TIDMVRP
Verona Pharma plc
("Verona Pharma" or the "Company")
Interim results for the six months ended 30 June 2016
Significant clinical progress and strong balance sheet bodes well for future of
RPL554
13 September 2016, Cardiff - Verona Pharma plc (AIM: VRP.L), 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
2016.
OPERATIONAL HIGHLIGHTS
· Reported positive results from "add-on" Phase 2 study with RPL554 in
COPD patients. Data continues to suggest drug could be a meaningful new
addition, alone or in combination, for the treatment of COPD
o Primary objective of study met; RPL554 produced a highly significant (P<
0.001) and a clinically meaningful additional (>50%) bronchodilation on top of
the administered standard of care bronchodilators, salbutamol or ipratropium
bromide
o The bronchodilator effects seen with the combinations were significantly (P<
0.001) larger than those of either salbutamol or ipratropium bromide alone,
which were in turn all significantly greater than placebo
o Secondary objectives also met; the combination of RPL554 with salbutamol or
ipratropium bromide caused a significant reduction (p=0.0002 and p=0.004
respectively) in trapped air in the lung (residual volume) as compared to
salbutamol or ipratropium bromide alone, suggesting that RPL554 treatment may
reduce dyspnea, a major debilitating symptom of COPD1
o Consistent with previous studies, RPL554 was well tolerated both alone and
in combination
- No effect on vital signs or ECG parameters
- No gastro-intestinal adverse events recorded
· Reported positive results from dose finding study with RPL554 in
asthmatic patients
o Primary objective of study met; nebulized RPL554 demonstrated a
dose-dependent bronchodilator response in asthma patients; the response was
highly statistically significant (p<0.0001) at all doses tested
o The maximum bronchodilator effect of RPL554 in this study was comparable to
the effect observed with the supramaximal dose (7.5mg) of nebulized salbutamol
used in the study
o Large dose range (0.4 to 24mg) examined; suggests RPL554 potentially has a
large safety margin
o RPL554 did not elicit any serious adverse events or adverse events of
concern at any dose
- Fewer adverse events recorded with RPL554 than with nebulized salbutamol
- No gastro-intestinal adverse events or cardiovascular events of concern
· Data from first Phase 1 study with RPL554 supporting the Company's view
that RPL554 could become an important, novel and complementary inhaled medicine
for the treatment of respiratory diseases such as COPD, asthma and cystic
fibrosis presented at American Thoracic Society (ATS) 2016 International
Conference in USA:
o Studies continue to demonstrate the excellent bronchodilator properties of
RPL554
o Formulation is much better tolerated than the earlier solution formulation
prototype, with no maximum tolerated dose observed even at 16 times the active
bronchodilator dose
o New formulation is suitable for twice daily dosing
o Formulation provides for a longer pulmonary residence time, lower peak
plasma exposure and longer half-life in blood than the earlier formulation
suggesting a more pronounced effect locally in the lung and comparatively less
effects in other organs in the body
FINANCIAL HIGHLIGHTS
· Loss after tax for the period of GBP1.60 million (2015: GBP3.69 million) or
0.16 pence (2015: 0.37 pence) per ordinary share, reflecting a tight control
over costs.
· Net cash outflows from operating activities during the six month period
of GBP2.23 million (2015: GBP3.92 million), with cash and cash equivalents as at 30
June 2016 of GBP1.21million (2015: GBP6.09 million) with spending focused on RPL554
clinical trials and related activities.
