Verona Pharma plc Interim Results for the Six Months Ended June 30, 2017 and Clinical Development Update
Completed US IPO
Continues to advance lead candidate RPL554 with four clinical trials commenced
LONDON, Aug. 08, 2017 (GLOBE NEWSWIRE) -- Verona Pharma plc (AIM:VRP) (NASDAQ:VRNA) ("Verona Pharma" or the "Company"), a clinical-stage biopharmaceutical company focused on developing and commercializing innovative therapies for respiratory diseases, announces today a clinical development update and interim results for the six months ended June 30, 2017.
The Company's lead product candidate RPL554, is a first-in-class, inhaled, dual inhibitor of the enzymes phosphodiesterase 3 and 4, or PDE3 and PDE4, that acts as both a bronchodilator and an anti-inflammatory agent in a single compound. Verona Pharma is developing RPL554 for the treatment of chronic obstructive pulmonary disease ("COPD") and cystic fibrosis ("CF"), and potentially asthma.
CLINICAL AND DEVELOPMENT HIGHLIGHTS
- Obtained approval for and commenced (post-period) a 4-week, Phase 2b dose-ranging clinical trial in Europe in approximately 400 patients to investigate the efficacy, safety, and dose-response of nebulized RPL554 for the maintenance treatment of COPD, with top-line data expected in the second half of 2018;
- Commenced a Phase 2a clinical trial evaluating RPL554 as an add-on therapy to tiotropium (Spiriva®), a commonly used long-acting bronchodilator, for the treatment of COPD. Dosing is completed and top-line data is expected in the fourth quarter of 2017;
- Commenced a Phase 1 clinical pharmacokinetic ("PK") trial in the United States following acceptance of an Investigational New Drug application ("IND") by the US Food and Drug Administration ("FDA") for RPL554. Dosing is completed and top-line data is expected in the fourth quarter of 2017;
- Commenced a Phase 2a clinical study to evaluate the PK and pharmacodynamic ("PD") profile and tolerability of RPL554 in up to 10 CF patients as well as examine the effect on lung function. Top-line data is expected in the first half of 2018;
- Initiated development of RPL554 as dry powder inhaler ("DPI") and metered dose inhaler ("MDI") formulations for maintenance treatment of COPD; and
- Entered into a global strategic services agreement with QuintilesIMS, in which QuintilesIMS agreed to serve as sole provider of core clinical trial services for Verona Pharma's RPL554 clinical development programs. Verona Pharma will also have access to QuintilesIMS' global commercial insights when developing its market access strategy in the United States and globally for RPL554.
CORPORATE AND FINANCIAL HIGHLIGHTS
- Successfully raised £70 million ($90 million) gross, through a global offering comprising an initial public offering ("IPO") on the NASDAQ Global Market ("NASDAQ"), and a concurrent European private placement, together with a shareholder private placement;
- Verona Pharma American Depositary Shares ("ADSs") now listed on NASDAQ under the symbol VRNA; each ADS represents 8 Verona ordinary shares;
- Net cash, cash equivalents and short-term investments at June 30, 2017 amounted to £94.6 million (December 31, 2016: £39.8 million);
- Strengthened management team through the addition of Richard Hennings as Commercial Director and Dr Desiree Luthman as VP Regulatory Affairs;
- For the six months ended June 30, 2017, reported operating loss of £10.9 million (first half of 2016: £1.9 million) and reported loss after tax of £5.1 million (first half of 2016: loss after tax of £1.8 million), reflecting the preparation and initiation of clinical trials and expansion of the team;
- Reported loss per share of 7.3 pence for the six months ended June 30, 2017 (first half of 2016: loss per share 8.7 pence);
- Net cash used in operating activities for the six months ended June 30, 2017 of £8.2 million (first half of 2016: £2.2 million) reflecting increased clinical activities; and
- Shareholders at the General Meeting on February 8, 2017 approved a 50 for 1 consolidation of the Company's ordinary shares.
Dr. Jan-Anders Karlsson, CEO of Verona Pharma, commented:
"It has been a transformative six months for Verona Pharma. Not only have we successfully completed our IPO of ADSs on NASDAQ, but we have also commenced four clinical trials with our lead candidate RPL554, including our first clinical study in the United States following FDA acceptance of our IND application and have continued to expand our senior management.
We now have the team and funding to deliver a comprehensive package of Phase 2b data for nebulized RPL554 as maintenance therapy for both COPD and CF, as well as for the treatment of acute exacerbations of COPD. We are developing additional formulations of RPL554 that we believe would significantly extend the commercial opportunity in COPD and other respiratory indications. We look forward to updating the market on multiple clinical data points in this and coming years."
