Preliminary Results

Oxford Biomedica PLC
06 March 2007



For Immediate Release                                            6 MARCH 2007

                              OXFORD BIOMEDICA PLC

            PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2006


Oxford, UK - 6 March 2007: Oxford BioMedica (LSE: OXB), the leading gene therapy
company, today announces its preliminary results for the year ended 31 December
2006.

Operational highlights:

TroVax(R) (cancer)

   • Licensing discussions at advanced stage
   • International Phase III TRIST trial for renal cancer in progress
   • FDA Special Protocol Assessment for Phase III TRIST trial
   • Positive recommendation for orphan drug designation in EU for renal
     cancer
   • Encouraging results from Phase II trials in renal, colorectal and
     prostate cancer
   • UK clinical network committed to Phase III trial in colorectal cancer

MetXia(R) (cancer)

   • Three dose levels of cyclophosphamide alongside MetXia successfully
     evaluated in second stage of Phase II trial in pancreatic cancer

Targeted Antibody Therapy/CME-548 (cancer)

   • Wyeth completed key preclinical studies

ProSavin(R) (Parkinson's disease)

   • ProSavin outperformed standard treatment in preclinical studies
   • Manufacturing of clinical material initiated in GMP facility
   • Regulatory process for start of clinical trials underway

RetinoStat(R) (retinopathy)

   • Preclinical results with optimised clinical candidate confirmed efficacy
   • Preparations for clinical trials initiated

StarGen(TM) (Stargardt's disease)

   • Preclinical programme initiated in collaboration with the Foundation
    Fighting Blindness

Technology licensing

   • LentiVector(R) technology licensing agreement with GlaxoSmithKline

Financial highlights (audited financial results):

   • Revenue of £0.8 million (2005: £0.8 million)
   • Research and development costs of £19.5 million (2005: £9.3 million)
   • Loss for the year of £17.6 million: (2005: £9.1 million)
   • Net cash used in operating activities of £15.7 million (2005: £7.3
     million)
   • Year end cash, cash equivalents and current asset investments of £28.5
     million (2005: £43.8 million)


Commenting on the annual results, Oxford BioMedica's Chief Executive, Professor
Alan Kingsman said: '2006 has been a landmark year for Oxford BioMedica with
TroVax entering Phase III development that, if successful, should lead to
product launch in 2009 for the treatment of renal cancer. We made excellent
progress with our lead neurotherapy programmes as well as expanding our
technology licensing activities. Furthermore, following extensive commercial
discussions with potential partners for TroVax we are now negotiating final
contractual terms and, subject to agreement on these terms and final approvals,
we hope to conclude a licensing agreement in the near future.'

Analyst meeting:
An analyst briefing will be held at 10:00 am today at the offices of Buchanan
Communications, 45 Moorfields, London EC2Y 9AE.

Web cast:
Simultaneously to the analyst briefing at 10.00 am, there will be a live audio
web cast of the results presentation. To connect to the web cast facility,
please go to the Company's website: http://www.oxfordbiomedica.co.uk/
approximately 10 minutes (09:50 am) before the start of the briefing. This will
also be available for replay shortly after the presentation.


                                     -Ends-

For further information, please contact:
Oxford BioMedica plc:

Professor Alan Kingsman, Chief Executive            Tel: [phone]
City/Financial Enquiries:

Lisa Baderoon/ Mark Court/ Mary-Jane Johnson        Tel: [phone]
Buchanan Communications
Scientific/Trade Press Enquiries:

Gemma Price/ Holly Griffiths/ Katja Stout           Tel: [phone]

Northbank Communications



Notes to editors:

1. Oxford BioMedica

Oxford BioMedica (LSE: OXB) is a biopharmaceutical company specialising in the
development of novel gene-based therapeutics with a focus on oncology and
neurotherapy. The Company was established in 1995 as a spin out from Oxford
University, and is listed on the London Stock Exchange.

Oxford BioMedica has core expertise in gene delivery, as well as in-house
clinical, regulatory and manufacturing know-how. In oncology, the pipeline
includes two clinical candidates and a preclinical targeted antibody therapy,
which is being developed in collaboration with Wyeth. The Company has started
Phase III development of its lead cancer immunotherapy product, TroVax, in renal
cancer and has an ongoing Phase II programme in various cancer settings
including renal, colorectal and prostate cancer. In neurotherapy, the Company's
lead product, ProSavin, is expected to enter clinical trials in Parkinson's
disease in 2007. The preclinical pipeline includes gene-based products for
vision loss, motor neuron disease and nerve repair.

The Company is underpinned by over 80 patent families, which represent one of
the broadest patent estates in the field. The Company has a staff of 72 split
between its main facilities in Oxford and its wholly owned subsidiary, BioMedica
Inc, in San Diego, California. Oxford BioMedica has corporate collaborations
with Wyeth, Intervet, Sigma-Aldrich, Viragen, MolMed and VIRxSYS; and has
licensed technology to a number of companies including Merck & Co, Biogen Idec,
GlaxoSmithKline and Pfizer.

Further information is available at www.oxfordbiomedica.co.uk

CHAIRMAN'S REPORT

I am pleased to report another year of excellent progress for Oxford BioMedica.
We have advanced both our development and our commercialisation activities. In
2006, we achieved a key development milestone by commencing a Phase III clinical
trial with TroVax, our lead cancer immunotherapy product, and made good progress
towards the objective of starting clinical trials of ProSavin, our product for
Parkinson's disease. Our key commercial focus in 2006 was to secure a commercial
partner for TroVax. We have progressed to an advanced stage of negotiations with
potential partners and remain committed to achieving this goal. Also in 2006,
the Company celebrated its ten year anniversary. I am extremely proud that we
have established one of the world's leading gene therapy companies with a broad
pipeline and suite of technologies in that time. We remain committed to our
corporate mission to improve patient lives by bringing safe and effective
gene-based treatments to the market and, in doing so, to create long term value
for shareholders.

Oncology Overview

The need for new cancer therapies has never been greater and the pharmaceutical
industry has recognised that vaccines could play a significant role as
additional treatment options for patients. We believe that TroVax has the
potential to be one of the first of a new generation of cancer vaccines, and
that it could provide benefit in a number of different cancers. In 2006, we
reported further positive data from the Phase II programme of TroVax, including
final data from the colorectal cancer trials and interim data from trials in
patients with renal and prostate cancer. Over 180 patients have now been treated
with TroVax, and the product has an excellent safety profile with evidence of
efficacy in multiple cancer settings. Starting the Phase III TRIST trial of
TroVax in renal cancer in November 2006 was a major milestone for the Company.
We are very encouraged to have support from the FDA, which earlier in the year
agreed a Special Protocol Assessment for the trial. This provides a clear path
to approval and launch of TroVax in the USA if the trial is successful. We
expect further data from the TroVax clinical programme during 2007, including
the first review by the Data Safety Monitoring Board of TRIST. Our commercial
negotiations for TroVax are well advanced and, subject to final agreement, we
expect to conclude a global licensing deal with a major pharmaceutical company.

Our second clinical candidate, MetXia, has progressed in clinical development,
but more slowly than anticipated due to the aggressiveness of the disease and,
hence, poor patient recruitment. A Phase II trial of MetXia as a localised
therapy alongside chemotherapy in patients with operable pancreatic cancer is
ongoing. The data continue to look encouraging and we are taking steps to
accelerate patient recruitment, whilst considering our commercial options for
the programme. Also in oncology, during 2006, we were delighted that our partner
Wyeth announced that it is continuing its preclinical evaluation of our
collaborative product candidate, CME-548. The commencement of clinical
development will trigger a milestone payment under our agreement.

As our TroVax development programme matures, we are considering strategic
opportunities to broaden our oncology portfolio and exploit our expertise in
cancer immunotherapy and biological products.

