silence therapeutics plc
the royal institution of great britain 
21 albemarle street 
london w1s 4bs
tel  44 0 20 7491 6520 
fax  44 0 20 7491 6521 
email  mailsilencetherapeuticscom
website wwwsilencetherapeuticscom
silence therapeutics plc annual report and accounts 2009
 silence therapeutics plc
annual report  
and accounts 2009 registered office
22 melton street 
london nw1 2bw
registered number 
2992058
nominated advisers
nomura code securities ltd
1 carey lane 
london ec2v 8ae
registrars
capita irg plc
northern house 
woodsome park 
fenay bridge 
huddersfield hd8 0la
auditor
grant thornton uk llp
grant thornton house 
melton street 
euston square 
london nw1 2ep
silence therapeutics plc 
is a leader in the 
of 
novel rna interference rnai 
therapeutics for the 
rna interference a nobel prize winning 
technology is one of the most exciting areas 
of drug discovery today as it can selectively 
“silence” genes linked to the onset of disease 
thus leading to the creation of a new class of 
therapeutic products rnai therapeutics
we aim to establish silence therapeutics 
as a partnerofchoice for the world’s leading 
pharmaceutical companies
review of the year
 01  highlights of 2009
 02  post yearend highlights
 04 chairman’s statement
 06 chief executive’s review
corporate governance
 10 board of directors
 12 directors’ report
financial statements
 16 independent auditors’ report
 17 consolidated income statement
   consolidated statement 
of comprehensive income
 18 consolidated balance sheet
 19   consolidated statement 
of changes in equity
 20 company balance sheet
 21   company statement 
of changes in equity
 22 cash flow statements
 23 notes to the financial statements
 43 company information and advisers
 44 notice of annual general meeting
 45  explanatory notes to the notice 
of annual general meeting
 47 form of proxy 01
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
highlights of 2009
operational
  silence initiated a phase i clinical trial of atu027 its lead drug candidate for the 
treatment of advanced solid tumours the trial being conducted at the marienhospital 
herne germany is an open‑label dose‑finding study to address the safety tolerability 
and pharmacokinetics of atu027 it is expected that results from the trial will be available 
in the second half of 2011 
  silence’s licensing partner quark pharmaceuticals commenced phase iii clinical 
trials with qpi‑1002 a short interfering rna sirna therapeutic product candidate in 
development for use in kidney transplants qpi‑1002 is based on silence’s proprietary 
aturnai chemistry
  the european patent office epo granted a patent on protein kinase n3 pkn3 
the target gene for silence’s lead compound atu027
  the technical board of appeal of the european patent office revoked in its entirety 
european patent ep1 214 945 which is a fundamental competitor patent owned by 
alnylam europe ag
  silence entered into a delivery collaboration with dainippon sumitomo pharma co ltd 
of japan to demonstrate the functional delivery of silence’s proprietary sirna molecules 
to specific targets the collaboration is evaluating silence’s proprietary aturnai a novel 
proprietary sirna molecule which is chemically modified to improve stability reduce 
manufacturing costs and increase yield the collaboration is also making use of silence’s 
atuplex delivery technology which has been shown to improve functional intracellular uptake 
  the opposition division of the epo upheld silence’s core aturnai patent ep 1 527 176 
’176 in amended form the amended form of patent ’176 covers silence’s proprietary 
blunt‑ended sirna molecules containing alternating 2’‑o‑methyl modifications
financial
  revenue generated in the year was £172m 2008 £221m
  administrative expenses increased to £420m 2008 £329m
  research and development expenditure decreased to £507m 2008 £671m
  the cash position at year‑end was £113m a further £150m gross was raised shortly 
after the year end through an institutional placing that closed in january 2010 at the end 
of 2008 silence had cash of £335m 02
silence therapeutics plc annual report and accounts 2009
post yearend highlights
by combining the expertise 
of both intradigm and silence 
we now have 
delivery technology platforms
pf4523655 diabetic macular oedema pfizerquark     local delivery to the eye 
aturnai
pf4523655 age‑related macular degen pfizerquark    local delivery to the eye 
aturnai
qpi‑1002 acute kidney injury quark    systemic delivery to the kidney 
aturnai
qpi‑1002 prevention of delayed graft function quark    systemic delivery to the kidney 
aturnai
atu027 gi  lung and other cancers  internal    systemic delivery to tumour 
aturnai      endothelium
atu134 acute lung injury  internal    systemic delivery to lung 
aturnai      endothelium
atu111 solid tumours  internal    systemic delivery to tumour  
aturnai      endothelium
atu150 solid tumours internal    systemic delivery to tumour 
aturnai      endothelium
at least half of the sirna therapeutics currently in clinical trials are based on silence technology
product indications partners preclinical phase i phase ii status
our product pipeline
naked sirna
naked sirna
naked sirna
naked sirna
dacc8
atuplex
atuplex
atuplex 03
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
post yearend operations
  silence merged with usbased rnai therapeutic company intradigm corporation 
intradigm on 5 january 2010 to form a leading company in the field of rna 
interference the merger was effected by the issue of silence shares to the shareholders of 
intradigm such that the intradigm shareholders at the time of the merger owned approximately 
36 of the issued share capital of silence the merger offers a number of strategic benefits 
including multiple rnai discovery development and delivery technologies a broad internal 
and partnered product pipeline and a strong portfolio of intellectual property 
  in parallel with the merger silence therapeutics raised £15m gross through an 
institutional placing and a subscription of shares at a price of 23p per share the funds 
raised will support the company’s ongoing development efforts and provide the strength 
from which to pursue additional partnerships and development deals
  upon completion of the merger philip haworth jd phd former chief executive officer of 
intradigm assumed the role of chief executive officer of the enlarged group
  the united states patent and trademark office uspto issued the company a notice 
of allowance on a patent application directed to methods of treatment using pkn3 
a highvalue therapeutic target in the area of oncology 
  silence and dainippon sumitomo pharma co ltd agreed to expand their ongoing 
sirna delivery collaboration to examine delivery of rnai therapeutics to additional disease 
targets selected by dainippon sumitomo 
  silence announced a strategic plan designed to optimally organise its resources 
following its recent merger with intradigm moving forward all research activities related to 
silence’s novel rnai therapeutic platforms including technologies that have emerged from 
both silence and intradigm will take place at the company’s berlin location other functions 
including operations business development legal and certain drug development activities 
will be conducted in palo alto silence expects this move to result in a significant reduction 
in the company’s operating costs moving forward 
  silence and astrazeneca agreed to an extension of their ongoing sirna delivery 
collaboration to examine new and enhanced delivery approaches for rnai therapeutics 
post yearend board and management changes
  silence announced a board change with the resignation of iain ross as chairman  
jerry randall who was appointed to the silence board in 2008 was appointed 
non‑executive chairman
  silence announced a management and board change with the resignation of melvyn davies 
as chief financial officer silence also announced the appointment of max herrmann as the 
company’s chief financial officer and company secretary with effect from 4 may 2010 silence therapeutics plc annual report and accounts 2009
04
chairman’s statement
2009 was a defining year for silence therapeutics 
each of the company’s internal programmes 
advanced steadily – we entered into a new 
collaboration with dainippon sumitomo and 
made excellent progress with each of our 
pharma partnerships and we strengthened 
our intellectual property position by expanding 
our portfolio of filed and issued patents
despite our many internal successes the 
turbulence of the world’s financial markets created 
a significant degree of uncertainty that required 
the company’s attention and decisive action 
in an effort to address the declining opportunity 
for financing and the erosion of our share value 
we began to evaluate our options with the goal 
of achieving the following objectives
  establish silence as a partner‑of‑choice 
for the world’s leading pharmaceutical 
companies 
  expand our technology base to allow us 
to best address the challenges of rnai 
delivery and
  secure additional financing for 
the company
the merger with intradigm corporation which 
was completed in january 2010 took silence 
therapeutics a long way to achieving these goals 
including a concurrent financing of £150m gross 
as a result silence is now better funded and holds 
a strong strategic position in the three areas 
we believe are critical to building protecting 
and commercialising rnai therapeutics 
  proprietary delivery technologies 
  silence’s delivery platform is one of the 
industry’s broadest including both lipid 
and polymer technologies offering drug 
developers an increased opportunity for 
successful delivery to specific tissues 
to cause specific therapeutic benefits 
  potent sirna sequences 
  silence has issued and pending patents 
on multiple high‑value sirna sequences 
of varying structure 
  innovative sirna structural features 
  silence has issued and pending patents directed 
to one of the industry’s most advanced sirna 
chemical modification technologies optimised 
for improved stability yield and safety
  silence’s exclusive licences from the university 
of massachusetts provide access to issued and 
pending patents associated with the zamore 
“design rules” including methods for increased 
potency and reduced off‑target effects 
a key factor in establishing silence as a 
partner‑of‑choice for pharmaceutical companies 
is our ability to provide novel and effective sirna 
delivery solutions as it is not likely that the vast 
range of sirna delivery challenges will be addressed 
by a single platform we believe it’s critical to build 
a broad toolbox of solutions and technologies 
by combining the impressive expertise of both 
silence and intradigm we now have one of the 
industry’s most comprehensive and versatile 
delivery technology platforms providing silence 
with unmatched potential to develop solutions 
for successful sirna delivery to particular tissues 
to cause specific therapeutic benefits the combined 
assets of the new company have drawn the attention 
of a number of leading pharmaceutical companies 
worldwide and we are actively engaged in partnering 
discussions spanning a range of new and 
exciting development opportunities 
in summary the merger combined the strength 
of two innovative entities and created a new 
leadership in rnai therapeutic development 
“ a key factor in 
establishing silence 
as a partnerofchoice 
for pharmaceutical 
companies is our 
ability to provide 
novel and effective 
sirna delivery 
solutions”  05
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
as a result we have succeeded in establishing 
a new company with the following strengths 
and advantages 
  comprehensive platform of technologies 
capable of addressing the discovery 
development and delivery of rnai 
therapeutics capabilities extend to all essential 
areas for successful product development 
including formulation and drug delivery 
sirna structure and chemistry and a diverse 
library of therapeutic sirna sequences 
  advancing pipeline of internal and partnered 
product candidates at least half of the sirna 
programmes currently in clinical development 
globally incorporate silence’s technology 
these include product candidates that are 
being advanced by partners such as pfizer 
and quark pharma
  broad and diverse intellectual property 
portfolio ip protection covering essential 
areas of rnai therapeutic development 
target sequences delivery and sirna 
structural features
  validating partnerships with global 
pharmaceutical companies the multiple 
major partnerships with companies such 
as astrazeneca pfizer quark pharma 
and dainippon sumitomo demonstrate 
the credibility of silence’s technologies 
  experienced management team and 
board of directors our new management 
team board and recent reorganisation 
provide the expertise and focused skills 
required to advance silence’s discovery 
and development activities
  expanded financial support and stability 
to facilitate new growth opportunities 
international shareholder base offers broader 
access to capital which should ultimately 
provide additional strength to negotiate 
favourable strategic transactions 
we believe the merger produced a stronger 
more stable and technologically sophisticated 
company that is well positioned as a new leader 
in rnai therapeutic development we are actively 
developing our strategic plan for the near term 
and we will continue to take all steps required 
to advance our internal and partnership programmes 
as well as establish new collaborations to fuel 
our pipeline in the future
we are grateful for the support of our shareholders 
and new investors alike and we wish to assure 
them both that we are committed to building 
corporate value through meaningful scientific 
progress and additional high‑value partnerships 
with the pharmaceutical industry 
thank you for your continued support 
of silence therapeutics 
jerry randall aca
chairman 
the merger 
 of two innovative 
companies and created a 
 in rnai 
therapeutic development 06
silence therapeutics plc annual report and accounts 2009
chief executive’s review
overview
in 2009 a number of pivotal events provided 
the foundation and framework that will propel 
silence forward in 2010 and beyond during 
the year the company made progress on all 
fronts – in the clinic with partnerships financially 
and in securing critical intellectual property ip 
these successes opened the door for further 
opportunity culminating in the merger with 
intradigm on 5 january 2010 we believe 
post‑merger silence is a new leader in rnai 
therapeutic development with a unique potential 
to develop delivery solutions that can be tailored 
to address various therapeutic requirements 
with our expanded technologies and assets 
we are aggressively executing a plan designed 
to further strengthen the business and create 
increasing value for our shareholders 
before looking ahead i’d like to address each 
of the critical 2009 events that contributed to 
our new company and our future opportunities 
operational
progress in the clinic
in 2009 we made great strides in the clinic with two 
of our programmes in human trials in january 2009 
our licensing partner quark pharmaceuticals 
commenced a phase iii clinical trial with qpi‑1002 
its rnai drug targeting the p53 gene for the 
prevention of delayed graft function dgf following 
kidney transplants qpi‑1002 incorporates silence’s 
aturnai technology and we believe this independent 
advancement of our technology represents 
a significant validation of silence’s science and drug 
candidates while this programme is managed 
by quark we believe the trial is progressing 
as planned and we look forward to the results
in june 2009 silence initiated a phase i study 
of atu027 our lead drug candidate for the treatment 
of advanced solid tumours the trial being 
conducted at the clinical study centre of the 
cancer hospital sanafontis in freiburg germany 
is an open‑label dose‑finding study to address 
the safety tolerability and pharmacokinetics 
of atu027 this trial has eleven dosing regimens 
we are advancing through the dosing protocol 
as planned and we remain on target to have results 
in the second half of 2011 
atu027 specifically targets pkn3 a molecule 
involved in cancer growth and metastasis formation 
atu027 is silence’s most advanced clinical 
candidate for a systemically delivered sirna 
using the company’s proprietary atuplex 
delivery technology it is our belief that atu027 
may ultimately be a valuable treatment option 
for cancer patients that do not respond to 
standard therapy
we are executing a plan designed 
to the business 
and create for 
our shareholders 07
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
silence is also working to develop three pre‑clinical 
programmes atu134 is being evaluated for potential 
treatment of acute lung injury and atu111 and 
atu150 are both being evaluated for the potential 
treatment of solid tumours
expanding our collaborations
in august 2009 silence expanded its partnerships 
with the addition of a new collaboration with 
dainippon sumitomo pharma co ltd of japan 
the purpose of the collaboration is to demonstrate 
the functional delivery of silence’s proprietary 
sirna molecules to specific targets the ongoing 