POST PERIOD AND OTHER EVENTS
· Fundraising completed in July 2016 to raise gross proceeds of GBP44.7
million (approximately US$63.3 million at the exchange rate of 17 June 2016) by
way of a placing to issue 1,555,796,345 placing shares at a price of 2.873
pence per share (each placing share includes one warrant to subscribe for 0.4
of a placing share)
o The net proceeds of the Placing of GBP41.9 million will predominantly be used
to progress RPL554 through a Phase 2b clinical trial in COPD patients, and to
fund additional clinical Phase 2 studies in COPD and cystic fibrosis as well as
further supportive pre-clinical work
o The cornerstone investors in the Placing are specialist healthcare focused
funds Vivo Capital, OrbiMed and Edmond de Rothschild Investment Partners
o Other new investors include New Enterprise Associates, Novo A/S, Abingworth
and Aisling Capital with participation of existing investors including Arix
Bioscience, Hargreave Hale and Polar Capital
· On 29 July 2016, three additional Non-Executive Directors joined the
Verona Pharma Board as representatives of certain of the investors in the
Placing: Mahendra Shah (Vivo Capital), Rishi Gupta (Orbimed) and Andrew
Sinclair (Abingworth)
· On 12 September 2016, Vikas Sinha joined the Verona Pharma Board as an
independent Non-Executive Director
· Clinical data from Phase 2a "add on" study with RPL554 presented at the
European Respiratory Society (ERS) 2016 International Conference in London
Dr. Jan-Anders Karlsson, CEO of Verona Pharma commented: "We have continued to
make excellent progress with the clinical development of RPL554. The headline
data reported from the two clinical trials during the period continues to
support our belief that this first-in-class drug could be a meaningful new
treatment for COPD patients.
"The recent fund raise is a significant milestone in the Company's history
which allows us to continue development in later stage Phase 2 trials. The
fundraising has also brought a number of specialist healthcare investors as new
shareholders. Several of them have now joined our Board and we look forward to
benefiting from their multi-faceted experience in the sector."
This announcement contains inside information.
-S-
About Verona Pharma
Verona Pharma plc is a UK-based clinical stage biotech 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
2 trials as a nebulized maintenance treatment for COPD patients with moderate
to severe disease and possibly as a treatment of 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 maximize 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 received a Venture
and Innovation Award from the Cystic Fibrosis Trust.
For further information, please contact:
Verona Pharma plc Tel: +44 (0)20 3283 4200
Jan-Anders Karlsson, CEO
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
CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S JOINT STATEMENT
INTRODUCTION
Verona Pharma is a UK-based clinical stage biotech 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) and cystic fibrosis. The Company's lead product, RPL554, is a
first-in-class, inhaled dual phosphodiesterase PDE3/PDE4 inhibitor that is
ready to start Phase 2b as a nebulized formulation for treatment of patients
with COPD. The drug has already demonstrated clinically relevant bronchodilator
and anti-inflammatory effects which are essential to the improvement of
symptoms in patients with COPD.
The Board believes that broadening the development strategy for RPL554, to
include new indications and combination products, together with strengthening
the IP coverage around the program, has the potential to add significant value
to the Company. To enable this larger development program and to broaden the
investor base, to include healthcare focused funds based in the US as well as
in the UK and Europe, the Company raised gross proceeds of GBP44.7 million via a
placing post period (the Placing). The cornerstone investors in the Placing
were the specialist healthcare focused funds Vivo Capital, OrbiMed and Edmond
de Rothschild Investment Partners, with other new investors including New
Enterprise Associates, Novo A/S, Abingworth and Aisling Capital and
participation of the existing investors Arix Bioscience, Hargreave Hale and
Polar Capital.
The net proceeds of the Placing of approximately GBP41.9 million will be used
predominantly to progress the Company's lead product, RPL554, through a Phase
2b clinical trial in COPD patients, to fund additional clinical Phase 2 studies
in COPD and cystic fibrosis, and to fund further supportive pre-clinical work,
including the development of a dry powder inhaler (DPI) or metered dose inhaler
(MDI). The Board believes that this funding provides a strong platform to
accelerate the development of RPL554 for subsequent commercial use in
multi-billion dollar markets and creates greater strategic flexibility to
maximize future value for Shareholders. The Board further believes that the
Company's strong balance sheet increases both Verona Pharma's flexibility in
negotiating attractive commercial collaborations and its ability to expand
patent protection for the emerging franchise.