Neurotherapy Overview

The development of novel neurobiological products is one of the fastest growing
sectors in the pharmaceutical industry. Our neurotherapy pipeline, which is
based on the Company's core LentiVector gene delivery technology, continues to
attract interest from industry and support from charitable and patient
organisations. Our products are addressing debilitating diseases with unmet
medical need. With an aging population, neurodegenerative diseases are a growing
burden to the healthcare system. A recent US study raised concerns about the
lack of long term effective treatments for Parkinson's disease, which is costing
society US$27 billion a year in medical bills and lost wages.

In 2006, we made good progress towards the goal of starting clinical trials of
our novel gene therapy product for Parkinson's disease, ProSavin. The process of
scaling-up the manufacture and transferring this to a facility capable of
producing clinical-grade material was a technical challenge. The product is
entirely novel and therefore required the development of a completely new
manufacturing process. As a result we had to overcome some unforeseen hurdles
along the way. However, these issues have now been addressed, the manufacturing
technology has been successfully transferred to a contract manufacturer and
initial regulatory meetings have been held. Final toxicology and dosing studies
remain to be completed and we expect to make formal regulatory submissions for
the first clinical trial of ProSavin in 2007.

We have also made progress with our other neurotherapy programmes, including the
completion of further preclinical studies to support the start of human trials
with both RetinoStat for vision loss and MoNuDin for motor neuron disease.
Furthermore, we are currently in discussions with patient groups and charities
to secure funding to support the ongoing development of our drug candidate for
spinal muscular atrophy, SMN-1G.

During 2006, we expanded our neurotherapy pipeline by formally commencing
preclinical development of a LentiVector-based therapy to treat an inherited
ocular condition, Stargardt's disease. A leading US blindness charity, the
Foundation Fighting Blindness, the National Neurovision Research Institute and a
consortium of investors are funding the development of this product, named
StarGen. Our strategy is to expand our pipeline further by following a similar
approach for other inherited ocular diseases. These diseases tend to have
limited prevalence but represent an unmet medical need for safe and effective
therapies. As the timelines for development of these therapies would be
relatively short, the commercial opportunity could be considerable. We have been
encouraged by the active support of dedicated charities in these disease areas,
which enables us to share the risk of product development whilst maintaining
commercial flexibility.

Licensing and Collaborations Overview

Our LentiVector technology is becoming the gold standard gene delivery tool in
pharmaceutical research as evidenced by an increasing number of users of
LentiVector-based reagents through our alliance partner, Sigma-Aldrich, and
through direct licensees of the technology. Sigma-Aldrich has launched a suite
of reagents based on our technology, and is planning further launches in 2007.
Oxford BioMedica receives royalties on Sigma-Aldrich's global sales of these
reagents. In 2006, GlaxoSmithKline joined other major pharmaceutical and
biotechnology companies by licensing our LentiVector technology for research use
in a joint agreement with Oxford BioMedica and Sigma-Aldrich. Also during the
year, another of our licensees expanded its agreement to a worldwide perpetual
licence.

Financial Overview

Our financial results for 2006 reflect increased investment in clinical
development, most notably relating to TroVax. Net cash used in operating
activities during 2006 rose to £15.7 million (2005: £7.3 million). Revenue,
which is primarily annual fees for technology licensing, was unchanged at £0.8
million. The start of the Phase III TRIST trial of TroVax contributed to an
increase of 109% in research and development costs for 2006 to £19.5 million
(2005: £9.3 million). We closed the year with a net balance of cash, cash
equivalents and short term deposits of £28.5 million (2005: £43.8 million). Our
current resources are sufficient to support operations, including the TRIST
trial, until mid-2008 and we do not anticipate the need to raise additional
funds ahead of achieving our major commercial objective of a global
collaboration for TroVax.

Board and People

Our total staff headcount has remained relatively stable during 2006 at
approximately 72 full-time employees. During the year, there were two changes to
the Board. Dr Michael McDonald, who joined Oxford BioMedica in 2005 as Chief
Medical Officer, was appointed to the Board as an Executive Director in February
2006. Mike has considerable experience in clinical development and regulatory
affairs gained over 20 years in the pharmaceutical and biotechnology industry,
and I welcome him to the Board. Raj Uppal, a Non-Executive Director, resigned
from the Board in March 2006 to pursue other interests. I would like to thank
Raj for his valuable contribution to Oxford BioMedica. He has been an excellent
source of advice over the years, having joined the Board in February 2001. A
replacement Non-Executive Director is being sought.

Outlook

As we move into our next decade, I am more confident than ever that we have the
elements in place to become a successful biopharmaceutical company. We have set
clear, near-term development and commercial objectives for our lead programmes.
As we achieve these key milestones, we expect to accelerate some of our
early-stage product candidates and to expand the pipeline with new development
opportunities that make the best use of our strengths and expertise. We look
forward to delivering on these goals during 2007.

I would also like to recognise the support and commitment shown to Oxford
BioMedica by our partners, licensees and shareholders, and most importantly, the
skills, knowledge and dedication of our staff, which are critical to the success
of Oxford BioMedica. I am, as ever, grateful to them for their efforts, which
have helped to shape our progress.


Dr Peter Johnson
CHAIRMAN


OPERATING REVIEW

ONCOLOGY

The oncology pipeline at Oxford BioMedica exploits the expertise of the Company
and its partners in tumour biology, immunology and product development. The
oncology pipeline comprises three major product candidates as well as a product
for treating cancer in companion animals. These novel cancer therapies are
designed to deliver a combination of improved efficacy and safety over existing
treatments.

In 2006, Oxford BioMedica achieved key milestones in the development of TroVax,
including the start of the Phase III TRIST trial in renal cancer, which could
support product registration in 2009. During the year, the Company also received
further commitment from QUASAR, a UK-based clinical trials network, which is
expected to conduct a Phase III trial in colorectal cancer. In parallel,
discussions with major pharmaceutical companies for a global commercial licence
for TroVax have reached an advanced stage. The Phase II trial of MetXia in
pancreatic cancer is progressing more slowly than anticipated and the Company
has implemented changes that are designed to accelerate patient recruitment. The
Company's partners, Wyeth and Intervet, made progress with their respective
cancer programmes during 2006.

TroVax(R)

TroVax is Oxford BioMedica's lead cancer immunotherapy product. It is designed
to stimulate a specific anti-cancer immune response and has potential
application in many tumour types. The product induces an immune response against
the tumour antigen 5T4, which is broadly distributed throughout a wide range of
solid tumours. The product consists of a Modified Vaccinia Ankara (MVA) virus,
which delivers the gene for 5T4. Vaccinia viruses are widely used as delivery
systems for antigen-specific vaccines. MVA is the vaccinia virus strain of
choice because of its excellent safety profile and its effectiveness in
stimulating an immune response. Once the immune system is activated by TroVax,
antibodies and killer T-cells can migrate round the body seeking out and
destroying cancer cells bearing 5T4.

Over 180 patients have now been treated with TroVax in ten clinical trials in
colorectal, renal and prostate cancer. Four Phase II trials in renal cancer and
a Phase II trial in prostate cancer are ongoing and continue to show encouraging
results. About 100 patients have been enrolled in these five trials to date.

In November 2006, the Company achieved an important milestone by starting its
planned Phase III trial, TRIST (TroVax Renal Immunotherapy Survival Trial) in
renal cancer. More than 40 clinical centres in the USA, European Union and
Eastern Europe are now actively recruiting patients. In January 2007, the UK
National Cancer Research Network (NCRN), which provides the UK National Health
Service (NHS) with the infrastructure to support cancer clinical trials, agreed
to adopt the trial. The NCRN's adoption of TRIST means that multiple NHS centres
are able to participate in the study, which should facilitate rapid recruitment
of patients in the UK. In reaching its decision to adopt the TRIST trial, the
Renal Cancer Clinical Studies Group of the NCRN evaluated TroVax and the trial
design and concluded that the product offers potential improvement in patient
care for the NHS.

