he	will	continue	to	shape	and	
develop	silence	as	he	has	done	already	in	his	short	time	
with	us	
capital raising
during	2012	we	have	continued	to	receive	strong	
support	from	key	shareholders	and	undertook	two	
capital	raisings	£57	million	before	expenses	in	july 	
and	£50	million	before	expenses	in	november 	in	
addition	as	announced	in	april	2013	a	further	£19	
million	before	expenses	was	raised		these	capital	
raisings	have	demonstrated	the	continued	strong	
support	of	our	existing	key	shareholders	and	also	
now	some	significant	new	investors	on	behalf	of	
the	board	of	the	company	i	would	like	to	thank	our	
shareholders	for	their	continued	support	and	input	to	
the	development	of	silence	in	2012	and	into	the	future	
as	a	board	we	are	committed	to	maximising	the	value	
of	the	company	and	hence	the	value	to	shareholders
looking forward
thanks	to	the	work	in	the	last	12	months	by	the	whole	
team	and	key	shareholders	of	the	company 	silence	
is	progressing	in	its	transformation	into	a	product	
company	using	our	expertise	in	chemical	modifications	
of	sirna	and	delivery	technologies		at	the	same	time	
the	field	of	rna‑based	therapeutics	continues	to	see	
positive	developments	which	in	our	view 	validates	the	
approach				
as	a	board	we	are	incredibly	excited	about	2013	
and	beyond	as	we	look	to	translate	our	preclinical	
excellence	today	into	clinical	results	and	products	
w e	look	forward	very	positively	to	2013	and	the	
development	of	our	pipeline	and	business	and	to	
translating	that	into	true	growth	in	shareholder	value
jerry randall 
non‑executive	chairman
•	may	2013
silence therapeutics plc  
annual report and financial statements 2012
45
wwwsilencetherapeuticscom
business review corporate governance financial statements
get 
signature
silence therapeutics plc  
annual report and financial statements 2012
45
wwwsilencetherapeuticscom
business review corporate governance financial statements
	 share		 	 share‑based	 		 capital 	
	 premium	 merger	 payment	 w arrant	 redemption	 	
	 account		 reserve	 reserve		 reserve	 reserve		 t otal 	
company	 £000s	 £000s	 £000s	 £000s	 £000s	 £000s
at	1	january	2011	 	54189		 	22064		 	3832		 —		 	—	 	80085	
on	shares	issued	in	the	year		 	2974		 —	 —	 —	 —	 	2974	
–	less	cost	of	shares	issued	 427		 —	 —	 —	 —	 427	
on 	 options 	 in 	 issue 	 during 	 the 	 year	 —	 —	 	120		 —	 —	 120	
on	vested	options	lapsed	 	
during	the	year	 —	 —	 1796		 —	 —	 1796	
on	issued	warrants	 	
during	the	year		 —	 —	 —	 	1		 —	 	1	
movement	in	the	year		 	2547		 —	 1676		 1		 —		 	872	
at	31	december	2011	 	56736		 	22064		 	2156		 1	 —		 	80957	
on	shares	issued	in	the	year		 	9219		 —	 —	 —	 —	 	9219
–	less	cost	of	shares	issued		 265		 —	 —	 —	 —	 265
on	transfer	to	capital	 	
redemption	reserve		 —	 —	 —	 —	 	5194		 	5194	
on 	 options 	 in 	 issue 	 during 	 the 	 year	 —	 —	 	656		 —	 —	 	656	
on	vested	options	lapsed	 	
during	the	year	 —	 —	 1128	 —	 —	 1128
on	options	exercised	 	
during	the	year	 24	 —	 24		 —	 —	 —
on	issued	warrants	during	the	year		 —		 —	 —	 	32		 —	 	32
movement	in	the	year		 	8978		 	—	 496		 	32		 	5194		 	13708
at 31 december 2012  65714   22064   1660   33   5194   94665
the	capital	redemption	reserve	was	created	last	year	following	the	reduction	of	nominal	share	capital	to	01p	per	
share	it	is	required	under	section	733	of	the	companies	act	2006	held	to	maintain	the	capital	of	the	company	
when	shares	are	bought	back	and	subsequently	cancelled	without	court	approval	
due	to	the	size	of	the	retained	loss	the	company	has	no	distributable	reserves
the	share	premium	account	reflects	the	premium	to	nominal	value	paid	on	issuing	shares	less	costs	related	to	
the	issue
the	merger	reserve	was	created	on	issuance	of	share	relating	to	the	acquisition	of	silence	therapeutics	ag
the	share‑based	payments	reserve	reflects	the	cost	to	issue	share‑based	compensation	primarily	employee	
stock	options