Industry Background
The Company is initially developing RPL554 as a treatment for patients with
COPD. These patients are commonly treated with bronchodilators to dilate the
airways and thereby ease breathing and reduce breathlessness, a major symptom
in these patients, and with glucocorticosteroids to reduce the chronic
inflammation of the airways. For more severe patients that are not well
controlled, an oral formulation of an anti-inflammatory PDE4 inhibitor is
added. Despite the recently introduced novel maintenance treatments for COPD,
many patients experience acute worsening with cough, sputum production and
breathlessness, and become hospitalized. For many of these patients, a better
and more effective maintenance treatment is required, that can control their
symptoms and reduce the risk of exacerbations. For those patients that end up
in hospital, 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 or anti-inflammatory 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 administrators and payers in optimizing
treatment of acute COPD exacerbations and beyond, when patients are discharged
from hospital. This provides an opportunity for RPL554 that we intend to
explore in further Phase 2 clinical studies.
Almost 10% of COPD patients, most likely the more severely ill patients, prefer
treatment with a nebulizer instead of using an MDI or DPI. Normal breathing
through a mouthpiece or facemask is convenient and comforting when the patient
is anxious about receiving the treatment. A nebulizer is both convenient and
effective in delivering a large and effective dose. About 9% of COPD patients
in the US prefer treatment with a nebulizer over a hand-held device MDI/DPI,
while up to 30% of these patients use a nebulizer more intermittently. We are
initially developing RPL554 as a nebulized treatment for more severe patients,
at home or after they have been admitted to hospital. Importantly, the
development and regulatory paths of a nebulized treatment is different from
that of an MDI or DPI. Based on initial experiments, we have demonstrated that
RPL554 can be used in a range of both jet and mesh nebulizers.
Positive data with RPL554 in Phase 2a clinical studies in 2015
As a nebulized treatment, RPL554 successfully completed a number of early
clinical Phase 1 and Phase 2 studies. 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.2
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.
As the original proof of concept formulation could not be commercialized, a
novel nebulized proprietary suspension 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 was a Single Ascending Dose (SAD) and
Multiple Ascending Dose (MAD, 5 days, twice daily dosing) study in 80 healthy
subjects and a 5 day MAD study in 32 COPD patients completed in 2015. The new
formulation was 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 a significantly
longer pulmonary residence time, a substantially lower peak plasma
concentration and a longer plasma half-life than the previously used
formulation, suggesting longer exposure of the target organ (lung) to RPL554,
less systemic activity and that twice daily dosing most likely could be
achieved. The study also demonstrated the excellent bronchodilator properties
of RPL554 indicating that it is able to produce large improvements in lung
function in healthy subjects as well as patients with mild, moderate or severe
lung disease.
Successful Phase 2a and add-on study for RPL554 in interim period
A single-dose, 7-way cross over Phase 2a dose-finding study with the new
formulation was conducted in 29 asthma patients in 2016. The study was
performed 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 were compared to two different doses of salbutamol,
a standard bronchodilator used in both asthma and COPD patients, and placebo.
The primary objective of the study was met as nebulized RPL554 demonstrated a
highly statistically significant and dose-dependent bronchodilator response in
asthma patients. The maximum bronchodilator effect of RPL554 in this study was
comparable to the effect observed with the supramaximal dose of nebulized
salbutamol used in the study. RPL554 did not elicit any serious adverse events
or adverse events of concern at any dose, suggesting that RPL554 potentially
has a very large safety margin. There were also fewer adverse events recorded
with RPL554 than with nebulized salbutamol and no gastro-intestinal adverse
events or cardiovascular events of concern.
In a second Phase 2a study in COPD patients, RPL554 produced a highly
significant (P<0.001) and a clinically meaningful additional (>60%)
bronchodilation when administered on top of standard of care bronchodilators,
salbutamol or ipratropium bromide. The bronchodilator effects seen with the
combinations were significantly (P?0.001) larger than those of either
salbutamol or ipratropium bromide alone, which were in turn all significantly
greater than placebo. In addition, the combination of RPL554 with salbutamol or
ipratropium bromide caused a significant reduction (p=0.0002 and p=0.004
respectively) of trapped air in the lung (residual volume) as compared to
salbutamol or ipratropium bromide alone suggesting that RPL554 treatment may
reduce dyspnea, a major debilitating symptom of COPD. Consistent with previous
studies, RPL554 was well tolerated both alone and in combination. No effect on
vital signs or ECG parameters or gastro-intestinal adverse events were
recorded.