collaboration is currently evaluating silence’s 
proprietary aturnai molecule that is chemically 
modified to improve safety reduce manufacturing 
costs and increase stability the collaboration 
is also making use of silence’s atuplex delivery 
technology which has been shown to improve 
functional intracellular uptake
though this collaboration is currently only 
seven months old we were pleased to announce 
in march 2010 that dainippon sumitomo has 
elected to expand this collaboration by examining 
delivery to additional disease targets that were not 
originally specified under the initial collaboration 
as a company focused on addressing the challenges 
of rnai delivery we are very pleased that dainippon 
sumitomo has elected to expand our collaboration 
so quickly we believe this is a strong testimony 
to the potential of our delivery technology as well 
as the value we bring our partners 
in addition to our partnership with dainippon 
sumitomo we currently have two ongoing 
collaborations with astrazeneca which were initiated 
in june 2007 and march 2008 the june 2007 
collaboration was established for the purpose 
of developing novel sirna therapeutics against 
specific targets exclusive to astrazeneca and 
the march 2008 collaboration seeks to develop 
a range of novel approaches for the delivery of 
sirna molecules these collaborations continue 
to advance as planned and we together with 
our partners are very pleased with the progress 
to date we look forward to providing updates 
on these collaborations in the near future
building financial strength
in january 2009 silence raised £265m net 
of expenses through the issue of 15m shares 
at a price of 18p per share concurrent with 
our merger with intradigm in january 2010 
we raised an additional £15m gross at a price 
of 23p per share such funds are intended 
to support the company’s ongoing development 
efforts and provide a position of strength as 
we work to pursue additional partnerships 
and development deals
beyond the funding itself it is important to note 
who invested in each of these rounds we are 
fortunate to have the support of several pre‑eminent 
institutions in the uk as well as several leading 
us institutions we are also very fortunate to have 
the financial backing of a number of strategic 
pharmaceutical venture groups including lilly 
ventures roche finance and astellas venture 
who were investors in intradigm
enhancing our intellectual property estate
the importance of intellectual property to success 
in the rnai therapeutic field cannot be overstated 
yet we argue that the true value of ip lies in 
the specific claims as opposed to the number 
of patents during 2009 and continuing in 2010 
both silence and the former intradigm secured 
a number of pivotal patents that are all now 
owned by post‑merger silence the following 
events contributed significantly to the strength 
of silence’s ip estate
  the european patent office epo granted 
a patent on protein kinase n3 pkn3 the target 
gene for silence’s lead compound atu027
  the technical board of appeal of the european 
patent office revoked in its entirety european 
patent ep1 214 945 which is a fundamental 
competitor patent owned by alnylam europe ag 
  the opposition division of the epo upheld 
silence’s core aturnai patent ep 1 527 176 
’176 in amended form the amended form 
of patent ’176 covers silence’s proprietary 
blunt‑ended sirna molecules containing 
alternating 2’‑o‑methyl modifications and
“ in august 2009 
silence expanded 
its partnerships with 
the addition of a new 
collaboration with 
dainippon sumitomo 
pharma co ltd 
of japan” silence therapeutics plc annual report and accounts 2009
08
chief executive’s review continued
operational continued
enhancing our intellectual property estate 
continued
  the united states patent and trademark 
office uspto issued a notice of allowance 
on a patent application directed to methods 
of treatment using pkn‑3 a high‑value 
therapeutic target in the area of oncology 
the allowed subject matter is directed to 
among other things methods of treating 
cancer with sirna or antisense molecules 
that target the pkn‑3 messenger rna mrna 
the claims cover the sirna molecule in 
silence’s lead clinical compound atu027 
an rnai therapeutic that targets pkn‑3 for 
the treatment of advanced solid tumours
in addition to these events silence also now 
owns key intellectual property rights previously 
secured by intradigm as follows
  issued and pending patents on multiple 
high‑value sirna sequences of varying 
structure
  issued and pending patents directed to 
one of the industry’s most advanced sirna 
chemical modification technologies optimised 
for improved stability yield and safety and
  three exclusive licences from the university 
of massachusetts to the issued and pending 
patents associated with the zamore “design 
rules” including methods for increased 
potency and reduced off‑target effects
with these combined assets we believe our patent 
estate today is one of the most useful most 
functional portfolios in the rnai field and we believe 
it will provide us with the opportunity to actively 
pursue all our areas of interest
financial
silence successfully strengthened its financial 
position through the completion of two financings 
in 2009 and early 2010 that generated proceeds 
of approximately £177m gross this funding 
provided cash resources that will support the 
company’s operations into the second quarter 
of 2011 this is without taking into account any 
milestone or other receipts that the company 
believes it could receive in 2010
revenue
revenue generated in the year declined to £172m 
in 2009 from £221m in 2008 the decrease 
in revenue was primarily attributable to receiving 
milestone income from previous deals in 2008 
which did not arise in 2009
administrative expenses
administrative expenses during the year increased 
to £420m in 2009 from £329m in 2008 
the increase in administrative expenses is 
primarily attributed to costs incurred in respect 
of the acquisition of intradigm subsequent 
to the year end
research and development expenses
research and development expenses during 
the year decreased to £507m in 2009 from 
£671m in 2008 the decrease in research 
and development expense is primarily attributed 
to the group having incurred substantial 
pre‑clinical development costs in 2008 prior 
to the commencement of its clinical trials 
of atu027 which commenced in 2009
interest
interest income fell from £025m in 2008 to 
less than £01m in 2009 due to lower average 
balances on deposit and the marked fall 
in interest rates during 2008 and 2009
 in the 
enablement of clinical development 
of rnai therapeutic candidates
“ silence successfully 
strengthened its 
financial position 
through the 
completion of two 
financings in 2009 
and early 2010 that 
generated proceeds 
of approximately 
£177m gross ”  09
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
taxation
the taxation credit arises through the availability 
of uk rd tax credits in respect of some of 
the group’s research and development costs
liquidity cash cash equivalents and money 
market investments
the group’s cash position at year‑end was £113m 
a further £150m gross was raised shortly after 
the year‑end through an institutional placing that 
closed in january 2010 at the end of 2008 
silence had cash of £335m 
the net cash outflow from operating activities was 
£465m against an operating loss of £755m 
primarily reflecting the impact of changes in 
other working capital of £16m and of non‑cash 
items such as depreciation amortisation and 
share option charges of £10m
summary and outlook
i’d like to conclude by reviewing the rationale 
for the recent merger and the subsequent goals 
we aim to achieve
in setting out to combine these two companies 
our objective was to dramatically change the 
competitive landscape in the field of rnai 
therapeutics while other companies in the 
sector may claim leadership this merger created 
one of the most sophisticated platforms in rnai 
therapeutic development as a result of this merger 
silence now holds a powerful and strategic position 
in the three areas we believe are critical to building 
protecting and commercialising rnai therapeutics 
proprietary delivery technologies potent sirna 
sequences and innovative sirna structural features
this unique combination of technology has created 
an unparalleled technology platform that we believe 
will drive many of the most critical advances in 
the field perhaps most exciting about the merger 
is the powerful range of rnai delivery technology 
solutions possessed by the new company the most 
significant hurdle to overcome in realisation of the 
vast potential of rnai therapeutics is that of enabling 
safe and effective delivery of sirna payloads 
by combining the expertise of both intradigm 
and silence we now have one of the industry’s 
most comprehensive and versatile delivery 
technology platforms providing silence with 
unmatched potential to develop delivery 
solutions that can be tailored to address 
various therapeutic requirements
beyond our technology platform silence is 
a clear leader in the enablement of clinical 
development of rnai therapeutic candidates 
at present we believe that at least half of the 
sirna programmes currently in clinical trials 
worldwide are based on silence’s technology 
representing the significant impact that our 
technology platform has within the sector 
this impressive pipeline of products not only 
validates the strength of silence’s technology 
it also validates the team of researchers that has 
guided the development path 
in summary the rationale driving this merger 
was to combine the strength of two innovative 
entities to create a new leadership in rnai 
therapeutic development with the transaction 
complete it is now our task to establish a path 
that allows us to optimise our resources and 
efficiently advance our development programmes 
and clinical efforts to this end we recently 
announced a restructuring of the company 
to focus research in berlin and business 
operations in palo alto we will continue 
to evaluate the most beneficial strategies 
to address the challenges ahead
in closing i wish to express my sincere appreciation 
to our dedicated employees and the shareholders 
who support our company in the coming year 
we will continue to work diligently to advance 
our groundbreaking science and to continue 
to build shareholder value
thank you for your continued support 
of silence therapeutics 
philip haworth phd
chief executive officer silence therapeutics plc annual report and accounts 2009
10
board of directors
jerry randall
nonexecutive chairman
mr randall is a qualified chartered accountant most recently he was chief financial officer of sinclair 
pharmaceuticals plc which he joined in 2000 as part of a management buy‑in team prior to this 
mr randall worked in corporate finance with gambit corporate finance and had previously been 
involved in two other buy‑ins he acted as adviser to both private and quoted companies between 1993 
and 2000 in both the capacity of nominated adviser and in practice with kpmg during this period 
he was involved in a number of flotations and transactions on the official list unlisted securities 
market and the alternative investment market as well as raising private equity
audit committee 
assisting board oversight of accounting and 
financial reporting processes and the audits 
of the company’s financial statements 
  jerry randall chairman
  david u’prichard
nomination committee 
recommending to the board those persons 
to be nominated for election as directors at 
any shareholders meeting 
  david u’prichard
  annette clancy
  david mack
remuneration committee 
assisting the board in the discharging of 
its responsibilities related to remuneration 
of the company’s executive officers 
  annette clancy chairman
  jamie topper
  david u’prichard
  david mack
  jerry randall
committee composition
dr phil haworth
chief executive officer
dr haworth was appointed chief executive officer of silence therapeutics in january 2010 following 
the company’s merger with intradigm corporation prior to this role dr haworth served as chief executive 
officer of intradigm following his tenure as the company’s vice president of business development 
he joined intradigm in 2007 having spent the previous 15 years in senior business development 
roles at several leading biotechnology companies including genencor international cor therapeutics 
and affymaxaffymetrix among others in these positions he led the identification and negotiation of 
numerous collaborative and licensing agreements with a range of global and regional pharmaceutical 
companies he most recently served as vice president business development at codexis inc he possesses 
deep deal‑ making expertise that spans establishing discovery and development partnerships technology 
and product in‑ and out‑licensing mergers and acquisitions and financing support dr haworth 
earned his jd from stanford university law school and his phd in biochemistry from the university 
of manchester in the uk 
max herrmann
chief financial officer and company secretary
mr herrmann was appointed chief financial officer of silence therapeutics in may 2010 he is 
a qualified chartered accountant and possesses more than 20 years of biotechnology and pharmaceutical 
industry experience having held key management positions with leading development stage companies 
as well as several investment banks prior to joining silence mr herrmann served as chief financial 
officer of intercytex group plc a publicly traded company focused on the emerging area of regenerative 
medicine before joining intercytex he spent over ten years as a sell‑side equity analyst most recently 
as managing director and head of european pharmaceutical and biotechnology research at ing 
he has also held the position of financial controller for us‑based onyx pharmaceuticals inc and 
currently serves on the boards of regenerative medicine assets limited as well as the company’s 
subsidiaries intercytex ltd and axordia ltd 11
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
annette clancy
nonexecutive director
ms clancy has had a distinguished career spanning 30 years with glaxosmithkline gsk she has 
15 years’ experience in business development leading gsk’s global t ransactions and alliance management 
teams for the past three years and during her tenure she and her team have been responsible for concluding 
a large number of research development and commercial business collaborations on behalf of gsk 
prior to her role in business development ms clancy held a number of positions in clinical research 
rd project management and commercialisation ms clancy has a bsc hons pharmacology from 
bath university
dr david mack
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 vice 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 
dr james topper
nonexecutive director
dr topper is a general partner at frazier healthcare ventures’ palo alto office and was the chairman 
of the board of intradigm from may 2006 to the date of the merger with silence therapeutics since joining 
frazier healthcare in 2003 dr topper has led several biopharma investments including arête therapeutics 
cotherix and macusight dr topper is also an advisory board member to the harvard‑partners center 
for genetics and genomics prior to joining frazier healthcare he served as head of the cardiovascular 
research and development franchise at millennium pharmaceuticals and ran millennium san francisco 
formerly cor therapeutics prior to the merger of cor and millennium he served as the vice president 
of biology at cor and was responsible for managing all of its research activities dr topper received 
his md and phd in biophysics from stanford university school of medicine in 1991 he continues to 
hold an appointment as a clinical assistant professor of medicine at stanford university
dr david u’prichard
nonexecutive director
prior to joining the board of silence therapeutics dr david u’prichard was chief executive officer 
and a member of the board of directors of 3‑dimensional pharmaceuticals inc yardley pa 3dp from 
1999 to 2003 during that time he took 3dp public and secured major collaborations with bristol‑myers 
squibb and johnson  johnson in march 2003 3dp became a part of johnson  johnson pharmaceutical 
rd from 1997 to 1999 dr u’prichard served as chairman of research and development at smithkline 
beecham where he oversaw the entry of approximately ten compounds into global development 
four compounds into phase iii trials and six compounds into early clinical trials additionally he was 
involved in several major restructuring efforts at the company prior to smithkline beecham dr u’prichard 
worked for icizeneca from 1986 to 1997 as executive vice president and international research director 
from 1994 to 1997 silence therapeutics plc annual report and accounts 2009
12
directors’ report
year ended 31 december 2009
the directors present their report and the financial statements for the year ended 31 december 2009
review of the business and future developments
the group carries out research and development of pharmaceutical products in particular the group is focusing on the development of its rnai 
