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Lipoxen PLC (XEN)

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Thursday 29 June, 2006

Lipoxen PLC

Preliminary Results

Lipoxen PLC
29 June 2006

For Immediate Release                                               29 June 2006

                                  Lipoxen PLC
                          ('Lipoxen' or 'the Company')

               Preliminary Results for the Year Ended 31 December 2005


London, UK, 29 June, 2006 - Lipoxen PLC (AIM: LPX) a biopharmaceutical company
specialising in the development of high value differentiated biologicals,
vaccines and oncology drugs, today announces its final results for the year
ended 31 December 2005.

CHAIRMAN'S STATEMENT

Current Status

It gives me great pleasure to write to Lipoxen's shareholders for the first time
in my capacity as Chairman of the Company. In the first six months of 2006 we
have made significant changes to the Company which I believe have created a
strong platform for the development of a dynamic value creating
biopharmaceutical organisation. This platform is based on our novel drug and
vaccine delivery system technologies, which have the potential to improve
greatly the performance of high value differentiated biologicals, vaccines, and
oncology drugs. These are all significant markets.

To capture the clear potential that our technologies offer we are adopting a
two-pronged strategy.  We are developing our own product portfolio based on our
proprietary PolyXen(R) and ImuXen(R) and a related liposomal technology.  In
addition, we are working with a range of partners in order to assist them in
developing new products as well as optimising the performance and patent-life of
their current drugs.  This partnership strategy is central to Lipoxen's near
term development and we are very encouraged that our technologies are being
currently evaluated by some of world's leading biotechnology and pharmaceutical
companies such as Amgen, Baxter, Genentech, Genzyme, Teva and the Serum
Institute of India, a leading global vaccine producer.

Lipoxen's drug delivery technologies include PolyXen(R), which is designed to
improve the stability, biological half-life, water solubility and immunologic
characteristics of therapeutic proteins and is seen as a potential alternative
to PEGylation. In addition, ImuXen(R) and a related liposomal technology, for
the formulation of cytotoxic oncology drugs, are being developed to enhance the
efficacy and safety of various vaccines such as Hepatitis B and pneumococcal
vaccines, as well as a number of anti-cancer agents like paclitaxel.

Based on this two-pronged strategy we have put in place a development and
clinical product pipeline of 13 candidates which I believe places us in a strong
position to enhance shareholder value.

We expect 2006 to be a landmark year in the life of the Company as a number of
our product candidates move through preclinical trials and approach the clinic.
We also anticipate material decisions regarding a number of our collaborations
which could validate our approach and place us on the biopharmaceutical map.
Although the capital raise that we made earlier in the year was modest, our
collaborative partners are allocating significant human and capital resources to
realize the potential of our two proprietary technologies in a number of drug
and vaccine product candidates. We look forward to the remainder of 2006 and
plan to keep our shareholders fully informed as these key value-creating events
unfold.

The Reverse Takeover Transaction

Whilst Greenchip Investments plc had no operational activity in the period under
review, the Directors continued to seek out a suitable transaction to utilise
its status as a listed shell. Following several months of detailed discussions,
your Company successfully concluded a Reverse Takeover Transaction (RTO) by
which it has acquired the entire issued share capital of Lipoxen Technologies
Limited (LTL). Contemporaneous with the RTO, the Company raised new capital of
£3.78 million before expenses.  Full details of the transaction were circulated
to all shareholders on 23 December 2005 in preparation for the necessary EGM
which was held on 16 January 2006 where the transaction was duly approved.
Subsequent to that EGM a full RNS announcement was made to the London Stock
Exchange.

At the EGM, inter alia, the name of the Company was changed from Greenchip
Investments plc to Lipoxen PLC. The shares of the 'new' Company were admitted to
trading on AIM on 17 January 2006 and can be accessed under the ticker LSE:LPX.

Consideration for the RTO was satisfied by the issue of 66,666,665 million new
Ordinary shares to the shareholders of Lipoxen which consideration shares as at
the date of the transaction represented approximately 64.75% of the Issued
Ordinary Share Capital of the Company as enlarged by the Acquisition and the
Placing. Based on the placing price of 13.5p per share the Company was then
valued at approximately £13.9 million. As of 26 June 2006 the company has a
market capitalisation of approximately £22m based on a mid market price of circa
21.0 pence per share.