21  capital commitments and contingent liabilities
there	were	no	capital	commitments	or	contingent	liabilities	at	31	december	2012	2011	£nil
22  commitments under operating leases
at	31	december	the	group	and	company	had	a	three	month	commitment	on	its	serviced	office	in	mayfair 	london	
equal	to	£001m	2011	£001m	
no	amounts	are	payable	between	one	to	five	or	greater	than	five	years we are transforming silence from a technology company to a product 
company and developing a clinical capability that will match and exploit 
our expertise in preclinical development
2012	has	been	a	year	of	significant	positive	change	
and	development	for	silence		w ith	the	support	of	key	
long	term	supportive	shareholders	we	have	been	able	
to	restructure	the	company	and	provide	a	significant	
runway	of	cash	to	enable	the	company	to	both	progress	
its	atu027	clinical	asset	and	to	broaden	its	preclinical	
pipeline	the	transformation	of	silence	from	a	
technology	company	to	a	product	company	continues	
and	we	are	evaluating	opportunities	to	match	and	
exploit	our	expertise	in	preclinical	development
in	the	last	18	months	we	have	seen	clinical	progress	
for	rna‑based	drugs	in	development	including
•	 completion	of	our	atu027	phase	i	trial	showing	
safety	and	tolerability	in	man
•	 data	showing	aln‑ttr02	can	robustly	knockdown	
relevant	serum	protein	in	july	2012
•	 data	showing	eteplirsen	has	a	clinical	impact	in	
patients	in	october	2012
•	 approval	of	the	first	gene	silencing	drug	kynamro	
in	the	us	in	january	2013
•	 progression	into	the	clinic	of	microrna	mimetic	
mrx34	in	april	2013
silence	is	well	positioned	to	take	advantage	of	this	
return	of	positive	sentiment	as	it	builds	its	clinical	and	
preclinical	pipeline	and	broadens	it	to	include	areas	
outside	of	oncology 
clinical development
our	development	strategy	with	our	sirnas	makes	drug	
development	significantly	cheaper 	quicker	and	more	
efficient	than	traditional	drug	development
•	 broad	applicability	the	ability	to	target	any	gene
•	 specificity	the	ability	to	block	only	selected	genes	
without	interfering	with	others
•	 simplicity	after	identification	of	the	gene	target	
path	to	phase	i	is	relatively	simple	and	well	defined	
this	is	in	contrast	to	traditional	development	where	
there	is	a	risk	of	off‑target	effects	multiple	cycles	
of	optimisation	and	design	before	a	drug	candidate	
is	identified	for	phase	i	study 		additionally 	relative	
to	other	oligonucleotide‑based	technologies	our	
technology	has	the	potential	to	be	used	at	much	lower	
doses
during	2012	we	completed	the	phase	i	clinical	study	
for	atu027	which	we	believe	has	anti‑metastatic	
effects		a	total	of	34	patients	were	treated	and	the	
excellent	safety	and	tolerability	observed	in	the	study	
underpins	our	technology 	atu027	is	believed	to	
block	the	extravasation	and	intravasation	of	cancer	
cells	necessary	for	the	spread	of	cancer 		this	activity	
represents	a	novel	cancer	treatment	paradigm	versus	
many	other	anti‑cancer	drugs	which	target	tumour	
directly 		the	potential	for	atu027	when	used	with	
conventional	anti‑cancer	drugs	is	a	very	exciting	
proposition	for	us
the	next	stage	for	atu027	is	a	phase	ibiia	trial	that	
combines	atu027	with	a	chemotherapy	agent	our	
preclinical	work	on	this	combination	has	demonstrated	
a	reduction	in	total	tumour	burden	including	visible	
metastatic	spread		w e	were	given	ethical	committee	
approval	for	this	phase	ibiia	early	in	2013	for	this	
trial	and	dosed	the	first	patient	in	april	2013
chairman’s statement
silence therapeutics plc  
annual report and financial statements 2012
46
wwwsilencetherapeuticscom
“rnai therapeutics are 
succeeding”
jerry randall 
non‑executive	chairman
silence therapeutics plc  
annual report and financial statements 2012
46
wwwsilencetherapeuticscom
notes to the financial statements continued
year ended 31 december 2012
23  financial instruments and risk management
