OPERATIONAL HIGHLIGHTS
Received the final quality assured study report from the Centre for Human Drug Research (CHDR) at Leiden University for the Phase I/IIa trial of Verona?s lead product, RPL554, which confirmed the quality of the clinical trial and its associated analyses.
Completed successful studies to test the feasibility of administrating RPL554 in the two major types of inhaler devices commonly used by patients with asthma and COPD to offer different administration routes for potential licensees.
Progressed discussions further with potential licensees for the future further development and commercialisation of RPL554.
Planned further trials of RPL554 to provide additional clinical data about the safety, duration of bronchodilatory action and the extent of anti-inflammatory action at higher doses, thereby strengthening and adding value to the RPL554 licensing package.
Filed four new patents related to novel compounds discovered under the Company?s Novel Anti-Inflammatory Polysaccharides project.
FINANCIAL HIGHLIGHTS
Loss after tax of £0.78 million or 0.33 pence per ordinary share.
Low cash burn rate and cash and cash equivalents as at 30 June 2010 of £2.91 million.
SUBSEQUENT EVENT HIGHLIGHTS
The regulatory documents for the clinical trial of VRP700 in chronic cough patients have been submitted to the ethics committee at the University of Florence. Approval to proceed with the trial is expected soon.
The regulatory documents are being prepared for the two further clinical trials for RPL554 to be conducted in the Netherlands in order to further investigate the safety, duration of bronchodilatory action as well as the extent of anti-inflammatory action at higher doses. Some of the documents have already been submitted for approval. These trials involve both single doses and repeated dosing over a period of days. We hope to receive the go- ahead for these trials within the next quarter.
Commenting on the results, Clive Page, Chairman of Verona Pharma, said:
“The six month period to 30 June 2010 has been another busy one for Verona. We continue to vigorously pursue the licensing of RPL554 to an appropriate and financially strong pharma partner, as well as progress our other programmes – for intractable cough and the Novel Anti- Inflammatory Polysaccharides. We also continue to review potential new projects for inclusion into the Verona pipeline for the longer term. We maintain a firm hold on the Company?s finances and operate a proven financial model which enables us to apply our resources to the maximum.”
For more information, please contact:
Enquiries For more information please contact:
Verona Pharma plc Professor Clive Page, Chairman
Tel: 020 7863 3300 Evolution Securities Limited Barry Saint / Tim Redfern / Esther Lee
Tel: 020 7071 4300 College Hill Melanie Toyne Sewell / Nicole Yost / Gemma Howe Tel: 020 7457 2020
CHAIRMAN AND CEO’S JOINT STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2010
INTRODUCTION
The six month period to 30 June 2010 has been another busy one for Verona. We continue to vigorously pursue the licensing of RPL554 to an appropriate and financially strong pharma partner, as well as progress our other programmes – for intractable cough and the Novel Anti- Inflammatory Polysaccharides (“NAIPS”). We also continue to review potential new projects for inclusion into the Verona pipeline for the longer term. We maintain a firm hold on the Company?s finances and operate a proven financial model which enables us to apply our resources to the maximum.
RPL554
Discussions are advancing with respect to our lead drug, RPL554, a treatment for inflammatory diseases of the respiratory tract, including asthma, allergic rhinitis (hay fever) and Chronic Obstructive Pulmonary Disease (“COPD”) with a number of potential licensees. As we have stated before, we are seeking the most compatible and appropriate licensing partner to develop RPL554. In the interim period, the Company has also implemented steps to initiate three further clinical trials to provide useful clinical data that is expected to add to the overall value of the RPL554 package.
The Company is in the process of preparing and submitting the necessary regulatory documents to appropriate authorities in the Netherlands for two clinical trials in asthmatic patients. The two trials will examine the safety and duration of action of RPL554 with respect to bronchodilation as well as the extent of anti-inflammatory action of RPL554 at higher repeated doses given over several days. Additionally, the Company has almost completed the regulatory and ethical process with the University of Rome, Tor Vergata, for a clinical trial designed to test the bronchodilator effects as well as safety of RPL554 in patients with established COPD. The incidence of COPD continues to grow. It is a disease with significant unmet treatment needs and in which we anticipate that RPL554 will be of significant clinical value.
Furthermore, the Company is ascertaining the methods by which RPL554 can be administered by oral inhalation to patients using appropriate oral inhaler devices. Traditionally, asthma and COPD drugs are delivered mainly from dry powder inhalers and/or pressurised metered inhalers while nebulised drugs are also used in a minority of patients. In both the currently planned and completed trials, RPL554 has been delivered using a nebulizer. The Company is now conducting experimental trials designed to test the feasibility of delivering RPL554 for inhalation via a dry powder inhaler (DPI) and/or via a pressurized metered dose inhaler (pMDI). These experiments will assist potential licensees in deciding the most suitable administration route for the commercialisation of RPL554. They will obviously add value and strengthen the Company?s position with respect to licensing discussions.