In May 2006, Oxford BioMedica secured an agreement with the US Food and Drug
Administration (FDA) on a Special Protocol Assessment (SPA) for the TRIST trial.
The written agreement from the FDA specifies the design, conduct, analysis and
endpoints of the trial. With an SPA in place, the trial can be used to support
an efficacy claim in a regulatory submission for product registration in the
USA.

The TRIST study is designed to evaluate whether TroVax immunotherapy, in
combination with first-line standard-of-care therapies, prolongs the survival of
patients with locally advanced or metastatic clear cell renal adenocarcinoma.
The study is randomised, double-blinded and placebo-controlled. Approximately
700 patients will be recruited. The primary endpoint is improvement of survival
and secondary endpoints include progression-free survival, tumour response rates
and quality of life scores.

The Company has appointed an independent Data Safety Monitoring Board (DSMB) to
assess the safety and potential efficacy of TroVax at various time points during
the trial. The first DSMB review is anticipated in the second half of 2007. The
duration of the trial will be determined by the number of survival events
(deaths) in the study group, and the trial is expected to reach a conclusion in
2008-09. If the trial is successful, TroVax could be submitted for product
registration in 2009.

In December 2006, Oxford BioMedica received a positive opinion from the
Committee for Orphan Medicinal Products (COMP) recommending orphan drug
designation for TroVax for the treatment of patients with renal cancer in the
European Union (EU). The COMP is part of the European Medicines Agency (EMEA).
The European Commission adopted this opinion in January 2007, which ensures a
ten-year marketing exclusivity for TroVax within the EU. In addition, Oxford
BioMedica and its prospective partner will benefit from a simplified,
accelerated and cost-effective approval procedure under the consultative
guidance of the EMEA. The Company plans to request the equivalent orphan drug
status in the USA.

During the year, data from the Phase II trials of TroVax were presented at a
number of key oncology meetings. The Annual Meeting of the American Society of
Clinical Oncology in June 2006 was an important forum for TroVax. Oxford
BioMedica's scientists along with external clinical investigators from cancer
centres in the USA and from Cancer Research UK presented data from five Phase II
studies of TroVax in colorectal and renal cancer.

Ongoing analysis of two completed Phase II trials in 36 patients, in which
TroVax was evaluated as a first-line treatment for metastatic colorectal cancer
alongside chemotherapy, showed that 95% of patients who received both TroVax and
at least six cycles of chemotherapy experienced disease control based on
unaudited tumour response data. Encouragingly, 60% showed complete or partial
tumour responses (tumour shrinkage). In the analysis of patients that received
at least two TroVax immunisations and were therefore able to raise an
anti-tumour immune response, TroVax extended median survival to 80 weeks from 72
weeks based on historical controls for chemotherapy alone. Similarly, TroVax
improved survival at twelve months from 70% to 90%. Importantly, as at 21 August
2006, nine patients (25%) remained alive with an average follow-up time of
almost two and a half years. This level of survival is higher than expected and
may indicate that TroVax is providing a long term therapeutic effect after
treatment has halted. As reported previously in 2005, the primary endpoints of
safety and anti-tumour immunological responses were achieved in both trials and
the results confirmed the excellent safety profile of TroVax with no serious
adverse events being attributed to the product.

Data from Cancer Research UK's Phase II trial of TroVax as an adjuvant therapy
in patients with colorectal cancer undergoing surgery for liver metastases
showed that 95% of patients produced an anti-tumour immune response. Hence, the
primary endpoint of immunological response was achieved. Again, TroVax was well
tolerated in all patients with no serious adverse events associated with the
product. Of the 20 patients recruited, 16 had successful surgical resection of
their colorectal cancer liver metastases. All evaluable resected tumours were
positive for the 5T4 antigen, the target for TroVax, confirming previously
reported data on the broad distribution of 5T4 on solid tumours.

In November 2006, a principal clinical investigator, who is conducting two Phase
II trials of TroVax alongside standard therapy in renal cancer and a Phase II
trial in prostate cancer, presented encouraging data from all three trials at
the EORTC-NCI-AACR Symposium on 'Molecular Targets and Cancer Therapeutics'. In
renal cancer, data were available from 33 patients, who had been heavily
pre-treated and were at an advanced stage of disease prior to entering the
trials. TroVax was well tolerated and showed promising anti-tumour activity. One
patient had a complete response, i.e. the tumour mass was completely eradicated.
Two patients developed a partial response. A further 15 patients showed disease
stabilisation for periods exceeding three months, including one patient that has
been stable for more than 46 weeks. It is still too early to assess the endpoint
of median survival in the two studies, as more than 50% of patients remain
alive. The immunological analysis is ongoing. However, a preliminary assessment
showed that TroVax induced 5T4-specific antibody responses in 96% of evaluable
patients. Importantly, in patients with clear cell renal cancer, there was a
statistically significant correlation (p=0.028) between the immune response to
5T4 and a reduction in patients' tumour burden. This is particularly encouraging
since it supports the rationale that the 5T4-specific immune response induced by
TroVax has therapeutic benefit. Clear cell is the most common subtype of renal
cancer and is the patient group for the ongoing Phase III TRIST study.

The Phase II trial in prostate cancer is evaluating TroVax as a single agent and
in combination with standard therapy. The trial has enrolled 27 patients with
hormone-refractory prostate cancer. An initial assessment showed that TroVax has
been well tolerated and that all patients have developed a strong 5T4-specific
antibody response.

In 2006, Oxford BioMedica advanced its discussions with the QUASAR group
regarding a Phase III trial of TroVax in early-stage (Stage II/III) colorectal
cancer. QUASAR is a UK-based clinical trials network that is funded from a
variety of sources including the UK Medical Research Council and the Department
of Health. QUASAR completed its evaluation of TroVax and the proposed trial in
May 2006. QUASAR has confirmed its commitment to conduct the Phase III trial and
is seeking financial support from the appropriate agencies.

The proposed QUASAR trial will be randomised and placebo-controlled and is
expected to enrol approximately 3,000 patients. The study is designed to support
product registration in Europe and the USA, and is expected to start before the
end of 2007.

The US clinical trials co-operative group, Southwest Oncology Group (SWOG), has
made progress towards the start of a Phase II trial with TroVax in breast
cancer, which will be sponsored by the US National Cancer Institute. In the
first half of 2006, the proposed trial was submitted to the FDA and no issues
were raised. In August 2006, the study was submitted to the US Recombinant DNA
Advisory Committee and was similarly accepted, which means that the trial can
commence. Approximately 120 patients will be enrolled in the trial. It has taken
longer than expected for SWOG to finalise its trial plan and submit to the
authorities but, based on recent discussions, Oxford BioMedica expects SWOG to
commence patient recruitment during 2007.

Oxford BioMedica remains committed to securing a suitable commercial partner for
TroVax. The clinical data that have been generated to date place TroVax amongst
the leading cancer immunotherapy candidates in development worldwide. The value
of the programme continues to increase as more data emerge and with the start of
Phase III development. Discussions with our lead prospective partners for a
global licence to TroVax are at an advanced stage, and the Company expects these
to reach a successful conclusion.

MetXia(R)

MetXia is Oxford BioMedica's cancer therapeutic, designed to enhance the
effectiveness of cyclophosphamide, which is a widely used cancer therapy. MetXia
uses a highly-engineered retrovirus gene delivery system to deliver a specific
human cytochrome P450 gene. The product is administered locally to the tumour
site, enabling the P450 enzyme to be produced locally. The enzyme activates the
prodrug cyclophosphamide at the tumour site, thus increasing the effective
concentration of the anti-tumour, cytotoxic derivative of cyclophosphamide in
the tumour mass. In principle, this should enhance the local efficacy of
cyclophosphamide and reduce the need for systemic administration. This in turn
should reduce the dose limiting toxicity of the drug and expand the therapeutic
window.

