Prescription medication for the common cold is big business in the US and it's this $2bn (£1.2bn) market from which drug company Vernalis (VER) is hoping to generate significant revenue through sales of a slow-release liquid cold and cough medication.
Last year it achieved proof-of-concept for its first such cold drug, CCP-01, and is three months away from filing for regulatory approval in the US. If successful, approval could come as early as the first half of 2015, with a launch to market at the year-end. Vernalis is looking to achieve an equally rapid path to market with four further drugs in this family.
It's hoped that revenue from the low-risk cold portfolio will help fund Vernalis' higher-risk, new drug development programmes. Key data on two such studies is expected this year and could lead to partnerships with big pharmaceutical players.
Meanwhile, Vernalis is generating most of its revenue from royalties and research collaboration - notably relating to migraine painkiller Frovatriptan and AUY922, a cancer treatment being developed by Novartis. Indeed, chief executive Ian Garland reckons AUY992 could become a "blockbuster" - jargon for a product with annual sales of more than $1bn.
Broker Canaccord Genuity expects an adjusted pre-tax loss of £6.9m in 2014 and a £13.7m loss in 2015.
| VERNALIS (VER) | ||||
|---|---|---|---|---|
| ORD PRICE: | 37p | MARKET VALUE: | £164m | |
| TOUCH: | 36-37p | 12-MONTH HIGH: | 38p | LOW: 19p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 19p | NET CASH: | £76.9m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 54.8 | 2.6 | 22.3 | nil |
| 2010 | 14.2 | -22.1 | -21.1 | nil |
| 2011 | 12.2 | -10.6 | -8.9 | nil |
| 2012 | 14.6 | -6.8 | -1.4 | nil |
| 2013 | 14.1 | -6.3 | -0.9 | nil |
| % change | -3 | - | - | - |
Ex-div:- Payment:- | ||||