technology which is currently moving from the pre‑clinical into clinical development phase 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 details of the financial performance including 
comments on the cash position and research and development expenditure are given in the financial section of the chief executive’s review on 
pages 8 and 9 the product development pipeline is also shown above with a briefing on the group’s technology 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 the research and development 
activity during the year as well as outlining future planned developments 
post balance sheet events
a description of post balance sheet events is set out in note 26 to the financial statements
results and dividends
the group recorded a loss for the year before taxation of £7470597 2008 £7434641 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 accumulated deficit on reserves
directors
the directors who served at any time during the year were
chairman
i g ross 
executive directors
j m davies
non‑executive directors
j l curnock cook 
a clancy 
j a p randall 
h r p reynolds 
d c u’prichard 
b o wetzel
the interests of the directors in the share options of the company are set out in note 18 to the financial statements 
since the year end on 5 january 2010 p haworth j topper and d mack were appointed to the board and on 26 february 2010 i g ross and j m davies 
resigned m herrmann was appointed to the board in may 2010
substantial interests
at 31 march 2010 the company had been informed of the following substantial interests of over 3 of the issued share capital of the company
       percentage  
       of issued 
       share capital 
      number 
frazier healthcare ventures     27265465 974
acp capital     25356422 906
fidelity investments     22753009 813
gartmore investment ltd     19477919 696
lilly ventures     16747951 598
neue bank vaduz     10023270 358
roche finance     8515906 304
corporate governance
the board meets regularly and has ultimate responsibility for the management of the group and sub‑committees comprising of non‑executive directors 
meet as and when required to deal with remuneration and audit matters 13
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
corporate governance continued
committee structure
remuneration
a clancy chairman j a p randall d c u’prichard d mack and j topper
audit
j a p randall chairman and d c u’prichard
nominations and governance committee
d c u’prichard chairman a clancy and d mack
remuneration committee
the group has established a remuneration committee comprising five non‑executive directors to determine and review the emolument packages of 
the directors of both the parent and subsidiary companies the committee meets at least twice a year and is responsible for setting the group’s overall 
policy on executive remuneration and employment conditions including setting the specific remuneration benefits and terms of employment for each 
executive director
the board of directors has considered the remuneration committee’s proposals in respect of the remuneration of the directors and senior executives 
and has accepted them without substantial revision
audit committee
the board seeks to present a balanced and understandable assessment of the group’s position and prospects in all interim final and price‑sensitive 
reports and information required to be presented by statute
the audit committee comprises two non‑executive directors and its terms of reference include keeping under review the scope and results of the external 
audit and its cost‑effectiveness the committee reviews the independence and objectivity of the external auditors including the nature and extent of non‑audit 
services supplied by them to the group 
shareholder communications
the company uses its corporate website wwwsilence‑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 accounts 
the company counts all proxy votes and will indicate the level of proxies lodged on each resolution after it has been dealt with by a show of hands
compliance with bia code
the group is a member of the bioindustry association bia and has complied with the bia code of best practice throughout the year the bia code consists 
of principles and provisions relating to corporate governance access to external advice release of sensitive information and public announcements concerning 
the group’s products and technology the code which is obligatory for members of the bia is designed to operate with reference to the particular 
circumstances of biotechnology companies
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 that give a true and fair view of the state of affairs of the company and the group 
and of the profit or loss of the group for the period
the financial statements for the group are prepared in accordance with international financial reporting standards ifrss as adopted by the european union 
and the board has also elected to prepare financial statements for the company in accordance with ifrss
in preparing the 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 applicable ifrs have been followed subject to any material departures disclosed and explained in the financial statements and
  prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business
the directors are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the 
company and enable them to ensure that the financial statements comply with the companies act 2006 they are also responsible for safeguarding 
the assets of the company and for taking reasonable steps for the prevention and detection of fraud and other irregularities
insofar as the directors are aware
  there is no relevant audit information of which the company’s auditors are unaware and
  the directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that 
the auditors are aware of that information
the directors are responsible for the maintenance and integrity of the corporate and financial information included on the company’s website legislation 
in the united kingdom governing the preparation and dissemination of the financial statements may differ from legislation in other jurisdictions silence therapeutics plc annual report and accounts 2009
14
directors’ report continued
year ended 31 december 2009
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 emea in europe the group will have limited control over the type and cost of trial required to obtain 
regulatory approval 
  the group will rely on third parties to conduct clinical trials if these third parties do not successfully carry out their contractual duties or meet expected 
deadlines the programmes of the group may be delayed or the group may not be able to obtain regulatory approval for its products any failure or 
delay of projects in development or clinical trials could have an adverse effect on the business 
  with the prime focus of the group being on such a new area of technology there can be no assurance that the group’s products will receive and maintain 
regulatory approval 
product development risk
  the group is involved at the leading edge of a revolutionary technology within the pharmaceutical sector more drugs fail in development than progress 
to market and there is no guarantee that the group will be able to successfully develop this new technology or bring any of the drug candidates 
it is developing to market further the drugs that the group does bring to market may not be commercially successful
  the group has no track record of successful development and registration of any product and will need to acquire or gain access to relevant additional expertise
  in order to progress the group’s product development plans it may be desirable or necessary to find collaborators on certain projects the group cannot 
guarantee that it will be able to find and maintain suitable collaborators under acceptable terms or that once found such collaborators will devote 
sufficient resources to the collaboration to make it commercially successful 
  the group’s suppliers may encounter unexpected difficulties in the design and construction of manufacturing processes and the scale‑up of production 
to viable commercial levels or may otherwise be unable to supply materials to the group in a timely manner 
  competition for employees in the biotechnology sector may lead to increased costs or decreased availability of staff as a result the group may 
be unable to recruit or retain certain important employees this could weaken the group’s scientific and management capabilities and could delay 
or halt the development of products and technologies 
competition risk
  rnai technology is attracting increased interest and with that is increased competition competitors in the sector may have greater financial human 
and other resources and more experience to develop competing products or technology
  many companies are trying to develop competing technologies and one or more of these may restrict the potential commercial success of the group’s 
products or render them obsolete 
  increasing competition may also have an adverse effect on the timing or scale of commercialisation of the group’s technology 
intellectual property risk
  intellectual property issues from challenges by others or lack of protection for its own products may negatively impact the group other companies 
may have or develop intellectual property that restricts the group’s freedom of use or imposes high additional costs to obtain 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 15
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
risk factors continued
risks applicable to the biotechnology sector and the group continued
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 rd 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
this list should not be considered an exhaustive statement of all potential risks and uncertainties
going concern
after making enquiries the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the 
foreseeable future further details are given in note 23 to the financial statements for this reason the directors continue to adopt the going concern 
basis in preparing the financial statements
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 raised 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 47 days 2008 29 days 
on behalf of the board
jerry randall
chairman 
17 may 2010 silence therapeutics plc annual report and accounts 2009
16
independent auditors’ report
to the members of silence therapeutics plc
we have audited the financial statements of silence therapeutics plc for the year ended 31 december 2009 which comprise the consolidated income 
statement the consolidated statement of comprehensive income the consolidated balance sheet the consolidated statement of changes in equity 
the company balance sheet the company statement of changes in equity the consolidated and company cash flow statement and the related notes 
the financial reporting framework that has been applied in their preparation is applicable law and international financial reporting standards ifrss 
as adopted by the european union 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 auditors’ 
report and for no other purpose to 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 auditors
as explained more fully in the directors’ responsibilities statement set out on page 13 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 the financial statements in accordance with applicable 
law and international standards on auditing uk and ireland those standards require us to comply with the auditing practices board’s apb’s ethical 
standards for auditors
scope of the audit of the financial statements
a description of the scope of an audit of financial statements is provided on the apb’s website at wwwfrcorgukapbscopeuknp 
opinion on financial statements
in our opinion
   the group financial statements give a true and fair view of the state of the group and of the parent company’s affairs as at 31 december 2009 
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 european union 
   the parent company financial statements have been properly prepared in accordance with ifrs as adopted by the european union and as applied 
in accordance with the provisions of the companies act 2006 and
  the financial statements have been prepared in accordance with the requirements of the companies act 2006
emphasis of matter – going concern
in forming our opinion on the financial statements which is not qualified we have considered the adequacy of disclosures made in note 23 of the 
financial statements concerning the ability of the company to continue as a going concern the group made a loss for the year of £75m and had net 
assets of £89m at 31 december 2009 as explained in note 23 there are uncertainties regarding the group’s ability to access additional funding through 
grants milestone and licence fee payments relating to either new or existing agreements to meet working capital requirements 
these conditions explained in note 23 to the financial statements indicate the existence of a material uncertainty which may cast significant doubt about 
the company’s ability to continue as a going concern the financial statements do not include any adjustments that would result if the company were 
unable to continue as a going concern
opinion on other matters prescribed by the companies act 2006
in our opinion the information given in the directors’ report for the financial year for which the financial statements are prepared is consistent with the 
financial statements
matters on which we are required to report by exception
we have nothing to report in respect of the following matters where the companies act 2006 requires us to report to you if in our opinion
   adequate accounting records have not been kept by the parent company or returns adequate for our audit have not been received from branches 
not visited by us or
  the parent company financial statements are not in agreement with the accounting records and returns or
  certain disclosures of directors’ remuneration specified by law are not made or
  we have not received all the information and explanations we require for our audit
christopher smith
senior statutory auditor
for and on behalf of grant thornton uk llp
statutory auditor chartered accountants
london
17 may 2010 17
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
consolidated income statement
year ended 31 december 2009
      2009 2008 
     note £ £
revenue    3 1723289 2208699
research and development costs     5073333 6712032
gross loss     3350044 4503333
administrative expenses     4204371 3288304
operating loss    5 7554415 7791637
finance income    7 46104 356996
loss for the year before taxation     7508311 7434641
taxation credit for the year    8 37714 —
loss for the year after taxation     7470597 7434641
loss per share basic and diluted    9 555p 620p
the accompanying accounting policies and notes form an integral part of these financial statements
 
consolidated statement 
of comprehensive income
year ended 31 december 2009
 
      2009 2008 
      £ £
loss for the year after taxation     7470597 7434641
other comprehensive income
exchange differences arising on consolidation of foreign operations    410482 2654895
total comprehensive income for the year     7881079 4779746
the accompanying accounting policies and notes form an integral part of these financial statements silence therapeutics plc annual report and accounts 2009
18
consolidated balance sheet
at 31 december 2009
      2009 2008 
     note £ £
non‑current assets
property plant and equipment    10 376676 535909
goodwill    11 8130972 8611087
other intangible assets    12 736117 812696
      9243765 9959692
current assets
trade and other receivables    14 560190 998702
current tax assets     59198 70000
cash and cash equivalents    15 1131146 3350187
      1750534 4418889
liabilities – current
trade and other payables    16 2103144 934601
      2103144 934601
net assets     8891155 13443980
equity
share capital    18 1350334 1199134
capital reserves    19 49810071 47010414
translation reserve     2881007 3291489
retained loss     45150257 38057057
total equity     8891155 13443980
the financial statements were approved by the board of directors on 17 may 2010
jerry randall
chairman
the accompanying accounting policies and notes form an integral part of these financial statements 19
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
consolidated statement of changes in equity
year ended 31 december 2009
   share capital translation retained 
   capital reserves reserve loss total 
   £ £ £ £ £
at 1 january 2008  1198835 46465165 636594 30624834 17675760
recognition of share‑based payments  — 544158 — — 544158
transfer upon
 – exercise of options in year  — 1687 — 1687 —
 – lapse of vested options in year  — 731 — 731 —
shares issued in the year  299 3509 — — 3808
transactions with owners  299 545249 — 2418 547966
loss for the year ended 31 december 2008  — — — 7434641 7434641
other comprehensive income
exchange differences arising on consolidation of foreign operations — — 2654895 — 2654895
total comprehensive income for the year  — — 2654895 7434641 4779746
at 1 january 2009  1199134 47010414 3291489 38057057 13443980
recognition of share‑based payments  — 661704 — — 661704
transfer upon