An electronic copy of the interim results will be made available today on the Company's website ( http://www.veronapharma.com ). This press release does not constitute an offer to sell or the solicitation of an offer to buy any of the Company's securities, and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction.
About Verona Pharma plc
Verona Pharma is a clinical-stage biopharmaceutical company focused on developing and commercializing innovative therapies for the treatment of respiratory diseases with significant unmet medical needs.
Verona Pharma's product candidate, RPL554, is a first-in-class, inhaled, dual inhibitor of the enzymes phosphodiesterase 3 and 4 that acts as both a bronchodilator and an anti-inflammatory agent in a single compound. Verona Pharma is developing RPL554 for the treatment of chronic obstructive pulmonary disease (COPD) and cystic fibrosis (CF), and potentially asthma.
Forward Looking Statements
This press release and accompanying Chairman and Chief Executive's Joint Statement contain forward-looking statements. All statements contained in this press release and accompanying Chairman and Chief Executive's Joint Statement that do not relate to matters of historical fact should be considered forward-looking statements, including, but not limited to, statements regarding the US IPO and clinical developments boding well for our future, the timing of top-line data for our clinical trials of RPL554, our ability to deliver a package of comprehensive Phase 2b data for RPL554, the ability of additional formulations of RPL554 to significantly extend the commercial opportunity for RPL554, our ability to update the market on multiple clinical data points, the treatment potential for RPL554 for asthma and other respiratory diseases, the successful progression of RPL554 through Phase 2b development, the value of the United States as a commercial market for RPL554, the timing and design of future clinical trials for RPL554, and our planned use of proceeds from the Global Offering and Shareholder Private Placement.
These forward-looking statements are based on management's current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from our expectations expressed or implied by the forward-looking statements, including, but not limited to, the following: our limited operating history; our need for additional funding to complete development and commercialization of RPL554, which may not be available and which may force us to delay, reduce or eliminate our development or commercialization efforts; the reliance of our business on the success of RPL554, our only product candidate under development; economic, political, regulatory and other risks involved with international operations; the lengthy and expensive process of clinical drug development, which has an uncertain outcome; serious adverse, undesirable or unacceptable side effects associated with RPL554, which could adversely affect our ability to develop or commercialize RPL554; potential delays in enrolling patients, which could adversely affect our research and development efforts; we may not be successful in developing RPL554 for multiple indications; our ability to obtain approval for and commercialize RPL554 in multiple major pharmaceutical markets; misconduct or other improper activities by our employees, consultants, principal investigators, and third-party service providers; material differences between our "top-line" data and final data; our reliance on third parties, including clinical investigators, manufacturers and suppliers, and the risks related to these parties' ability to successfully develop and commercialize RPL554; and lawsuits related to patents covering RPL554 and the potential for our patents to be found invalid or unenforceable. These and other important factors under the caption "Risk Factors" in our final prospectus filed with the Securities and Exchange Commission ("SEC") on April 28, 2017 relating to our Registration Statement on Form F-1, and our other reports filed with the SEC, could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management's estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.
For further information please contact:
Verona Pharma plc | Tel: +44 (0)20 3283 4200 |
Jan-Anders Karlsson, Chief Executive Officer | info@veronapharma.com |
N+1 Singer (Nominated Adviser and UK Broker) | Tel: +44 (0)20 7496 3000 |
Aubrey Powell / James White / Alex Laughton-Scott | |
ICR, Inc. (US Media and Investor Enquiries) | |
Darcie Robinson | Tel: +1 203 682 8379 |
Darcie.Robinson@icrinc.com | |
Stephanie Carrington | Tel: +1 646 277 1282 |
Stephanie.Carrington@icrinc.com | |
FTI Consulting (UK Media and Investor Enquiries) | Tel: +44 (0)20 3727 1000 |
Simon Conway / Stephanie Cuthbert / Natalie Garland-Collins | veronapharma@fticonsulting.com |
CHAIRMAN AND CHIEF EXECUTIVE'S JOINT STATEMENT
We are a clinical-stage biopharmaceutical company focused on developing and commercializing innovative therapies for the treatment of respiratory diseases with significant unmet medical needs. Our product candidate, RPL554, is a first-in-class, inhaled, dual inhibitor of the enzymes phosphodiesterase 3 and 4, or PDE3 and PDE4, that acts as both a bronchodilator and an anti-inflammatory agent in a single compound, giving it a dual mechanism of action to improve lung function. If successful, RPL554 would represent the first novel class of bronchodilator developed in decades, and at the same time have anti-inflammatory effects. RPL554 has been well tolerated in our clinical trials, and has not been observed to result in the gastrointestinal or other side effects commonly associated with PDE4 inhibition.