For illustrative purposes only and in order to demonstrate the effect of the
transaction on the Company as if it had been concluded at that date, a Pro Forma
Consolidated Balance Sheet as at 31 December 2005 is set out in Note 15 to the
Financial Statements.

The Board of Directors of the Company has been changed and enlarged to encompass
the necessary skills required for the development of the LTL business. I am
pleased to report that the aggregate level of commercial and financial
experience now vested in the Board will provide shareholders with the confidence
that the Directors have the ability to execute professionally the Company's
strategy.

Future Prospects

Lipoxen's future prospects are dependant upon the successful completion of
clinical trials of products based on the patented drug and vaccine delivery
technologies and on the Company's ability to continue to fund the development
effort required to attain that goal.  The nature of early stage enterprises in
the life sciences sector is one of ongoing technical challenges in a competitive
environment where new capital is regularly sought in tranches sufficiently large
to fully fund clinical trials and continued product pipeline expansion.  While
Lipoxen has sufficient working capital to meet its needs in the next 12 months,
based on successful preclinical and early phase clinical performance of the
technologies, new funds will have to be raised in due course.

We are confident that the progress that we anticipate in making over the next
six months will provide us with a solid platform from which to raise additional
funds.

I would like to thank the former directors of Greenchip Investments plc (as the
predecessor company) for all of their efforts in ensuring that the RTO was
concluded in a timely manner. I equally look forward to working with the
enlarged Board as the Company meets its development challenges in the upcoming
period. Finally, I congratulate the management and staff of LTL whose efforts
have opened up many possibilities for commercial benefit both in the short and
longer term.

Sir Brian Richards
Non-Executive Chairman

London: 29 June 2006


Annual Report and Accounts

Copies of the Report and Accounts will be sent to shareholders on 29 June 2006
and will be available from the Secretary at the Company's registered office at
22 Melton Street, London NW1 2BW.


Enquiries

Lipoxen PLC
Scott Maguire, Chief Executive Officer                       +44 (0)20 7691 3583

Citigate Dewe Rogerson                                       +44 (0)20 7638 9571
David Dible/Yvonne Alexander


Notes to Editor

Lipoxen PLC (LSE:LPX) is a biopharmaceutical company specialising in the
development of high value differentiated biologicals, vaccines and oncology
drugs. Potential products, which address markets in excess of US$1 billion,
currently under development include improved formulations of important
biologicals including EPO, G-CSF, insulin and Interferon-alpha based on
Lipoxen's proprietary PolyXen(R) technology. This technology is designed to
improve the stability, biological half-life and immunologic characteristics of
therapeutic proteins naturally. Lipoxen has two further naturally-derived
proprietary delivery technologies ImuXen(R) and a related liposomal technology
for the formulation of cytotoxic oncology drugs, which are being developed to
enhance the efficacy and safety of various vaccines such as Hepatitis B and
pneumococcal vaccines, as well as a number of anti-cancer agents like
paclitaxel. The Company's proprietary delivery technologies are attracting
significant interest and Lipoxen is already co-developing products with Serum
Institute of India, one of the world's leading vaccine companies. In addition,
its technologies are being currently evaluated by leading biotechnology
companies such as Baxter, Amgen, Genzyme and Genentech.

Lipoxen was admitted to trading on the AIM Market of the London Stock Exchange
in January 2006.

This announcement includes 'forward-looking statements' which include all
statements other than statements of historical facts, including, without
limitation, those regarding the Company's financial position, business strategy,
plans and objectives of management for future operations (including development
plans and objectives relating to the Company's products and services), and any
statements preceded by, followed by or that include forward-looking terminology
such as the words 'targets', 'believes', 'estimates', 'expects', 'aims',
'intends', 'will', 'can', 'may', 'anticipates', 'would', 'should', 'could' or
similar expressions or the negative thereof. Such forward-looking statements
involve known and unknown risks, uncertainties and other important factors
beyond the Company's control that could cause the actual results, performance or
achievements of the Company to be materially different from future results,
performance or achievements expressed or implied by such forward-looking
statements. Such forward-looking statements are based on numerous assumptions
regarding the Company's present and future business strategies and the
environment in which the Company will operate in the future. Among the important
factors that could cause the Company's actual results, performance or
achievements to differ materially from those in forward-looking statements
include those relating to The Company's funding requirements, regulatory
approvals, clinical trials, reliance on third parties, intellectual property,
key personnel and other factors. These forward-looking statements speak only as
at the date of this announcement. The Company expressly disclaims any obligation
or undertaking to disseminate any updates or revisions to any forward-looking
statements contained in this announcement  to reflect any change in the
Company's expectations with regard thereto or any change in events, conditions
or circumstances on which any such statements are based. As a result of these
factors, readers are cautioned not to rely on any forward-looking statement.


