TIDMVRP
Verona Pharma plc
("Verona Pharma" or the "Company")
Interim results for the six months ended 30 June 2015
Strategic Focus, Clinical Progress and Financial Discipline
8 September 2015, Cardiff - Verona Pharma plc (AIM: VRP), the drug development
company focused on first-in-class medicines to treat respiratory diseases,
today announces its interim results for the six months ended 30 June 2015.
OPERATIONAL HIGHLIGHTS
* Successfully completed dosing of healthy volunteers in Single Ascending
Dose (SAD) and Multiple Ascending Dose (MAD) studies with our new,
commercially scalable, proprietary nebulized formulation of RPL554.
* The formulation was well tolerated with subjects dosed with up to 16 times
the dose of RPL554 previously shown to produce significant bronchodilation
without a maximum tolerated dose being reached.
* Successful completion of SAD part of trial demonstrated no effect on cardio
vascular parameters and no nausea or vomiting observed at any dose.
* Commenced a MAD study of RPL554 in June 2015 in up to 30 chronic
obstructive pulmonary disease (COPD) patients to further confirm the safety
and tolerability seen in earlier parts of the trial, with this new
formulation.
* Data are expected from the combined SAD/MAD study in healthy subjects and
COPD patients in early Q4 2015.
* Initiated a phase 2a dose-finding trial in asthma patients with new
proprietary formulation of RPL554, to explore a dose-response relationship
in this setting.
* Headline data from this study are anticipated in Q1 2016.
FINANCIAL HIGHLIGHTS
* Loss after tax for the period of GBP3.69 million (2014: GBP1.39 million) or
0.37 pence (2014: 0.19 pence) per ordinary share, reflecting accelerated R&
D activities.
* Net cash outflows from operating activities during the six month period of
GBP3.92m (2014: GBP1.47m), with cash and cash equivalents as at 30 June 2015 of
GBP6.09 million (2014: GBP12.10 million).
POST PERIOD AND OTHER EVENTS
* Completed dosing with new nebulized formulation in MAD study in COPD
patients with data expected in early Q4 2015.
* Appointed Ken Cunningham MD and Anders Ullman MD PhD as Non-Executive
Directors to the Board effective 10 September 2015 (as announced separately
today). Both are recognised leaders in the pharmaceutical and biotechnology
industry and have particular clinical development expertise in the area of
respiratory drug development.
* The Company undertook a secondary listing of its shares on the Xetra
Exchange in Frankfurt to increase awareness of the Company and to
facilitate trading in its shares in Continental Europe.
Dr. Jan-Anders Karlsson, CEO of Verona Pharma commented: "In the first half of
2015 we have continued to make good progress with our lead drug candidate,
RPL554. In particular, initial results from studies in healthy volunteers using
our new more robust formulation of the drug have been extremely encouraging.
These data bode well for the outcome of our ongoing phase 2a multiple ascending
dose study with the drug in COPD patients, where we expect to announce results
in early Q4 2015. During the period we also initiated a phase 2a trial of
RPL554 in asthma patients to explore a dose-response relationship in this
setting and will report results early next year. Positive data in these studies
will encourage us to move into phase 2b studies. Further studies in cystic
fibrosis with RPL554 are planned for 2016. Additionally we continue to seek to
develop the Company by searching for suitable products to enhance our
pipeline."
For further information please contact:
Verona Pharma plc Tel: +44 (0)20 7863 3300
Jan-Anders Karlsson, CEO
Biresh Roy, CFO
N+1 Singer Tel: +44 (0)20 7496 3000
Aubrey Powell / Jen Boorer
FTI Consulting Tel: +44 (0)20 3727 1000
Simon Conway / Stephanie Cuthbert /
Natalie Garland-Collins
Notes to Editors
About Verona Pharma plc
Verona Pharma plc is a UK-based clinical stage biopharmaceutical company
focused on the development of innovative prescription medicines to treat
respiratory diseases with significant unmet medical needs, such as chronic
obstructive pulmonary disease (COPD), asthma and cystic fibrosis.