the	group’ s	financial	instruments	comprise	primarily	cash	and	various	items	such	as	trade	debtors	and	trade	
creditors	which	arise	directly	from	its	operations	the	main	purpose	of	these	financial	instruments	is	to	provide	
working	capital	for	the	group’ s	operations	the	group	does	not	utilise	complex	financial	instruments	or	hedging	
mechanisms	in	respect	of	its	non‑sterling	operations	the	group	assesses	counterparty	risk	on	a	regular	basis	
board	approval	is	required	for	adoption	of	any	new	financial	instrument	or	counterparty 	the	primary	focus	of	the	
treasury	function	is	preservation	of	capital	
financial assets by category
the	categories	of	financial	assets	as	defined	by	ias	39	financial	instruments	recognition	and	measurement	
included	in	the	balance	sheet	and	the	heading	in	which	they	are	included	are	as	follows
	 2012 		 2011	
	 			
		 group company 	 group	 company 	
	 		 £000s 	 £000s 	 £000s	 £000s
current assets    
t rade	and	other	receivables	  148 39 	 64	 33
cash	and	cash	equivalents	 	 	 8909 8463 	 3688	 3323
categorised	as	loans	and	receivables	 	 	 9057 8502 	 3752	 3356
all	amounts	are	short	term	and	none	are	past	due	dates	at	the	reporting	date
	 2012 		 2011	
	 			
		 group company 	 group	 company 	
	 		 £000s 	 £000s 	 £000s	 £000s
current liabilities  
t rade	and	other	payables		 	 959 153 	 1260	 182
all	amounts	are	short	term	and	payable	in	zero	to	three	months	 	 	
the	maximum	exposure	to	credit	risk	at	the	reporting	date	by	class	of	financial	asset	was		
	 2012 		 2011	restated	
	 			
	 		 group 	 company 	 group	 company 	
	 		 £000s 	 £000s 	 £000s	 £000s
loans	and	receivables	 	 72 20 	 65	 33
capital management
the	group	considers	its	capital	to	be	equal	to	the	sum	of	its	total	equity 	the	group	monitors	its	capital	using	a	
number	of	key	performance	indicators	including	cash	flow	projections	working	capital	ratios	the	cost	to	achieve	
preclinical	and	clinical	milestones	and	potential	revenue	from	existing	partnerships	and	ongoing	licensing	
activities	the	group’ s	objective	when	managing	its	capital	is	to	ensure	it	obtains	sufficient	funding	for	continuing	
as	a	going	concern	the	group	funds	its	capital	requirements	through	the	issue	of	new	shares	to	investors	
milestone	and	research	support	payments	received	from	existing	licensing	partners	and	potential	new	licensees	
interest rate risk
the	nature	of	the	group’ s	activities	and	the	basis	of	funding	are	such	that	the	group	has	significant	liquid	
resources	the	group	uses	these	resources	to	meet	the	cost	of	future	research	and	development	activities	
consequently 	it	seeks	to	minimise	risk	in	the	holding	of	its	bank	deposits	while	maintaining	a	reasonable	rate	
of	interest	the	group	is	not	financially	dependent	on	the	income	earned	on	these	resources	and	therefore	the	
risk	of	interest	rate	fluctuations	is	not	significant	to	the	business	nonetheless	the	directors	take	steps	to	secure	
rates	of	interest	which	generate	a	return	for	the	group	by	depositing	sums	which	are	not	required	to	meet	the	
immediate	needs	of	the	group	in	interest‑bearing	deposits	other	balances	are	held	in	interest‑bearing	instant	
access	accounts	all	deposits	are	placed	with	main	clearing	banks	to	restrict	both	credit	risk	and	liquidity	risk	
the	deposits	are	placed	for	the	short	term	between	one	and	three	months	to	provide	flexibility	and	access	to	the	
funds	and	to	avoid	locking	into	potentially	unattractive	interest	rates	
liquidity risk
the	group’ s	liquid	resources	are	invested	having	regard	to	the	timing	of	payments	to	be	made	in	the	ordinary	
course	of	the	group’ s	activities	all	financial	liabilities	are	payable	in	the	short	term	between	zero	and	three	
months	and	the	group	maintains	adequate	bank	balances	in	either	instant	access	or	short‑term	deposits	to	meet	
those	liabilities	as	they	fall	due w e	are	evaluating	further	studies	for	atu027	in	
combination	with	other	chemotherapy	agents	in	a	