DIRECTORS' REPORT 2005

The Directors present their annual report and the audited financial statements
for the year ended 31 December 2005.

Principal activities, review of the business and future prospects

While the Company has had no operational activity in the year under review, the
Directors have continuously sought out a suitable transaction to utilise its
status as a listed shell following the disposal in late 2003 of all of its
operating assets. On 16 January 2006, the Company acquired Lipoxen Technologies
Limited for a consideration satisfied by the issue of 66,666,665 new ordinary
shares of 0.5p each to the vendors, and raised £3.78 million (before expenses)
by way of a placing of 28,000,000 new ordinary shares of 0.5p each at a price of
13.5p per share. The Company has changed its name to Lipoxen plc following the
acquisition.

Lipoxen Technologies Limited is engaged in the development of drug delivery
systems and proprietary products in the fields of protein drugs, vaccines and
oncology.

A full review of the business and of future prospects is contained in the
Chairman's Statement which accompanies these financial statements.

Review of Developments

The results of the Company for the year are disclosed in the Profit and Loss
Account.

The financial position of the Company is disclosed in the Balance Sheet.

Policy for payment of creditors

It is the Company's policy to settle all agreed transactions within the terms
established with suppliers. Trade creditors at the year end amounted to 155 days
of average supplies.

Corporate governance

The Company's shares are traded on AIM and the Company is not therefore required
to report on compliance with the Combined Code ('the Code'). However, the Board
of Directors supports the Code, and also the recommendations made by Quoted
Companies Alliance ('QCA') in its bulletin 'Guidance for Smaller Quoted
Companies'.  The bulletin provides a series of recommendations for smaller
quoted companies in approaching the question of corporate governance.

Accordingly, the Board complies with the Code in areas where it is felt
justified by reference to the QCA comments as being relevant to a business the
size of Lipoxen plc.

Internal control

The Directors acknowledge their responsibilities for the Company's system of
internal control.  In fulfilling these responsibilities the Board has continued
to review the effectiveness of the system of internal control on the basis of
the criteria set out in the Guidance for Directors 'Internal Control and
Financial Reporting' as appropriate for a company of this size.  Accepting that
no system of control can provide absolute assurance against material
misstatement or loss, the Directors believe that the established systems of
internal control within the Company are appropriate to the business.  No
weaknesses have resulted in any material losses, contingencies or uncertainties
which would require disclosure as recommended by the Guidance for Directors.

Directors and their interests

The Directors in office at the end of the year and their beneficial interests in
the ordinary shares of the Company were:

                   Beneficial Holdings      Non-Beneficial         Share Options
                   Ordinary   Ordinary   Ordinary   Ordinary   Ordinary   Ordinary
                  0.5p each    1p each  0.5p each    1p each  0.5p each    1p each
                       2005       2004       2005       2004       2005       2004

Malcolm A. Burne    250,000          -     48,500  2,425,000      5,000    250,000

Dr Giap Wang Chong *375,000          -          -          -          -          -

Colin W. Hill       375,000          -          -          -          -          -

* also held at date of appointment

Dr Giap Wang Chong was appointed as a Director on 1st August 2005. On 16th
January 2006, Malcolm A. Burne resigned as a Director and Sir Brian M. Richards,
Scott Maguire, Professor Gregory Gregoriadis, Dr Dmitry D. Genkin and Dr Tatiana
Zhuravskaya were appointed as Directors of the Company.

Financial instruments

The company's financial instruments comprise cash at bank and various items such
as trade debtors and trade creditors that arise directly from its operations.
The purpose of these instruments is to provide finance for operations. The
company does not enter into derivative transactions or trade in financial
instruments as a matter of policy. The only risk arising from the company's
financial instruments is interest rate risk, which would affect the interest
received on the company's bank deposit account balance.

Most of the agreements that the enlarged group has entered into are denominated
in US dollars whilst the group's operating costs are denominated in sterling.
The group has not entered into any contracts to reduce its currency risk
exposure. Therefore currency fluctuation could have a potential adverse impact
on the financial results of the group.

