Operational Update and Financial Results for the Three and Six Months Ended June 30, 2020
Completed $200 million private placement post period
Phase 3 COPD clinical trials planned to start later this year
Pilot clinical study in patients hospitalized with COVID-19 planned to start in the third quarter
Conference Call Today at 9:00 am EDT / 2:00 pm BST
LONDON, UK and RALEIGH, NC, August 14, 2020 – 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 financial results for the three and six months ended June 30, 2020 and provides a corporate update.
"We have made significant progress in the second quarter and are extremely pleased to have raised $200 million from a group of highly experienced life science investors in July,” said David Zaccardelli, Pharm. D., President and Chief Executive Officer. “Following the financing and the positive response from the U.S. Food and Drug Administration (“FDA”) to our End-of-Phase 2 briefing package in May, we are on schedule to initiate our ENHANCE (Ensifentrine as a Novel inHAled Nebulized COPD thErapy) Phase 3 clinical trials with nebulized ensifentrine for the treatment of chronic obstructive pulmonary disease ("COPD") later this year.
I am also pleased to announce that we have received a notice to proceed for our Investigational New Drug (“IND”) from the FDA to study ensifentrine in patients with COVID-19. We plan to initiate a randomized, double-blind, placebo-controlled pilot clinical study to evaluate ensifentrine delivered via pressurized metered-dose inhaler ("pMDI") formulation as a treatment for patients hospitalized with COVID-19 at the University of Alabama at Birmingham. Clinical data from prior studies of ensifentrine in other respiratory diseases have demonstrated ensifentrine improves lung function and reduces cellular markers of inflammation in the lungs. We believe ensifentrine, with its novel mechanism of action, has the potential to improve oxygenation and lung function assisting recovery from COVID-19.
To date, the impact of COVID-19 on clinical development programs has been limited, but we continue to monitor the situation and have put in place mitigation strategies to reduce the risk of COVID-19 related delays. In March, due to the pandemic, we postponed the start of the second, multiple dose, part of the Phase 2 study with the pMDI formulation of ensifentrine in patients with moderate to severe COPD. I am pleased to report that we now plan to initiate the second part of this study in the third quarter of 2020 with results anticipated in the first half of 2021.”
OUTLOOK AND STRATEGY
Verona Pharma aims to improve health and quality of life for the millions of people affected by respiratory diseases. The Company's first-in-class development candidate, ensifentrine, has the potential to provide relief for patients suffering from respiratory conditions such as COPD, cystic fibrosis ("CF"), asthma, as well as patients suffering from COVID-19.
Ensifentrine is a novel, investigational inhaled therapy that has been shown to act as both a bronchodilator and an anti-inflammatory agent in one compound. Initially, the Company is advancing the development of nebulized ensifentrine for the maintenance treatment of COPD.
In the first quarter results, Verona Pharma outlined the Company’s key objectives for 2020:
- Completing an End-of-Phase 2 meeting with the FDA in the second quarter of 2020 to receive guidance on the design of the Phase 3 program with nebulized ensifentrine
- Securing sufficient capital to fund the Phase 3 program for nebulized ensifentrine
- Initiating the Phase 3 program with nebulized ensifentrine in moderate to severe COPD patients
Verona Pharma is pleased to have met the first two objectives, obtaining clarity from the FDA on important features of the pivotal Phase 3 clinical program and securing $200 million ($183 million net of commissions and expenses) through a private placement. The Company is on track to meet the third objective as it plans to start the Phase 3 program with nebulized ensifentrine in COPD later this year.
OPERATIONAL AND DEVELOPMENT HIGHLIGHTS FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 2020
- In July, the Company completed a $200 million (£159 million) private placement of American Depository Shares ("ADSs") and ordinary shares that resulted in net proceeds of approximately $183 million (£145 million) after giving effect to transaction related fees and expenses ("Private Placement"). The Company expect the proceeds of the Private Placement to be sufficient to support its operations and clinical programs into 2023 including the Phase 3 ENHANCE program with nebulized ensifentrine for the treatment of COPD, which is expected to start later this year.
- In May, the FDA provided written comments in response to the Company’s End-of-Phase 2 briefing package for nebulized ensifentrine as a maintenance treatment for COPD. The response supports progressing the Phase 3 program, ENHANCE, to support a New Drug Application and the Company is preparing to initiate the clinical studies later in 2020. The two randomized, double-blind, placebo-controlled studies (ENHANCE-1 and ENHANCE-2) will evaluate the efficacy and safety of nebulized ensifentrine as monotherapy and as an add-on to standard of care treatment with a single bronchodilator. Each study will enroll approximately 800 moderate to severe, symptomatic COPD patients at sites primarily in the U.S. and Europe. The two study designs are essentially identical over 24 weeks, but ENHANCE-1 will also evaluate longer-term safety in 400 patients over 48 weeks.