Verona Pharma's lead drug, RPL554, is a first-in-class drug currently in phase
II trials as a nebulised treatment for acute exacerbations of COPD in the
hospital setting. The drug is a dual phosphodiesterase (PDE) 3/4 inhibitor and
therefore has both bronchodilator and anti-inflammatory effects, which are
essential to the improvement of patients with COPD and asthma.
Verona Pharma is also building a broader portfolio of RPL554-containing
products to maximise its benefit to patients and its value. This includes the
very significant markets for COPD and asthma maintenance therapy. The Company
is also exploring the potential of the drug in different diseases, such as
cystic fibrosis, where it is in pre-clinical testing and has recently received
a Venture and Innovation Award from the Cystic Fibrosis Trust.
About Chronic Obstructive Pulmonary Disease (COPD)
Sixty-five million people worldwide suffer from moderate to severe COPD and the
World Health Organisation (WHO) expects COPD to be the 3rd leading cause of
death globally by 2020. It is the only major chronic disease with increasing
mortality. Currently available drugs are aimed at long-term maintenance
therapy, with the market dominated by large pharma. Despite the wide
availability of these therapies, COPD patients suffer acute periods of
worsening symptoms (exacerbations), which cause, in the US alone, some 1.5
million A&E visits, 726,000 hospitalisations and 120,000 deaths per annum.
Bronchodilating therapy is considered to be the standard of care, and agents
can be administered via handheld devices such as metered dose inhaler (MDI),
dry powder inhaler (DPI) and by nebulisers. The nebulised bronchodilator
market was worth about $1 billion in 2014 in the US.1 RPL554 is being developed
by Verona Pharma as an add-on therapy to the "Standard of Care" with the
objectives of providing rapid and pronounced improvement in lung function,
reduced symptoms and both shortened duration of hospital stays and reduced
re-admission rates 30 days after discharge from hospital. Studies to date on
RPL554 have demonstrated that it has a strongly differentiated 3-way mode of
action, being: (1) bronchodilation (the relaxation of smooth muscle in the
airway); (2) anti-inflammatory effects on cells and (3) ion channel activation
in epithelial cells, with increased mucociliary clearance of the airway.
1 IMS Consulting Group market research 2014
CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S JOINT STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2015
INTRODUCTION
Verona Pharma is a UK-based clinical stage biopharmaceutical company focused on
the development of innovative prescription medicines to treat respiratory
diseases with significant unmet medical needs such as chronic obstructive
pulmonary disease (COPD), asthma and cystic fibrosis. The Company's lead
product, RPL554, is a first-in-class drug currently in phase 2 clinical trials
as a nebulised formulation for acute exacerbations of COPD. The drug is an
inhaled dual phosphodiesterase PDE3/PDE4 inhibitor and has already demonstrated
clinically relevant bronchodilator and anti-inflammatory effects which are
essential to the improvement of symptoms of patients with COPD and asthma.
The Board believes that broadening the development strategy for RPL554 over
time, to include combination products and new indications, together with
strengthening the IP coverage around the programme, has the potential to add
significant value to the Company. The Board further believes that this approach
should accelerate access to multi-billion dollar commercial markets, increase
Verona Pharma's flexibility in negotiating attractive commercial partnerships
and prolong patent protection for the emerging franchise.
Phase 2 clinical programme for RPL554 in new formulation yields encouraging
interim results
We are initially developing RPL554 as a treatment for acute exacerbations of
COPD. Despite the many recently introduced novel maintenance treatments for
COPD, patients frequently experience acute exacerbations and become
hospitalised. The older, short-acting nebulized bronchodilators are still used
on hospital wards and there is clearly a need for effective treatments in this
acute hospital setting. We believe RPL554 can become an attractive add-on
therapy to provide extra clinical benefit in patients with acute exacerbations
of COPD. There is little innovation in the form of novel classes of
bronchodilator drugs for these acutely ill patients, or for the maintenance
treatment of COPD patients, and the Board therefore believes that these are
very attractive commercial opportunities for Verona Pharma.