Substantial shareholders

The directors are aware of the following substantial shareholdings of 3 per cent
or more of the current Issued Ordinary Share Capital of 104,146,662 shares on 8
June 2006:

Ordinary Shares of 0.5p each                     Number      Percentage

FDS Pharma Ass.                              45,849,964           44.02

T. Hoare Nominees Limited                     9,946,256            9.55

HSBC Global Custody Nominee (UK) Limited      5,740,960            5.51

Professor Gregory Gregoriadis                 5,561,973            5.34

BNY GIL Client Account (Nominees) Limited     4,193,515            4.03

Vidacos Nominees Limited                      3,450,000            3.31

Path Property Limited                         3,437,570            3.30


Auditors

PKF (UK) LLP were appointed as auditors to the company on 16 January 2006
following the resignation of F.W.Smith, Riches & Co. A resolution to re-appoint
PKF (UK) LLP as auditors for the ensuing year will be proposed at the annual
general meeting in accordance with section 385 of the Companies Act 1985.

Approved by the Board of Directors on 26 June 2006

and signed on its behalf by:

Colin Hill
Director


DIRECTORS' RESPONSIBILITIES IN RELATION TO THE PREPARATION OF THE FINANCIAL
STATEMENTS

The directors are responsible for preparing the financial statements in
accordance with applicable law and United Kingdom Generally Accepted Accounting
Practice.

Company law requires the directors to prepare financial statements for each
financial year which give a true and fair view of the state of the affairs of
the Company at the end of the year and of the profit or loss of the Company for
that year.

In preparing the financial statements, the directors are required to select
suitable accounting policies, as described on page 13, and then apply them on a
consistent basis, making judgments and estimates that are prudent and
reasonable. The directors must also 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 proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Company and to enable them to ensure that the financial statements comply with
the Companies Act 1985. The directors are also responsible for safeguarding the
assets of the Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.



INDEPENDENT AUDITORS' REPORT

FOR THE YEAR ENDED 31 DECEMBER 2005

We have audited the financial statements of Lipoxen plc for the year ended 31
December 2005 which comprise the profit and loss account, the balance sheet, the
cash flow statement and the related notes. The financial statements have been
prepared under the accounting policies set out therein.

This report is made solely to the company's members, as a body, in accordance
with Section 235 of the Companies Act 1985. 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 THE DIRECTORS AND AUDITORS

The directors' responsibilities for preparing the Annual Report and the
financial statements in accordance with applicable law and United Kingdom
Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are
set out in the Statement of Directors' Responsibilities.

Our responsibility is to audit the financial statements in accordance with
relevant legal and regulatory requirements and International Standards on
Auditing (UK and Ireland).

We report to you our opinion as to whether the financial statements give a true
and fair view and are properly prepared in accordance with the Companies Act
1985. We also report to you if, in our opinion, the directors' report is not
consistent with the financial statements, if the company has not kept proper
accounting records, if we have not received all the information and explanations
we require for our audit, or if information specified by law regarding
directors' remuneration and other transactions is not disclosed.

We read other information contained in the Annual Report, and consider whether
it is consistent with the audited financial statements. This other information
comprises only the Chairman's Statement and the Directors' Report. We consider
the implications for our report if we become aware of any apparent misstatements
or material inconsistencies with the financial statements. Our responsibilities
do not extend to any other information.

BASIS OF AUDIT OPINION

We conducted our audit in accordance with International Standards on Auditing
(UK and Ireland) issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts and
disclosures in the financial statements. It also includes an assessment of the
significant estimates and judgements made by the directors in the preparation of
the financial statements, and of whether the accounting policies are appropriate
to the company's circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.

OPINION

In our opinion the financial statements:

-    give a true and fair view, in accordance with United Kingdom Generally 
     Accepted Accounting Practice, of the state of the company's affairs as at 
     31 December 2005 and of its loss for the year then ended; and

-    have been properly prepared in accordance with the Companies Act 1985.