MetXia is potentially useful in the treatment of a number of solid tumours and
their metastases, particularly those where cyclophosphamide is commonly used as
a treatment. The Company is targeting its development efforts for MetXia on the
treatment of pancreatic cancer through direct administration of both MetXia and
cyclophosphamide to the tumour. A two-stage Phase II trial is ongoing in
patients with non-resectable pancreatic tumours.

The Company successfully completed the first stage of the trial in 2005. Patient
recruitment continues for the second stage of the trial using a fixed, optimal
dose of MetXia and increasing doses of cyclophosphamide in up to 25 patients, at
two centres in the UK. The objective of the second stage is to determine the
optimal dose of cyclophosphamide and to evaluate clinical benefit in addition to
safety. Recruitment of patients into this part of the trial is purposefully
staged since each patient must be carefully reviewed for their response to
therapy prior to treatment of subsequent patients.

Three dose levels of cyclophosphamide alongside MetXia have been evaluated and
patient recruitment at a fourth dose level is ongoing. The patients are at an
advanced stage of their disease, and most have previously failed to respond to
other therapies. To date, there have been no serious adverse events associated
with MetXia. Recruitment of patients into the trial has been slower than
expected and the Company has implemented changes that are designed to accelerate
the study.

Oxford BioMedica expects to report further safety and outcome data from this
trial during 2007. In addition, the Company intends to open discussions with the
regulatory authorities to determine the most expeditious route to obtain
regulatory approval of MetXia for the treatment of pancreatic cancer.

MetXia could provide a novel treatment option for the unmet need in pancreatic
cancer and other tumour types. To maximise the commercial opportunity for
MetXia, the Company is evaluating various strategic options, including licensing
the programme to potential partners.

5T4 Targeted antibody therapy/CME-548 (Wyeth)

Wyeth has licensed the rights to Oxford BioMedica's proprietary antibody against
the 5T4 tumour antigen for the treatment of cancer. Wyeth is using the antibody
to develop an antibody-toxin conjugate, based on its expertise with the
anti-cancer agent calicheamicin. Wyeth has previously demonstrated the validity
of the concept of targeted toxins through its successful development of Mylotarg
(R) for the treatment of acute myeloid leukaemia.

In 2006, Wyeth completed key preclinical studies of the 5T4-targeted antibody
therapy in collaboration with Oxford BioMedica. The product has been denoted by
Wyeth as CME-548 and was described in detail in an R&D presentation to analysts
and investors hosted by Wyeth in October 2006. Wyeth continues to evaluate the
product in preclinical models. The expectation is that, if warranted on
completion of preclinical studies, Phase I/II development of CME-548 will be in
patients with any solid tumours that express the 5T4 tumour antigen. The start
of clinical development will trigger a milestone payment to Oxford BioMedica
under its US$24 million collaboration with Wyeth.

TroVax-VET(R) (Intervet)

TroVax-Vet is Oxford BioMedica's veterinary 5T4 tumour antigen-targeted
immunotherapy programme for the treatment of cancer in companion animals,
focusing on dogs and cats. The product is licensed to Intervet, which is the
world's largest animal vaccine company and a unit of Akzo Nobel.

In 2006, Intervet completed its preclinical optimisation of the canine version
of TroVax-Vet, in collaboration with Oxford BioMedica, in readiness to commence
initial field trials of the product. Intervet anticipates a regulatory
submission for the start of field trials in dogs with naturally occurring cancer
in 2007.

NEUROTHERAPY

The neurotherapy pipeline exploits the Company's proprietary LentiVector gene
delivery technology, and addresses a range of neurological and ophthalmic
conditions. These are primarily disorders associated with ageing, inherited
diseases and vision loss. Oxford BioMedica's novel gene-based neurotherapy
candidates offer potentially safe and effective therapies for diseases, where,
in some cases, there are currently no available treatment options.

In 2006, the key objective for the neurotherapy pipeline was to prepare the two
lead product candidates, ProSavin for Parkinson's disease and RetinoStat for
retinopathy, for clinical development. The Company has made progress on both
programmes. The Company faced some unexpected manufacturing issues related to
ProSavin, which have been successfully addressed. The regulatory process that
will lead to a formal submission for the start of trials with ProSavin is
underway. The Company started pivotal non-clinical studies with RetinoStat and
is preparing for manufacturing scale-up to support a regulatory submission for
clinical trials.

Given the commonality of the LentiVector system to all the neurotherapy
products, the infrastructure for ProSavin that relates to manufacturing scale-up
and safety testing can be applied to the entire portfolio. Hence, the time
invested in ProSavin should accelerate the programmes for the other development
candidates. The Company anticipates starting clinical development of ProSavin
and RetinoStat for age-related macular degeneration within 12 to 18 months with
at least one neurotherapy product candidate advancing to clinical development
each year thereafter.

The neurotherapy portfolio continues to attract support from charitable and
patient organisations. In 2006, a sixth preclinical programme was added to the
neurotherapy portfolio. This new gene-based product candidate, StarGen for the
treatment of an inherited ocular condition, Stargardt's disease, is being
developed in collaboration with the US charity, Foundation Fighting Blindness
and the National Neurovision Research Institute.

ProSavin(R)

The Company's lead neurobiology product, ProSavin, provides a novel approach to
the treatment of Parkinson's disease. ProSavin uses a LentiVector system to
deliver the genes for three enzymes that are required for the synthesis of
dopamine. The product is administered locally to the region of the brain called
the striatum, converting cells into a replacement dopamine factory within the
brain, thus replacing the patient's own lost source of the neurotransmitter.

In 2006, Oxford BioMedica made good progress towards the goal of starting
clinical trials of ProSavin in Parkinson's disease. The manufacturing process
for production scale-up was successfully transferred to a facility that is in
compliance with Good Manufacturing Practice (GMP). This step was more
time-consuming than anticipated, and this has delayed the formal regulatory
submission to start trials. However, all remaining issues have been addressed
and the manufacture of GMP clinical material is now underway and relevant safety
studies using the final product are ongoing. The manufactured material will be
sufficient for the Company's proposed Phase I/II trial in patients with moderate
to late-stage Parkinson's disease.

In the second half of 2006, Oxford BioMedica had two formal meetings with a
European regulatory agency to discuss the application to start trials and the
development plan for ProSavin. The proposed development plan is to conduct a
Phase I/II trial, then, subject to the efficacy results in the Phase I/II study,
to move directly to a Phase III trial that would be designed to support product
registration and could commence in 2009. Interactions with the regulatory agency
have been encouraging and the Company anticipates a regulatory submission for
the start of the Phase I/II trial in 2007.

At the European Society of Gene Therapy Annual Congress in November 2006, a
leading neuroscientist presented new preclinical data from the ProSavin
programme. In industry-standard models of the disease, ProSavin outperformed the
standard treatment for Parkinson's disease, L-DOPA, in terms of efficacy without
inducing any of the disabling dyskinesias (movement disorders) that occur
following prolonged treatment with L-DOPA. In addition, long term data showed
that ProSavin's therapeutic benefit from a single administration was maintained
for at least 15 months, the most recent time point, without any loss of effect,
whereas the benefit of continuous L-DOPA therapy waned significantly.

The superior efficacy of ProSavin combined with the absence of side effects
suggest that ProSavin could be used to replace standard L-DOPA therapy in
moderate to late-stage Parkinson's disease. The results from these and other
preclinical proof of principle studies are being submitted for publication in a
medical journal during 2007.

