Verona Pharma plc Operational Update and Financial Results for the Third Quarter Ended September 30, 2017
Emerging clinical data confirms the potential for RPL554 to be an important, novel treatment for patients with COPD
LONDON, Nov. 07, 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 an operational update and financial results for the third quarter ended September 30, 2017.
The Company's 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.
OPERATIONAL HIGHLIGHTS
During the three months ended September 30, 2017 the Company:
-
Reported data from two clinical studies:
· Positive top-line data from a Phase 2a clinical trial in COPD with RPL554 when dosed in addition to tiotropium (Spiriva®):
· Achieved significant and clinically meaningful additional improvement in peak lung function when added to tiotropium, a widely used drug to treat COPD;
· Achieved faster onset-of-action when added to tiotropium; and
· Demonstrated statistical significance across all primary and secondary efficacy outcome measures, as well as a clear dose response at 6 mg dose compared to 1.5 mg dose;
· Earlier than expected positive top-line data from U.S. pharmacokinetic ("PK") trial demonstrated that nebulized RPL554 delivers optimal clinical dose to patients:
· Confirmed inhaled RPL554 is an appropriate form of administration for patients with chronic COPD and other respiratory disorders; and
· Demonstrated absorption occurs primarily in the lungs following inhaled administration, consistent with optimal inhaled delivery of medications for the treatment of COPD and asthma; -
Commenced 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;
· Study has now enrolled ahead of schedule, more than 200 patients (equivalent to 50% of the study) enrolled, see separate announcement issued today; and
· Top-line data now expected in mid-2018, and potentially sooner than previous guidance of second-half of 2018; -
Continued the 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 expected in the first half of 2018; - Continued development of RPL554 as dry powder inhaler ("DPI") and metered dose inhaler ("MDI") formulations for maintenance treatment of COPD.
FINANCIAL HIGHLIGHTS
- Net cash, cash equivalents and short-term investments at September 30, 2017 amounted to £85.5 million (December 31, 2016: £39.8 million);
- For the nine months ended September 30, 2017, reported operating loss of £19.1 million (first nine months of 2016: £4.1 million) and reported loss after tax of £14.2 million (first nine months of 2016: loss after tax of £4.2 million), reflecting the preparation, initiation and completion of clinical trials and expansion of the team;
- Reported loss per share of 17.4 pence for the nine months ended September 30, 2017 (first nine months of 2016: loss per share 15.4 pence); and
- Net cash used in operating activities for the nine months ended September 30, 2017 of £15.8 million (first nine months of 2016: £3.3 million) reflecting increased clinical activities.
Jan-Anders Karlsson, PhD, CEO of Verona Pharma, commented:
"We are delighted to report another period of significant progress for Verona Pharma. We reported positive top-line data from two clinical studies that we completed ahead of schedule during the third quarter. In a Phase 2a trial RPL554 demonstrated a significant and clinically meaningful improvement in lung function in COPD patients and faster onset of action when administered as an add-on treatment to tiotropium, one of the most widely prescribed LAMA bronchodilators in these patients. In the PK trial in the United States, we demonstrated that inhalation of RPL554 is an appropriate route of administration for people with COPD and other respiratory diseases. We are also pleased that we were able to update the market today on the solid progress being made in enrolling patients in our 4-week Phase 2b COPD trial and we now expect to report top line data in mid-2018."
Conference Call and Webcast Information
Verona Pharma will host an investment community conference call at 8:00 a.m. Eastern Standard Time (1:00 pm Greenwich Mean Time) on November 7, 2017. Analysts and investors may participate in the conference call by utilizing the conference ID: 1550110 and dialing the following numbers:
- (877)-280-1254 or (646)-254-3388 for callers in the United States
- 0800 279 5736 or 44 (0) 20 3427 1901 for callers in the United Kingdom
- 0800 589 2673 or 49 (0) 69 2222 10619 for callers in Germany
Those interested in listening to the conference call live via the internet may do so by visiting the "Investors" page of Verona Pharma's website at www.veronapharma.com and clicking on the webcast link. A webcast replay of the conference call [audio] will be available on the "Investors" page of Verona Pharma's website at www.veronapharma.com .
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.
This press release contains inside information for the purposes of Article 7 of Regulation (EU) No. 596/2014.