PKF (UK) LLP
Registered auditors
London
27 June 2006


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2005

                                             Note
                                                       2005              2004
                                                          £                 £

Turnover                                                  -                 -

Cost of Sales                                             -                 -
                                                  ___________        __________

Gross profit/(loss)                                       -                 -

Administrative Expenses                             114,201            11,730
                                                  ___________        __________

Operating loss                                 2   (114,201)          (11,730)

Interest receivable                                   2,258                83
                                                  ___________        __________

Loss for the year before and after taxation        (111,943)          (11,647)
                                                  ===========        ==========

Loss per ordinary share - basic                5      (2.06) p          (0.36) p
                                                  ===========        ==========

Loss per ordinary share - diluted              5      (2.06) p          (0.36) p
                                                  ===========        ==========


There is no difference between the profits and losses stated above and their
historical cost equivalents.

The Company has no recognised gains or losses other than the results for the
year as set out above.




BALANCE SHEET AS AT 31 DECEMBER 2005
                                                       2005             2004
                                 Notes                    £                £

CURRENT ASSETS
Debtors                            6                 82,936           10,000
Cash at bank and in hand                            142,613              931
                                                  __________       __________
                                                    225,549           10,931

CREDITORS: Amounts falling
due within one year                7               (121,495)            (993)
                                                  __________       __________
NET CURRENT ASSETS                                  104,054            9,938
                                                  __________       __________

TOTAL ASSETS LESS CURRENT
LIABILITIES                                         104,054            9,938
                                                  ==========       ==========
CAPITAL AND RESERVES
Called up share capital            8              1,675,000        1,635,128
Share premium account             10              7,311,165        7,136,165
Profit and loss account           10             (8,882,111)      (8,770,168)
                                                  __________       __________
                                                    104,054            1,125

NON EQUITY
Shares to be issued               11                      -            8,813

                                                  __________       __________
SHAREHOLDERS' FUNDS               12                104,054            9,938
                                                  ==========       ==========


The financial statements on pages 10 to 18 were approved and authorised for
issue by the Board of Directors on 26 June 2006 and signed on its behalf by:

Colin Hill
Director




CASH FLOW STATEMENT FOR YEAR ENDED 31 DECEMBER 2005

                                                  2005          2005          2004          2004
                                       Notes         £             £             £             £

Net cash outflow from
operating activities                     13                  (75,448)                    (35,063)

Returns on investments and
servicing of finance

Interest received                                2,258                          83
                                             __________                  __________

Net cash inflow from returns on
investments and servicing of finance                           2,258                          83
                                                           __________                  __________

Net cash outflow before financing                            (73,190)                    (34,980)

Financing
Issue of equity shares                                       214,872                      32,312
                                                           __________                  __________

Increase/(decrease) in cash resources    14                  141,682                      (2,668)
                                                           ==========                  ==========




NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005

1    Accounting policies

Basis of accounting

The financial statements have been prepared under the historical cost convention
and in accordance with applicable Accounting Standards.

Deferred taxation

In accordance with FRS 19 full provision is made at current rates for taxation
deferred in respect of all timing differences. Deferred tax balances are not
discounted. Deferred tax assets are only recognised where they arise from timing
differences where their recoverability in the short term is regarded as more
likely than not.

Investments

Investments held as fixed assets are stated at cost less provision for any
permanent diminution in value.



2.   Operating Loss

                                                    2005       2004
                                                       £          £

  Operating loss is stated after charging:

  Auditors' remuneration:
   Audit Fees                                      2,000          -
   Other services                                      -          -
                                                =========  =========

Remuneration of £2,000 paid to the previous auditors in respect of the 2004
audit has also been included in the 2005 profit and loss account.



3.   Taxation

(a) No taxation is provided due to the availability of losses for tax purposes.

(b) Factors affecting the tax charge for the year

The tax assessed for the year does not reflect a credit equivalent to the loss
on ordinary activities multiplied by the standard rate of corporation tax of 30%
(2004:30%)
                                                    2005             2004
                                                       £                £
Loss on ordinary activities before tax          (111,943)         (11,647)
                                                =========        =========

Loss on ordinary activities multiplied by        (33,583)          (3,494)
the standard rate of corporation tax of 30%
Effects of:
Expenses not deductible for tax purposes           1,201                -
Capital allowances in advance of                  (2,236)          (2,981)
depreciation
Unrelieved tax losses arising in the year         34,618            6,475
                                                _________        _________
Current tax credit for the period                      -                -
                                                =========        =========



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005 (continued)

4.   Information regarding directors and employees

Directors' emoluments for the year were £37,500 (2004: £nil).

Consultancy fees of £10,000 were paid to Wangi Limited, a company controlled by
Dr Giap Wang Chong, during the year.

