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There are two key changes under this regime: 1) Goodwill is no longer amortised, but rather assessed for impairment each year, and 2) we have a charge for the cost of share based incentives for employees, under IFRS 2. Also under IFRS, there are much more specific requirements concerning the fair valuation and disclosure of assets purchased as a result of business combinations. Revenue Total revenue for the year increased 67% to £11.6m (2005: £7.0m), reflecting the continued organic growth of our products in the overseas markets, a full year 's contribution from Sinclair Srl in Italy, and the addition of 3 months of revenue from CSD. Direct sales The Group effects online tramadol now has its own sales presence in 5 European countries - effects online tramadol France, UK*, Italy, Spain and Portugal, and these business contributed revenue effects online tramadol of £5.4m (2005: £1.1m, Italy only).

Sinclair Srl had sales of £2.7m (2005: £1.1m) reflecting a full years contribution compared over phentermine viagra xanax to 5 months in 2005 and have included the launch of Sinclair 's own products Atopiclair(tm), Sebclair(tm), and DermaChronic(tm) in the period. There were already within the Sinclair Srl portfolio some small products which compete how to order oxycodone 512 head on with these Sinclair products and during the current financial year a number of these will be disposed of.

During the year the sales force was fully reviewed and rationalised within Sinclair Srl, and changed from a sales force of 21 commissioned agents to 17 full time employees, which has provided improved control and monitoring of the sales force. This has allowed us to replace a number of the agents with higher quality employees, with a consequent increase in effectiveness at the sales level. CSD contributed £2.7m (2005:£nil) to the revenue of Sinclair for the period from acquisition to 30th June 2006. We have been particularly pleased with the progress of the integration of CSD and that the business has itself continued to trade in line with our expectations. * UK acquisition happened post-period Sales through marketing partner network Revenues from our out-licensing activities for the period are summarised below: 2006 2005 £m £m Product sales 5.0 3.4 Royalties 0.7 0.2 License fees and milestones 0.5 2.3 Total 6.2 5.9 Recurring revenue from product sales and royalties increased 58% to £5.7m from £3.6m in 2005.

Product sales growth has been driven principally by sales of Atopiclair(tm) Cream into the US of £0.7 m (2005: £0.4m), where it was launched by Chester Valley Pharmaceuticals, and was running at 2,000 prescriptions per week in June 2006. Also growth has come from sales of Decapinol(tm) in Italy, Spain, and Israel of £0.5m (2005: £0.2 m). Royalties are principally derived from the sales of Atopiclair(tm) in the US of £0.3m (2005: £nil) and Gelclair(tm) worldwide of £0.2m (2005: £0.2m). During the period Sinclair recognised license fees and milestones of effects online tramadol £0.5m (2005: £2.3m), including launch fees for Decapinol(tm) in Spain and Xclair(tm) and Salinum(tm) in the US.

On 29th June 2006 a license fee of $1.0 m was received from OraPharma Inc., a subsidiary of Johnson & Johnson, upon the signing of a distribution agreement for the sale of Decapinol(tm) Rinse in the US.



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