Oxford BioMedica's strategy is to secure commercial partners after demonstrating
efficacy in clinical trials. In the case of ProSavin, the Company has had
discussions with potential partners that may lead to an earlier agreement if
sufficiently attractive terms can be negotiated.

RetinoStat(R)

RetinoStat is the Company's novel gene-based treatment for neovascular
age-related macular degeneration (AMD) and diabetic retinopathy (DR), which are
caused by the unregulated and aberrant growth of leaky and disruptive blood
vessels in the retina. The product uses the LentiVector system to deliver two
anti-angiogenic genes that block the formation of new blood vessels in the
retina. The therapeutic genes, angiostatin and endostatin, have been exclusively
licensed by Oxford BioMedica for use in treatments of ocular diseases from
Entremed Inc.

In 2006, Oxford BioMedica and its collaborators at Johns Hopkins University
School of Medicine, Baltimore, Maryland, USA, presented encouraging preclinical
data with RetinoStat at the Association for Research in Vision and Ophthalmology
(ARVO) Annual Meeting. The data confirmed that RetinoStat provides statistically
significant efficacy in an industry-standard preclinical model of neovascular
age-related macular degeneration (AMD). In addition, by precisely engineering
gene switches in the product, the Company achieved highly specific gene
expression in the target cells of the retina. This substantially enhances the
potential safety and efficacy of RetinoStat.

Oxford BioMedica and Johns Hopkins University, in partnership with the
Foundation Fighting Blindness (FFB) and its support organisation, the National
Neurovision Research Institute, are conducting pivotal non-clinical studies with
RetinoStat that are designed to support a regulatory submission for the start of
clinical trials in patients with neovascular AMD. Following completion of the
GMP manufacture of ProSavin, the Company plans to scale-up the manufacturing of
RetinoStat during 2007. The objective is to submit an Investigational New Drug
(IND) application to the US FDA for the start of trials in 2008.

As with other preclinical candidates in its pipeline, Oxford BioMedica may
collaborate on the development of RetinoStat prior to demonstrating clinical
efficacy. Initial discussions with potential partners have taken place.

StarGen(TM)

In October 2006, Oxford BioMedica announced a new preclinical development
programme for the treatment of Stargardt's disease, which is the most common
juvenile degenerative retinal disease. The Company is evaluating its LentiVector
technology for the treatment of several ocular diseases, and the Stargardt's
disease programme, called StarGen, is the most advanced. The programme is part
of a broad collaboration with FFB and its support organisation, the National
Neurovision Research Institute, and it builds on the existing agreement with FFB
for the development of RetinoStat. Under the agreement, FFB and a consortium of
investors made an upfront payment and committed to a staged subscription for
approximately US$3.9m of Oxford BioMedica ordinary shares at a 10% premium to
the market price at the time of investment. An initial subscription of
US$300,000 was made in 2006. These funds support the development of StarGen,
and, in return, FFB and the investors will receive a royalty on
commercialisation of the product.

The Company also reported initial preclinical data with StarGen, showing
efficacy in an industry-standard model of Stargardt's disease. The product was
effective for the duration of the study, which was approximately six months.
Further preclinical development is ongoing at Columbia University in the USA.

MoNuDin(R), SMN-1G and Innurex(R)

The three early-stage neurological programmes, MoNuDin, SMN-1G and Innurex,
continue to progress through preclinical development. These gene-based
therapeutics are addressing motor neuron disease, spinal muscular atrophy and
nerve repair for spinal cord injury, respectively. In 2006, the Company and its
scientific collaborators continued to build the preclinical data packages that
will support advancement of the product candidates into clinical development.

New data with MoNuDin for amyotrophic lateral sclerosis, the most common form of
motor neuron disease, showed that the product successfully reached motor neurons
following remote, intramuscular administration. Further data from the MoNuDin
programme are expected to be presented at a medical conference in 2007. The UK
Motor Neurone Disease Association continues to fund this programme.

In 2006, the SMN-1G product configuration was further optimised. The objective
for 2007 is to define the clinical strategy for SMN-1G with support from leading
clinicians in the field of spinal muscular atrophy. In addition, the Company is
seeking further funding from charities and patient groups associated with this
inherited disease.

Oxford BioMedica and its collaborators at King's College London, UK, published
preclinical efficacy results with Innurex in Nature Neuroscience in February
2006. The data were based on a preclinical study of Innurex in spinal cord
injury, which showed a statistically significant improvement in both sensory and
motor functional ability with Innurex compared to placebo for most measurements.
The results were also presented at the British Society for Gene Therapy Annual
Conference in March 2006. Further preclinical studies are ongoing and the
Company aims to define a clinical plan for initial trials of Innurex during
2007.

OTHER PROGRAMMES

Outside of its core therapeutic focus, the Company has advanced its preclinical
programme, for the blood clotting disorder, haemophilia A. This congenital
condition is caused by a deficiency of the blood clotting protein, Factor VIII.
The Company's product, ReQuinate(R), is designed to restore levels of the
deficient protein by delivering the gene for Factor VIII using the LentiVector
system.

The Company presented preclinical data from the ReQuinate programme at the
British Society for Gene Therapy Annual Conference in March 2006. The data
showed that the product produced potentially therapeutic levels of the Factor
VIII protein in liver cells. The Company is conducting further optimisation work
with ReQuinate to improve the delivery of the Factor VIII gene to the liver. The
programme is funded by a grant from the UK Department of Health.

The Company continues to evaluate opportunities for therapeutic product
development using the LentiVector technology as a delivery mechanism for
molecules that can silence genes via a process known as RNA interference (RNAi).
The Company's research efforts are focused on the evaluation of the LentiVector
system for the delivery of micro-RNA, which can be used to regulate the
expression of disease-related genes.

These programmes are at the discovery or early preclinical stage and are outside
of the Company's core focus. Hence, their successful application and progression
are uncertain and may be subject to priority changes within the Company.

TECHNOLOGY LICENSING

Oxford BioMedica's technology licensing strategy is to exploit the potential of
its suite of gene delivery technologies by providing third-party access either
for research, product development or specific applications. In 2006, Oxford
BioMedica delivered on its broad goals of attracting new licensees and expanding
existing agreements. Oxford BioMedica added two new licensees, VIRxSYS and
GlaxoSmithKline, during the year, bringing the total number of active licensing
agreements to nine. In addition, one existing licence was upgraded to an
all-territory perpetual licence. The Company's strategic alliance partner,
Sigma-Aldrich, commenced commercialisation of LentiVector-based reagents, and
another licensee, Viragen, reported progress with its LentiVector-based
transgenic programme.

The agreement with VIRxSYS, signed in March 2006, provides a licence to Oxford
BioMedica's patents for the VSV-G viral envelope system for the production of
VIRxSYS' product for the treatment of AIDS, VRX496. This novel gene therapy is
the first lentiviral-based drug candidate to have entered clinical development
in the USA. VIRxSYS is conducting two Phase II trials of VRX496 in patients with
HIV. Under the agreement, Oxford BioMedica received an upfront licence fee in
2006 and receives annual maintenance payments, clinical and regulatory milestone
payments and royalties on product sales.

In December 2006, GlaxoSmithKline (GSK) licensed the Company's LentiVector gene
delivery technology for research activities in a joint agreement with
Sigma-Aldrich. GSK has joined other major pharmaceutical and biotechnology
companies, including Biogen Idec, Merck & Co and Pfizer, in utilising the
LentiVector system in its research and drug discovery programmes. Also in
December 2006, Oxford BioMedica expanded an existing research licence agreement
for the LentiVector technology with a major undisclosed pharmaceutical company.
The amendment broadens the agreement from an annual licence for research
activities in the USA to a worldwide perpetual licence. In all of these
agreements the licence is restricted to research, and a more substantial
commercial licence would need to be obtained from Oxford BioMedica to use the
technology for a commercial product or process.