Employees

Staff costs were as follows:                  2005                2004
                                                 £                   £

Wages and Salaries                          55,461               6,888

Social Security costs                        6,495                 212
                                          _________           _________
                                            61,956               7,100
                                          =========           =========

The average monthly number of employees, including directors
during the year, was as follows:
                                            Number              Number

Management                                       5                   4
                                           ========            ========


5.   Loss per ordinary share

The calculation of loss per ordinary share is based on losses of £111,943 (2004
- £11,647) and on the number of shares in issue, being the adjusted weighted
average number of shares in issue during the period of 5,440,743 ordinary 0.5p
shares (2004 - 3,251,408 ordinary 0.5p shares). There is no dilutive effect of
share options on the basic loss per share.



6.   Debtors

                                        2005              2004
                                           £                 £

Other debtors                         13,523            10,000

Prepayments and accrued income        69,413                 -
                                    _________         _________

                                      82,936            10,000
                                    =========         =========



7.   Creditors: Amounts falling due within one year

                                       2005                2004
                                          £                   £

Trade creditors                      54,628                 399

Other creditors                           -                 244

Accruals and deferred income         66,867                 350
                                   _________           _________
                                    121,495                 993
                                   =========           =========


NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005 (continued)


8.   Called up share capital                           2005               2004
                                                          £                  £

Authorised

452,909,957 ordinary shares of 1p each                    -          4,529,100

673,300,000 ordinary shares of 0.5p each          3,366,500                  -

16,335,000,000 deferred shares of 0.01p each      1,633,500                  -
                                                  _________          _________

                                                  5,000,000          4,529,100
                                                  =========          =========


Called up, allotted and fully paid

163,512,847 ordinary shares of 1p each                    -          1,635,128

8,300,000 ordinary shares of 0.5p each               41,500                  -

16,335,000,000 deferred shares of 0.01p each      1,633,500                  -
                                                  _________          _________

                                                  1,675,000          1,635,128
                                                  =========          =========


On 3 May 2005 the Company issued 1,487,153 ordinary shares of 1p each in
satisfaction of an outstanding creditor balance.

In June 2005 the Company underwent a restructuring of its share capital under
which:

(a)    the authorised share capital was increased to 500,000,000 ordinary shares
of 1p each;

(b)    each of the 165,000,000 ordinary shares of 1p each in issue was
sub-divided into 1 ordinary share of 0.01p and 99 deferred shares of 0.01p. The
rights of the deferred shares are such that they have no value and in due course
they will be repurchased by the Company for no consideration;

(c)    each of the 335,000,000 unissued ordinary shares of 1p each was
sub-divided into 100 ordinary shares of 0.01p each; and

(d)    each 50 ordinary shares of 0.01p each were then consolidated into 1
ordinary share of 0.5p each.

On 28 July 2005 the Company placed 5,000,000 ordinary shares of 0.5p each at 4p
per share, raising cash of £200,000 before costs.



9.   Share Options and warrants

The Company currently has share option schemes for the Company's shares which
have been granted to directors and other parties. The share options in existence
at the balance sheet date were as follows:

                                                   Number  Exercise
Date granted        Parties     Exercise price  of shares  period

9 August 1999       Directors   150p                5,000  Until 8 August 2006

9 August 1999       Others      150p               25,000  Until 8 August 2006

1 February 2000     Others      750p               16,000  Until 31 January 2007
                                             _____________

                                                   46,000
                                              ============

On 22 December 2005 a warrant was granted under which the holder may subscribe
for up to 1,680,000 ordinary shares of 0.5p at a price of 13.5p per share,
exercisable between 17th January 2006 and 17th June 2007.


NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005 (continued)


10.  Reserves

                                  Share        Profit and
                                premium              loss
                                account           account            Total
                                      £                 £                £

Balance at 1 January 2005     7,136,165        (8,770,168)      (1,634,003)

Loss for the year                     -          (111,943)        (111,943)

Shares issued in the year       175,000                 -          175,000
                               _________         _________        _________

Balance at 31 December 2005   7,311,165        (8,882,111)      (1,570,946)
                               =========         =========        =========


11.  Shares to be issued
                                                                £

Balance at 1 January 2005                                   8,813

Additional amounts to be settled in shares                  6,059

Shares issued in year                                     (14,872)
                                                       ___________

Balance at 31 December 2005                                     -
                                                        ==========


         On 5 May 2005, shares with a par value of £14,872 were issued to a
trade creditor who had agreed to accept them in settlement of the amount owed.