We have investigated 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 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 those moderate to severe
COPD patients that prefer to use a nebulizer. There is an even larger market
for COPD patients that are routinely treated with a 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.
RPL554 shows promise as a treatment of cystic fibrosis
Additional pre-clinical data continue to demonstrate the potential usefulness
of RPL554 as a treatment of cystic fibrosis. RPL554 is an activator of the
cystic fibrosis transmembrane conductance regulator (CFTR) that is
dysfunctional in cells of cystic fibrosis patients (because of different types
of gene mutations). A direct effect on the CFTR, an anti-inflammatory effect on
many of the key inflammatory cells in the lungs of cystic fibrosis patients and
a direct bronchodilator effect may collectively improve mucociliary clearance
(reduce phlegm in the airways), reduce symptoms of chronic inflammation and
ease breathing. This adds a further dimension to the potential utility of the
drug. Further studies exploring the potential of RPL554 in cystic fibrosis are
being planned.
FINANCIALS
The loss from operations after tax for the six month period ended 30 June 2016
(the "Period") was GBP1.60 million (2015: GBP3.69 million) or 0.16 pence (2015:
0.37 pence) per ordinary share. The reported loss includes a non-cash
share-based payment charge of GBP0.18 million (2015: GBP0.26 million) and a
research and development tax credit receivable of GBP0.28 million (2015: GBP0.74
million).
Research and development expenditure, which was expensed as incurred, amounted
to GBP1.24 million (2015: GBP3.48 million). Development program expenditures during
the period amounted to GBP1.24 million for RPL554 (2015: GBP3.37 million), and the
2015 results include GBP0.11 million for VRP700 as a result of the discontinuance
of the VRP700 program.
Expenditures in RPL554 reduced by GBP2.13 million as a result of the clinical
trials ceasing as the Company came to the end of Phase 2a.
Administrative expenses for the period were GBP0.66 million (2015: GBP0.99
million). The reduction of GBP0.33 million over the prior period was due to a
decrease in share-based payment charge and other administrative items.
As at 30 June 2016, the Group had approximately GBP1.21 million (2015: GBP6.09
million) in cash and cash equivalents.
FURTHER DEVELOPMENT & COMMERCIALIZATION STRATEGY
The Company has made significant progress since the fundraising in March 2014
which enabled us to advance the new commercial formulation of RPL554 through
clinical studies up to the start of Phase 2b, which is expected in the second
half of 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 intention of expanding the use of RPL554
in new indications and in combination products.
Our focus on developing 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 the fourth quarter of 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 hospitalized
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 RPL554 in the treatment of other respiratory conditions.
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. In addition,
we plan to 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.
The Company recognizes that an experienced and resourceful commercial
collaborator 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
program. However, the Company intends to collaborate in respect of its drug
candidates only when it can extract a commercially attractive return for the
Company and its Shareholders.
BOARD CHANGES
Post period; we were pleased to announce the appointment of Mahendra Shah,
Rishi Gupta, Andrew Sinclair and Vikas Sinha, as Non-Executive Directors to the
Board. The new Board members are highly experienced directors and entrepreneurs
with invaluable expertise in the field of drug development, commercialization,
corporate development and financial management. We very much look forward to
working with them as we continue our focused clinical development of the lead
pipeline asset RPL554.
OUTLOOK
We continue to develop the Company by exploring opportunities to expand RPL554
across multiple disease areas and in combination with other products to enhance
our pipeline, and by recruiting additional expertise (particularly in the
development and commercialization of respiratory products) across both our
management team and Board of Directors. The Company operates with a strong
focus and financial discipline, and with a well-financed Balance Sheet coupled
with our additional expertise we remain very positive about progress to date in
our lead drug development program, RPL554, and the opportunities for its
further development and commercialization.