Sigma-Aldrich commenced its commercialisation efforts as part of the strategic
alliance with Oxford BioMedica, which was signed in October 2005. During 2006,
Sigma-Aldrich launched a range of high-value LentiVector-based research products
for its extensive customer base in the pharmaceutical, biotechnology and
academic sectors. Further launches are anticipated in 2007. Under the agreement
with Sigma-Aldrich, Oxford BioMedica receives annual minimum payments and
royalties on sales of these products.

Viragen, which licensed the LentiVector technology in 2004 for the development
of an avian transgenic biomanufacturing system, published results and reported
further progress with its programme in January 2007. An article in a leading
scientific journal profiled the avian transgenic (OVA(TM)) system's ability to
express two therapeutic proteins in the whites of eggs of transgenic hens.
Following this publication, Viragen reported the successful expression of a
third protein, human interferon alpha-2a, in the OVA(TM) system. The Viragen
agreement includes annual licence payments, milestone payments on the
achievement of technical goals and royalties on commercialisation.

The LentiVector technology is becoming a gold standard tool for various
applications in research and drug discovery. The current revenue stream from the
Company's technology licensing is modest, although some of the agreements have
the potential to generate significant additional income. In 2007, the ongoing
objective is to broaden the portfolio of licensed users of the Company's
technologies. The Company also aims to expand its existing relationships,
particularly the research-based agreements, into more substantial, longer-term
collaborations.

INTELLECTUAL PROPERTY

Maintenance and expansion of the Company's intellectual property estate is
fundamental to the Company's commercial strategy. The Company's patent portfolio
covering its products and technologies comprises 39 US and 12 European granted
patents. This portfolio increased by four patents in the USA and two in Europe
from the figure in the 2005 Annual Report. A further 66 patents have been issued
in other jurisdictions, an increase of one since last year. In total, 162 patent
applications are currently pending. Another 14 patent families, covering key
technologies, are licensed from third parties.

Key events related to intellectual property during 2006 included a Notice of
Allowance from the US Patent Office for a key patent application for ProSavin,
strengthening of the LentiVector patent portfolio, and the grant of a European
patent for Innurex.

The US patent for ProSavin, that received a Notice of Allowance, significantly
extends the protection of the Company's lead product candidate for Parkinson's
disease. This patent describes the genetic composition of ProSavin and, as such,
is an important addition to the portfolio of patents that protect the product.
The patent also provides protection for new product candidates that the Company
may develop for the treatment of other neurodegenerative conditions such as
Alzheimer's disease.

The patent estate covering the LentiVector technology was strengthened by the
issue of one new US patent and a Notice of Allowance on another patent
application. These patents broaden the protection of the LentiVector delivery
and production systems. Patents covering aspects of this technology have
previously been granted in Europe and China. The Innurex programme benefited
from the grant of a European patent that covers the genetic delivery of the
therapeutic gene, which is a subtype of the retinoic acid receptor that induces
nerve cells to re-grow.

In 2006, Sigma-Aldrich and Oxford BioMedica filed a lawsuit against Open
Biosystems Inc for infringement of two US patents relating to the use of the
LentiVector technology for RNA interference research tools. The costs of the
litigation are being covered by Sigma-Aldrich.


FINANCIAL REVIEW

Income statement overview

In line with expectation, investment in research and development more than
doubled in 2006 with the start of the TRIST Phase III trial of TroVax, leading
to a net loss almost twice the level of 2005 and a comparable increase in cash
burn. As in previous years, revenue was not significant compared to the level of
R&D spending.

Revenue £760,000 (2005: £824,000)

Revenue in 2006 derived from licences to the Group's proprietary gene delivery
technology. The small reduction in total revenue was due partly to the weaker US
Dollar in 2006 but mostly due to the impact on last year's revenue of the
initial payment received under the Sigma-Aldrich licence. Two new gene delivery
licenses were signed in 2006 and an existing licence was upgraded to an
all-territory perpetual licence. Under the Group's revenue recognition policy,
the non-refundable one-off payments under such licences are recognised as
revenue in the year in which the agreements are signed. Revenue was also earned
in 2006 from the ongoing collaboration with Viragen Inc, using LentiVector gene
delivery in the field of avian transgenics. The new ocular gene therapy
development agreement with the US charity Foundation Fighting Blindness brought
revenue of £53,000 (US$100,000) in 2006.

Operating expenses £22,222,000 (2005: £12,192,000)

Operating expenses in 2006 were significantly higher than 2005 due to investment
in the TroVax Phase III TRIST study and increased spending on ProSavin. This
increase in spending was anticipated at the time that new funds were raised at
the end of 2005. Administration costs were £166,000 (6%) lower than in 2005.

Research & development costs £19,523,000 (2005: £9,327,000)

The Group's R&D costs comprise in-house costs (staff salaries and expenses, R&D
consumables, IP costs, facilities costs and depreciation of R&D assets) and
external preclinical and clinical costs (preclinical development, GMP
manufacturing, regulatory costs, clinical trials and clinical consultants).
Following the fundraising at the end of 2005, there was a modest increase in
in-house R&D spending and a significant increase in external development
expenditure, particularly for TroVax and ProSavin. There were three additional
Phase II studies of TroVax (two in renal cancer and one in prostate cancer) in
addition to starting the Phase III TRIST study. TroVax manufacturing costs in
2006 included £3,454,000 for large-scale validation of the manufacturing
process, which is not expected to be a recurring expense. Increased costs for
ProSavin were mainly for preclinical studies (increased from £328,000 in 2005 to
£1,487,000 in 2006). Manufacturing and process development costs for ProSavin
were up £290,000 at £424,000.

External clinical and preclinical costs are expected to remain high in 2007 and
2008 with continuing expenditure on the TRIST programme, and the move of
ProSavin into clinical trials.

Grant income £360,000 (2005: £135,000)

Grant income was higher in 2006, due to the full-year effect of two grants that
started in 2005. The UK Department of Health is supporting a development
programme for haemophilia which contributed £127,000 in 2006 (2005: £89,000).
The UK charity Motor Neurone Disease Association (MNDA) is supporting
development in motor neurone disease, and contributed £190,000 to other
operating income in 2006 (2005: £48,000). In addition the MNDA grant has
contributed £79,000 towards laboratory equipment in 2005-2006.

Net interest receivable £1,714,000 (2005:£938,000)

The Group places its cash on deposit for periods of up to 12 months and
generates interest on those deposits. The maturity profile of deposits is
intended to match planned patterns of expenditure. As a result of the cash
received from the share issue in December 2005, net interest receivable in 2006
was considerably higher than 2005 at £1,743,000 (2005: £969,000). The Group has
no debt, but is recognising as an interest charge the discount on an onerous
lease provision and, from 2006, a dilapidation provision.

Taxation: net credit £1,762,000 (2005: £1,210,000)

The UK operating subsidiary Oxford BioMedica (UK) Limited is entitled to claim R
&D tax credit. The credit is based on certain eligible expenses, to which a 50%
mark-up and a tax rate of 16% is applied. R&D costs in 2006 were more than
double the level of 2005, but due to the capping rules for R&D credit, the 2006
claim was up by just 45% on the year before, and was capped at the total of
Income Tax and National Insurance on the UK payroll. There was a prior year
credit of £75,000 reflecting the release of a contingency provision following
agreement with the UK tax authorities on the R&D claim for 2005. However,
agreement was not secured in time to receive payment in 2006, and the year end
debtor comprises £600,000 for 2005 and £1,709,000 for 2006. The final part of
the 2005 claim was received in February 2007.

Loss for the financial year £17,626,000 (2005: £9,085,000)

The net effect of higher operating expenses, offset by increased grant income,
interest receivable and tax credit was an increase of £8,541,000 in the loss for
the year to £17,626,000.