variety	of	tumour	types	w e	plan	to	initiate	further	
programmes	and	will	provide	updates	in	due	course	
in	addition	to	this	exciting	clinical	program	we	are	
evaluating	preclinical	opportunities	in	areas	that	begin	
to	take	us	outside	oncology 	showcase	the	strength	of	
our	technology 	as	well	as	take	advantage	of	various	
accelerated	clinical	and	regulatory	pathways	these	
programs	may	make	use	of	our	dbtc	and	dacc	
delivery	systems	targeted	towards	the	liver	and	lung	
endothelium	respectively 
finally 	we	are	pleased	to	report	our	partner	quark	
pharmaceuticals	quark	continues	to	make	progress	
in	the	two	projects	covered	under	our	license	
agreements	pfe‑4523655	in	diabetic	macular	edema	
under	a	licensing	agreement	between	quark	and	
pfizer	and	qpi‑1002	in	delayed	graft	function	post	
kidney	transplantation	under	an	option	agreement	
between	quark	and	novartis		the	results	of	these	
studies	if	they	warrant	continued	development	by	
pfizer	and	novartis	respectively 	could	yield	milestone	
payments	for	us	in	2014	to	2015		if	these	molecules	
are	commercialised	we	would	be	entitled	to	further	
economics	in	the	form	of	royalties		
operations
during	2012	we	were	able	to	significantly	restructure	
the	head	office	costs	in	london	reducing	the	costs	
and	ensuring	more	of	our	cash	resources	are	focussed	
on	developing	the	assets	of	the	company 		at	the	same	
time	we	have	added	the	appropriate	personnel	to	
support	our	progression	into	a	product	company 
the	development	team	in	berlin	headed	by	dr	klaus	
gieise	has	continued	to	make	significant	progress	with	
our	pipeline	and	technology	assets	and	i	am	excited	
about	the	developments	and	their	future	potential	
in	july	2012	t ony	sedgwick	chief	executive	officer	
and	max	herrmann	chief	financial	officer	left	the	
company 	
ali	mortazavi	joined	us	as	director	of	corporate	
strategy 	t im	freeborn	as	finance	director 	and	i	
moved	from	non‑executive	to	executive	chairman		ali	
brings	a	wealth	of	experience	in	the	capital	markets	as	
well	as	small	cap	companies	and	has	been	instrumental	
in	the	development	of	silence	since	he	has	joined	t im	
has	a	wealth	of	experience	in	the	financial	markets	
and	as	an	analyst	and	qualified	accountant	he	has	
already	undertaken	significant	streaming	of	the	finance	
function	
ali	is	now	moving	to	the	position	of	chief	executive	
officer 	and	i	am	sure	he	will	continue	to	shape	and	
develop	silence	as	he	has	done	already	in	his	short	time	
with	us	
capital raising
during	2012	we	have	continued	to	receive	strong	
support	from	key	shareholders	and	undertook	two	
capital	raisings	£57	million	before	expenses	in	july 	
and	£50	million	before	expenses	in	november 	in	
addition	as	announced	in	april	2013	a	further	£19	
million	before	expenses	was	raised		these	capital	
raisings	have	demonstrated	the	continued	strong	
support	of	our	existing	key	shareholders	and	also	
now	some	significant	new	investors	on	behalf	of	
the	board	of	the	company	i	would	like	to	thank	our	
shareholders	for	their	continued	support	and	input	to	
the	development	of	silence	in	2012	and	into	the	future	
as	a	board	we	are	committed	to	maximising	the	value	
of	the	company	and	hence	the	value	to	shareholders
looking forward
thanks	to	the	work	in	the	last	12	months	by	the	whole	
team	and	key	shareholders	of	the	company 	silence	
is	progressing	in	its	transformation	into	a	product	
company	using	our	expertise	in	chemical	modifications	
of	sirna	and	delivery	technologies		at	the	same	time	
the	field	of	rna‑based	therapeutics	continues	to	see	
positive	developments	which	in	our	view 	validates	the	
approach				
as	a	board	we	are	incredibly	excited	about	2013	
and	beyond	as	we	look	to	translate	our	preclinical	
excellence	today	into	clinical	results	and	products	
w e	look	forward	very	positively	to	2013	and	the	
development	of	our	pipeline	and	business	and	to	
translating	that	into	true	growth	in	shareholder	value