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. In clinical trials, treatment with RPL554 has been observed to result in statistically significant improvements in lung function as compared to placebo, and has shown clinically meaningful and statistically significant improvements in lung function when administered in addition to frequently used short- and long-acting bronchodilators as compared to such bronchodilators administered as a single agent. 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 contains forward-looking statements. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, but not limited to, statements regarding the expected timing of top-line data from our clinical trials of RPL554, development of RPL554 to treat asthma or other respiratory diseases, RPL554 as an important and promising therapy for COPD patients, the timing of commencement of clinical trials for RPL554, the ability of DPI and MDI formulations of RPL554 to address a larger COPD market segment and significantly extend RPL554's commercial opportunity, our ability to deliver a comprehensive package of Phase 2b data for nebulized RPL554, the broad potential applicability of RPL554 in COPD and other respiratory indications, and collaborations to acquire or in-license product candidates.
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 | |
Stifel Nicolaus Europe Limited (Nominated Adviser and UK
Broker) | Tel: +44 (0) 20 7710 7600 | |
Stewart Wallace / Jonathan Senior / Ben Maddison | SNELVeronaPharma@stifel.com | |
FTI Consulting (UK Media and Investor enquiries) | Tel: +44 (0)20 3727 1000 | |
Simon Conway / Natalie Garland-Collins | veronapharma@fticonsulting.com | |
ICR, Inc. (US Media and Investor enquiries) | ||
James Heins | Tel: +1 203-682-8251 | |
James.Heins@icrinc.com | ||
Stephanie Carrington | Tel. +1 646-277-1282 | |
Stephanie.Carrington@icrinc.com |
OPERATIONAL REVIEW
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.
We have initiated four clinical trials of nebulized RPL554 in 2017, of which two were successfully completed this quarter. In September 2017, we announced positive top-line data from our Phase 2a clinical trial of RPL554 as an add-on treatment to tiotropium, one of the most important current therapies for COPD. The data showed a significant improvement in peak lung function when RPL554 was added on top of tiotropium, supporting the continued development of RPL554 as a promising therapy for COPD patients. We have also shown in a pharmacokinetic, or PK, clinical trial that RPL554 is well-suited to inhaled administration.
Enrollment in our current study in 400 COPD patients in Europe, being treated for 4 weeks, is progressing well and the Company now expects to report top-line data in mid-2018, sooner than previous guidance of second-half of 2018.
Our ongoing Phase 2a study in CF patients, to evaluate PK and PD is progressing as planned and we expect to report top-line data in the first half of 2018.
The Company continues to review its development strategy for RPL554 in the context of additional data generated, including from clinical trials and market research, to identify opportunities to enhance the planned development and commercialization of RPL554 which may lead to changes in the planned future clinical development of RPL554.
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.
For the nine months ended September 30, 2017 the Company recorded a loss after tax of £14.2m (2016: loss of £4.2m) and a loss per share of 17.4p (2016: loss of 15.4p). Net cash outflows from operating activities during the nine month period ended September 30, 2017 were £15.8m (2016: outflow of £3.3m), and at September 30, 2017 the Company held cash, cash equivalents and short-term investments of £85.5m (December 31, 2016: £39.8m).
OUTLOOK
Having successfully completed earlier this year a global offering comprised of an initial public offering of our American Depositary Shares ("ADSs") on Nasdaq and an offering in Europe of our ordinary shares, we believe that we now have the team and funding in place to progress the development of 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 has the potential to 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 intend to seek strategic collaborative relationships and opportunities to acquire or in-license product candidates for the treatment of additional unmet clinical needs in respiratory diseases.
FINANCIAL REVIEW
Financial review of the three and nine month periods ended September 30, 2017
Three months ended September 30, 2017
The operating loss for the three months ended September 30, 2017 was £8.1m (three months ended September 30, 2016: £2.2m) and the loss after tax for the period was £9.1m (three months ended September 30, 2016: £2.5m).
Research and development costs for the three months ended September 30, 2017 were £6.1m (three months ended September 30, 2016: £1.4m), an increase of £4.7m. This increase related to the expense of preparation for, initiation, progression and completion 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 £0.5m related to share-based payment charges (2016: £0.1m).
General and administrative costs for the three months ended September 30, 2017 were £2.0m (three months ended September 30, 2016: £0.8m), an increase of £1.2m. This increase was due to an expansion in the commercial and administrative structure and activities of the Company. Included in the increase was an amount of £0.5m related to share-based payment charges (2016: £0.0m).
Finance income for the three months ended September 30, 2017 was £0.1m (three months ended September 30, 2016: £0.1m).
Finance expense for the three months ended September 30, 2017 was £2.4m (three months ended September 30, 2016: £0.7m). The increase in finance expense was due to an increase in the fair value of the warrant liability of £1.2m, 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, offset by transaction costs relating to warrants in 2016. The increase in the value of the warrants was caused by changes in the underlying assumptions for measuring the liability of the warrants, predominantly the increase in the price of the Company's shares. The Company manages its exposure to movements in foreign exchange movements by holding its cash and short-term investments in a range of currencies. The movement in the sterling US dollar exchange rate resulted in a foreign exchange loss during the period.