– exercise of options in year  — 4514 — 4514 —
– lapse of vested options in year  — 372883 — 372883 —
shares issued in the year  151200 2515350 — — 2666550
transactions with owners  151200 2799657 — 377397 3328254
loss for the year ended 31 december 2009  — — — 7470597 7470597
other comprehensive income
exchange differences arising on consolidation of foreign operations — — 410482 — 410482
total comprehensive income for the year  — — 410482 7470597 7881079
at 31 december 2009  1350334 49810071 2881007 45150257 8891155 silence therapeutics plc annual report and accounts 2009
20
company balance sheet
at 31 december 2009
      2009 2008 
     note £ £
non‑current assets
investment in subsidiary undertakings    13 23494482 19917264
current assets
trade and other receivables     91236 65747
cash and cash equivalents    15 358256 1914188
      449492 1979935
liabilities – current
trade and other payables    16 1185705 146774
      1185705 146774
net assets     22758269 21750425
equity
share capital    18 1350334 1199134
capital reserves    19 49626155 46826498
retained loss     28218220 26275207
total equity     22758269 21750425
the financial statements were approved by the board of directors on 17 may 2010
jerry randall
chairman
the accompanying accounting policies and notes form an integral part of these financial statements 21
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
company statement of changes in equity
year ended 31 december 2009
    share capital retained 
    capital reserves loss total 
    £ £ £ £
at 1 january 2008   1198835 46281249 24233386 23246698
loss for the year ended 31 december 2008   — — 2041821 2041821
recognition of share‑based payments   — 544158 — 544158
transfer upon 
 – exercise of options in year   — 1687 — 1687
 – lapse of vested options in year   — 731 — 731
shares issued in the year   299 3509 — 3808
movement in the year   299 545249 2041821 1496273
at 31 december 2008   1199134 46826498 26275207 21750425
loss for the year ended 31 december 2009   — — 2313382 2313382
recognition of share‑based payments   — 661704 — 661704
transfer upon
 – exercise of options in year   — 4514 — 4514
 – lapse of vested options in year   — 372883 370369 2514
shares issued in the year   151200 2515350 — 2666550
movement in the year   151200 2799657 1943013 1007844
at 31 december 2009   1350334 49626155 28218220 22758269 silence therapeutics plc annual report and accounts 2009
22
cash flow statements
year ended 31 december 2009
  group  company
    2009 2008 2009 2008 
    £ £ £ £
cash flow from operating activities
loss before taxation   7508311 7434641 2313382 2041821
adjustments for
depreciation charges   150293 116489 — —
amortisation charges   220658 306916 — —
loss on sale of property plant and equipment   19577 307 — —
charge for the year in respect of share‑based payments    661704 544158 318027 125353
foreign exchange movement   198717 73410 — —
reductionincrease in impairment provision against loan to subsidiary  — — 140667 596533
recovery of loan provided for in previous years   — 31000 — 31000
finance income   46104 253634 43971 198464
    6306466 6677995 2179993 1549399
decreaseincrease in trade and other receivables   438512 668891 25489  65747
increasedecrease in trade and other payables   1168543 1032708 1038931  146774 
cash absorbed by operations   4696411 7041812 1166551 1468372
taxation received   48516 60000 — —
net cash outflow from operating activities   4647895 6981812 1166551  1468372
cash flow from investing activities
investment in subsidiary undertakings   — — 3409986 6308552
reductionincrease in loans to subsidiary undertakings   — — 310084 109384
recovery of loan made in previous years   — 31000 — 31000
finance income   46104 253634 43971 198464
additions to property plant and equipment   36648 135584 — —
additions to intangible assets   188494 135752 — —
net cash used ingenerated from investing activities   179038 13298 3055931 6188472
cash flow from financing activities
proceeds from issue of share capital   2666550 3808 2666550 3808
decrease in cash and cash equivalents   2160383 6964706 1555932 7653036
cash and cash equivalents at start of year   3350187 10174389 1914188 9567224
net decrease in the year   2160383 6964706 1555932 7653036
effect of exchange rate fluctuations on cash held   58658 140504 — —
cash and cash equivalents at end of year   1131146 3350187 358256 1914188
cash and cash equivalents includes
instant access bank accounts   1131146 3350187 358256 1914188
the accompanying accounting policies and notes form an integral part of these financial statements 23
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
notes to the financial statements
year ended 31 december 2009
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 the royal institution of great britain 21 albemarle street london w1s 4bs
12 company income statement
the company has taken advantage of section 408 of the companies act 2006 and has not included its own profit and loss account in these financial 
statements the loss for the financial year dealt with in the accounts of the company including provision against the loans to and investment in subsidiary 
companies amounted to £2313382 2008 loss £2041821
2 principal accounting policies
21 basis of preparation
the financial statements have been prepared in accordance with international financial reporting standards ifrs as adopted by the eu and on the 
historical cost basis 
the group has not adopted the following new ifrs and international accounting standards ias that have been issued but are not yet effective
       effective from
ifrs 9 financial instruments      1 january 2013
ias 24 revised 2009 related party disclosures      1 january 2011
ias 32 amendment to classification of rights issues      1 february 2010
ifric 19 extinguishing financial liabilities with equity instruments     1 july 2010
ifric 14 amendment to  prepayments of a minimum funding requirement    1 january 2011
none of these are expected to have a significant impact on the financial statements
the following standards amendments and interpretations have been applied for the first time in the year under review
   ias 1 presentation of financial statements revised 2007 requires presentation of a comparative balance sheet at the beginning of the first 
comparative period in some circumstances management considers that this is not necessary because the 2007 balance sheet is the same as 
that previously published
   ifrs 8 operating segments replaces ias 14 segment reporting and requires implementation of the management approach to reporting as operating segments
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 2009 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 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 
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 outflow for 2009 of £2160383 and at 31 december 2009 had cash balances of £113m in early january 2010 the group 
acquired intradigm corporation and raised £15m before costs 
the directors have reviewed the working capital requirements of the group which now comprises two research and development pharmaceutical 
companies for the next twelve months and are confident that these can be met the directors have a reasonable expectation that further finances will 
become available during the course of the year through grants milestone and licence fee payments relating to either new or existing agreements 
the directors note that there is a material uncertainty as to the exact timing and source of these funds and that the failure to receive sufficient funding 
from these sources would cast significant doubt on the group’s ability to continue as a going concern the directors have also taken a number of steps 
to reduce administration costs and to restrict the research and development expenditure to core areas pending the availability of additional funds
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 silence therapeutics plc annual report and accounts 2009
24
notes to the financial statements continued
year ended 31 december 2009
2 principal accounting policies continued
24 business combinations
the acquisition of subsidiaries is accounted for using the purchase method the cost of the acquisition is measured at the aggregate of the fair values 
at the date of exchange of assets given liabilities incurred or assumed and equity instruments issued by the group in exchange for control of the acquiree 
plus any costs directly attributable to the business combination the acquiree’s identifiable assets liabilities and contingent liabilities that meet the conditions 
for recognition under ifrs 3 are recognised at their fair values at the acquisition date 
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 issue 
where this figure exceeds the nominal value of the shares the excess amount is treated as an addition to the share premium account 
25 goodwill
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
26 revenue recognition
the group’s income consists of licence fees milestone and option payments grant income and fees from research and development collaborations 
income is measured at the fair value of the consideration received or receivable
licence fees option and milestone payments are recognised in full on the date that they are contractually receivable in those circumstances where
  the amounts are not time related 
  the amounts are not refundable
  the licensee has unrestricted rights to exploit the technology within the terms set by the licence and
  the group has no further contractual duty to perform any future services 
where such fees or receipts require future performance or financial commitments on behalf of the group the revenue is recognised pro rata to the services 
or commitments being performed 
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 27 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
27 government grants
government grants towards the cost of staff employed in research and development activities are recognised as income over the periods necessary 
to match them with the related costs grants amounting to £527129 were recognised as revenue in the year ended 31 december 2009 2008 £863578 
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 2009 2008 £53477
there were no unfulfilled conditions or contingencies attaching to these grants
28 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 profit or loss for the period 
when a gain or loss on a non‑monetary item is recognised directly in equity any exchange component of that gain or loss is also recognised directly 
in equity when a gain or loss on a non‑monetary item is recognised in profit or loss any exchange component of that gain or loss is also recognised 
in profit or loss 
for the purpose of presenting consolidated financial statements the assets and liabilities of the group’s foreign operations including comparatives 
are expressed in sterling using exchange rates prevailing on the balance sheet date income and expense items including comparatives are translated 
at the actual exchange rates 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 25
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
2 principal accounting policies continued
29 defined contribution pension funds
the group pays contributions related to salary to certain uk employees’ individual pension schemes the pension cost charged against profits represents 
the amount of the contributions payable to the schemes in respect of the accounting period no separate provision is made in respect of non‑uk employees
210 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 lives of between three and five years estimated useful lives and residual values are reviewed 
each year and amended if necessary
211 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
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 
rate used is 10 per annum amortisation is included within research and development costs
capitalisation of research and development costs
costs associated with research activities are treated as an expense in the period in which they are incurred
costs that are directly attributable to the development phase of an internal project will only be recognised as intangible assets provided they meet 
the following requirements
  an asset is created that can be separately identified
  the technical feasibility exists to complete the intangible asset so that it will be available for sale or use and the group has the intention and ability 
so to do
  it is probable that the asset created will generate future economic benefits either through internal use or sale
  sufficient technical financial and other resources are available for completion of the asset and
  the expenditure attributable to the intangible asset during its development can be reliably measured
careful judgement by the group’s management is applied when deciding whether recognition requirements for development costs have been met this 
is necessary as the economic success of any product development is uncertain and may be subject to future technical problems at the time of recognition 
judgements are based on the information available at each balance sheet date 
to 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 
212 impairment testing of goodwill other intangible assets and property plant and equipment
at each balance sheet date the group assesses whether there is any indication that the carrying value of any asset may be impaired if any such indication 
exists the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss if any where it is not possible to estimate 
the recoverable amount of an individual asset the group estimates the recoverable amount of the cash‑generating unit to which the asset belongs
in the case of goodwill and any intangible asset with either an indefinite useful life or which is not yet ready for use the group tests for impairment 
at each balance sheet date
for the purposes of assessing impairment assets are grouped at the lowest levels for which there are separately identifiable cash flows cash‑generating 
units goodwill is allocated to those cash‑generating units that are expected to benefit from synergies of the related business combination and represent 
the lowest level within the group at which management controls the related cash flows 
individual assets or cash‑generating units that include goodwill and other intangible assets with an indefinite useful life or those not yet available for use 
are tested for impairment at least annually all other individual assets or cash‑generating units are tested for impairment whenever events or changes 
in circumstances indicate that the carrying amount may not be recoverable
an impairment loss is recognised for the amount by which the asset’s or cash‑generating unit’s carrying amount exceeds its recoverable amount 
the recoverable amount is the higher of fair value reflecting market conditions less costs to sell and value in use based on an internal discounted 
cash flow evaluation impairment losses recognised for cash‑generating units to which goodwill has been allocated are credited initially to the carrying 
amount of goodwill any remaining impairment loss is charged pro rata to the other assets in the cash‑generating unit  silence therapeutics plc annual report and accounts 2009
26
notes to the financial statements continued
year ended 31 december 2009
2 principal accounting policies continued
213 investments in subsidiaries
investments in subsidiaries comprise shares in the subsidiaries and loans from the company investment in shares of the subsidiaries are stated at cost 
less provisions for impairment loans to subsidiaries are recorded at fair value
214 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
derecognition 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
trade receivables are measured at initial recognition at fair value plus if appropriate directly attributable transaction costs and are subsequently measured 
at amortised cost using the effective interest method appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when 
there is objective evidence that the asset is impaired the allowance recognised is measured as the difference between the asset’s carrying amount 
and the present value of estimated future cash flows discounted at an effective interest rate computed at initial recognition
loans receivable
loans receivable are non‑derivative financial assets with fixed or determinable payments that are not quoted in an active market they arise when the group 
or company provides money directly to a debtor with no intention of trading the receivables loans receivable are measured at initial recognition at fair 
value plus if appropriate directly attributable transaction costs and are subsequently measured at amortised cost using the effective interest method 
less provision for impairment any change in their value is recognised in profit or loss
cash and cash equivalents
cash and cash equivalents comprise cash on hand and demand deposits that are readily convertible to a known amount of cash and are subject 
to an insignificant risk of change in value
financial liabilities and equity
financial liabilities and equity instruments issued by the group are classified according to the substance of the contractual arrangements entered into 