jerry randall 
non‑executive	chairman
•	may	2013
silence therapeutics plc  
annual report and financial statements 2012
47
wwwsilencetherapeuticscom
business review corporate governance financial statements
get 
signature
silence therapeutics plc  
annual report and financial statements 2012
47
wwwsilencetherapeuticscom
business review corporate governance financial statements
currency risk
the	group	operates	in	a	global	market	with	income	possibly	arising	in	a	number	of	different	currencies	
principally	in	sterling	or	euros	the	majority	of	the	operating	costs	are	incurred	in	euros	with	the	rest	
predominantly	in	sterling	the	group	does	not	hedge	potential	future	income	since	the	existence	quantum	and	
timing	of	such	income	cannot	be	accurately	predicted
financial	assets	and	liabilities	denominated	in	euros	and	translated	into	sterling	at	the	closing	rate	were
	 2012 		 2011	
	 			
	 		 group 	 company 	 group	 company 	
	 		 £000s 	 £000s 	 £000s	 £000s
financial	assets	 	 	 554 — 	 403	 —
financial	liabilities	 	 	 373 — 	 308	 —
net	financial	assets	 	 181 — 	 95	 —
				
financial	assets	and	liabilities	denominated	in	us	dollars	and	translated	into	sterling	at	the	closing	rate	were
	 2012 		 2011	
	 			
	 		 group 	 company 	 group	 company 	
	 		 £000s 	 £000s 	 £000s	 £000s
financial	assets	 	 4 — 	 298	 —
financial	liabilities	 	 	 136 — 	 769	 —
net	financial	assets	 	 	 132 — 	 471	 —
the	following	table	illustrates	the	sensitivity	of	the	net	result	for	the	year	and	the	reported	financial	assets	of	the	
group	in	regards	to	the	exchange	rate	for	sterlingeuro
during	the	year	sterling	appreciated	by	5	versus	the	euro	the	table	shows	the	impact	of	a	further	strengthening	
or	fall	of	sterling	against	the	euro	by	20
     if sterling if sterling 
    as reported  rose 20 fell 20 
2012    £ £ £
group	result	for	the	year	 	 	 	 26284 25579 26989
euro	denominated	net	financial	assets	 	 	 	 181 151 217
t otal	equity	at	31	december	2012	 	 	 	 16116 14750 18189
			
	 	 	 	 	 if	sterling	 if	sterling 	
	 	 	 	 as	reported	 	rose	20	 fell	20 	
2011		 	 	 	 £	 £	 £
group	result	for	the	year	 	 	 	 5737	 5095	 6698
euro	denominated	net	financial	assets	 	 	 	 95	 79	 119
t otal	equity	at	31	december	2011	 	 	 	 32177	 32017	 32418
the	group	no	longer	has	a	material	operating	exposure	to	the	us	dollar 	 we are transforming silence from a technology company to a product 
company and developing a clinical capability that will match and exploit 
our expertise in preclinical development
2012	has	been	a	year	of	significant	positive	change	
and	development	for	silence		w ith	the	support	of	key	
long	term	supportive	shareholders	we	have	been	able	
to	restructure	the	company	and	provide	a	significant	
runway	of	cash	to	enable	the	company	to	both	progress	
its	atu027	clinical	asset	and	to	broaden	its	preclinical	
pipeline	the	transformation	of	silence	from	a	
technology	company	to	a	product	company	continues	
and	we	are	evaluating	opportunities	to	match	and	
exploit	our	expertise	in	preclinical	development
in	the	last	18	months	we	have	seen	clinical	progress	
for	rna‑based	drugs	in	development	including
•	 completion	of	our	atu027	phase	i	trial	showing	
safety	and	tolerability	in	man
•	 data	showing	aln‑ttr02	can	robustly	knockdown	
relevant	serum	protein	in	july	2012
•	 data	showing	eteplirsen	has	a	clinical	impact	in	
patients	in	october	2012
•	 approval	of	the	first	gene	silencing	drug	kynamro	
in	the	us	in	january	2013
•	 progression	into	the	clinic	of	microrna	mimetic	
mrx34	in	april	2013
silence	is	well	positioned	to	take	advantage	of	this	
return	of	positive	sentiment	as	it	builds	its	clinical	and	
preclinical	pipeline	and	broadens	it	to	include	areas	
outside	of	oncology 
clinical development
our	development	strategy	with	our	sirnas	makes	drug	
development	significantly	cheaper 	quicker	and	more	
efficient	than	traditional	drug	development