VRP700
The Company has submitted the necessary regulatory and ethical documents for a clinical trial of VRP700 in patients with intractable cough due to underlying severe lung disease. The study will be conducted at the University of Florence, Italy. The trial has been specifically designed to demonstrate the anti-tussive (cough-suppressive) effects of VRP700. It is anticipated that the ethics committee will make a decision on the proposed trial soon. Once approved, we would aim to complete the trial by the year end, however, this will be dependent on other factors, namely, patient recruitment and the effectiveness of the anti-cough actions of VRP700.
NAIPS
Verona Pharma?s NAIPS project has progressed to the point that the Company has submitted four new „composition of matter? patents for fractions that have been discovered as a result of the collaboration with Glycomar Ltd. These novel fractions have been identified from a number of marine sources. They have shown anti-inflammatory actions that are of potential clinical value in disease states. This is a significant step forward for the project. We also continue to seek other novel NAIPs via our collaboration with Glycores SpA.
FINANCIALS
The loss for the six month period ended 30 June 2010 (“the Period”) increased by 1% or £0.01 million to £0.78 million (2009: £0.77 million).
Research and development expenditures for the Period were £0.41 million as compared to £0.46 million for the comparable period in 2009. The focus of the Company?s research and development activities during the Period has continued to be the RPL554 programme with expenditures of £0.33 million (2009: £0.41 million). Overall research and development expenditure decreased by £0.05 million, primarily due to the decreases in expenditures for the RPL554 programme and NAIPS in the amount of £0.08 million and £0.01 million respectively. These decreases were offset by an increase in expenditure for VRP700 of £0.03 million and expenditure incurred in connection with searching for new projects in the amount of £0.01 million.
Administrative expenses for the Period were £0.37 million (2009: £0.32 million). The increase of £0.05 million over the prior period is primarily due to increase in investor relations activities and cost in connection with attending bio-partnering conferences.
The income tax expense of £0.01 million is capital gains tax paid by Verona Pharma?s wholly- owned subsidiary Rhinopharma Limited during the period.
As at 30 June 2010 the Company had approximately £2.91 million in cash and cash equivalents.
OUTLOOK
All current evidence indicates that RPL554 has the potential to be a significant new respiratory drug that could capture significant market share. Verona Pharma is optimistic that we will find a suitable partner to assist us in taking the drug to market. In the meantime, the trials currently being planned for RPL554 are designed to take the drug through to the next development stage and add value to our licensing.
Progress with the VRP700 project clinical trial has been slower than we had hoped for due to administrative delays associated with setting the trial up. However, we have submitted the appropriate documentation to the ethics committee in Florence and anticipate that approval to start this trial will be received shortly.
We are pleased to report that we have continued to maintain a low cash burn rate that is in line with the proposed utilisation of £2.7 million net proceeds raised at the end of last year. We feel very positive about the progress to date and we look forward to updating the market on further developments in due course.
Professor Clive P. Page Professor Michael J. A. Walker Chairman Chief Executive Officer
GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30 JUNE 2010
6 months ended 6 months ended Year ended 31 December 30 June 2010 30 June 2009 2009 Notes (unaudited) (unaudited) (audited) £ £ £
Revenue - - - Cost of sales - - -
Gross profit/(loss) - - -
Research and development (411,643) (458,870) (944,903) Administration expenses (367,806) (318,790) (660,872)
Operating loss (779,449) (777,660) (1,605,775)
Finance revenue 4,202 6,241 7,243
Loss before taxation (775,247) (771,419) (1,598,532)
Taxation (4,532) - -
Loss and comprehensive loss for the period
(779,779) (771,419) (1,598,532)
Loss per ordinary share – basic and diluted
2 (0.33)p (0.36)p (0.74)p
GROUP STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2010
As at As at As at 30 June 2010 30 June 2009 31 December 2009 (unaudited) (unaudited) (audited) £ £ £ ASSETS
Non current assets Tangible assets 17,120 10,504 18,004 Intangible assets 88,353 72,609 70,570 Goodwill 1,469,112 1,469,112 1,469,112 1,574,585 1,552,225 1,557,686
Current assets Trade and other receivables 78,085 66,464 381,259 Cash and cash equivalents 2,907,373 1,672,783 2,829,981 2,985,458 1,739,247 3,211,240