and the definitions of a financial liability and an equity instrument a financial liability is a contractual obligation to either deliver cash or another financial 
asset to another entity or to exchange a financial asset or financial liability with another entity including obligations which may be settled by the group 
using its equity instruments an equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its 
liabilities the accounting policies adopted for specific financial liabilities and equity instruments are set out below
financial liabilities
at initial recognition financial liabilities are measured at their fair value plus if appropriate any transaction costs that are directly attributable to the issue 
of the financial liability after initial recognition all financial liabilities are measured at amortised cost using the effective interest method
equity instruments
equity instruments issued by the group are recorded at the proceeds received net of direct issue costs
215 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
216 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 
217 share‑based payments
the group issues equity‑settled share‑based payments to certain employees and advisers equity‑settled share‑based payments are measured at fair value 
excluding the effect of non market‑based vesting conditions at the date of grant the fair value so determined is expensed on a straight‑line basis 
over the vesting period based on the group’s estimate of the number of shares that will eventually vest and adjusted for the effect of non market‑based 
vesting conditions
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 27
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
2 principal accounting policies continued
218 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
219 taxation
the tax credit recognised in the income statement represents the sum of the tax currently payable or receivable and deferred tax
the tax currently payable is based on taxable profit for the year taxable profit differs from profit as reported in the income statement because it excludes 
items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible the group’s 
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date
tax receivable arises from the uk legislation regarding the treatment of certain qualifying research and development costs allowing for the surrender 
of tax losses attributable to such costs in return for a tax rebate
deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases 
used in the computation of taxable profit and is accounted for using the balance sheet liability method deferred tax liabilities are generally recognised 
for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against 
which deductible temporary differences can be utilised such assets and liabilities are not recognised if the temporary difference arises from initial 
recognition of goodwill or from the initial recognition other than in a business combination of other assets and liabilities in a transaction that affects 
neither the taxable profit nor the accounting profit
deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates and interests in joint ventures 
except where the group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse 
in the foreseeable future
the carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient 
taxable profits will be available to allow all or part of the asset to be recovered
deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised deferred tax is charged 
or credited to profit or loss except when it relates to items charged or credited directly to equity in which case the deferred tax is also dealt with in equity
deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when 
they relate to income taxes levied by the same taxation authority and the group intends to settle its current tax assets and liabilities on a net basis
220 critical accounting judgements and key sources of estimation uncertainty
in the process of applying the entity’s accounting policies management makes estimates and assumptions that have an effect on the amounts recognised 
in the financial statements although these estimates are based on management’s best knowledge of current events and actions actual results may ultimately 
differ from those estimates
the key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date that have a significant risk of causing 
a material adjustment to the carrying amounts of assets and liabilities within the next financial year are those relating to
  the capitalisation or otherwise of development expenditure
  the ability of the group to operate as a “going concern”
  the carrying value of the company’s investment in its subsidiaries
  the future recoverability of goodwill and other intangible assets and 
  the corresponding review for impairment of those assets
the group expends considerable sums on its development projects with its total research and development costs for 2009 amounting to £5073333 
2008 £6712032 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 silence therapeutics plc annual report and accounts 2009
28
notes to the financial statements continued
year ended 31 december 2009
2 principal accounting policies continued
220 critical accounting judgements and key sources of estimation uncertainty continued
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 2009 is £23494482 2008 £19917264 
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 £8130972 at 31 december 2009 2008 £8611087 the movement in the year represents an adjustment 
in respect of fluctuations in foreign exchange rates 
other intangible assets have a carrying value at 31 december 2009 of £736117 2008 £812696 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
all revenue in the year was from licence and service fees generated by european operations the analysis of revenues by geographical destination is
      2009 2008 
      £ £
europe     1601796 1113749
north america     — 1094950
asiapacific     121493 —
      1723289 2208699
4 segment reporting
for 2008 and 2009 the group operated in two specific technology fields that of rnai therapeutics and in immunotherapy these activities were carried 
out in separate operating subsidiaries with certain centralised functions carried out at group level these are the three reporting areas used by the board 
in its management of the entity
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 2009 £763900 or 443 of group revenues arose from a single customer with £275000 160 coming from a second customer during 2008 
the comparative figures for those two customers were £220881 100 and nil respectively whilst a different customer provided revenues of £1094968 
representing 496 of 2008 group revenues
business segments
    rnai  group consolidated 
    therapeutics immunotherapy administration data 
2009   £ £ £ £
revenue from external customers   1422289 301000 — 1723289
revenue from other operating segments   — — 246373 —
operating lossprofit   5278476 205598 2481537 7554415
interest revenue   1360 773 43971 46104
net lossprofit for the year before taxation   5277116 206371 2437566 7508311
segment assets   10397568 161103 435631 10994302
segment liabilities   1525419 40670 537055 2103144
costs to acquire property plant and equipment   36648 — — 36648
costs to acquire intangible assets   188494 — — 188494
depreciation and amortisation   367977 2974 — 370951
income tax income   — 37714 — 37714
charge for non‑cash expenses share‑based payments charge    343677 — 318027 661704 29
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
4 segment reporting continued
business segments continued
    rnai   group consolidated 
    therapeutics immunotherapy unallocated data 
2008   £ £ £ £
revenue from external customers   2182699 26000 — 2208699
revenue from other operating segments   — — 465318 —
operating loss   5787779 271759 1732099 7791637
net finance income   81817 47595 227584 356996
net loss for the year before taxation   5705962 224164 1504515 7434641
segment assets   11960517 463752 1954312 14378581
segment liabilities   767254 46200 121147 934601
costs to acquire property plant and equipment   135584 — — 135584
costs to acquire intangible assets   135752 — — 135752
depreciation and amortisation   420412 2993 — 423405
income tax income   — — — —
charge for non‑cash expenses share‑based payments charge    418805 — 125353 544158
the operations segment assets and liabilities of the rnai therapeutics segment are located in germany the operations segment assets and liabilities 
of the remaining two segments are located in the united kingdom
5 operating loss 
this is stated after charging
      2009 2008 
      £ £
depreciation of property plant and equipment     150293 116489
amortisation of intangibles     220658 306916
impairment of goodwill     — —
share‑based payments charge     661704 544158
auditors’ remuneration
 – audit of parent company     50340 45318
 – audit of subsidiary     12000 10000
operating lease payments on offices     295756 396628
fees payable to auditors other than the auditors of the company amounted to £22017 2008 £19761 silence therapeutics plc annual report and accounts 2009
30
notes to the financial statements continued
year ended 31 december 2009
6 directors and staff costs
staff costs including directors’ remuneration during the year were as follows
      2009 2008 
      £ £
wages and salaries     2561158 2867764
compensation for loss of office     — 282296
social security costs     317458 364977
pension costs     17500 25083
      2896116 3540120
the average number of employees including both executive and non‑executive directors during the year was 43 2008 51 
apart from the directors the average number of employees of the parent company was two 2008 two
management remuneration paid and other benefits supplied to the directors during the year was as follows
      2009 2008 
      £ £
remuneration     557200 662200
benefits in kind     4057 4379
compensation for loss of office     — 253667
      561257 920246
chargecredit in respect of share‑based payments     204377 37700
pension contributions to defined contribution schemes for one director 2008 one director   17500 17500
      783134 900046
included in the amounts shown above are payments to third parties amounting to £120000 for the services of certain directors 2008 £85000
the amounts set out above include remuneration to the highest paid director as follows 
      2009 2008 
      £ £
remuneration     242000 143000
benefits in kind     — 1173
compensation for loss of office     — 253667
charge in respect of share‑based payments     71466 —
      313466 397840
the directors of the group are the same as the key management personnel as defined by ias 24 related party transactions
7 finance income
the finance income comprises
      2009 2008 
      £ £
bank interest receivable     46104 253634
release of provision against loan     — 31000
exchange differences     — 72362
      46104 356996 31
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
8 taxation
the credit for the year is made up as follows
      2009 2008 
      £ £
corporate taxation on the results for the year 
– uk     — —
– non‑uk     — —
research and development tax credit uk     — 48000
adjustment in respect of prior years uk     37714 48000
taxation credit for the year     37714 —
the credit for uk corporation tax arises from the group taking advantage of the legislation regarding the treatment of certain qualifying research 
and development costs 
a reconciliation of the tax credit appearing in the income statement to the tax credit that would result from applying the standard rate of tax to the results 
for the year is
      2009 2008 
      £ £
loss per accounts     7508311 7434641
tax credit at the standard rate of corporation tax averaged between the two countries of operation  
of 296 2008 298     2219310 2215728
impact of costs disallowable for tax purposes     495490 163580
impact of income not taxable     41578 9239
deferred tax in respect of temporary differences     181 749
impact of unrelieved tax losses not provided for     1765579 2062136
sub‑total     — —
relief and refund available in respect of rd expenditure     — 48000
adjustment to that relief in respect of prior periods     37714 48000
taxation credit for the year     37714 —
estimated tax losses of £46000000 2008 £36000000 are available for relief against future profits
the deferred tax asset not provided for in the accounts based on the estimated tax losses and the treatment of the equity‑settled share‑based payments 
net of any other temporary differences is approximately £12800000 2008 £10200000
9 loss per share
the calculation of the loss per share is based on the loss for the financial year after taxation of £7470597 2008 loss £7434641 and on the weighted 
average of 134640515 2008 119885617 ordinary shares in issue during the year 
the options outstanding at 31 december 2009 and 31 december 2008 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 silence therapeutics plc annual report and accounts 2009
32
notes to the financial statements continued
year ended 31 december 2009
10 property plant and equipment
       equipment 
       and furniture 
       total 
group      £
cost
at 1 january 2008      3297068
additions      135584
disposals      278836
translation adjustment      932070
at 31 december 2008      4085886
additions      36648
disposals      181616
translation adjustment      222242
at 31 december 2009      3718676
depreciation
at 1 january 2008      2898304
charge for the year       116489
eliminated on disposal      278529
translation adjustment      813713
at 31 december 2008      3549977
charge for the year       150293
eliminated on disposal      162039
translation adjustment      196231
at 31 december 2009      3342000
net book value 
as at 31 december 2008      535909
as at 31 december 2009      376676
11 goodwill
the carrying amount of goodwill is wholly attributable to the acquisition of silence therapeutics ag in 2005
      2009 2008 
      £ £
balance at start of year     8611087 6653990
translation adjustment     480115 1957097
balance at end of year     8130972 8611087
in accordance with ias 36 impairment of assets the carrying value of goodwill has been assessed comparing its carrying value to its recoverable amount 
the recoverable amount has been calculated by the directors as being the fair value less costs of sale 
to arrive at fair value less costs of sale the directors have reviewed observable market information that being the price to sales ratios of recent 
transactions in the sector as well as enterprise valueturnover ratios based on recent deals and similar quoted companies 
the value of silence therapeutics ag is largely influenced by the expected success of its rnai technology which has been successful in preliminary trials 
to date the directors are of the opinion that this supports the fair value less costs to sale approach to assessing the carrying value of silence therapeutics ag 
and consider this to be a more relevant and reliable methodology in this instance than value in use 
on the basis of these assessments the board considers there is no need to impair the carrying value of goodwill  33
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
12 other intangible assets
      internally  
      generated  
      patents   
      and patent   
     licences applications total 
     £ £ £
cost
at 1 january 2008    2026796 567883 2594679
additions    10429 125323 135752
translation adjustment    597663 185459 783122
at 31 december 2008    2634888 878665 3513553
additions    416 188078 188494
translation adjustment    146921 54233 201154
at 31 december 2009    2488383 1012510 3500893
amortisation
at 1 january 2008    1693050 121926 1814976
charge for the year     230070 76846 306916
translation adjustment    531802 47163 578965
at 31 december 2008    2454922 245935 2700857
charge for the year     100433 120225 220658
translation adjustment    139675 17064 156739
at 31 december 2009    2415680 349096 2764776
net book value 
as at 31 december 2008    179966 632730 812696
as at 31 december 2009    72703 663414 736117
the licences included above have finite useful lives estimated to be of ten years from date of initial acquisition over which period the assets are amortised 
the group’s internally generated patent costs above represent expenses connected with filings for patent registration in respect of technology that has been 
developed by the group for use in revenue generating activities these costs are amortised on a straight‑line basis over ten years commencing upon 
the completion of the relevant asset the charge for amortisation is included within research and development costs in the income statement 
the group tests for possible impairment of definite‑lived intangible assets on a regular basis if indicators of possible impairment exist such as a change 
of use of the asset a reduction in operating cash flow or a change in technology the company compares the discounted cash flows related to the asset 
to the carrying value of the asset if the carrying value is greater than the discounted cash flow amount an impairment charge is recorded for the amount 
necessary to reduce the carrying value of the asset to fair value fair value for the purpose of the impairment tests is determined based on current market 