•	 broad	applicability	the	ability	to	target	any	gene
•	 specificity	the	ability	to	block	only	selected	genes	
without	interfering	with	others
•	 simplicity	after	identification	of	the	gene	target	
path	to	phase	i	is	relatively	simple	and	well	defined	
this	is	in	contrast	to	traditional	development	where	
there	is	a	risk	of	off‑target	effects	multiple	cycles	
of	optimisation	and	design	before	a	drug	candidate	
is	identified	for	phase	i	study 		additionally 	relative	
to	other	oligonucleotide‑based	technologies	our	
technology	has	the	potential	to	be	used	at	much	lower	
doses
during	2012	we	completed	the	phase	i	clinical	study	
for	atu027	which	we	believe	has	anti‑metastatic	
effects		a	total	of	34	patients	were	treated	and	the	
excellent	safety	and	tolerability	observed	in	the	study	
underpins	our	technology 	atu027	is	believed	to	
block	the	extravasation	and	intravasation	of	cancer	
cells	necessary	for	the	spread	of	cancer 		this	activity	
represents	a	novel	cancer	treatment	paradigm	versus	
many	other	anti‑cancer	drugs	which	target	tumour	
directly 		the	potential	for	atu027	when	used	with	
conventional	anti‑cancer	drugs	is	a	very	exciting	
proposition	for	us
the	next	stage	for	atu027	is	a	phase	ibiia	trial	that	
combines	atu027	with	a	chemotherapy	agent	our	
preclinical	work	on	this	combination	has	demonstrated	
a	reduction	in	total	tumour	burden	including	visible	
metastatic	spread		w e	were	given	ethical	committee	
approval	for	this	phase	ibiia	early	in	2013	for	this	
trial	and	dosed	the	first	patient	in	april	2013
chairman’s statement
silence therapeutics plc  
annual report and financial statements 2012
48
wwwsilencetherapeuticscom
“rnai therapeutics are 
succeeding”
jerry randall 
non‑executive	chairman
silence therapeutics plc  
annual report and financial statements 2012
48
wwwsilencetherapeuticscom
notes to the financial statements continued
year ended 31 december 2012
24  related party transactions
during	the	year	the	company	charged	a	fee	to	its	subsidiary	company	silence	therapeutics	ag	amounting	to	
£02m	2011	£02m	
during	the	year	the	company	paid	£01m	to	fast	w eb	media	for	supporting	the	website	fast	w eb	media	is	
controlled	by	robert	keith	a	major	shareholder 	
the	company	issued	333m	warrants	exercisable	at	15p	to	darwin	strategic	limited	“darwin”	in	consideration	
for	an	equity	funding	facility 	darwin	is	37	owned	by	ali	mortazavi	chief	executive	of	silence	therapeutics	plc	
in	the	summer	2012	refinancing	robert	keith	a	major	shareholder 	bought	a	£10m	loan	note	at	nil	yield	
convertible	into	shares	at	05p	from	the	company 	the	loan	note	was	converted	in	december	2012
25  subsequent events
during	april	2013	silence	therapeutics	raised	£187m	after	expenses	with	an	issue	of	4756m	shares	at	4p	
per	share
in	addition	during	april	2013	the	company	consolidated	its	shares	from	50	into	1


Summary:
 silence therapeutics plc  
annual report and financial statements 2012
04
wwwsilencetherapeuticscom
“we will use our technology to 
change patient lives for the 
better and in the process 
build shareholder value”
ali mortazavi
chief	executive
new	technologies	enable	the	development	of	new	
medicines	that	change	lives	dramatically	for	the	better 	
for	example	five‑year	relative	survival	rate	for	cancer	
increased	to	69	in	1999	to	2005	from	50	in	1975	to	
1977	by	supporting	companies	that	made	a	difference	
for	patients	investors	in	these	companies	were	
rewarded	in	2012	european	small‑cap	biotechnology	
stocks	were	up	over	40	according	to	ernst		y oung’ s	
2013	biotechnology	industry	report
silence	therapeutics	as	one	of	the	few	companies	with	
intellectual	property	and	know‑how	in	the	emerging	
oligonucleotide	therapeutics	platform	now	has	an	
opportunity	to	become	a	fully	fledged	biotechnology	
company	in	the	tradition	of	the	previous	waves	of	
biotechnology	pioneers	
our	team	of	scientists	who	have	been	with	us	since	the	