Dr. David Ebsworth Dr. Jan-Anders Karlsson
Chairman Chief Executive Officer
12 September 2016 12 September 2016
1 Dyspnea (shortness of breath) in COPD patients is often associated with
hyperinflation of the lungs resulting from a higher residual volume of air
2 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.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2016
6 months ended 6 months ended Year ended
30 June 2016 30 June 2015 31 December 2015
Notes (unaudited) (unaudited) (audited)
GBP GBP GBP
Research and development (1,244,715) (3,477,322) (7,268,847)
Administration expenses (661,114) (987,792) (1,705,944)
Operating loss (1,905,829) (4,465,114) (8,974,791)
Finance income 7,375 27,169 44,791
Loss before taxation (1,898,454) (4,437,945) (8,930,000)
284,977 743,762 1,509,448
Taxation - credit 2
Loss for the period (1,613,477) (3,694,183) (7,420,552)
attributable to owners of the
parent
Other comprehensive gains
Exchange differences on 15,866 5,593 3,784
translating foreign
operations
Total Comprehensive loss for (1,597,611) (3,688,590) (7,416,768)
the period attributable to
owners of the parent
Loss per ordinary share - 3 (0.16)p (0.37)p (0.73)p
basic and diluted (pence)
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
As at As at As at
30 June 2016 30 June 2015 31 December 2015
(unaudited) (unaudited) (audited)
GBP GBP GBP
ASSETS
Non-current assets
Property, plant and equipment 9,962 17,343 13,162
Intangible assets 403,232 286,186 344,645
Goodwill 1,469,112 1,469,112 1,469,112
1,882,306 1,772,641 1,826,919
Current assets
Prepayments and other 518,522 494,780 513,300
receivables
Current tax receivable 1,824,788 1,385,414 1,534,788
Cash and cash equivalents 1,205,724 6,093,913 3,524,387
3,549,034 7,974,107 5,572,475
Total assets 5,431,340 9,746,748 7,399,394
EQUITY AND LIABILITIES
Capital and reserves
attributable to equity holders
Called up share capital 1,009,923 1,009,923 1,009,923
Share premium account 26,650,098 26,650,098 26,650,098
Share-based payments reserve 1,113,694 912,016 1,022,440
Retained losses (24,606,707) (19,396,536) (23,095,806)
Total equity 4,167,008 9,175,501 5,586,655
Current liabilities
Trade and other payables 1,264,332 571,247 1,812,739
1,264,332 571,247 1,812,739
Total liabilities
Total equity and liabilities 5,431,340 9,746,748 7,399,394
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2016
6 months ended 6 months ended Year ended
30 June 2016 30 June 2015 31 December 2015
(unaudited) (unaudited) (audited)
GBP GBP GBP
Reconciliation of operating loss to
net cash outflow from operating
activities
Operating loss (1,905,829) (4,465,114) (8,974,791)
Exchange differences on translating
foreign operations 15,866 5,593 3,784
Share based payment expense 177,962 259,611 398,943
Decrease/(increase) in prepayments (5,221) 76,153 57,633
and other receivables
(Decrease)/increase in trade and (539,372) 46,934 1,274,370
other
payables
Depreciation of plant and equipment 5,095 4,951 9,854
Write-off of intangible assets - 134,533 134,533
Amortization of intangible assets 26,092 21,688 43,262
Net cash outflow from operating (2,225,407) (3,915,651) (7,052,412)
activities
Net cash outflow from operating (2,225,407) (3,915,651) (7,052,412)
activities
Cash (outflow)/inflow from taxation (14,057) 69,150 699,519
Cash flow from investing activities
Finance income 7,375 32,969 50,591
Purchase of property, plant and (1,838) (616) (1,830)
equipment
Payment for patents (84,736) (61,698) (141,240)
Net cash outflow from investing (79,199) (29,345) (92,479)
activities
(2,318,663) (3,875,846)
Net decrease in cash and cash (6,445,372)
equivalents
Cash and cash equivalents at the 3,524,387 9,969,759
beginning of the period 9,969,759
Cash and cash equivalents at the
end of the period 1,205,724 6,093,913 3,524,387
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2016
Share-based
payment
Share Share Retained
capital premium reserve losses Total
GBP GBP GBP GBP GBP
Balance at 1 January 2016 1,009,923 26,650,098 1,022,440 (23,095,806) 5,586,655
Loss for the period - - - (1,613,477) (1,613,477)
Other comprehensive income
for the period:
Exchange differences on - - - 15,866 15,866
translating foreign
operations
1,009,923 26,650,098 1,022,440 (24,693,417) 3,989,044
- - 177,962 - 177,962
Share-based payments
Transfer of previously - - (86,708) 86,708 -
expensed share-based
payment
charge upon lapse of