Intangible assets £1,665,000 (2005: £1,641,000)

Since the adoption of IFRS the balance sheet has contained substantial
intangible assets for purchased intellectual property rights. These assets are
either amortised or reviewed for impairment at each balance sheet date. No
amortisation has been charged to date, as the products underpinned by the
intellectual property have not yet generated positive cashflows. Purchased
intellectual property costs of £24,000 were capitalised in 2006 (2005: £14,000).

Trade and other receivables £2,202,000 (2005: £1,777,000)

Trade and other receivables (debtors) were £425,000 higher in 2006 than in 2005.
Increased trade receivables and accrued income at 31 December 2006 reflect the
increased revenue receivable under two new gene delivery licence agreements
signed in December 2006. Included in other receivables is grant income
receivable, which was reduced from £516,000 in 2005 to £65,000 in 2006. However,
this reduction was offset by higher interest accrued on bank deposits in 2006
and by legal costs incurred in the litigation with Open Biosystems that are to
be reimbursed by Sigma-Aldrich. Increased prepayments in 2006 included prepaid
insurance for the expanded clinical trial programme.

Trade and other payables £4,763,000 (2005: £2,180,000)

Trade and other payables (creditors) were dramatically higher in 2006,
reflecting the increased costs of the expanded clinical programme. Trade
payables at December 2006 included £800,000 for two of the key contractors in
the TRIST programme (manufacturing and trial management). Accrued costs for
clinical programmes rose from £721,000 in 2005 to £1,782,000 in 2006.

Share issues in 2006

During 2006 a total of 2,446,260 shares were issued on the exercise of share
options, raising proceeds of £466,000. In September 2006 485,185 shares were
issued under the Foundation Fighting Blindness collaboration for ocular gene
therapy, raising proceeds of £160,000. This is modest when compared to 2005,
when share option exercises raised proceeds of £1,038,000 and an open offer,
placing and subscription raised £28,013,000 net of costs.

Cash and deposits £28,543,000 (2005: £43,817,000), cash burn £15,876,000 (2005:
£7,665,000)

The placing, open offer and subscription in December 2005 raised the total of
cash, cash equivalents and available for sale investments (bank deposits) to
£43,817,000 at the end of 2005. Over the course of 2006 this total fell by
£15,274,000 to £28,543,000 as the result of the significantly increased clinical
spending and relatively low proceeds from share issues. However, the present
balance keeps the Group in a strong position as it negotiates the licensing deal
for TroVax, while keeping up the pace of investment in the Phase III programme.

The format of the cash flow statement under IFRS does not make it easy to assess
the overall level of operational cash outflow (the 'cash burn') that has
traditionally been a key performance indicator for development-stage
biotechnology companies. However, it can be calculated by taking the total of
cash used in operating activities, less proceeds of sale of property, plant and
equipment, plus purchases of property, plant and equipment and purchases of
intangible assets. On this measure, cash burn for 2005 was £7,665,000 while 2006
was more than double at £15,876,000. 2005 was a little lower than might have
been expected due to receipt of overdue R&D tax credits in that year, and 2006
was affected by delays to some of the tax credit expected to be received. But
even allowing for this, cash outflow in 2006 was much higher than the year
before because of the increased research and development expenditure.

Financial outlook

The present level of spending will continue through 2007 if, as expected, the
Group continues to be responsible for paying the costs of the Phase III TRIST
trial of TroVax. However, the Directors expect these costs will be covered by
the proceeds of a global licensing deal for TroVax. Progress by Wyeth with its
CME-548 Targeted Antibody Therapy, advances in the Company's other existing
collaborations, and new technology licensing agreements are expected to generate
additional revenue. The Group's good financial position at the end of 2006, its
exciting commercial potential and the pipeline of novel products provide a
strong platform from which to deliver value to shareholders in the future.


Consolidated income statement
for the year ended 31 December 2006

                                                        Notes    2006      2005
                                                                £'000     £'000
Revenue                                                   1       760       824

Research and development costs                                (19,523)   (9,327)
Administrative expenses                                        (2,699)   (2,865)
Other operating income: grants receivable                         360       135
Operating loss                                                (21,102)  (11,233)

Interest payable and similar charges                              (29)      (31)
Interest receivable                                             1,743       969
Loss before tax                                               (19,388)  (10,295)
Taxation                                                  2     1,762     1,210
Loss for the financial year                                   (17,626)   (9,085)
Basic loss and diluted loss per ordinary share            3     (3.5p)    (2.4p)

The results for the years above are derived entirely from continuing operations.

There is no difference between the loss before tax and the loss for the years
stated above, and their historical cost equivalents.

Consolidated balance sheet
at 31 December 2006
                                                         Notes    2006     2005
                                                                 £'000    £'000
Assets
Non-current assets
Intangible assets                                          4     1,665    1,641
Property, plant and equipment                              5       819      831
                                                                 2,484    2,472
Current assets
Trade and other receivables                                6     2,202    1,777
Current tax assets                                               2,309    1,175
Financial assets: Available for sale investments           7    20,500   23,500
Cash and cash equivalents                                  7     8,043   20,317
                                                                33,054   46,769
Current liabilities
Trade and other payables                                   8     4,763    2,180
Current tax liabilities                                              -        1
Provisions                                                 9        58       67
                                                                 4,821    2,248
Net current assets                                              28,233   44,521
Non-current liabilities
Provisions                                                 9       627      393
Net assets                                                      30,090   46,600

Shareholders' equity
Ordinary shares                                                  5,014    4,984
Share premium                                                  106,732  106,097
Other reserves                                                      84       84
Retained losses                                                (81,740) (64,565)
Total equity                                                    30,090   46,600


Consolidated cash flow statement
for the year ended 31 December 2006
                                                        Notes     2006     2005
                                                                 £'000    £'000
Cash used in operating activities
Cash used in operations                                  10    (17,726) (10,074)
Interest received                                                1,440    1,040
Interest paid                                                        -      (11)
Tax credit received                                                650    1,786
Overseas tax paid                                                  (25)     (65)
Net cash used in operating activities                          (15,661)  (7,324)

Cash flows from investing activities
Proceeds from sale of property, plant and equipment                  1        -
Purchases of property, plant and equipment                        (192)    (327)
Purchases of intangible assets                                     (24)     (14)
Net maturity/(purchase) of available for sale                    3,000   (6,000)
investments
Net cash generated by/(used in) investing activities             2,785   (6,341)

Cash flows from financing activities                           
Net proceeds from issue of ordinary share capital                  629   29,043

Effects of exchange rate changes                                   (27)      22

Net (decrease)/increase in cash and cash equivalents           (12,274)  15,400
Cash and cash equivalents at 1 January                          20,317    4,917
Cash and cash equivalents at 31 December                  7      8,043   20,317


Statement of changes in shareholders' equity

                             Share   Share  Translation     Merger  Retained    Total
                           capital premium      reserve    reserve    losses
                             £'000   £'000        £'000      £'000     £'000    £'000

At 1 January 2005            3,721  78,309         (623)       711   (55,739)  26,379
Exchange adjustments             -       -           (4)         -         -       (4)
Loss for the year                -       -            -          -    (9,085)  (9,085)
Share options                   60     978            -          -         -    1,038

Proceeds from shares
issued
Value of employee                -       -            -          -       259      259
services
Issue of shares              1,203  28,879            -          -         -   30,082
excl. options
Costs of share                   -  (2,069)           -          -         -   (2,069)
issues
At 31 December 2005          4,984 106,097         (627)       711   (64,565)  46,600
Exchange adjustments             -       -            -          -         -        -
Loss for the year                -       -            -          -   (17,626) (17,626)
Share options                   25     441            -          -         -      466

Proceeds from shares
issued
Value of employee                -       -            -          -       451      451
services
Issue of shares                  5     155            -          -         -      160
excl. options
Refund in respect of             -      39            -          -         -       39
share issues
At 31 December 2006          5,014 106,732         (627)       711   (81,740)  30,090


Basis of preparation


This financial information for the years ended 31 December 2006 and 31 December
2005 does not constitute the statutory financial statements for the respective
years and is an extract from the financial statements. Financial statements for
the year ended 31 December 2005 have been delivered to the Registrar of
Companies and included the auditors' report. Financial statements for the year
ended 31 December 2006 have not yet been delivered to the Registrar. The
auditors' reports on the financial statements for the years ended 31 December
2006 and 31 December 2005 were unqualified and did not contain statements under
either section 237(2) or section 237(3) of the Companies Act 1985.