inception	of	the	company 	created	a	powerful	platform	
technology	from	which	new	drugs	can	be	developed	to	
treat	previously	unaddressable	conditions	
the	drug	development	industry	remains	an	attractive	
investment	opportunity	due	to	demographic	trends	
although	this	path	is	not	without	challenges	w e	
believe	our	success	is	contingent	on	developing	drugs	
that	truly	make	a	difference	to	patients	w e	are	in	the	
process	of	acquiring	the	capabilities	to	enable	us	to	
make	appropriate	clinical	development	decisions	for	the	
benefit	of	patients	and	shareholders
in	the	next	year 	we	look	forward	to	sharing	with	you	
a	research	and	development	plan	and	timelines	for	
delivering	key	development	milestones	
leveraging the strengths of our technology
the	core	technology	of	silence	therapeutics	enables	the	
development	of	novel	molecular	entities	that	“silence”	or	
inactivate	genes	it	is	inspired	by	a	naturally	occurring	
process	called	rna	interference	rnai	this	process	is	
triggered	by	a	short	double	stranded	oligonucleotide	
known	as	short	interfering	rna	sirna	in	cells	where	
the	target	gene	is	expressed	and	when	such	expression	
is	undesirable	
our	scientists	improved	on	nature	by	chemically	
modifying	a	natural	sirna	to	create	a	proprietary	
form	of	sirna	molecule	known	as	aturnai	these	
molecules	have	been	demonstrated	to	be	more	stable	
and	less	immunostimulatory	than	unmodified	sirnas	
making	aturnai	desirable	as	drugs	molecules	
additionally 	our	scientists	developed	technology	
that	preferentially	delivers	aturnai	to	the	vascular	
endothelium	atuplex	the	lung	endothelium	dacc	
and	the	liver	dbtc
in	contrast	to	conventional	drugs	that	can	access	a	
limited	proportion	of	disease	targets	we	believe	our	
technology	can	be	used	to	address	the	overexpression	of	
any	gene	as	such	our	technology	may	be	able	to	help	
more	patients	and	treat	more	diseases	
given	the	properties	of	our	technology 	we	believe	it	
would	be	most	powerful	when	used	to	address	diseases	
with	established	and	well‑studied	links	between	
the	expression	of	a	specific	gene	or	the	production	
of	a	specific	protein	and	a	disease	more	of	these	
opportunities	should	come	to	light	as	gene	sequencing	
technology	advances	
i am pleased to be appointed chief executive of silence therapeutics 
transitioning from my prior role at the company as director of corporate 
strategy with the completion of the atu027 phase i study and a 
strengthened cash position silence therapeutics is now ready to embark 
on the next step in a road well‑trodden by the pioneers of the biotechnology 
industry such as amgen and biogen
chief executive’s review silence therapeutics plc  
annual report and financial statements 2012
05
wwwsilencetherapeuticscom
business review corporate governance financial statements
pursuing new clinical development projects
our	technology	provides	many	clinical	development	
opportunities	w e	have	a	responsibility	to	patients	
and	shareholders	to	pursue	projects	with	the	highest	
chance	of	success	t o	do	so	we	will	adhere	to	the	
following	simple	principles
•	 decision enabling experiments we 	 will 	 do 	 studies 	 that	
enable 	 gono 	 go 	 decisions 	 where 	 the 	 benchmark 	 for	
“go” 	 is 	 prospectively 	 defined 	 and 	 we 	 will 	 stop 	 projects 	
that 	 are 	 not 	 worth 	 doing 	 as 	 soon 	 as 	 practicable
•	 efficacy signals early we 	 will 	 target 	 conditions	
where 	 it 	 is 	 possible 	 to 	 know 	 early 	 whether 	 the 	 drug	
works 	 for 	 example 	 where 	 clinical 	 outcome 	 would 	 be	
obvious 	 in 	 small 	 uncontrolled 	 studies 	 or 	 where 	 there	
are 	 well‑accepted 	 surrogate 	 endpoints 	 for 	 clinical	
outcome 	 importantly  	 early 	 efficacy 	 signals 	 may 	
enable 	 accelerated 	 path 	 to 	 approval 	 for 	 the 	 benefit 	 of 	
patients 	 and 	 value 	 creation 	 for 	 shareholders
•	 found patient population we	are	better	able	to	
help	patients	if	they	are	already	known	to	treating	
