5 August 2014
Vernalis plc (LSE: VER) today announces its results for the six months ended 30 June 2014.
- Continued strong financial performance ahead of market expectations
- Revenue was £6.2 million (H1 2013: £7.6 million)
- Frovatriptan royalty income at £1.8 million (H1 2013: £2.6 million) was in line with market expectations, with one 12.5 kg batch of API delivered to Menarini
- Collaboration income was £4.4 million (H1 2013: £5.0 million) with £1.1 million of milestones earned (H1 2013: £2.5 million) and the remaining income derived from FTE funding
- Operating costs (including R&D) before exceptional items marginally higher at £9.5 million (2013: £9.1 million)
- R&D spend remains largely flat at £6.9 million (H1 2013: £6.5 million)
- External R&D expenditure increased to £1.4 million (H1 2013: £1.0 million) due to investment in V158866, V81444 and increased activity on Tris related projects
- Operating loss before exceptional items was £3.9 million (H1 2013: £2.6 million)
- Loss for the period after exceptional items was £4.6 million (H1 2013: profit of £4.2 million) including a £1.7 million unrealised foreign exchange loss (H1 2013: £4.4 million gain) due to the strength of Sterling
- Balance sheet remains strong with £70.3 million of cash resources (including cash, cash equivalents and held-to-maturity financial assets) and debt free
- Net decrease in cash resources of £6.6 million for the first six months of 2014
- Large proportion of cash still denominated in US dollars, with a £1.7 million unrealised foreign exchange loss reported for the period
- Proof-of-Concept (POC) payment on CCP-07 of £1.8 million paid to Tris in April 2014
- Underlying cash burn increased to £3.8 million (2013: £2.6 million) resulting from decline in revenue and small increase in operating costs
Cough Cold Commercial Pipeline:
- NDA for Tuzistra™ XR (CCP-01) submitted to the FDA at the end of June as expected
- POC achieved for both CCP-07 and CCP-08 triggering milestone payments to Tris in April and July 2014 respectively
- Two further programmes continue in active development at Tris and are targeted to achieve POC before the end of 2014
NCE Development Pipeline:
Frovatriptan (marketed) (Migraine):
- H1 2014 Menarini frovatriptan sales were in line with the same period in 2013 (€13.2 million vs €13.1million)
V81444 (CNS diseases):
- Results of the Phase Ib/II POC study in Attention Deficit Hyperactivity Disorder (ADHD) (April 2014) were promising and the goal is now to partner this programme for further development in ADHD, PD or other CNS disorders where A2A receptor antagonists show potential patient benefit
- The Phase II POC study in spinal cord injury neuropathic pain continues with data now expected in 2015, due to slower than anticipated patient recruitment
- Multiple Phase I and Phase II studies with Novartis continue in a variety of cancers with a focus on non-small-cell lung cancers
Tosedostat - CHR2797 (Cancer):
- The partial clinical hold on investigator led trials was removed by the FDA in January 2014 enabling studies to resume
- CTI Biopharma Corp. (previously Cell Therapeutics Inc.) is hoping that data from these trials in acute myeloid leukaemia (AML) and myelodysplastic syndrome (MDS) may inform the appropriate design of a Phase III study
- CTI Biopharma also announced in June, the initiation of an international co-operation group Phase II study of tosedostat in combination with low dose cytarabine in older patients with AML or MDS
Servier 1 (Cancer):
- Servier signed a global strategic agreement with Novartis to develop and commercialise drug candidates from this collaboration (May 2014)
- The lead molecule from this collaboration with Servier, a selective BCL-2 inhibitor, has progressed into Phase I (June 2014) triggering a £0.8 million (€1 million) milestone receipt
- Milestone achieved in collaboration with Asahi Kasei Pharma triggering a £0.3 million payment to Vernalis (March 2014)
- Winner of Queen's Award for Enterprise (April 2014)
- Two milestones achieved in our collaborations with Servier triggering, in total, a €0.75 million payment to Vernalis (August 2014)
- Tuzistra™ XR NDA filing acceptance by FDA (Q3 2014)
- Achieve POC for remaining two cough cold pipeline programmes (before year end 2014)
- V158866 (Pain) – Completion of Phase II POC study (2015)
- AUY922 (Cancer) – Multiple Phase I and II study results (Novartis, timing not disclosed)
- Achieve further milestones under existing research collaborations
- Secure new research collaborations
Ian Garland, Chief Executive Officer, commented, "We have made excellent progress across all aspects of our business during the first half of this year.
The cough cold commercial pipeline has advanced significantly with submission of the Tuzistra™ XR NDA to the FDA and proof-of-concept achieved for both CCP-07 and CCP-08. We aim to achieve proof-of-concept on the two remaining cough cold products before the end of 2014.
We also announced positive news from the NCE pipeline with promising results from V81444's phase Ib/II study in ADHD. We now aim to partner this programme having significantly enhanced the data package. In the period we also announced that Servier 1, a selective BCL-2 inhibitor had entered Phase 1.
Research continues to perform well and remains self-funding with more milestones earned and five collaborations active during the period. Our financial results overall continue to be strong and we are well positioned for the launch of our first cough cold product into the US market in 2015."
Presentation & Conference Call
Vernalis management will host a presentation at 09.00 am (UK) today (5 August 2014) at Brunswick's offices, 16 Lincoln's Inn Fields, London WC2A 3ED. It will also be available via webcast at http://www.vernalis.com/investor-centre/presentations-and-webcasts and www.cantos.com.
Please contact Valerie Mugridge at Brunswick on +44 (0) 207 396 5325 for details.
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Ian Garland, Chief Executive Officer
+44 (0) 118 938 0015
David Mackney, Chief Financial Officer
Canaccord Genuity Limited (Nominated Adviser):
+44 (0) 20 7523 8350
Dr Julian Feneley
Shore Capital (Joint Broker)
+44 (0)20 7408 4090
+44 (0) 20 7404 5959
Notes to Editors
Vernalis is a revenue generating development stage pharmaceutical company with significant expertise in drug development. The Group has one marketed product, frovatriptan for the acute treatment of migraine, an exclusive licensing agreement to develop and commercialise multiple novel products focussed on the US prescription cough cold market as well as seven programmes in its NCE development pipeline. Vernalis has also significant expertise in fragment and structure based drug discovery which it leverages to enter into collaborations with larger pharmaceutical companies. The Company's technologies, capabilities and products have been endorsed over the last five years by collaborations with leading pharmaceutical companies, including AKP, Biogen Idec, Endo, GSK, Genentech, Lundbeck, Menarini, Novartis, Servier and Tris.
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Vernalis Forward-Looking Statement
This news release may contain forward-looking statements that reflect the Company's current expectations regarding future events including the clinical development and regulatory clearance of the Company's products, the Company's ability to find partners for the development and commercialisation of its products, as well as the Company's future capital raising activities. Forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein and depend on a number of factors including the success of the Company's research strategies, the applicability of the discoveries made therein, the successful and timely completion of clinical studies, the uncertainties related to the regulatory process, the ability of the Company to identify and agree beneficial terms with suitable partners for the commercialisation and/or development of its products, as well as the achievement of expected synergies from such transactions, the acceptance of frovatriptan and other products by consumers and medical professionals, the successful integration of completed mergers and acquisitions and achievement of expected synergies from such transactions, and the ability of the Company to identify and consummate suitable strategic and business combination transactions.