Taxation for the three months ended September 30, 2017 amounted to a credit of £1.3m (three months ended September 30, 2016: £0.3m), an increase in the credit amount of £1.0m. 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.
Nine months ended September 30, 2017
The operating loss for the nine months ended September 30, 2017 was £19.1m (nine months ended September 30, 2016: £4.1m) and the loss after tax for the period was £14.2m (nine months ended September 30, 2016: £4.2m).
Research and development costs for the nine months ended September 30, 2017 were £14.0m (nine months ended September 30, 2016: £2.7m), an increase of £11.3m. This increase related to the expense of preparation for, initiation, progression and completion 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 £1.2m related to share-based payment charges (2016: £0.2m).
General and administrative costs for the nine months ended September 30, 2017 were £5.0m (nine months ended September 30, 2016: £1.4m), an increase of £3.6m. This increase was due to an expansion in the commercial and administrative structure and activities of the Company. Included in the increase was an amount of £1.0m related to share-based payment charges (2016: £0.1m).
Finance income for the nine months ended September 30, 2017 was £4.1m (nine months ended September 30, 2016: £0.1m). The increase in finance income was primarily due to a decrease in the fair value of the warrant liability of £3.9m caused by changes in the underlying assumptions for measuring the liability of the warrant, predominantly the price of the Company's shares.
Finance expense for the nine months ended September 30, 2017 was £2.2m (nine months ended September 30, 2016:£0.9m). The increase in finance expense was 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, offset by transaction costs relating to warrants in 2016. As part of our approach to risk management we hold cash and short-term investments in a mix of currencies. The movement in the sterling US dollar exchange rate has resulted in the foreign exchange loss for the nine months ended September 30, 2017 (nine months ended September 30, 2016: gain).
Taxation for the nine months ended September 30, 2017 amounted to a credit of £2.9m (nine months ended September 30, 2016: £0.6m), an increase in the credit amount of £2.3m. 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 in operating activities increased by £12.5m to £15.8m for the nine months period ended September 30, 2017 compared to £3.3m for the nine month period ended September 30, 2016. This increase was 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 nine month period ended September 30, 2017 amounted to £54.8m, reflecting the placing of funds on term deposits with maturity of greater than 3 months together with certain patent costs, compared to £0.1m for the nine months ended September 30, 2016.
Cash Flow - Financing activities: net cash inflow from financing activities for the nine month period ended September 30, 2017 amounted to £63.2m and relates to the net proceeds from the global offering of our ADSs and ordinary shares and a private placement of our ordinary shares, each of which completed on May 2, 2017. For the period ended September 30, 2016 the net cash inflow of £41.8m related to a financing that took place in July 2016.
Financial position
At September 30, 2017 Verona Pharma plc and its subsidiaries had approximately £85.5m 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 NINE MONTHS ENDING SEPTEMBER 30, 2016 AND SEPTEMBER 30, 2017
Notes |
Three months
ended September 30, 2016 (unaudited) |
Three months
ended September 30, 2017 (unaudited) |
Nine months
ended September 30, 2016 (unaudited) |
Nine months
ended September 30, 2017 (unaudited) | ||||||||||||
£ | £ | £ | £ | |||||||||||||
Research and development costs | (1,408,726 | ) | (6,084,999 | ) | (2,653,441 | ) | (14,027,854 | ) | ||||||||
General and administrative costs | (751,912 | ) | (2,040,276 | ) | (1,427,026 | ) | (5,041,200 | ) | ||||||||
Operating loss | (2,160,638 | ) | (8,125,275 | ) | (4,080,467 | ) | (19,069,054 | ) | ||||||||
Finance income | 6 | 139,803 | 114,079 | 147,178 | 4,130,934 | |||||||||||
Finance expense | 6 | (711,285 | ) | (2,360,885 | ) | (859,195 | ) | (2,151,329 | ) | |||||||
Loss before taxation | (2,732,120 | ) | (10,372,081 | ) | (4,792,484 | ) | (17,089,449 | ) | ||||||||
Taxation - credit | 7 | 270,757 | 1,257,906 | 555,734 | 2,861,359 | |||||||||||
Loss for period | (2,461,363 | ) | (9,114,175 | ) | (4,236,750 | ) | (14,228,090 | ) | ||||||||
Other comprehensive income/(expense):
Items that may be subsequently reclassified to profit or loss. |
By: Nasdaq / GlobeNewswire
- 07 Nov 2017
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