We are developing RPL554 for the treatment of COPD and CF. We may also explore, alone or with a collaborator, the development of RPL554 to treat asthma and other respiratory diseases.
Over the last six months we have initiated four clinical trials of nebulized RPL554; these trials form an important starting point for what we anticipate will be the successful progression of RPL554 through Phase 2b of its clinical development. This programme of work has included the FDA's acceptance of our IND for RPL554, enabling us to initiate clinical development work in the United States, which we believe is the most valuable commercial market for RPL554. This stage of development builds on previously completed studies in 282 subjects which have shown RPL554 to be effective in improving lung function whilst also being well tolerated. The four studies currently ongoing, using a nebulized formulation of RPL554, are as follows:
- In February 2017, we commenced a Phase 2a clinical trial of RPL554 in the United Kingdom for the maintenance treatment of COPD. This trial is evaluating RPL554 as an add-on therapy to tiotropium (Spiriva®), a commonly used long-acting bronchodilator, in approximately 30 patients. Dosing is completed and we expect to report top-line data from this trial in the fourth quarter of 2017.
- In June 2017, we commenced a single-dose PK trial of RPL554 in approximately 12 healthy volunteers in the United States, following acceptance of an IND by the FDA for RPL554, to establish the oral bioavailability of the swallowed portion of an inhaled dose of RPL554. Dosing is completed and we expect to report top-line data from this study in the fourth quarter of 2017.
- In July 2017, we commenced a four-week Phase 2b dose ranging clinical trial in Europe in approximately 400 patients, to evaluate RPL554 for the maintenance treatment of COPD, comparing RPL554 to placebo. We expect to report top-line data from this trial in the second half of 2018.
- In March 2017, we commenced a Phase 2a single dose PK and PD trial in the United Kingdom evaluating RPL554 in up to 10 CF patients and expect to report top-line data from this trial in the first half of 2018.
In addition, we plan to commence a longer Phase 2b dose-ranging clinical trial of RPL554 for the maintenance treatment of COPD in the second half of 2018. In this trial, we plan to evaluate RPL554 as an add-on therapy to standard COPD treatment in patients with COPD. We are also developing RPL554 as an add-on therapy to short-acting bronchodilators and other commonly used therapies for the treatment of hospitalized patients with acute exacerbations of COPD. We plan to commence a Phase 2 clinical trial in the United States for RPL554 in this indication in the second half of 2018. We also plan to commence a proof-of-concept Phase 2b trial in patients with CF in 2018.
In addition to our nebulized formulation of RPL554, we are also developing RPL554 in both DPI and MDI formulations for the maintenance treatment of COPD. We believe these formulations may enable the Company to address a larger COPD market segment than can be addressed through the nebulizer formulation. We may explore the development of RPL554 in these formulations for the treatment of CF and other respiratory diseases.
In May 2017, we announced that we had successfully completed a global offering, consisting of the initial public offering in the United States and listing on NASDAQ of our ADSs, with each ADS representing eight ordinary shares, and the private placement in Europe of our ordinary shares (the Global Offering). Existing and new healthcare focused, US-based investment firms participated in the Global Offering and our ADSs are listed on NASDAQ under the symbol "VRNA". At the same time as the Global Offering we closed a separate private placement of our ordinary shares with certain existing shareholders (the "Shareholder Private Placement"). Through the Global Offering and shareholder private placement, including additional ADSs sold upon the exercise by the underwriters of their option to purchase additional ADSs, we raised approximately $90 million before deducting underwriting discounts and commissions and expenses payable by us. These proceeds, together with our cash and cash equivalents, will be used to fund our planned clinical trials of RPL554 for the treatment of COPD and CF, current and future research and development activities and for working capital and other general corporate purposes.
In the first six months of the year we are pleased to have also strengthened our management team through the addition of commercial and regulatory expertise. In March 2017, we hired Mr Richard Hennings as our Commercial Director and in June 2017 we hired Dr Desiree Luthman as our Vice President of Regulatory Affairs. We have also entered into a global strategic services agreement with QuintilesIMS, a leading provider of biopharmaceutical development and commercial outsourcing services, in which QuintilesIMS has agreed to serve as sole provider of core clinical trial services for our RPL554 clinical development programs, beginning with the ongoing four-week Phase 2b dose-ranging clinical trial for the maintenance treatment of COPD in Europe and the single-dose PK trial in the United States. We will also have access to QuintilesIMS' global commercial insights when developing our market access strategy in the United States and globally for RPL554.