An increasing awareness of the problem of COPD patients returning for hospital
treatment within 30 days of discharge has triggered a strong interest from
industry, regulators and healthcare payers in optimising treatment of acute
COPD exacerbations and beyond, when patients are discharged from hospital. This
provides a unique opportunity for RPL554 that we intend to explore in further
phase 2 clinical studies.
RPL554 successfully completed a number of early clinical phase 1 and phase 2
studies based on the previous nebulized formulation. These single and multiple
dose studies demonstrate that RPL554, when inhaled across a range of doses, is
an effective bronchodilator in patients with COPD and asthma. RPL554 has a
rapid onset of action and the magnitude of the bronchodilator effect seems to
be at least as profound as that of other commonly used bronchodilator drugs.1
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RPL554 has also been demonstrated to have a potent anti-inflammatory effect in
a clinical trial. This property is unique to RPL554 and is not shown by other
bronchodilator drugs of the beta2-agonists or anti-muscarinic classes. RPL554
showed a broad inhibitory effect on inflammatory cells in the airways,
including a significant reduction in the number of neutrophils, a cell type
thought to be involved in COPD (and cystic fibrosis). This effect sets RPL554
apart from steroids as this class of drugs seem to have little effect on
neutrophils and increasingly the use of inhaled steroids in COPD patients is
being questioned as they seem to have limited beneficial effects. Therefore,
RPL554 as a combined bronchodilator and anti-inflammatory agent offers unique
benefits to COPD patients, both as a novel type of bronchodilator, and as an
anti-inflammatory compound offering additional benefits over and above those of
steroids.
In line with the new development strategy announced in 2014, a novel nebulized
proprietary formulation of RPL554 was developed which is stable, scalable and
suitable for commercial use. The first phase 1/2a study with the new nebulized
formulation started at the end of 2014 and the clinical phases of the SAD and
MAD (5 days, twice daily dosing) study in healthy subjects and the MAD study in
COPD patients have been completed. Initial observations from the SAD part of
the study indicated that the new formulation is well tolerated as 16 times the
previously used bronchodilator dose (with the old formulation) could be
administered without reaching a maximum tolerated dose. Pharmacokinetic
analysis revealed lower peak plasma concentrations and a longer plasma
half-life than the previously used formulation, suggesting that twice daily
dosing could perhaps be achieved. A more comprehensive data-set from these
studies is expected in early Q4 2015.
We have also initiated a second, single-dose phase 2a dose-finding study in up
to 30 asthma patients. This study with the new formulation is being carried out
in asthma patients because typically a dose response relationship to
bronchodilators can be more accurately established in this group of patients
with highly reversible airways obstruction compared to patients with COPD. A
wide range of RPL554 doses will be compared to two different doses of
salbutamol, a standard bronchodilator used in both asthma and COPD patients,
and placebo. The primary objective is to establish the bronchodilator effect
and duration of action and data are expected in Q1 2016.
We are also investigating RPL554 as a combination product with an
anti-muscarinic drug, such as glycopyrrolate, a class of drugs that is widely
used in treating COPD patients. We have been strongly encouraged by data
showing a synergistic effect of RPL554 in combination with anti-muscarinic
drugs in isolated human airway smooth muscle. Such a combination product could
have significant advantages over the many dual long-acting beta2-agonists /
long acting-muscarinic antagonists (LABA / LAMA) bronchodilator inhalers
available to COPD patients and could be used both in acute hospital care and in
long-term maintenance treatment.
In addition to treatment of acute exacerbations, RPL554 clearly has potential
as a chronic maintenance therapy in patients with COPD. Both the bronchodilator
and the anti-inflammatory properties would be beneficial to these out-patients
and it is a larger market opportunity. The new nebulized formulation could be
developed into an attractive maintenance treatment for moderate to severe COPD
patients.
We believe there is also an opportunity to develop RPL554 as a maintenance
therapy for mild to moderate COPD patients, a much larger addressable market.
