Vernalis's efforts to transform itself into a speciality pharmaceutical company overshadowed these figures. Indeed, the balance sheet has been transformed after raising £65.9m through an open offer in February - to partly fund a development deal with Tris Pharma for cold and cough medicines in the US, with the hope that products will enter the clinic within two years. Vernalis also plans to shift its listing to Aim at the end of April. Should its strategy prove successful, the shares could have speculative potential.
This diversification is given extra urgency by slowing sales of lead product painkiller, frovatriptan. Price cuts in Germany during the second half meant a 13.4 per cent fall in frovatriptan sales, at licensing partner Menarini, meaning a £0.5m fall in the product's royalty stream to £6.5m. Even without the price cuts, underlying tablet volumes were roughly flat at 8.55m. Moreover, Vernalis ramped up research and development spending to £13.6m, from £11.7m in 2010, after funding early-stage trials for pain and cancer drugs V158866 and V158411. As part of its new approach, Vernalis will likely use the data to interest potential licensing partners.
Broker Singer Capital Markets expects adjusted pre-tax losses for 2012 of £11.1m, giving an adjusted loss per share of 2.1p.
VERNALIS (VER) | ||||
|---|---|---|---|---|
| ORD PRICE: | 25p | MARKET VALUE: | £111m | |
| TOUCH: | 24-25p | 12-MONTH HIGH: | 49p | LOW: 19p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 5p | NET CASH: | £24.7m* | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 12.4 | -36.3 | -13.6 | nil |
| 2008 | 19.8 | -31.6 | -14.5 | nil |
| 2009 | 54.8 | 2.57 | 22.3 | nil |
| 2010 | 14.2 | -22.1 | -21.1 | nil |
| 2011 | 12.2 | -10.6 | -8.9 | nil |
| % change | -14 | – | -58 | – |
Ex-div: – Payment: – *Includes £19.5m of financial assets; excludes £95.6m of cash raised via February's open offer | ||||