value or discounted future cash flows in determining the fair value certain assumptions are made concerning for example estimated cash flow and growth 
of the group’s operations
13 investments
      2009 2008 
company     £ £
investment in subsidiary undertakings     23494482 19917264 silence therapeutics plc annual report and accounts 2009
34
notes to the financial statements continued
year ended 31 december 2009
13 investments continued
the investment in subsidiary undertakings is made up as follows
     investment impairment net 
     at cost provision total 
     £ £ £
shares in subsidiary undertakings
at 1 january 2008    12719169 209991 12509178
additions    6724938 — 6724938
at 31 december 2008    19444107 209991 19234116
additions    3746635 4514 3751149
at 31 december 2009    23190742 205477 22985265
loans to subsidiary undertakings
at 1 january 2008    23265772 22095476 1170296
additions    109384 596532 487148
at 31 december 2008    23375156 22692008 683148
reductions    310084 136153 173931
at 31 december 2009    23065072 22555855 509217
total investment 
as at 31 december 2008    42819263 22901999 19917264
as at 31 december 2009    46255814 22761332 23494482
subsidiary companies
the principal activity of all subsidiaries is the research and development of pharmaceutical products 
    place of  proportion of 
    incorporation principal ownership 
name   and operation technology area interest
silence therapeutics ag   germany rnai therapeutics 100
stanford rook ltd   england immunotherapy 100
innopeg ltd   england not active 100
the company has made additional investment during the year in its operating subsidiary silence therapeutics ag 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 as the directors believe that the fair value exceeds the cost 
of investment to date 
14 trade and other receivables
    group company group company 
    2009 2009 2008 2008 
    £ £ £ £
trade receivables   164871 — 692009 —
other receivables   197212 78818 96362 65747
prepayments   198107 12418 210331 —
    560190 91236 998702 65747
the directors consider that the carrying amount of trade and other receivables approximates to their fair value fair values have been calculated by discounting 
cash flows at prevailing interest rates see also note 24
no interest is charged on outstanding trade receivables 35
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
15 cash and cash equivalents
    group company group company 
    2009 2009 2008 2008 
    £ £ £ £
cash at bank   1131146 358256 3350187 1914188
cash at bank comprises of balances held by the group in current and short‑term bank deposits with a maturity of three months or less the carrying amount 
of these assets approximates to their fair value the deposits held at bank are treated as cash equivalents under the definitions of ias 7 “cash flow statements” 
although the sums are held on short‑term fixed rate deposit they are instantly available to the group but only by breaking the terms of the deposit which 
may incur minor penalties during the year the effective rates of interest on fixed rate deposits ranged between 079 and 398 per annum
16 trade and other payables 
    group company group company 
    2009 2009 2008 2008 
    £ £ £ £
trade payables   626315 522500 432887 55512
social security and other taxes   24149 24149 23225 —
deferred revenues   511766 — 95635 —
accruals and other payables   940914 625192 382854 65635
amounts due to group companies   — 13864 — 25627
    2103144 1185705 934601 146774
trade payables and accruals principally comprise amounts outstanding for trade purchases and continuing costs the directors consider that the carrying 
amount of trade and other payables approximates to their fair value fair values have been calculated by discounting cash flows at prevailing interest rates 
see also note 24
17 deferred taxation
the following are the major deferred tax liabilities and assets recognised by the group
      2009 2008 
      £ £
deferred tax liability 
– in respect of intangible assets     214000 228000
liability     214000 228000
less offset of deferred tax asset below     214000 228000
      — —
      2009 2008 
      £ £
deferred tax asset
– in respect of available tax losses     11900000 10200000
– in respect of share‑based payments     890000 812000
deferred tax asset     12790000 11012000
less offset against deferred tax liability     214000 228000
 provision against asset      12576000 10784000
asset     — — silence therapeutics plc annual report and accounts 2009
36
notes to the financial statements continued
year ended 31 december 2009
18 share capital
      2009 2008 
      £ £
allotted called up and fully paid 
135033392 2008 119913392 ordinary shares     1350334 1199134
the group has only one class of share all ordinary shares have equal voting rights and rank pari passu for the distribution of dividends and repayment 
of capital
details of the shares issued by the company during the current and previous years are as follows
      2009 2008 
      £ £
number of shares in issue at 1 january 2008      119883536
shares issued during 2008
– upon the exercise of staff share options at 1275p per share      29856
number of shares in issue at 31 december 2008      119913392
shares issued during 2009
– issue of shares for cash at 18p per share     15000000
– upon the exercise of staff share options at 1275p per share     100000
– upon the exercise of staff share options at 19p per share     20000
total issued in year      15120000
number of shares in issue at 31 december 2009      135033392
the group operates both an inland revenue approved share option scheme and an unapproved share option scheme all directors and uk employees 
are eligible for both schemes the group has also granted options to certain directors and employees under the auspices of an enterprise management 
incentive scheme 
at 31 december 2009 there were options outstanding over 20585547 2008 22058911 unissued ordinary shares and warrants outstanding over 
925926 unissued ordinary shares 
details of the options outstanding are as follows
       exercise price 
exercise date     number  p
at any time up to 27 may 2014     900000 270p
at any time up to 24 july 2015     8600000 230p
at any time up to 25 july 2016     755548 1275p
at any time up to 23 november 2016     1200000 430p
at any time up to 29 may 2017     70000 109p
between 31 march 2010 and 29 may 2017     10000 109p
at any time up to 26 july 2017     668000 127p
between 26 july 2010 and 26 july 2017     332000 127p
at any time up to 14 december 2017     386669 6775p
between 14 december 2010 and 14 december 2017     193331 6775p
at any time up to 16 may 2018     26667 415p
between 7 may 2010 and 6 may 2018     26667 415p
between 7 may 2011 and 6 may 2018     51666 415p
at any time up to 25 september 2018     405000 295p
between 26 september 2010 and 25 september 2018     5000 295p
between 26 september 2011 and 25 september 2018     5000 295p
at any time up to 4 december 2018     1916669 20p
between 5 december 2010 and 4 december 2018     2716682 20p
between 5 december 2011 and 4 december 2018     2316648 20p
total     20585547 37
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
18 share capital continued
the options held by the directors at the beginning and end of the year are as detailed below no director was granted or exercised options during 2009
  at 1 january lapsed in at 31 december exercise price earliest date latest date 
director 2009 the year 2009 p of exercise of exercise
i g ross
– unapproved scheme 500000 — 500000 27p 280504 270514
– unapproved scheme 1000000 — 1000000 23p 250705 240715
– unapproved scheme 1000000 — 1000000 23p 250706 240715
– unapproved scheme 1000000 — 1000000 23p 250707 240715
– unapproved scheme 1000000 — 1000000 23p 250708 240715
– unapproved scheme 150000 — 150000 43p 241107 231116
– unapproved scheme 125000 — 125000 43p 241108 231116
– unapproved scheme 125000 — 125000 43p 241109 231116
– unapproved scheme 1100000 — 1100000 20p 051209 041218
j m davies
– emi scheme 200000 — 200000 27p 280507 280514
– unapproved scheme 250000 — 250000 23p 250705 240715
– unapproved scheme 300000 — 300000 23p 250706 240715
– unapproved scheme 350000 — 350000 23p 250707 240715
– unapproved scheme 400000 — 400000 23p 250708 240715
– unapproved scheme 75000 — 75000 43p 241107 231116
– unapproved scheme 62500 — 62500 43p 241108 231116
– unapproved scheme 62500 — 62500 43p 241109 231116
– unapproved scheme 750000 — 750000 20p 051209 041218
j l curnock cook
– unapproved scheme 50000 — 50000 23p 250705 240715
– unapproved scheme 60000 — 60000 23p 250706 240715
– unapproved scheme 70000 — 70000 23p 250707 240715
– unapproved scheme 70000 — 70000 23p 250708 240715
– unapproved scheme 200000 200000 — 75p 300907 300909
– unapproved scheme 350000 — 350000 20p 051209 041218
h r p reynolds
– unapproved scheme 200000 — 200000 27p 280504 270514
– unapproved scheme 50000 — 50000 23p 250705 240715
– unapproved scheme 60000 — 60000 23p 250706 240715
– unapproved scheme 70000 — 70000 23p 250707 240715
– unapproved scheme 70000 — 70000 23p 250708 240715
– unapproved scheme 200000 200000 — 75p 300907 300909
– unapproved scheme 350000 — 350000 20p 051209 041218
d c u’prichard
– unapproved scheme 50000 — 50000 23p 250705 240715
– unapproved scheme 60000 — 60000 23p 250706 240715
– unapproved scheme 70000 — 70000 23p 250707 240715
– unapproved scheme 70000 — 70000 23p 250708 240715
– unapproved scheme 200000 200000 — 75p 300907 300909
– unapproved scheme 350000 — 350000 20p 051209 041218 silence therapeutics plc annual report and accounts 2009
38
notes to the financial statements continued
year ended 31 december 2009
18 share capital continued
  at 1 january lapsed in at 31 december exercise price earliest date latest date 
director 2009 the year 2009 p of exercise of exercise
b o wetzel
– unapproved scheme 50000 — 50000 23p 250705 240715
– unapproved scheme 60000 — 60000 23p 250706 240715
– unapproved scheme 70000 — 70000 23p 250707 240715
– unapproved scheme 70000 — 70000 23p 250708 240715
– unapproved scheme 200000 200000 — 75p 300907 300909
– unapproved scheme 350000 — 350000 20p 051209 041218
a clancy
– unapproved scheme 200000 — 200000 295p 260908 250918
j a p randall
– unapproved scheme 200000 — 200000 295p 260908 250918
sub‑total 12250000 800000 11450000
none of the options granted under any of the schemes have any future performance or qualifying conditions attached to them other than remaining 
as an employee the remuneration committee did not believe that the inclusion of such conditions for staff or directors was appropriate at the time 
of granting these options
the market price of the shares at the year end was 185p per share 31 december 2008 18p 
during the year the minimum and maximum prices were 18p and 33p per share respectively
at both 31 december 2009 and 31 december 2008 the group had outstanding warrants over 925926 shares that are convertible at 27p per share 
all warrants may be exercised at any time up to 24 july 2010
19 capital reserves
    share  share‑based  
    premium merger payment  
    account reserve reserve total 
group   £ £ £ £
at 1 january 2008   37964447 6140874 2359844 46465165
on options exercised during the year   3509 — 1687 1822
on vested options lapsed during the year    — — 731 731
on options issued during the year   — — 544158 544158
movement in the year   3509 — 541740 545249
at 31 december 2008   37967956 6140874 2901584 47010414
on shares issued in the year   2550000 — — 2550000
 – less costs of share issue   50000 — — 50000
on options in issue during the year   — — 661704 661704
on options exercised during the year   15350 — 4514 10836
on vested options lapsed during the year    — — 372883 372883
movement in the year   2515350 — 284307 2799657
at 31 december 2009   40483306 6140874 3185891 49810071 39
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
19 capital reserves continued
    share  share‑based  
    premium merger payment  
    account reserve reserve total 
company   £ £ £ £
at 1 january 2008   37964447 5956958 2359844 46281249
on options exercised during the year   3509 — 1687 1822
on vested options lapsed during the year    — — 731 731
on options issued during the year   — — 544158 544158
movement in the year   3509 — 541740 545249
at 31 december 2008   37967956 5956958 2901584 46826498
on shares issued in the year   2550000 — — 2550000
– less costs of share issue   50000 — — 50000
on options in issue during the year   — — 661704 661704
on options exercised during the year   15350 — 4514 10836
on vested options lapsed in the year    — — 372883 372883
movement in the year   2515350 — 284307 2799657
at 31 december 2009   40483306 5956958 3185891 49626155
due to the size of the retained loss the company has no distributable reserves
20 equity‑settled share‑based payments
the company has two share option schemes open to all employees of the group options are exercisable at a price equal to the market price of the company’s 
shares on the date of grant 
in the inland revenue approved scheme the vesting period is three years and should the options remain unexercised they lapse after ten years from 
the date of grant the options also lapse after six months following the employee leaving the group 
under the unapproved share option scheme the options vest at dates set by the board at the time the option is granted the options lapse after 
three months following the employee leaving the group 
as part of the fee structure in respect of the acquisition of silence therapeutics ag and the subsequent fundraising in mid‑2005 the group issued warrants 
to its advisers which could be exercised at any time within five years from the date of issue most of those warrants have been converted into shares 
see note 19 above the holders may convert the remaining warrants into a maximum of 925926 ordinary shares at a price of 27p per share 
details of the share options and warrants outstanding at the year end are as follows
  2009  2008
     weighted average   weighted average 
     exercise price   exercise price 
    number p number   p
options
outstanding at the beginning of the year   22058911 3169p 17601728 4718p
granted during the year   — — 7559999 2098p
lapsed during the year   1353364 6167p 3072960 9423p
exercised during the year   120000 1379p 29856 1275p
outstanding at the year end   20585547 2982p 22058911 3169p
exercisable at the year end   14928553 3037p 4231229 3136p
warrants
outstanding at the beginning of the year   925926 2700p 925926 2700p
granted during the year   — — — —
lapsed during the year   — — — —
exercised during the year   — — — —
outstanding at the year end   925926 2700p 925926 2700p
exercisable at the year end   925926 2700p 925926 2700p silence therapeutics plc annual report and accounts 2009
40
notes to the financial statements continued
year ended 31 december 2009
20 equity‑settled share‑based payments continued
the weighted average share prices at each date when share options were exercised during the year were
       weighted average 
       share price  
date option exercised      p
14 july 2009      24p
the options outstanding at the year end have a weighted average remaining contractual life of 70 years 2008 77 years the exercise price of the 
options outstanding at the year end range from 1275p to 127p per share full details are given in note 18 above
the group granted no options during the year in previous years the fair values of options granted were calculated using a binomial model and the inputs 
into the model were as follows
      2008 2007
weighted average share price     30509p 88596p
weighted average exercise price     20981p 94989p
expected volatility     85–115 72–78
risk free rate     305–448 456–552
expected dividend yield     — —
expected volatility was determined using as a base the share price movements recorded over the previous four years and taking into account any specific 
factors impacting during that period
the expected life used in the model has been adjusted based on management’s best estimate for the effects of non‑transferability exercise restrictions 
and behavioural considerations 
the group recognised total charges of £661704 2008 £544158 related to equity‑settled share‑based payment transactions during the year
21  capital commitments
there were no capital commitments at 31 december 2009 or 31 december 2008
22 contingent liabilities
there were no contingent liabilities at 31 december 2009 or at 31 december 2008
23 commitments under operating leases
there were no commitments under operating leases at 31 december 2009 or at 31 december 2008
24 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 
financial assets by category
the categories of financial assets as defined by international accounting standard 39 financial instruments recognition and measurement – ias 39 
included in the balance sheet and the heading in which they are included are as follows
    group company group company 
    2009 2009 2008 2008 
    £ £ £ £
current assets
trade and other receivables   362083 78814 788371 65747
cash and cash equivalents   1131146 358256 3350187 1914188
categorised as loans and receivables   1493229 437070 4138558 1979935
all amounts are short term and none are past due at the reporting date  41
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
24 financial instruments and risk management continued