12.  Reconciliation of movements in shareholders' funds

                                                 2005                 2004
                                                    £                    £

Loss for the financial year                  (111,943)             (11,647)

New share capital subscribed                  214,872               32,312

Decrease in shares to be issued                (8,813)             (13,218)
                                            __________           __________

Net increase in shareholders' funds            94,116                7,447

Opening shareholders' funds                     9,938                2,491
                                            __________           __________

Closing shareholders' funds                   104,054                9,938
                                            ==========           ==========



13.  Reconciliation of operating loss to net     2005                 2004
cash flow from operating activities                 £                    £

Operating loss                               (114,201)             (11,730)

(Increase)/decrease in debtors                (72,936)               6,259

Increase/(decrease) in creditors              111,689              (29,592)
                                            __________           __________

                                              (75,448)             (35,063)
                                            ==========           ==========




NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005 (continued)



14.  Reconciliation of net cash flow to movement in net debt

                                               At 1          Cash         At 31
                                            January          flow      December
                                               2005                        2005
                                                  £             £             £

Cash at bank and in hand                        931       141,682       142,613
                                                ___       _______       _______
Net funds                                       931       141,682       142,613
                                                ===       =======       =======


15.  Events after the balance sheet date

On 16 January 2006, the Company acquired Lipoxen Technologies Limited for a
consideration satisfied by the issue of 66,666,665 new ordinary shares of 0.5p
each to the vendors, and raised £3.78 million (before expenses) by way of a
placing of 28,000,000 new ordinary shares of 0.5p each at a price of 13.5p per
share. Had this acquisition and placing taken place at 31 December 2005, the
summarised consolidated balance sheet of the Group would have been presented as:



FIXED ASSETS

Intangible assets - goodwill on consolidation      9,447,811

Tangible assets                                       25,196
                                                    _________

                                                   9,473,007
                                                    _________

CURRENT ASSETS

Debtors                                              354,728

Cash at bank                                       3,032,473
                                                    _________

                                                   3,387,201

CREDITORS: Amounts falling due within one year      (978,176)
                                                    _________

NET CURRENT ASSETS                                 2,409,025
                                                    _________

TOTAL ASSETS LESS CURRENT LIABILITIES             11,882,032
                                                     ========

CAPITAL AND RESERVES

Called up share capital                            2,148,333

Share premium account                             18,615,810

Profit and loss account                           (8,882,111)
                                                    _________

                                                  11,882,032
                                                     ========


NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005 (continued)



15.  Events after the balance sheet date (continued)

Following the acquisition of Lipoxen Technologies Limited, options in issue over
2,655,793 shares in that company were cancelled and the holders were granted
options over 3,602,792 ordinary shares in the Company. S Maguire was granted an
option over 6.75% of the enlarged share capital of the Company.

The Company has also undertaken to satisfy the obligations of Lipoxen
Technologies Limited under the FDS Development Agreement, under which FDS Pharma
Ass was to provide manufacturing and clinical development services in
consideration for the allotment of shares in Lipoxen Technologies Limited on the
attainment of a number of milestones set out in the agreement. A liquidated
amount has been agreed as the fee payable to FDS Pharma Ass for the achievement
of each milestone, which in aggregate for all milestones is $2,670,764. The
aggregate number of shares in the Company which can be allotted in satisfaction
of the obligation to pay these fees is up to 10,174,430 ordinary shares.

The Company has undertaken to provide sufficient funds to Lipoxen Technologies
Limited to enable it to meet its debts as they fall due for a period of twelve
months from the date of signature of these financial statements.

In March 2006, 1,180,000 ordinary shares of 0.5p each were issued for cash of
£159,300 under the terms of the warrant described in Note 9.



16.   Financial instruments

The Company's financial instruments comprise cash balances and various items
such as debtors and creditors arising directly from its operations.  The main
purpose of these instruments is to finance the Company's operations.

The Company does not enter into any derivative transactions.

Short term debtors and creditors have been excluded from the following
disclosure.

Interest rate risk of financial assets

                               Cash at bank and in hand
                                    2005           2004
                                       £              £

        Floating rate            142,613              -
                                 =======        =======


Floating rate cash earns interest based on prevailing market rates.



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