physicians	because	their	diseases	are	obvious	
enough	that	they	seek	medical	help	or	their	diseases	
are	screened	routinely
•	 in target tissues we	will	pursue	diseases	where	the	
undesirable	gene	expression	and	protein	production	
are	in	the	vascular	endothelium	lung	endothelium	
liver 	or	wherever	else	our	technology	can	take	us	in	
the	future
•	 necessary before	we	embark	on	any	clinical	
development	project	we	will	establish	the	necessary	
efficacy	and	safety	parameters	for	a	new	drug	that	
will	be	meaningful	to	patients	in	light	of	existing	
options	and	more	advanced	potential	therapies	
the	target	profile	will	inform	our	study	design	
so	we	can	know	as	early	as	possible	whether	our	
drug	can	make	a	difference	to	patients	clear	
characterisation	of	unmet	medical	needs	may	also	
allow	us	to	take	advantage	of	certain	accelerated	
regulatory	pathways
•	 elucidated biology we	plan	to	pursue	disease	where	
the	link	between	the	undesirable	gene	expression	
and	disease	is	already	well‑studied	preferably	by	
multiple	independent	groups
how atu027 fits into our future portfolio
currently  	 we 	 have 	 one 	 clinical 	 stage 	 project 	 atu027 	 an	
aturnai 	 against 	 pkn3 	 delivered 	 by 	 atuplex 	 to 	 the	
vascular 	 endothelium 	 by 	 acting 	 against 	 pkn3 	 in 	 the	
vascular 	 endothelium 	 it 	 is 	 hypothesised 	 that 	 metastatic	
spread 	 would 	 decrease 	 thereby 	 slowing 	 progression 	 and	
improving 	 survival 	 rates 	 of 	 cancer 	 patients
w e	have	demonstrated	the	safety	of	atu027	in	
34	patients	in	2012	we	completed	a	phase	i	
monotherapy 	one‑month	safety	study	of	atu027	in	
a	variety	of	solid	tumour	patients	
the	phase	i	study	showed	that	none	of	the	34	patients	
experienced	a	serious	adverse	event	directly	associated	
with	atu027	
the	next	logical	step	in	the	development	of	atu027	is	to	
combine	its	presumed	ability	to	stop	cancer	spread	with	
chemotherapy	agents	that	kill	tumours	to	better	clarify	
atu027’ s	efficacy	profile	when	used	as	intended	in	
april	2013	we	initiated	dosing	of	cancer	patients	with	
the	chemotherapy	agent	gemcitabine	in	combination	
with	atu027	as	such	further	studies	are	being	
planned	we	will	pay	special	attention	to	cancers	where	
patients	experience	spread	of	disease	or	death	within	
a	relatively	short	period	of	time	even	on	best	current	
available	therapy 	
if	successful	atu027	could	help	cancer	patients	at	
risk	from	developing	metastasis	thereby	slowing	
progression	of	disease	and	improve	survival	
demonstration	of	these	effects	will	ultimately	require	
sizable	randomised	controlled	trials	using	progression	
free	survival	or	overall	survival	as	endpoints	at	this	
time	the	early	indicators	of	efficacy	that	are	normally	
available	to	drugs	with	tumour	killing	properties	eg	
tumour	regression	are	not	available	to	atu027	given	
its	mechanism	of	action	therefore	we	consider	atu027	
to	be	a	high‑risk	but	high‑reward	opportunity 
w e	will	therefore	be	looking	to	balance	the	
pipeline	appropriately 
enabling infrastructure
w ith	its	solid	scientific	foundation	silence	is	well	
positioned	to	develop	impactful	new	treatments	for	
patients	that	would	also	generate	shareholder	value	
the	next	stage	of	our	development	will	require	
further	expertise
w e	have	identified	two	near ‑term	needs	for	
the	company
•	 run	clinical	trials	in	a	cost‑efficient	way	to	reach	
value	inflection	points	early
•	 identify	diseases	where	there	is	a	significant	medical	
need	and	the	required	target	profile	for	new	drugs
w e	have	taken	steps	to	recruit	the	appropriate	
personnel	to	address	the	aforementioned	needs	
conclusion
the	next	year	will	be	critical	for	silence	therapeutics	
in	its	transition	to	a	drug	development	company 	
including	an	update	on	our	clinical	development	plan	
i	look	forward	to	providing	you	with	further	updates	
throughout	the	year 	
ali mortazavi
chief	executive	
28	may	2013