financial liabilities by category
the categories of financial liabilities as defined by ias 39 included in the balance sheet and the heading in which they are included are as follows
    group company group company 
    2009 2009 2008 2008 
    £ £ £ £
current liabilities
trade and other payables   1567229 1161556 815741 146774
categorised as financial liabilities measured at amortised cost   1567229 1161556 815741 146774
all amounts are short term and payable in zero to three months 
credit risk
the maximum exposure to credit risk at the reporting date by class of financial asset was
    group company group company 
    2009 2009 2008 2008 
    £ £ £ £
loans and receivables   1750534 449492 4418889 1979935
interest rate risk
the nature of the group’s activities and the basis of funding are such that the group has significant liquid resources the group uses these resources 
to meet the cost of future research and development activities consequently it seeks to minimise risk in the holding of its bank deposits while maintaining 
a reasonable rate of interest the group is not financially dependent on the income earned on these resources and therefore the risk of interest rate fluctuations 
is not significant to the business nonetheless the directors take steps to secure rates of interest which generate a return for the group by depositing sums 
which are not required to meet the immediate needs of the group in interest‑bearing deposits other balances are held in interest‑bearing instant access 
accounts all deposits are placed with main clearing banks to restrict both credit risk and liquidity risk the deposits are placed for the short term between 
one and three months to provide flexibility and access to the funds and to avoid locking into potentially unattractive interest rates 
liquidity risk
the group’s liquid resources are invested having regard to the timing of payments to be made in the ordinary course of the group’s activities all financial 
liabilities are payable in the short term between zero and three months and the group maintains adequate bank balances in either instant access or short 
term deposits to meet those liabilities as they fall due
currency risk
the group operates in a global market with income possibly arising in a number of different currencies principally in sterling us dollars or euros the majority 
of the operating costs are incurred in euros with the rest predominantly in sterling the group does not hedge potential future income since the existence 
quantum and timing of such income cannot be accurately predicted
financial assets and liabilities denominated in euros and translated into sterling at the closing rate were
    group company group company 
    2009 2009 2008 2008 
    £ £ £ £
financial assets   1141216 — 1979450 —
financial liabilities   890633 — 767255 —
net financial assets   250583 — 1212195 —
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
for a number of years until 2007 the sterlingeuro exchange rate operated within a relatively close trading range however there was a sharp fall in sterling 
towards the end of 2007 which continued through 2008 before stabilising to a degree during 2009 nonetheless that movement has resulted in the exchange 
rate being approximately 30 different from the 2007 rate the table shows the impact of a further fall or strengthening of sterling against the euro by 20
     2009 if sterling if sterling 
     as reported  rose 20 fell 20 
     £ £ £
group result for the year    7470597 6590822 8790170
euro denominated net financial assets    250583 208819 313228
total equity at 31 december 2009    8891155 7393458 12278715 silence therapeutics plc annual report and accounts 2009
42
notes to the financial statements continued
year ended 31 december 2009
24 financial instruments and risk management continued
currency risk continued
     2008 if sterling if sterling 
     as reported  rose 20 fell 20 
     £ £ £
group result for the year    7434641 6977089 7979591
euro denominated net financial assets    1212195 1010163 1515244
total equity at 31 december 2008    13443979 11644059 16143859
25 related party transactions
during the year the company charged a management fee to its subsidiary companies stanford rook limited amounting to £15251 2008 £62830 
and silence therapeutics ag amounting to £231123 2008 £402488 both amounts were added to the cost of the company’s investment in these 
two subsidiaries in addition stanford rook limited settled expenses on behalf of the company amounting to £541205 2008 £491673 which has 
been deducted from the company’s cost of investment in this subsidiary
26 post balance sheet event
261 acquisition of intradigm
on 5 january 2010 the company acquired the entire issued share capital of intradigm corporation a company also engaged in the development 
of rnai‑based therapeutics by issuance of 79640668 ordinary shares representing consideration of £18317354 the fair value of each share was 
23p based on the price at which the company issued shares in a fundraising completed at the same time additional consideration for the acquisition 
included 27m shares and 114m immediately vesting options which were issued to executives of intradigm on completion of the deal
the total cost of acquisition includes the components stated below
       £’000
purchase price settled in shares      18317
value of shares issued to intradigm executives      621
value of options issued to intradigm executives      108
total cost of acquisition      19046
the carrying amount and fair value of the assets and liabilities acquired are as follows
      carrying amount fair value 
      £’000 £’000
property plant and equipment     266 266
trade and other receivable     114 114
cash and short term deposits     801 801
trade and other payables     1698 1698
short‑term borrowings     1876 1876
deferred revenue     423 423
fair value of net liabilities acquired     2816 2816
goodwill arising on acquisition     21862 21862
      19046 19046
the carrying value of goodwill arising on acquisition reflects the position intradigm occupies in the high profile field of rnai therapeutics and the synergies 
expected to arise from combination with the company already a leader in the field due to the early stage nature of the projects the timing of future cash flows is 
uncertain and so a value in use calculation is not possible none of the goodwill is expected to be deductible for income tax purposes management have 
yet to complete their assessment of any identifiable intangible assets and the disclosed figures are therefore provisional and may be subject to change
262 issue of shares in conjunction with the intradigm acquisition
on 5 january 2010 the company issued 65217392 new ordinary shares of 1p each at a price of 23p per share for a total cash consideration of £15m 
before expenses of the issue the nominal value of these shares was £652173 43
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
company information and advisers
secretary
max herrmann
registered office
22 melton street 
london nw1 2bw
registered number 
2992058
nominated advisers
nomura code securities ltd
1 carey lane 
london ec2v 8ae
registrars
capita irg plc
northern house 
woodsome park 
fenay bridge 
huddersfield hd8 0la
auditor
grant thornton uk llp
grant thornton house 
melton street 
euston square 
london nw1 2ep silence therapeutics plc annual report and accounts 2009
44
notice of annual general meeting
this document is important and requires your immediate attention  if you are in any doubt as to what action to take 
you should consult your stockbroker solicitor accountant or other appropriate independent professional adviser authorised under 
the financial services and markets act 2000  if you have sold or otherwise transferred all your shares in silence therapeutics plc 
please forward this document and the accompanying form of proxy to the person through whom the sale or transfer was effected 
for transmission to the purchaser or transferee
notice is hereby given that the annual general meeting “annual general meeting” of silence therapeutics plc the “company” will be held at the 
royal institution 21 albemarle street london w1s 4bs at 1000am on friday 18 june 2010 to consider and if thought fit to pass the following 
resolutions it is intended to propose resolution 8 as a special resolution all other resolutions will be proposed as ordinary resolutions
ordinary business
1 to receive the accounts for the financial year ended 31 december 2009 together with the reports of the directors and auditors thereon
2  to reappoint grant thornton uk llp as auditors of the company for the financial year ending 31 december 2010 and to authorise the directors 
to fix their remuneration
3 that philip haworth who has been appointed since the last annual general meeting be re‑elected as a director of the company
4 that max herrmann who has been appointed since the last annual general meeting be re‑elected as a director of the company
5 that david mack who has been appointed since the last annual general meeting be re‑elected as a director of the company
6 that jamie topper who has been appointed since the last annual general meeting be re‑elected as a director of the company
7  that the directors be and they are hereby generally and unconditionally authorised for the purposes of section 551 of the companies act 2006 
the “act” to exercise all the powers of the company to allot shares and grant rights to subscribe for or convert any security into shares up to an 
aggregate nominal amount within the meaning of section 5513 and 6 of the act of £279891 being 10 of the company’s issued share capital 
as at 26 may 2010 provided that this authority shall expire on whichever is the earlier of the conclusion of the next annual general meeting of the 
company or the date falling fifteen months from the date of passing of this resolution save that the company may before such expiry make any offer 
or agreement which would or might require shares to be allotted or rights to be granted after such expiry and the directors may allot shares or grant 
rights to subscribe for or to convert any security into shares in pursuance of any such offer or agreement as if the authority conferred hereby had not 
expired this authority is in substitution for any and all authorities previously conferred on the directors for the purposes of section 551 of the act
special business
8  that the directors be and they are hereby empowered pursuant to section 5701 of the act subject to the passing of resolution 7 above to allot 
equity securities as defined in section 5601 of the act of the company for cash pursuant to the authority conferred on them by resolution 7 above 
as if section 561 of the act did not apply to any such allotment provided that such power shall be limited to the allotment of equity securities for cash 
 81  in connection with or pursuant to a rights issue or open offer or any other pre‑emptive offer in favour of the holders of equity securities where the 
equity securities respectively attributable to the interests of all such holders are proportionate as nearly as practicable to the respective amounts 
of equity securities held by them subject to such exclusions or other arrangements as the directors may consider necessary or appropriate to deal 
with the requirements of any regulatory body or stock exchange in any territory fractional entitlements treasury shares record dates or legal or 
practical problems arising in or pursuant to the laws of any territory and
 82  other than pursuant to sub‑paragraph 81 above up to an aggregate nominal amount of £279891 and the power hereby conferred shall operate 
in substitution for any and all previous power given to the directors pursuant to section 5701 of the act and shall expire on whichever is the 
earlier of the conclusion of the next annual general meeting of the company or the date falling fifteen months from the date of passing of this 
resolution save that the company may before such expiry make any offer or agreement which would or might require equity securities to be 
allotted after such expiry and the directors may allot equity securities in pursuance of such offer or agreement as if the power hereby conferred 
had not expired 
  your board believes that the resolutions to be proposed at the annual general meeting are in the best interests of the company and its shareholders 
as a whole accordingly the directors unanimously recommend that the shareholders vote in favour of the resolutions as they intend to do in respect 
of their own beneficial holdings of shares in the company
by order of the board
max herrmann registered office
company secretary 22 melton street
26 may 2010 london nw1 2bw 45
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
explanatory notes to the notice of annual 
general meeting
proxies
1 a form of proxy is enclosed for your use
2  a member of the company entitled to attend and vote at the meeting may appoint one or more proxies to exercise all or any of his rights to attend 
to speak and to vote on hisher behalf a proxy need not be a member of the company a member may appoint more than one proxy in relation to the 
meeting provided that each proxy is appointed to exercise the rights attached to a different share or shares held by him you may photocopy this 
form the instrument appointing a proxy and the power of attorney or other authority if any under which it is signed or a notarially certified copy 
of that power or other authority if any must be deposited with the company’s registrars capita registrars pxs the registry 34 beckenham road 
kent br3 4tu not less than 48 hours before the time of the meeting or any adjournment thereof if you are a crest member see note 5 below
3  completion of a form of proxy or any crest proxy instruction will not preclude a member from attending and voting in person at the meeting should 
heshe wish to do so
4  pursuant to regulation 41 of the uncertificated securities regulations 2001 the company specifies that only those shareholders registered in 
the register of members of the company as at 600pm on wednesday 16 june 2010 or in the event that this meeting is adjourned in the register of 
members of the company at 600pm on the day two days prior to the adjourned meeting shall be entitled to attend and vote at the annual general 
meeting in respect of the number of shares registered in their name at the time subsequent changes to entries on the relevant register of securities 
will be disregarded in determining the rights of any person to attend or vote at the meeting
5  crest members who wish to appoint a proxy or proxies through the crest electronic proxy appointment service may do so for the annual general 
meeting to be held on 18 june 2010 at 1000am and any adjournments thereof by using the procedures described in the crest manual crest 
personal members or other crest sponsored members and those crest members who have appointed a voting service provider should refer to 
their crest sponsors or voting service providers who will be able to take the appropriate action on their behalf 
  in order for a proxy appointment or instruction made by means of crest to be valid the appropriate crest message a “crest proxy instruction” 
must be properly authenticated in accordance with euroclear uk  ireland limited’s specifications and must contain the information required for 
such instructions as described in the crest manual available via wwweuroclearcomcrest the message regardless of whether it constitutes 
the appointment of a proxy or an amendment to the instruction given to a previously appointed proxy must be transmitted so as to be received by the 
company’s agent capita registrars limited crest participant id ra10 no later than 48 hours before the time appointed for the meeting for this 
purpose the time of receipt will be taken to be the time as determined by the time stamp applied to the message by the crest application host 
from which the company’s agent is able to retrieve the message by enquiry to crest in the manner prescribed by crest after this time any change 
of instructions to proxies appointed through crest should be communicated to the appointee through other means
  crest members and where applicable their crest sponsor or voting service provider should note that euroclear uk  ireland limited does not 
make available special procedures in crest for any particular messages normal system timings and limitations will therefore apply in relation to the 
input of crest proxy instructions it is the responsibility of the crest member concerned to take or if the crest member is a crest personal 
member or sponsored member or has appointed a voting service provider to procure that his crest sponsor or voting service provider takes such 
action as shall be necessary to ensure that a message is transmitted by means of the crest system by any particular time in this connection 
crest members and where applicable their crest sponsor or voting service provider are referred in particular to those sections of the crest 
manual concerning practical limitations of the crest system and timings
  the company may treat as invalid a crest proxy instruction in the circumstances set out in regulation 355a of the uncertificated securities 
regulations 2001