- Additionally in May 2020, six abstracts presenting findings from clinical trials with ensifentrine for the treatment of COPD were accepted by the American Thoracic Society International Conference (“ATS”) 2020. The abstracts were published on the ATS website and in the peer reviewed publication, American Journal of Respiratory and Critical Care Medicine. The presentations included a late-breaking abstract that expanded on the Phase 2b efficacy and symptom data first announced by the Company in January 2020 where nebulized ensifentrine added on to tiotropium demonstrated clinically and statistically significant dose-dependent improvements in lung function as well as COPD symptoms.
- In June 2020, the Company hosted an “Investor and Analyst KOL Webcast” to provide insights into the unmet medical need and challenges of treating COPD, as well as details of the planned Phase 3 ENHANCE program. The forum featured a panel of leading U.S. respiratory clinicians who spoke about the urgent need for a new COPD treatment with a different mechanism of action that better addresses symptoms and offers greater benefits to patients.
- In July 2020, the Company received a notice to proceed from the FDA to evaluate pMDI ensifentrine in a randomized, double-blind, placebo-controlled pilot clinical study for the treatment of patients hospitalized with COVID-19. The Company plans to start the study in the third quarter.
- In June 2020, the Company appointed a U.S. commercial expert, Christopher Martin, as Vice President of Commercial. He will lead the Company’s commercialization efforts for ensifentrine. Mr. Martin brings more than 15 years of commercial experience spanning sales, marketing and business development. Previously, he served as Executive Director of Marketing at SK Life Science, a subsidiary of SK Biopharmaceutical, where he was instrumental in launching the company’s first commercial product, an anti-epileptic medication. Mr. Martin previously worked with Verona Pharma’s Chief Executive Officer and Chief Financial Officer, David Zaccardelli and Mark W. Hahn respectively, at Cempra. Mr. Martin is based in the Company's U.S. office in Raleigh, North Carolina.
THREE MONTHS ENDED MARCH 31, 2020
- In January 2020, the Company reported positive top-line data from a Phase 2b clinical study with nebulized ensifentrine added on to tiotropium (Spiriva®), a long acting anti-muscarinic (“LAMA”) bronchodilator in symptomatic patients with moderate to severe COPD. The study met the primary endpoint at all doses and also met clinically relevant secondary endpoints.
- In February 2020, the Company published its Phase 2b clinical results with nebulized ensifentrine as a monotherapy for maintenance treatment of COPD in the peer reviewed journal, Respiratory Research. The 403-patient trial, reported in March 2018, was the first of two large Phase 2b trials with nebulized ensifentrine for this indication. The study met its primary endpoint demonstrating that ensifentrine produced clinically and statistically significant improvements in lung function at all doses. In addition, clinically relevant secondary endpoints were met including significant progressive improvements in COPD symptoms.
- In March 2020, the Company reported positive efficacy and safety data with a single dose of the pMDI formulation of ensifentrine in a Phase 2 clinical trial in patients with moderate to severe COPD. With these results and those observed in previous Phase 2 clinical trials, ensifentrine has demonstrated statistically significant and clinically meaningful improvements in lung function in COPD patients when delivered via any of the three widely used inhaled modes: nebulizer, DPI and pMDI. Results from the single dose part of the study (Part A) demonstrated a statistically significant and clinically meaningful increase in lung function as measured by FEV11 compared to placebo. The positive data supported initiation of the second, multiple dose, part of the study (Part B), which will evaluate the pMDI formulation in this patient population over 7 days of twice-daily treatment. Verona Pharma postponed the initiation of Part B due to concerns regarding the safety of trial subjects, caregivers and medical staff during the coronavirus (COVID-19) pandemic, but following an assessment of the safety plans and procedures put in place by the UK clinical trial site, the Company is planning to initiate Part B of this study in the third quarter of 2020.
- Also, during the first quarter of 2020, the Company requested an End-of-Phase 2 meeting with the FDA for nebulized ensifentrine as a maintenance treatment for COPD.
• Net cash, cash equivalents and short term investments at June 30, 2020, amounted to £18.1 million ($22.4 million) (December 31, 2019: £30.8 million). In July 2020 the Company completed the Private Placement with gross proceeds of approximately £159 million ($200 million). The net proceeds of the Private Placement will be approximately £145 million ($183 million) after deducting placement agent fees and estimated expenses.