In April 2017, we also announced the retirement of Dr Patrick Humphrey from the Board as a Non-Executive Director.
For the six months ended June 30, 2017 the Company recorded a loss after tax of £5.1m (2016: loss of £(1.8)m) and a loss per share of (7.3)p (2016: loss of (8.7)p). Net cash outflows from operating activities during the six month period ended June 30, 2017 were £(8.2)m (2016: outflow of £(2.2)m), and at June 30, 2017 the Company held cash, cash equivalents and short term investments of £94.6m (2016: £39.8m).
OUTLOOK
Having successfully completed a Global Offering and IPO on NASDAQ, we believe that we now have the team and funding in place to deliver a comprehensive package of Phase 2b data for nebulized RPL554 as maintenance therapy for both COPD and CF, as well as for the treatment of acute exacerbations of COPD. We are also developing DPI and MDI formulations of RPL554 which we believe would significantly extend the commercial opportunity in COPD and other respiratory indications, as we believe RPL554's properties as a dual inhibitor of PDE3 and PDE4 give it broad potential applicability in this therapeutic area. Additionally, we are seeking strategic collaborative relationships and opportunities to acquire or in-license product candidates for the treatment of additional unmet clinical needs in respiratory diseases.
Dr David Ebsworth | Dr Jan-Anders Karlsson |
Chairman | CEO |
August 8, 2017 | August 8, 2017 |
FINANCIAL REVIEW
Financial review of the three and six months periods ended June 30, 2017
Three months ended June 30, 2017
The operating loss for the three months ended June 30, 2017 was £(6.8)m (2016: £(0.9)m) and the loss after tax for the period was £(3.2)m (2016: £(0.8)m).
Research and development costs for the three months ended June 30, 2017 were £(4.8)m (2016: £(0.5)m), an increase of £4.3m. This increase related to the expense of preparation for, initiation and progression of clinical trials as well as the build-out of the management team, including the expansion of clinical and regulatory capacity in the United States. Included in the increase was an amount of £(0.4)m related to share-based payment charges (2016: £(0.0)m).
General and administrative costs for the three months ended June 30, 2017 were £(2.0)m (2016: £(0.4)m), an increase of £1.6m. This increase included certain expenses relating to the Global Offering and shareholder private placement which completed in May 2017, together with an expansion in the commercial and administrative structure of the Company. Included in the increase was an amount of £(0.3)m related to share-based payment charges (2016: £(0.1)m).
Finance income for the three months ended June 30, 2017 was £3.4m (2016: £0.0m). The increase in Finance income was primarily due to a decrease in the fair value of the warrant liability of £3.4m caused by changes in the underlying assumptions for measuring the liability of the warrant, including the price and volatility of the Company's shares, the unwinding of the expected life of the warrant, as well as a small reduction in the number of the warrants outstanding.
Finance expense for the three months ended June 30, 2017 was £0.8m (2016: £0.1m). The increase was primarily due to increased losses following changes in exchange rates as well as an increase in the calculated value of the assumed contingent obligation resulting from the Vernalis licence agreement.
Taxation for the three months ended June 30, 2017 amounted to a credit of £1.0m (2015: £0.1m), an increase in the credit amount of £0.9m. The credits are obtained at a rate of 14.5% of 230% of our qualifying research and development expenditure, and the increase in the credit amount was primarily attributable to our increased expenditure on research and development.
Six months ended June 30, 2017
The operating loss for the six months ended June 30, 2017 was £(10.9)m (2016: loss of £(1.9)m) and the loss after tax for the period was £(5.1)m (2016: loss of £(1.8)m).
Research and development costs for the six months ended June 30, 2017 were £(7.9)m (2016: £(1.2)m), an increase of £6.7m. This increase related to the expense of preparation for, and initiation and progression of clinical trials as well as the build-out of the team, including the expansion of clinical and regulatory capacity in the United States. Included in the increase was an amount of £(0.6)m related to share-based payment charges (2016: £(0.1)m).