These patients are routinely treated with Dry Powder Inhaler (DPI) or
pressurized Metered Dose Inhaler (pMDI) and we have previously demonstrated
that RPL554 can be formulated for use in both a DPI and a pMDI. The Board takes
the view that larger, later-stage clinical studies and commercialisation in
this out-patient setting are better undertaken together with a suitable
partner.
RPL554 also shows promise in cystic fibrosis
Additional pre-clinical data demonstrates that RPL554 is an activator of the
cystic fibrosis transmembrane conductance regulator (CFTR) that is
dysfunctional in cells of cystic fibrosis patients. This adds a further
dimension to the potential utility of the drug. Asthma patients may also
benefit from this action of RPL554, as it may improve mucociliary clearance in
addition to its bronchodilator and anti-inflammatory properties. Further
studies exploring the potential of RPL554 in cystic fibrosis are planned for
2016.
FINANCIALS
The loss from operations after tax for the six month period ended 30 June 2015
(the "Period") was GBP3.69 million (2014: GBP1.39 million) or 0.37 pence (2014:
0.19 pence) per ordinary share. The reported loss includes a non-cash
share-based payment charge of GBP0.26 million (2014: GBP0.06 million) and receipt
of a research and development tax credit of GBP0.74 million (2014: GBPNil).
Research and development expenditure, which was expensed as incurred, amounted
to GBP3.48 million (2014: GBP0.87 million). Development programme expenditures
expensed during the period amounted to GBP3.37 million for RPL554 (2014: GBP0.57
million), and GBP0.11 million (2014: GBP0.30 million) for VRP700.
Expenditures in RPL554 increased by GBP2.80m as a result of accelerating the
clinical trials for the SAD/MAD and asthma studies and advancing preparations
for a commercially scaleable formulation of the compound.
Administrative expenses for the six month period were GBP0.98 million (2014: GBP
0.53 million). The increase of GBP0.45 million over the prior period was due to
an increase in the share-based payments and other administrative items
including the strengthened Board and senior management team.
As at 30 June 2015, the Group had approximately GBP6.09 million (2014: GBP12.10
million) in cash and cash equivalents.
FURTHER DEVELOPMENT & COMMERCIALISATION STRATEGY
The fundraising in March 2014 enabled us to advance the new commercial
formulation of RPL554 through clinical studies up to the start of phase 2b,
which is expected in H2 2016. Additional pre-clinical and manufacturing work
will be performed to satisfy certain regulatory guidelines. In parallel, we are
continuing to strengthen the IP coverage to provide comprehensive patent
protection for RPL554 in its various forms with the intent to expand the use of
RPL554 in new indications and in combination products.
Our initial focus to develop the nebulized formulation of RPL554 for hospital
use is motivated in part by the increasing concern and intent to tackle the
high rates of 30-day hospital re-admissions for COPD. This has recently gained
impetus following the implementation by the US Government in Q4 2014 of a new
policy which penalizes hospitals with high 30-day re-admission rates for select
conditions, including COPD. Interestingly, such a policy has already been
introduced by the NHS in the UK. In our clinical studies in hospitalised
patients, we will explore the possibility that treatment with RPL554 will
reduce such re-admission rates and so demonstrate a clear health-economic
benefit of treatment with the drug.
The Board believes that products combining RPL554 with other classes of
bronchodilators are potentially highly attractive for the respiratory market
and expand the RPL554 product franchise. Indeed, while there has been
significant interest in the novel dual bronchodilator products containing a
LABA and a LAMA recently introduced as chronic treatments for COPD, a
combination between RPL554 and, for example, the LAMA glycopyrrolate, would
contain two different bronchodilator components, with the added benefit that
RPL554 would also provide an anti-inflammatory component to create in essence a
triple-combination product.
We further plan to expand the use of RPL554 beyond COPD, and explore the
possible use of nebulized RPL554 to treat acute asthma attacks in the A&E unit.