The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) and International Financial Reporting
Interpretations Committee (IFRIC) interpretations endorsed by the European Union
and with those parts of the Companies Act 1985 applicable to companies reporting
under IFRS. The financial statements are prepared in accordance with the
historical cost convention as modified by revaluation of available for sale
investments. Whilst the financial information included in this preliminary
announcement has been prepared in accordance with IFRSs adopted for use in the
European Union, this announcement does not itself contain sufficient information
to comply with IFRSs.

Copies of this announcement and the interim report for 2006 are available from
the Company Secretary. The audited statutory financial statements for the year
ended 31 December 2006 are expected to be distributed to shareholders by 20
March 2006 and will be available at the registered office of the Company,
Medawar Centre, Oxford Science Park, Oxford, OX4 4GA.

This announcement was approved by the Board of Oxford BioMedica plc on 5 March
2007.



Notes to the accounts
for the year ended 31 December 2006

1 Segmental analysis

The Group's primary segment reporting is by geographical location of assets,
with business sector as the secondary format. The Group's revenue derives from
assets located in the UK. By destination, revenue derives from Europe and the
USA.
                                                             2006      2005
Revenue by destination                                      £'000     £'000

Europe                                                         56        53
United States of America                                      704       771
Total revenue                                                 760       824

2 Taxation

The Group is entitled to claim tax credits in the United Kingdom for certain
research and development expenditure. The amount included in the financial
statements for the year ended 31 December 2006 represents the credit receivable
by the Group for the year, and adjustments to prior periods. These amounts have
not yet been agreed with the relevant tax authorities.

                                                             2006      2005
                                                            £'000     £'000
Current tax
United Kingdom corporation tax research and development 
credit                                                     (1,709)   (1,175)
Overseas taxation                                              38        43
                                                           (1,671)   (1,132)
Adjustment in respect of prior periods
United Kingdom corporation tax research and development 
credit                                                        (75)     (101)
Overseas taxation                                             (16)       23
Taxation credit                                            (1,762)   (1,210)

3 Basic loss and diluted loss per ordinary share

The basic loss per share has been calculated by dividing the loss for the year
by the weighted average number of shares of 499,865,620 in issue during the year
ended 31 December 2006 (2005: 380,914,250).

The Company had no dilutive potential ordinary shares in either year which would
serve to increase the loss per ordinary share. There is therefore no difference
between the loss per ordinary share and the diluted loss per ordinary share.

4 Intangible assets
                                                             2006      2005
Intellectual property rights                                £'000     £'000
Cost
At 1 January                                                1,920     1,991
Additions                                                      24        14
Disposals                                                     (17)      (85)
At 31 December                                              1,927     1,920
Accumulated amortisation and impairment
At 1 January                                                  279       364
Disposals                                                     (17)      (85)
At 31 December                                                262       279
                                                            1,665     1,641

Net book amount at 31 December

5 Property, plant and equipment

                                             Office     
                                Short    equipment,    
                            leasehold      fixtures     Computer   Laboratory      Total
                         improvements  and fittings    equipment    equipment
                                £'000         £'000        £'000        £'000      £'000
Cost
At 1 January 2006               2,270            86          270        2,650      5,276
Exchange adjustments              (47)            -           (2)           -        (49)
Additions at cost                 385             3           34          111        533
Disposals                           -            (2)         (21)         (91)      (114)
At 31 December 2006             2,608            87          281        2,670      5,646
Accumulated depreciation
At 1 January 2006               2,093            74          212        2,066      4,445
Exchange adjustments              (47)            -           (1)           -        (48)
Charge for the year               221             9           34          273        537
Disposals                           -            (2)         (21)         (84)      (107)
At 31 December 2006             2,267            81          224        2,255      4,827
Net book amount at                
31 December 2006                  341             6           57          415        819
Net book amount at 31             
December 2005                     177            12           58          584        831

Additions to short leasehold improvements include an asset of £335,000
recognised on establishment of a dilapidation provision in respect of the
Group's leasehold property in Oxford.

6 Trade and other receivables
                                                               2006      2005
                                                              £'000     £'000
Non-current
Other receivables - rent deposit                                150       205
Current
Trade receivables                                               241       119
Other receivables                                               765       676
Other tax receivable                                            220       242
Prepayments                                                     603       442
Accrued income                                                  223        93
                                                              2,052     1,572
Total trade and other receivables                             2,202     1,777

7 Cash and cash equivalents
                                                               2006      2005
                                                              £'000     £'000
Cash at bank and in hand                                      2,343       185
Short term bank deposits                                      5,700    20,132
Total cash and cash equivalents                               8,043    20,317

In addition to the cash and cash equivalents described above, the Group held
bank deposits of £20,500,000 (2005: £23,500,000) with an initial term to
maturity between six and twelve months classified as available for sale
investments.

Cash at bank and in hand includes £182,000 (2005: nil) held in escrow for
expenses of the TRIST Phase III clinical trial.

8 Trade and other payables - current
                                                               2006      2005
                                                              £'000     £'000

Trade payables                                                1,579       397
Other taxation and social security                              315       263
Accruals                                                      2,777     1,415
Deferred income                                                  92       105
Total trade and other payables                                4,763     2,180


9 Provisions
                                                        Onerous            Onerous
                                        Dilapidations     lease     Total    lease
                                                 2006      2006      2006     2005
                                                £'000     £'000     £'000    £'000

At 1 January                                        -       460       460      464
Exchange adjustments                                -       (52)      (52)      50
Tangible fixed asset recognised in the            344         -       344        -
year
Utilised in the year                                -       (79)      (79)     (81)
Amortisation of discount                           12        17        29       20
Change of discount rate - charged to                -        (8)       (8)       7
income statement
Change of discount rate - adjustment to            (9)        -        (9)       -
recognised fixed asset
At 31 December                                    347       338       685      460

                                                               2006      2005
                                                              £'000     £'000

Current                                                          58        67
Non-current                                                     627       393
Total provisions                                                685       460


The dilapidations provision relates to anticipated costs of restoring the
leasehold property in Oxford, UK to its original condition at the end of the
present leases in 2011, discounted at 4.96% per annum. The provision will be
utilised at the end of the leases if they are not renewed.

The onerous lease provision relates to the estimated rental shortfall in respect
of a redundant property in San Diego, USA which has been sub-let for the
remainder of the lease term until June 2012, discounted at 4.88% per annum
(2005: 4.09% per annum).The provision will be utilised over the term of the
lease.

10 Cash flow from operating activities

Reconciliation of loss before tax to net cash used in operations

                                                               2006      2005
                                                              £'000     £'000

Continuing operations

Loss before tax                                             (19,388)  (10,295)
Adjustment for:

Depreciation                                                    537       674
(Profit)/loss on disposal of property, plant and equipment       (1)       33
Interest income                                              (1,743)     (969)
Interest expense                                                 29        31
Charge in relation to employee share schemes                    451       259


Changes in working capital:

Increase in trade and other receivables                        (107)     (190)
Increase in payables                                          2,583       457
Decrease in provisions                                          (87)      (74)
Net cash used in operations                                 (17,726)  (10,074)



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