6  any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a member 
provided that they do not do so in relation to the same shares
documents on display
7  copies of the directors’ service contracts and letters of engagement will be available for inspection at the registered office of the company during 
the usual business hours on any weekday saturday sunday and public holidays excepted from the date of this notice up to and including the date 
of the meeting and at the place of the meeting for 15 minutes prior to and during the meeting
total number of shares and voting rights
8  as at 26 may 2010 being the last practicable day prior to the publication of this notice the company’s issued share capital consists of 279891452 
ordinary shares carrying one vote each therefore the total voting rights in the company as at that date are 279891452
communication
9  you may not use any electronic address within the meaning of section 3334 of the companies act 2006 provided in this notice of meeting 
or in any related documents including the proxy form to communicate with the company for any purposes other than those expressly stated silence therapeutics plc annual report and accounts 2009
46
explanatory notes to certain of the resolutions
10  for the benefit of shareholders we provide the following notes concerning some of the resolutions to be placed before them at the annual general meeting 
a resolutions 3 4 5 and 6 
 dr phil haworth
 chief executive officer
  dr haworth was appointed chief executive officer of silence therapeutics in january 2010 following the company’s merger with intradigm 
corporation prior to this role dr haworth served as chief executive officer of intradigm following his tenure as the company’s vice president of 
business development he joined intradigm in 2007 having spent the previous 15 years in senior business development roles at several leading 
biotechnology companies including genencor international cor therapeutics and affymaxaffymetrix among others in these positions he led the 
identification and negotiation of numerous collaborative and licensing agreements with a range of global and regional pharmaceutical companies 
he most recently served as vice president business development at codexis inc he possesses deep deal‑making expertise that spans establishing 
discovery and development partnerships technology and product in‑ and out‑licensing mergers and acquisitions and financing support dr haworth 
earned his jd from stanford university law school and his phd in biochemistry from the university of manchester in the uk 
 max herrmann
 chief financial officer and company secretary
  mr herrmann was appointed chief financial officer of silence therapeutics in may 2010 he is a qualified chartered accountant and possesses 
more than 20 years of biotechnology and pharmaceutical industry experience having held key management positions with leading development stage 
companies as well as several investment banks prior to joining silence mr herrmann served as chief financial officer of intercytex group plc a publicly 
traded company focused on the emerging area of regenerative medicine before joining intercytex he spent over ten years as a sell‑side equity analyst 
most recently as managing director and head of european pharmaceutical and biotechnology research at ing he has also held the position of 
financial controller for us‑based onyx pharmaceuticals inc and currently serves on the boards of regenerative medicine assets limited as well as 
that company’s subsidiaries intercytex ltd and axordia ltd
 dr david mack
 non‑executive director
  dr mack was appointed as a non‑executive director of silence therapeutics in january 2010 prior to his appointment he was a non‑executive 
director of intradigm inc where he was a director since may 2006 he is a director at alta partners where he led the investment in angiosyn as a 
director and acting chief executive officer acquired by pfizer in 2005 he is currently on the board of directors of aerie pharmaceuticals ceregene and 
proacta prior to alta dr mack co‑founded and served as vice president of genomics research at eos biotechnology acquired by protein design 
labs in 2003 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 
 dr james topper
 non‑executive director
  dr topper mack was appointed as a non‑executive director of silence therapeutics in january 2010 he is a general partner at frazier healthcare 
ventures’ palo alto office and was the chairman of the board of intradigm from may 2006 to the date of the merger with silence therapeutics since 
joining frazier healthcare in 2003 dr topper has led several biopharma investments including arête therapeutics cotherix and macusight dr topper 
is also an advisory board member to the harvard‑partners center for genetics and genomics prior to joining frazier healthcare he served as head of 
the cardiovascular research and development franchise at millennium pharmaceuticals and ran millennium san francisco formerly cor therapeutics 
prior to the merger of cor and millennium he served as the vice president of biology at cor and was responsible for managing all of its research 
activities dr topper received his md and phd in biophysics from stanford university school of medicine in 1991 he continues to hold an 
appointment as a clinical assistant professor of medicine at stanford university
b  resolutions 7 and 8 your directors may only allot shares or grant rights over shares if authorised to do so by the shareholders your directors also 
require additional authority from shareholders to allot shares or grant rights over shares where they propose to do so for cash or otherwise than to 
existing shareholders pro rata to their holdings the authorities granted at the last annual general meeting on 14 december 2009 are due to expire 
at the company’s annual general meeting in 2010 or on 14 march 2011 whichever is the earlier and therefore require renewal these resolutions 
if passed will continue to give the directors flexibility to act in the best interest of the shareholders when the opportunity arises by issuing new 
shares resolution 7 will therefore be proposed as an ordinary resolution to grant a new authority to allot unissued share capital up to an aggregate 
nominal value of £279891 representing 10 of the total issued ordinary share capital as at 24 may 2010 resolution 8 will be proposed as a special 
resolution to allot shares or grant rights over shares for cash and otherwise than to existing shareholders pro rata to their holdings the authority will 
be limited to shares to a maximum aggregate nominal value of £279891 being 10 of the issued ordinary share capital these two authorities 
if given will expire at the conclusion of the next annual general meeting in 2011
 
explanatory notes to the notice of annual 
general meeting continued 47
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
form of proxy
silence therapeutics plc
if you will not be attending the annual general meeting or may not do so you can appoint another person a “proxy” who need not be a member of the 
company to exercise all or any of your rights to attend speak and vote at the meeting on your behalf completing this form of proxy does not prevent you 
from attending and voting in person
to be used at the annual general meeting to be held on 18 june 2010
iwe  block letters please
of 
being a members of the above company hereby appoint the chairman of the meeting failing whom
 see note 2
as myour proxy to vote for meus on myour behalf at the annual general meeting of the company to be held on 18 june 2010 at 1000am and at every 
adjournment thereof
iwe wish this proxy to be used in connection with those of the resolutions to be proposed at the annual general meeting which are listed below in the 
manner set out below and in connection with any other business transacted at the meeting
dated 2010  signature
please indicate with an x in the spaces below how you wish the proxy to vote unless otherwise instructed the proxy will at hisher discretion 
vote as heshe thinks fit or abstain from voting in relation to all business of the meeting
please tick here if this proxy appointment is one of multiple appointments being made  
resolutions  for  against  abstain
1 to receive and approve the accounts for the year ended 31 december 2009   
2 to reappoint grant thornton uk llp as auditors to the company   
3 to re‑elect p  haworth who has been appointed since the last annual general meeting as a director of the company   
4 to re‑elect m herrmann who has been appointed since the last annual general meeting as a director of the company   
5 to re‑elect d mack who has been appointed since the last annual general meeting as a director of the company   
6 to re‑elect j topper who has been appointed since the last annual general meeting as a director of the company   
7 to approve the directors’ powers to allot shares for the purposes of section 551 of the companies act 2006   
8 to approve the directors’ powers to allot shares for cash pursuant to section 5701 of the companies act 2006   
notes
1 this form is for use of shareholders only and will be used only in the event of a poll being directed or demanded
2 you may if you wish delete the words ‘the chairman of the meeting’ and substitute the names of your choice please initial such alteration
3  to be valid this proxy form together with any power of attorney under which it is signed or a duly certified copy thereof should reach the offices of 
the company’s registrar capita registrars not later than 1000am on 16 june 2010 in the uk postage on the proxy form is prepaid uk members 
may if they prefer return the proxy form in an envelope free of charge to capita registrars pxs the registry 34 beckenham road beckenham 
kent br3 4tu outside the uk the appropriate postage must be paid
4 in the case of a corporation the form must be executed under its common seal or under the hand of an officer or attorney duly authorised in writing
5  in the case of joint holders the signature of any of them will suffice but the names of all joint holders should be shown the vote of the senior joint 
holder who tenders a vote whether in person or by proxy shall be accepted to the exclusion of the votes of the other joint holders and for this purpose 
seniority shall be determined by the order in which the names stand in the register of members in respect of the joint holding
6  a shareholder may appoint more than one proxy in relation to the annual general meeting provided that each proxy is appointed to exercise the rights 
attached to a different share or shares held by him to appoint more than one proxy you may photocopy this form please indicate the proxy holder’s 
name and the number of shares in relation to which they are authorised to act as your proxy which in aggregate should not exceed the number of 
shares held by you please also indicate if the proxy instruction is one of multiple instructions being given all forms must be signed and should be 
returned together in the same envelope a failure to specify the number of shares each proxy appointment relates to or specifying a number in excess 
of those held by you may result in the appointment being invalid business reply style
business reply 
licence number 
rsbhuxkslrbc
pxs 
34 beckenham road 
beckenham 
br3 4tu
first fold
second fold
third fold and tuck in registered office
22 melton street 
london nw1 2bw
registered number 
2992058
nominated advisers
nomura code securities ltd
1 carey lane 
london ec2v 8ae
registrars
capita irg plc
northern house 
woodsome park 
fenay bridge 
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auditor
grant thornton uk llp
grant thornton house 
melton street 
euston square 
london nw1 2ep
silence therapeutics plc 
is a leader in the 
of 
novel rna interference rnai 
therapeutics for the 
rna interference a nobel prize winning 
technology is one of the most exciting areas 
of drug discovery today as it can selectively 
“silence” genes linked to the onset of disease 
thus leading to the creation of a new class of 
therapeutic products rnai therapeutics
we aim to establish silence therapeutics 
as a partnerofchoice for the world’s leading 
pharmaceutical companies
review of the year
 01  highlights of 2009
 02  post yearend highlights
 04 chairman’s statement
 06 chief executive’s review
corporate governance
 10 board of directors
 12 directors’ report
financial statements
 16 independent auditors’ report
 17 consolidated income statement
   consolidated statement 
of comprehensive income
 18 consolidated balance sheet
 19   consolidated statement 
of changes in equity
 20 company balance sheet
 21   company statement 
of changes in equity
 22 cash flow statements
 23 notes to the financial statements
 43 company information and advisers
 44 notice of annual general meeting
 45  explanatory notes to the notice 
of annual general meeting
 47 form of proxy silence therapeutics plc
the royal institution of great britain 
21 albemarle street 
london w1s 4bs
tel  44 0 20 7491 6520 
fax  44 0 20 7491 6521 
email  mailsilencetherapeuticscom
website wwwsilencetherapeuticscom
silence therapeutics plc annual report and accounts 2009
 silence therapeutics plc
annual report  
and accounts 2009


Summary:
 02
silence therapeutics plc annual report and accounts 2009
post yearend highlights
by combining the expertise 
of both intradigm and silence 
we now have 
delivery technology platforms
pf4523655 diabetic macular oedema pfizerquark     local delivery to the eye 
aturnai
pf4523655 age‑related macular degen pfizerquark    local delivery to the eye 
aturnai
qpi‑1002 acute kidney injury quark    systemic delivery to the kidney 
aturnai
qpi‑1002 prevention of delayed graft function quark    systemic delivery to the kidney 
aturnai
atu027 gi  lung and other cancers  internal    systemic delivery to tumour 
aturnai      endothelium
atu134 acute lung injury  internal    systemic delivery to lung 
aturnai      endothelium
atu111 solid tumours  internal    systemic delivery to tumour  
aturnai      endothelium
atu150 solid tumours internal    systemic delivery to tumour 
aturnai      endothelium
at least half of the sirna therapeutics currently in clinical trials are based on silence technology
product indications partners preclinical phase i phase ii status
our product pipeline
naked sirna
naked sirna
naked sirna
naked sirna
dacc8
atuplex
atuplex
atuplex 03
silence therapeutics plc annual report and accounts 2009
review
of the year
corporate
governance
financial
statements
post yearend operations
  silence merged with usbased rnai therapeutic company intradigm corporation 
intradigm on 5 january 2010 to form a leading company in the field of rna 
interference the merger was effected by the issue of silence shares to the shareholders of 
intradigm such that the intradigm shareholders at the time of the merger owned approximately 
36 of the issued share capital of silence the merger offers a number of strategic benefits 
including multiple rnai discovery development and delivery technologies a broad internal 
and partnered product pipeline and a strong portfolio of intellectual property 
  in parallel with the merger silence therapeutics raised £15m gross through an 
institutional placing and a subscription of shares at a price of 23p per share the funds 
raised will support the company’s ongoing development efforts and provide the strength 
from which to pursue additional partnerships and development deals
  upon completion of the merger philip haworth jd phd former chief executive officer of 
intradigm assumed the role of chief executive officer of the enlarged group
  the united states patent and trademark office uspto issued the company a notice 
of allowance on a patent application directed to methods of treatment using pkn3 
a highvalue therapeutic target in the area of oncology 
  silence and dainippon sumitomo pharma co ltd agreed to expand their ongoing 
sirna delivery collaboration to examine delivery of rnai therapeutics to additional disease 
targets selected by dainippon sumitomo 
  silence announced a strategic plan designed to optimally organise its resources 
following its recent merger with intradigm moving forward all research activities related to 
silence’s novel rnai therapeutic platforms including technologies that have emerged from 
both silence and intradigm will take place at the company’s berlin location other functions 
including operations business development legal and certain drug development activities 
will be conducted in palo alto silence expects this move to result in a significant reduction 
in the company’s operating costs moving forward 
  silence and astrazeneca agreed to an extension of their ongoing sirna delivery 
collaboration to examine new and enhanced delivery approaches for rnai therapeutics 
post yearend board and management changes
  silence announced a board change with the resignation of iain ross as chairman  
jerry randall who was appointed to the silence board in 2008 was appointed 
non‑executive chairman
  silence announced a management and board change with the resignation of melvyn davies 
as chief financial officer silence also announced the appointment of max herrmann as the 
company’s chief financial officer and company secretary with effect from 4 may 2010