When used as an addition to standard treatment, it is expected that RPL554
would rapidly improve lung function, reduce symptoms and reduce the number of
hospital admissions from the A&E unit. Again, this treatment would generate a
clear health-economics benefit. In addition, pre-clinical work demonstrating a
potentiating activity on CFTR, suggests that cystic fibrosis could be a
potential novel indication. We will further explore this opportunity in
pre-clinical and exploratory clinical trials.
The Company recognises that an experienced and resourceful commercial partner
could bring significant value to the development of RPL554 for chronic
maintenance treatment in COPD and perhaps asthma and therefore continues to be
involved in business development discussions around the RPL554 programme.
However, the Company intends to partner its drug candidates only when it can
extract a commercially attractive return for the Company and its shareholders.
BOARD CHANGES
Post period end, and as announced today Ms Claire Poll, Executive Director, Mr
Stuart Bottomley and Professor Trevor Jones, both Non-Executive Directors, will
be retiring from the Verona Board after having served since 2006. Ms Poll will
continue to provide legal and corporate services to the Company. We would like
to thank Claire, Stuart and Trevor for all their hard work and support over the
years. Their long tenure on our Board is testament to the value of their advice
and their numerous contributions on many fronts. They have all been
instrumental in nurturing the Company on AIM as it progressed its pipeline into
the clinic. We warmly wish them the very best for the future.
We were also pleased to announce the appointment of Ken Cunningham, MD and
Anders Ullman, MD, PhD, as Non-Executive Directors to the Board. Both are
highly respected industry leaders with invaluable expertise in the field of
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respiratory drug development. We very much look forward to working with them as
we continue our focused clinical development of lead pipeline asset RPL554.
OUTLOOK
We continue to develop the Company by searching for suitable products to
enhance our pipeline, and by expanding the expertise of our management team and
Board of Directors, especially in developing and commercialising respiratory
products. The Company operates with a strong focus and financial discipline,
and we remain very positive about progress to date in our lead drug development
programme, RPL554, and the opportunities for its further development and
commercialisation.
Dr. David Ebsworth Dr. Jan-Anders Karlsson
Chairman Chief Executive Officer
1 Pre-clinical studies in isolated airway muscle have demonstrated that RPL554
is an effective bronchodilator also in highly constricted airways, to some
extent mimicking bronchospasm in patients with respiratory disease, where other
bronchodilators of the currently used beta2-agonist and anti-muscarinic types
are less effective. If a similar effect is seen in patients with highly
obstructed airway muscles, RPL554 has the potential to be advantageous compared
to other types of bronchodilators.
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2015
6 months ended 6 months ended Year ended
30 June 2015 30 June 2014 31 December 2014
Notes (unaudited) (unaudited) (audited)
GBP GBP GBP
Continuing operations
Revenue - - -
Cost of sales - - -
Gross profit - - -
Research and development (3,477,322) (865,646) (2,634,848)
Administration expenses (982,199) (525,620) (1,157,925)
Operating loss (4,459,521) (1,391,266) (3,792,773)
Finance revenue 27,169 3,220 29,978
Loss before taxation (4,432,352) (1,388,046) (3,762,795)
743,762 - 1,004,065
Taxation - credit 2
Total comprehensive loss for (3,688,590) (1,388,046) (2,758,730)
the period
Loss per ordinary share - 3 (0.37)p (0.19)p (0.32)p
basic and diluted (pence)
GROUP STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2015
As at As at As at
30 June 2015 30 June 2014 31 December 2014
(unaudited) (unaudited) (audited)
GBP GBP GBP
ASSETS
Non-current assets
Plant and equipment 17,512 23,505 21,847