• For the six months ended June 30, 2020, the Company reported operating loss of £19.7 million ($24.4 million) (six months ended June 30, 2019: £19.8 million) and reported loss after tax of £16.9 million (six months ended June 30, 2019: £14.4 million). Research and development costs fell in the six months ended June 30, 2020, compared to the prior period as the six months ended June 30, 2019, included significant costs relating to a Phase 2b study. This fall was outweighed by higher general and administrative costs in the 2020 period as it included costs relating to executive changes and associated reorganization.
• The Company reported loss per share of 16.0 pence for the six months ended June 30, 2020 (six months ended June 30, 2019: 13.7 pence).
• Net cash used in operating activities for the six months ended June 30, 2020 was £12.7 million ($15.7 million) (six months ended June 30, 2019: £18.1 million). Cash used was lower as the £7.3 million tax credit for the 2019 fiscal year was received in April 2020, and the £4.4 million tax credit for the 2018 fiscal year was received in August 2019.
• The Company has re-evaluated its contingent liability and In-Process Research and Development asset in light of its determination that ensifentrine has moved from Phase 2 to Phase 3 stage of clinical development. Future cashflows relating to a milestone payment and potential royalties payable were remeasured. After applying estimated probabilities of success the assumed contingent liability that relates to these potential future cashflows was adjusted. Accordingly, in the second quarter of 2020 the Company recorded an increase of £22.6 million to the contingent liability and a corresponding increase to the related In-Process Research and Development asset. There is no material effect on current period comprehensive loss, net assets or cashflows.
COVID-19 IMPACT AND BUSINESS CONTINUITY
To help protect the health and safety of the patients, caregivers and healthcare professionals involved in its planned clinical trials of ensifentrine, as well as its employees and independent contractors, the Company plans to follow guidance from the FDA and other health regulatory authorities regarding the conduct of clinical trials during the COVID-19 pandemic to ensure the safety of study participants, minimize risks to study integrity, and maintain compliance with good clinical practice (GCP). The Company is continuing to review this guidance and the effect of the COVID-19 pandemic on its operations and clinical trials and will provide an update if it becomes aware of any disruption caused by the pandemic to its clinical trials.
Verona Pharma is closely monitoring activities at the Company’s contract manufacturers associated with clinical supply for the planned clinical trials, and is satisfied that appropriate plans and procedures are in place to ensure uninterrupted future supply of ensifentrine to the clinical trial sites, subject to potential limitations on their operations and on the supply chain due to the COVID-19 pandemic. The Company is continuing to monitor this situation and will provide an update if it becomes aware of any disruption caused by the pandemic to the clinical supply of ensifentrine for its clinical trials.
Corporate Operations and Financial Impact
Verona Pharma has also implemented measures to help keep the Company’s employees, families, and local communities healthy and safe. All employees are working remotely and all business travel has been restricted.
The COVID-19 pandemic has caused significant disruption to the financial markets but Verona Pharma has successfully raised sufficient capital to fund the Phase 3 program for nebulized ensifentrine.
COVID-19 Risk Factor
Verona Pharma has assessed the potential impact on its business of the COVID-19 pandemic and updated its risk factor disclosures on a Report on Form 6-K filed with the SEC on April 30, 2020.
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Conference Call and Webcast Information
Verona Pharma will host an investment community conference call at 9:00 a.m. EDT / 2:00 p.m. BST on Friday, August 14, 2020 to discuss the Q2 2020 financial results and the corporate update.
Analysts and investors may participate by dialing one of the following numbers and reference conference ID: 4180419:
- 877-870-9135 for callers in the United States
- +44 800 279 6619 for international callers
A live webcast will be available on the Events and Presentations link on the Investors page of the Company's website, www.veronapharma.com, and an audio replay will be available there for 30 days. An electronic copy of the Q2 2020 results release will also be made available today on the Company’s website. 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.
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. If successfully developed and approved, Verona Pharma’s product candidate, ensifentrine, has the potential to be the first therapy for the treatment of respiratory diseases that combines bronchodilator and anti-inflammatory activities in one compound. Following a response from the U.S. FDA to Verona Pharma’s End-of-Phase 2 briefing package, the Company plans to initiate its Phase 3 clinical program ENHANCE (Ensifentrine as a Novel inHAled Nebulized COPD thErapy) later in 2020 for nebulized ensifentrine for COPD maintenance treatment. The Company raised gross proceeds of $200 million through a private placement in July 2020 and expects the funds to support its operations and Phase 3 clinical program into 2023. Verona Pharma is currently in Phase 2 development with two additional formulations of ensifentrine for the treatment of COPD: dry powder inhaler ("DPI") and pressurized metered-dose inhaler ("pMDI"). Ensifentrine also has potential applications in cystic fibrosis, asthma, COVID-19 and other respiratory diseases. For more information, please visit www.veronapharma.com.
- Verona Pharma plc
- Verona Pharma plc