17 March 2016

Vernalis plc
Unaudited Interim Results Announcement for the six months ended 31 December 2015

Significant progress in Cough Cold franchise:
Tuzistra® XR launched; two further NDAs on track for 2016 submission

Vernalis plc (LSE: VER) today announces its unaudited consolidated results for the six month period ended 31 December 2015 with 2014 comparators for the same period.

Financial Highlights for the six months ended 31 December 2015

  • Revenue was £6.1 million (2014: £5.7 million):
    • Tuzistra® XR net revenue was £0.6 million and represents deliveries made to wholesalers by 31 December 2015 with trade distribution commencing in August and promotion in September 2015
    • Research collaboration income was flat at £3.8 million (2014: £3.8 million) but included an increase in FTE income offset by a reduction in milestone receipts. Our research organisation remains self-funding
    • Frovatriptan royalty income was down 10 per cent at £1.6 million (2014: £1.7 million); 5 per cent due to pricing and 5 per cent due to foreign exchange
      • As previously highlighted, major patent expiry occurred in December 2015 and subsequent generic entries are expected to significantly impact future royalty income
  • Operating costs before exceptional items were £19.0 million (2014: £9.9 million); the increase was due to Tuzistra® XR sales, marketing and other US commercial infrastructure costs
  • Pre-exceptional loss for the period was £10.2 million (2014: £1.7 million profit) and loss after exceptional items was £7.6 million (2014: £1.7 million profit), including an exceptional gain on the surrender of an onerous building lease; the increase in the loss was due to the additional operating cost base following the launch of Tuzistra® XR
  • Cash resources including cash and cash equivalents and held to maturity assets reduced by £7.3 million in the first six months and included:
    • $3.6 million (£2.4 million) upfront payment for the acquisition of Moxatag®. A further payment is anticipated in calendar H1 2016
    • £2.5 million unrealised foreign exchange gain (2014: £4.5 million)
  • Balance sheet remains strong with £54.0 million of cash resources and no debt at 31 December 2015

Operational Highlights
US Commercial Pipeline:

  • Tuzistra® XR, the only 12-hour, extended-release, codeine/chlorpheniramine-based cough cold suspension product, launched in the US ahead of the 2015/16 cough cold season which, to date, has been quite mild
  • Focused US primary care sales force fully recruited, trained and deployed to the field
  • US rights to Moxatag®, the only US approved once-a-day formulation of amoxicillin, acquired in October 2015 demonstrating the strategy to expand the US commercial portfolio
  • CCP-08 start of 12-months' stability testing announced October 2015 with New Drug Application ("NDA") submission expected in 2016
  • CCP-07 pivotal single-dose comparative bioavailability study successfully completed and NDA submission remains on track for 2016
  • Two further programmes in active development at Tris, with proof-of-concept ("POC") targeted by the end of 2016


  • Frovatriptan (marketed): Underlying Menarini sales for the six months to 31 December 2015 down 5 per cent at €12.7 million (2014: €13.3 million)
  • NCE Development Pipeline: Completion of the Phase 2 POC study of V158866 in August 2015 which ended in-house investment in NCE pipeline
  • Research Collaborations: Five active collaborations at 31 December 2015; £0.2 million of milestones earned from Servier collaboration – business remains self-financing

Post Period End Highlights

  • Corvus Pharmaceuticals, Inc. announced (in January 2016) as the worldwide licensee for the adenosine antagonist program with CPI-444 (formerly V81444), initially being developed for immuno-oncology with clinical studies expected in 2016

Expected 2015/16 Newsflow (all dates calendar year):

  • CCP-07: pivotal multi-dose pharmacokinetic study results and NDA submission (2016)
  • CCP-08: pivotal single and multi-dose pharmacokinetic study results and NDA submission (2016)
  • Re-launch Moxatag® in the US market through our focused US primary care sales force (H1 2016)
  • POCs on two remaining programmes in cough cold pipeline (CCP-05 and CCP-06) (by end of 2016)
  • Achieve milestones under existing collaborations (undisclosed)
  • Secure new research collaborations (undisclosed)
  • Continue to leverage our US commercial infrastructure with possible complementary new product acquisitions/in-licensing (undisclosed)

Ian Garland, Chief Executive Officer, commented, "The last six months has seen a major transformation in our business as we launched the first product from our cough cold franchise, Tuzistra® XR, into the US market. This significant milestone marks the beginning of the next phase of our evolution as a commercial specialty pharmaceutical company. We have made significant investment in launching Tuzistra® XR, and this will continue as the product gains greater share of the US cough cold market. We also aim to leverage this investment and our US commercial infrastructure later in the year with the launch of the once-a-day antibiotic, Moxatag®, whose US rights we have acquired. Additionally we continue to progress the rest of the cough cold pipeline and CCP-07 and CCP-08 remain on track for potential NDA submissions in 2016.

Our overall cash position remained strong at the period end and we remain very excited about the growth potential of the business."

Presentation & Conference Call
Vernalis management will host a presentation at 9.30am (UK) today at the offices of FTI Consulting 200 Aldersgate, Aldersgate Street, London, EC1A 4HD. It will also be available via webcast at http://www.vernalis.com/investor-centre/presentations-and-webcasts and www.cantos.com and via conference call, which can be joined by dialling: +44 (0) 20 3003 2666, Passcode 5780976# Please contact Jack Bower at FTI consulting +44 (0) 20 3727 1000 for details.

-- ends --


Vernalis plc:

 +44 (0) 118 938 0015

Ian Garland, Chief Executive Officer


David Mackney, Chief Financial Officer 


Canaccord Genuity Limited (Nominated Adviser):

+44 (0) 20 7523 8000

Dr Julian Feneley


Henry Fitzgerald-O'Connor


Emma Gabriel


Shore Capital (Joint Broker)

+44 (0)20 7408 4090

Bidhi Bhoma


Toby Gibbs 


FTI Consulting:

+44 (0) 20 3727 1000

Ben Atwell


Simon Conway 


Stephanie Cuthbert


Notes to Editors

About Vernalis
Vernalis is a revenue generating, commercial stage pharmaceutical company with significant expertise in drug development. The Group has three approved products: Tuzistra® XR targeting the US prescription cough cold market; Moxatag®, a once-a-day formulation of the antibiotic, amoxicillin, indicated for the treatment of tonsillitis and/or pharyngitis secondary to Streptococcus pyogenes in adult and paediatric patients 12 years of age or older; and frovatriptan for the acute treatment of migraine. It has an exclusive licensing agreement to develop and commercialise multiple novel products focussed on the US prescription cough cold market as well as eight 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, Taisho and Tris.

For further information about Vernalis, please visit www.vernalis.com.

Please click here to access the full PDF of this press release.

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 NCE pipeline, the Company's ability to successfully commercialise its cough cold products and Moxatag® through its own sales force 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 Tuzistra® XR, Moxatag®, 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.