Intangible assets - patents 286,017 347,463 380,540
Goodwill 1,469,112 1,469,112 1,469,112
1,772,641 1,840,080 1,871,499
Current assets
Trade and other receivables 1,880,194 324,093 1,287,535
Cash and cash equivalents 6,093,913 12,099,601 9,969,759
7,974,107 12,423,694 11,257,294
Total assets 9,746,748 14,263,774 13,128,793
EQUITY AND LIABILITIES
Capital and reserves
attributable to equity holders
Share capital 1,009,923 1,009,923 1,009,923
Share premium 26,650,098 26,669,298 26,650,098
Share-based payments reserve 912,016 653,931 677,946
Retained losses 19,396,536) (14,474,741) (15,733,487)
Total equity 9,175,501 13,858,411 12,604,480
Current liabilities
Trade and other payables 571,247 405,363 524,313
Total liabilities 571,247 405,363 524,313
Total equity and liabilities 9,746,748 14,263,774 13,128,793
GROUP STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2015
6 months 6 months Year ended
ended ended
30 June 30 June 31 December
2015 2014 2014
(unaudited) (unaudited) (audited)
GBP GBP GBP
Net cash outflow from operating activities (3,915,651) (1,469,753) (3,833,926)
Cash inflow from taxation 69,150 - 293,263
Cash flow from investing activities
Interest received 32,969 3,220 24,178
Purchase of plant and equipment (616) (1,507) (4,882)
Payment for patents (61,698) (158,361) (215,676)
Net cash outflow from investing activities (29,345) (156,648) (196,380)
Cash flow from financing activities
Financing costs - - -
Net proceeds from issue of shares - 13,122,211 13,103,011
Net cash inflow from financing activities - 13,122,211 13,103,011
Net (decrease)/increase in cash and cash (3,875,846) 11,495,810 9,365,968
equivalents
Cash and cash equivalents at the beginning 9,969,759 603,791 603,791
of the period
Cash and cash equivalents at the end of
the period 6,093,913 12,099,601 9,969,759
Reconciliation of operating loss to net
cash outflow from operating activities
Operating loss (4,459,521) (1,391,266)
(3,792,773)
Cost of issuing share options 259,611 56,233 192,186
Decrease/(increase) in trade and other 76,153 (74,454) (321,294)
receivables
(Decrease)/increase in trade and other 46,934 (83,957) 34,993
payables
Depreciation of plant and equipment 4,951 5,649 10,682
Write-off of intangible assets 134,533 - -
Amortisation of intangible assets 21,688 8,042 42,280
Net cash outflow from operating activities (3,915,651) (1,469,753) (3,833,926)
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2015
Share Share Option Retained
capital premium reserve losses Total
GBP GBP GBP GBP GBP
Balance at 1 January 2015 1,009,923 26,650,098 677,946 (15,733,487) 12,604,480
Total comprehensive loss - - - (3,688,590) (3,688,590)
for the period
1,009,923 26,650,098 677,946 (19,422,077) 8,915,890
Issue of shares - - - - -
Share issue costs - - - - -
Share-based payments - - 259,611 - 259,611
Transfer of previously - - (25,541) 25,541 -
expensed share-based
payment
charge upon lapse of
options
Balance at 30 June 2015 1,009,923 26,650,098 912,016 (19,396,536) 9,175,501
(unaudited)
372,598 14,184,412 640,579 2,068,013
Balance at 1 January 2014 (13,129,576)
Total comprehensive loss - - - (1,388,046) (1,388,046)
for the period
372,598 14,184,412 640,579 (14,517,622) 679,967
Issue of shares 637,325 13,383,821 - - 14,021,146
Share issue costs - (898,935) - - (898,935)
Share-based payments - - 56,233 - 56,233
Transfer of previously - - (42,881) 42,881 -
expensed share-based
payment
charge upon lapse of
options
Balance at 30 June 2014 1,009,923 26,669,298 653,931 (14,474,741) 13,858,411
(unaudited)
372,598 14,184,412 640,579 (13,129,576) 2,068,013
Balance at 1 January 2014
Total comprehensive loss - - - (2,758,730) (2,758,730)
for the year
372,598 14,184,412 640,579 (15,888,306) (690,717)
Issue of shares 637,325 13,383,821 - - 14,021,146
Share issue costs - (918,135) - - (918,135)
Share-based payments - - 192,186 - 192,186
Transfer of previously - - (154,819) 154,819 -
expensed share-based
payment
charge upon lapse of
options
Balance at 31 December 1,009,923 26,650,098 677,946 (15,733,487) 12,604,480
2014 (audited)
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