General and administrative costs for the six months ended June 30, 2017 were £(3.0)m (2016: £(0.7)m), an increase of £2.3m. This increase included certain expenses relating to the Global Offering and Shareholder Private Placement completed in May 2017, together with an expansion in the commercial and administrative structure of the Company. Included in the increase was an amount of £(0.4)m related to share-based payment charges (2016: £(0.1)m).
Finance income for the six months ended June 30, 2017 was £5.2m (2016: £0.0m). The increase in Finance income was primarily due to a decrease in the fair value of the warrant liability of £5.1m caused by changes in the underlying assumptions for measuring the liability of the warrant, including the price and volatility of the Company's shares, the unwinding of the expected life of the warrant, as well as a small reduction in the number of the warrants outstanding.
Finance expense for the six months ended June 30, 2017 was £(1.0)m (2016: £(0.1)m). The increase was primarily due to increased losses following changes in exchange rates as well as an increase in the calculated value of the assumed contingent obligation resulting from the Vernalis licence agreement.
Taxation for the six months ended June 30, 2017 amounted to a credit of £1.6m (2015: £0.3m), an increase in the credit amount of £1.3m. The credits are obtained at a rate of 14.5% of 230% of our qualifying research and development expenditure, and the increase in the credit amount was primarily attributable to our increased expenditure on research and development.
Cash Flow - Operating activities: net cash used by operating activities increased by £6.0m to £(8.2)m for the six months period ended June 30, 2017 compared to £(2.2)m for the six month period ended June 30, 2016. This increase is due to the increases in both research and development, and general and administrative expenses described above.
Cash Flow - Investing activities: net cash used in investing activities for the six month period ended June 30, 2017 amounted to £32.1m, reflecting the placing of funds on term deposits with maturity of greater than 3 months together with certain patent costs, compared to £(0.1)m for the six months ended June 30, 2016.
Cash Flow - Financing activities: net cash inflow from financing activities for the six month period ended June 30, 2017 amounted to £63.5m and relates to the net proceeds from the Global Offering and Shareholder Private Placement that completed on May 2, 2017. For the period ended June 30, 2016 the net cash outflow of £21 thousand related to expense prepayments for a private funding round that took place in July of 2016.
Financial position
As at June 30, 2017 Verona Pharma plc and its subsidiaries had approximately £94.6m in cash, cash equivalents and short-term investments (December 31, 2016: £39.8m).
VERONA PHARMA PLC
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE
INCOME FOR THE THREE AND SIX MONTHS ENDING JUNE 30, 2016 AND JUNE 30, 2017
Notes |
Three months ended June 30, 2016 (unaudited) |
Three months
ended June 30, 2017 (unaudited) |
Six months ended June 30, 2016 (unaudited) |
Six months
ended June 30, 2017 (unaudited) | |||||
£ | £ | £ | £ | ||||||
Research and development costs | (522,136 | ) | (4,838,167 | ) | (1,244,715 | ) | (7,942,855 | ) | |
General and administrative costs | (350,453 | ) | (1,968,617 | ) | (661,114 | ) | (3,000,924 | ) | |
Operating loss | (872,589 | ) | (6,806,784 | ) | (1,905,829 | ) | (10,943,779 | ) | |
Finance income | 9 | 2,492 | 3,439,511 | 7,375 | 5,204,518 | ||||
Finance expense | 9 | (77,255 | ) | (796,822 | ) | (147,910 | ) | (978,107 | ) |
Loss before taxation | (947,352 | ) | (4,164,095 | ) | (2,046,364 | ) | (6,717,368 | ) | |
Taxation - credit | 11 | 130,085 | 963,765 | 284,977 | 1,603,453 | ||||
Loss for period | (817,267 | ) | (3,200,330 | ) | (1,761,387 | ) | (5,113,915 | ) | |
Other comprehensive income:
Items that may be subsequently reclassified to profit or loss | |||||||||
Exchange differences on translating foreign operations | 12,376 | (9,778 | ) | 15,866 | (14,037 | ) | |||
Total comprehensive loss for the period attributable to owners of the Company | (804,891 | ) | (3,210,108 | ) | (1,745,521 | ) | (5,127,952 | ) | |
Loss per ordinary share - basic and diluted (pence) | 10 | (4.0)p | (3.6)p | (8.7)p | (7.3)p | ||||
The accompanying notes form an integral part of these condensed consolidated interim financial statements. |
VERONA PHARMA PLC
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
AS OF DECEMBER 31, 2016 AND JUNE 30, 2017
Notes |
As of
December 31, 2016 (audited) |
As of
By: Nasdaq / GlobeNewswire
- 08 Aug 2017
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