Verona preps $650M for COPD launch ahead of FDA decision

Verona Pharma has secured a substantial funding agreement with Oaktree Capital Management and OMERS Life Sciences, potentially reaching up to $650 million. This financing is intended to support the launch of ensifentrine, contingent on its approval by the FDA for treating chronic obstructive pulmonary disease (COPD) by the June 26 deadline. Ensifentrine, a PDE3/4 inhibitor, demonstrated significant lung function improvements in two Phase III trials conducted in 2022. Despite these positive outcomes, some key opinion leaders have expressed concerns about the study design, particularly the use of a placebo comparator and the absence of endpoints to confirm the drug's anti-inflammatory effects.

If approved, ensifentrine will be the first novel mechanism of action inhaled treatment for COPD in over two decades. The financing package announced on Thursday includes a $400-million debt facility and a $250-million revenue interest purchase and sale agreement (RIPSA). When combined with Verona’s existing $255 million in cash, these funds are expected to sustain the company financially "beyond 2026."

The debt facility replaces a previous $400-million agreement that Verona had arranged with Oxford Finance and Hercules Capital in January. The updated debt arrangement allows Verona to access the $400 million in five separate tranches. Initially, Verona will draw $55 million when the deal is finalized. An additional $70 million will be available upon FDA approval of ensifentrine, $175 million will be tied to sales milestones, and another $100 million will support strategic initiatives.

Under the RIPSA, Verona will sell redeemable interest in future revenue from ensifentrine, with the total capped at 1.75 times the funded amount. Verona will receive $100 million upon FDA approval of ensifentrine, with an additional $150 million tied to sales milestones.

Aman Kumar from Oaktree Capital Management commented on the deal, emphasizing the potential of ensifentrine to significantly impact the maintenance treatment of COPD. Kumar highlighted the drug's impressive clinical data and unique mechanism of action, suggesting it could be a transformative advancement for a condition that continues to have significant unmet needs.