Verona Pharma Q2 2024 Financial Results and Corporate Update

Verona Pharma plc, a biopharmaceutical company specializing in respiratory diseases, has announced its financial results for the second quarter ending June 30, 2024. The company also provided updates on its corporate progress, notably the availability of its new treatment for chronic obstructive pulmonary disease (COPD), Ohtuvayre (ensifentrine), in the United States.

David Zaccardelli, the President and CEO of Verona Pharma, highlighted that Ohtuvayre is the first novel inhaled product for COPD in over two decades. The product combines bronchodilator and non-steroidal anti-inflammatory properties, offering a new approach to COPD treatment. Since its launch, more than 2,000 healthcare professional (HCP) visits have been conducted, and over 100 HCPs have prescribed Ohtuvayre through a network of specialty pharmacies.

The company has set several near-term milestones. In July 2024, Verona Pharma submitted an investigational new drug (IND) application to the FDA to develop a fixed-dose combination of ensifentrine and glycopyrrolate, a long-acting muscarinic antagonist, for COPD maintenance via nebulizer. A Phase 2 dose-ranging trial is expected to start in the third quarter of 2024, contingent on the IND clearance. Additionally, the company plans to initiate a Phase 2 clinical trial within the same quarter to evaluate nebulized ensifentrine for non-cystic fibrosis bronchiectasis (NCFBE). Further analyses from the Phase 3 ENHANCE trials will be presented in the latter half of 2024 at key respiratory conferences.

Several key events marked the second quarter. The FDA approved Ohtuvayre for COPD maintenance treatment on June 26, 2024, making it available in the U.S. Verona Pharma also submitted a J-code application and local coverage determination documents to support the product's launch, with an expected permanent J-code effective from January 2025. In May, the company refinanced its $400 million debt facility and secured a $250 million revenue interest purchase and sales agreement, totaling $650 million in strategic financing. During the American Thoracic Society International Conference in May, Verona Pharma presented eight posters, including two oral presentations, focusing on additional pooled analyses of the Phase 3 ENHANCE trials for ensifentrine in COPD treatment.

Financially, Verona Pharma reported a cash and cash equivalents balance of $404.6 million as of June 30, 2024, up from $271.8 million at the end of 2023. Following Ohtuvayre's approval, the company drew $70 million under the debt facility and $100 million under the revenue interest agreement. This strong cash position, bolstered by the $650 million strategic financing, is expected to support the company’s operating expenses and capital expenditures beyond 2026, including the commercial launch of Ohtuvayre in the U.S.

Research and development (R&D) expenses surged to $19.4 million in the second quarter, compared to a net reversal of $2.5 million in the same period in 2023. This increase was primarily due to the accrual of a $6.3 million approval milestone, a $2.5 million rise in share-based compensation, and $1.7 million related to pre-launch inventory production. Other R&D costs included $2.5 million for clinical trials and development activities.

Selling, general, and administrative (SG&A) expenses rose to $49.0 million in the second quarter, up from $12.4 million in the same period in 2023. This increase was driven mainly by a $15.0 million first sale milestone payment, a $7.4 million rise in marketing and commercial launch activities, and a $2.3 million increase in support costs, including travel, professional fees, and IT expenses. Share-based compensation also increased by $8.0 million, alongside a $4.3 million rise in people-related costs due to the expansion of the commercial team.

Overall, Verona Pharma reported a net loss of $70.8 million for the second quarter, a significant increase from the $8.8 million net loss in the same period the previous year. Despite the financial challenges, the company remains optimistic about the commercial prospects of Ohtuvayre and its ongoing clinical programs.

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