Total assets 4,560,043 3,291,472 4,768,926
EQUITY AND LIABILITIES
Capital and Reserves attributable to Equity holders
Called up share capital 238,747 215,481 232,378 Option reserve 374,976 346,588 356,210 Share premium account 9,328,298 6,513,760 8,561,493 Retained losses (5,447,836) (3,840,944) (4,668,057) Total equity 4,494,185 3,234,885 4,482,024
Current liabilities Trade and other payables 65,858 56,587 286,902 Total liabilities 65,858 56,587 286,902
Total equity and liabilities 4,560,043 3,291,472 4,768,926
GROUP STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 JUNE 2010
6 months ended 6 months ended Year ended 31 December 30 June 2010 30 June 2009 2009
£ £ £
Net cash outflow from operating activities
(723,671) (783,428) (1,620,382)
Cash outflow from taxation (4,532) - -
Cash flow from investing activities
Interest received 4,118 8,774 9,879 Purchase of tangible assets (2,749) (2,321) (16,593) Purchase of intangible assets (23,313) (5,124) (8,070) Net cash (outflows) inflow from investing activities
(21,944) 1,329 (14,784)
Cash flow from financing activities
Deferred financing cost 54,365 - (54,365) Net proceeds from issue of shares 773,174 - 2,064,630 Net cash inflow from financing activities
827,539 - 2,010,265
Net increase (decrease) in cash and cash equivalents
77,392 (782,099) 375,099
Cash and cash equivalents at the beginning of the period
2,829,981 2,454,882 2,454,882
Cash and cash equivalents at the end of the period
2,907,373
1,672,783
2,829,981
Reconciliation of operating loss to net cash outflow from operating activities
Operating loss (779,449) (777,660) (1,605,775) Cost of issuing share options 18,766 3,587 13,209 Decrease/(increase) in trade and other receivables
248,893 5,835 (258,698) (Decrease)/increase in trade and other payables
(221,044) (27,606) 202,709 Non-cash expense - 2,000 6,000 Depreciation of tangible assets 3,634 5,905 12,676 Amortisation of intangible assets 5,529 4,511 9,497
Net cash outflow from operating activities
(723,671) (783,428) (1,620,382)
GROUP STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2010
Share Share Option Retained capital Premium reserve earnings Total £ £ £ £ £
Balance at 1 January 2010 232,378 8,561,493 356,210 (4,668,057) 4,482,024 Total comprehensive loss for the period - - - (779,779) (779,779)
232,378 8,561,493 356,210 (5,447,836) 3,702,245 Issue of shares 6,369 821,570 - - 827,939 Issue costs - (54,765) - - (54,765) Share based payment - - 18,766 - 18,766 Balance at 30 June 2010 (unaudited) 238,747 9,328,298 374,976 (5,447,836) 4,494,185
Balance at 1 January 2009 215,258 6,504,783 343,001 (3,069,525) 3,993,517 Total comprehensive loss for the period - - - (771,419) (771,419)
215,258 6,504,783 343,001 (3,840,944) 3,222,098 Issue of shares 223 8,977 - - 9,200 Share based payment - - 3,587 - 3,587 Balance at 30 June 2009 (unaudited) 215,481 6,513,760 346,588 (3,840,944) 3,234,885
Balance at 1 January 2009 215,258 6,504,783 343,001 (3,069,525) 3,993,517 Total comprehensive loss for the year - - - (1,598,532) (1,598,532)
215,258 6,504,783 343,001 (4,668,057) 2,394,985 Issue of shares 17,120 2,188,680 - - 2,205,800 Issue costs - (131,970) - - (131,970) Share based payment - - 13,209 - 13,209 Balance at 31 December 2009 (audited)
232,378
8,561,493
356,210
(4,668,057)
4,482,024
NOTES TO THE FINANCIAL INFORMATION FOR THE SIX MONTHS ENDED 30 JUNE 2010
1. Publication of non-statutory accounts
i) This interim financial information for the six months ended 30 June 2010 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 3 September 2010. The figures for the year ended 31 December 2009 have been extracted from the statutory accounts which have been reported on by the Company?s auditor.
ii) Accounting policies
The interim financial statements for the six months ended 30 June 2010 includes the results of Verona Pharma plc and its wholly-owned subsidiary 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 2009.
iii) The directors do not recommend the payment of a dividend (period to 30 June 2009 - £Nil, year ended 31 December 2009 - £Nil).
iv) A copy of the interim report is available on the company?s website www.veronapharma.com.
2. Earnings per share
i) The basic loss per share of 0.33p (30 June 2009: loss of 0.36p, 31 December 2009: loss of 0.74p) for the Group is calculated by dividing the loss for the period by the weighted average number of ordinary shares in issue of 238,448,621 (30 June 2009: 215,321,168, 31 December 2009: 215,540,798).
ii) The diluted loss per share has not been presented since the Company?s stock options are anti-dilutive.
3. Comparatives
The comparatives include audited figures for the year ended 31 December 2009 and unaudited figures for the six months ended 30 June 2009.