options
Balance at 30 June 2016 1,009,923 26,650,098 1,113,694 (24,606,709) 4,167,006
(unaudited)
1,009,923 26,650,098 677,946 (15,733,487) 12,604,480
Balance at 1 January 2015
Loss for the period (3,694,183) (3,694,183)
Other comprehensive income - - - 5,593 5,593
for the period:
Exchange differences on
translating foreign
operations
1,009,923 26,650,098 677,946 (19,422,077) 8,915,890
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)
1,009,923 26,650,098 677,946 (15,733,487) 12,604,480
Balance at 1 January 2015
Loss for the year - - - (7,420,552) (7,420,552)
Other comprehensive income - - - 3,784 3,784
for the year:
Exchange differences on
translating foreign
operations
1,009,923 26,650,098 677,946 (23,150,255) 5,187,712
Share-based payments - - 398,943 - 398,943
Transfer of previously - - (54,449) 54,449 -
expensed share-based
payment
charge upon lapse of
options
Balance at 31 December 2015 1,009,923 26,650,098 1,022,440 (23,095,806) 5,586,655
(audited)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2016
1. Publication of non-statutory accounts
i) This interim financial information for the six months ended 30 June
2016 is unaudited and does not constitute statutory accounts within the meaning
of Section 434 of the Companies Act 2006. It was approved by the Board of
Directors on 12 September 2016. The figures for the year ended 31 December 2015
have been extracted from the audited statutory accounts which have been
reported on by the Company's auditor. The financial statements for the year
ended 31 December 2015 have been delivered to the Registrar of Companies and
the auditor's report on those financial statements was unqualified and did not
contain a statement made under section 498(2) or section 498(3) of the
Companies Act 2006.
ii) Accounting policies
The interim financial statements for the six months ended 30 June 2016 includes
the results of Verona Pharma plc and its wholly-owned subsidiaries, Verona
Pharma Inc. and Rhinopharma Limited. The unaudited results for the period have
been prepared on the basis of accounting policies adopted in the audited
accounts for the year ended 31 December 2015 and expected to be adopted in the
financial year ending 31 December 2016.
In the opinion of the Directors, the interim financial information for the
period presents fairly the financial position and the results from operations
and cash flows for the period.
No new IFRS standards, amendments or interpretations became effective in the
six months to the 30 June 2016 which had a material effect on this interim
financial information.
iii) During the period two restatements have been made to the primary
statements as follows:
- Exchange differences arising on translating foreign operations have
been reclassified from research and development to other comprehensive
gains due to an error in the prior period amounting to GBP5,593 (30th
June 2015) and GBP3,784 (31st December 2015).
- Computer software has been reclassified from property, plant and
equipment to intangible assets amounting to GBP603 (30 June 2016), GBP169
(30 June 2015) and GBP660 (31 December 2015).
The impact of both these restatements is immaterial to the financial
statements.
iv) The directors do not recommend the payment of a dividend (period to 30
June 2015 - GBPNil; year ended 31 December 2015 - GBPNil).
v) A copy of the interim report is available on the Company's website
www.veronapharma.com.
2. Taxation
The current period tax credit, GBP0.28 million, represents the estimated research
and development tax credit receivable on qualifying expenditure incurred during
the six month period ended 30 June 2016.
(period to 30 June 2015: GBP0.74 million; year ended 31 December 2015: GBP1.51
million).
3. Loss per share
i) The basic loss per share of 0.16p (30 June 2015: loss of 0.37p; 31
December 2015: loss of 0.73p) for the Group is calculated by dividing the loss
for the period by the weighted average number of ordinary shares in issue of
1,009,923,481 (30 June 2015: 1,009,923,481; 31 December 2015: 1,009,923,481).
ii) Since the Group has reported a net loss, diluted loss per ordinary
share is equal to basic loss per ordinary share.
4. Comparatives
The comparatives include audited figures for the year ended 31 December 2015
and unaudited figures for the six months ended 30 June 2015.
END
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