Vernalis plc 9 August 2004 (LSE:VER, Nasdaq: VNLS) today announces that the Novartis
Institutes for BioMedical Research, Inc., (Novartis) has exercised its option to
license exclusive worldwide rights to Vernalis' lead oncology research programme
on Hsp90. Today's announcement is the positive conclusion of the option
agreement the companies signed in December 2003.

The companies will conduct a joint research programme under which Novartis will
provide research funding to Vernalis over an initial three-year period.  In 
addition, Novartis is responsible for funding and conducting the preclinical and
clinical development of product candidates, and for commercialisation.

Novartis will pay Vernalis a signature fee of $1.5 million and a series of
further payments upon achievement of development milestones for each product
candidate that Novartis takes into development. Vernalis will also receive
royalties on commercial sales of collaboration products.  In addition, Novartis
will make an equity investment of approximately £5 million ($9 million) through
the subscription for 7,106,344 new Vernalis ordinary shares at 70.18p per share,
representing almost 4.6% percent of Vernalis' enlarged issued share capital. The
methodology for calculating the subscription price was established at the time
of entering the option agreement in December 2003.

In the event that two product candidates from the collaboration reach the
market, total payments to Vernalis from Novartis could exceed $75 million,
excluding royalties.

The Vernalis Hsp90 programme is the result of a collaboration established in
March 2002 with Cancer Research Technology Ltd (CRT) (formerly Cancer Research
Ventures Ltd) and The Institute of Cancer Research, under which Vernalis will
pay CRT and The Institute of Cancer Research a proportion of its revenues from
the agreement with Novartis.

Simon Sturge, chief executive officer of Vernalis said, 'I am delighted to be
announcing a third major deal for Vernalis in only six weeks.  Novartis is a
world leader in oncology and an optimal partner to help maximise the opportunity
for developing Hsp90 inhibitors as potential cancer treatments.  This
collaboration further validates Vernalis' research capability and provides
additional funding.'