Vernalis's results were more about potential than achievement as the specialist pharmaceutical company settled down to wait for results of clinical trials that have been initiated by its development partners. But it could be next year before meaningful newsflow comes through, with the market currently valuing Vernalis's development pipeline at barely a premium to its cash pile. That said, Vernalis finally has the money to do something productive - but that doesn't disguise the speculative nature of the shares.
The company is now concentrating on spending its cash. The collaboration with Tris in the US cold and cough market should see products filed for development next year and Vernalis is already talking about developing a commercial sales structure in the US. In the product pipeline, Vernalis is expecting Phase II data from cancer medicine Tosedosat and also from AUY922, which is partnered with Novartis. Other early stage trial results from V158866 for pain, V81444 in central nervous system treatment and V158411 in cancer, will likely come in 2013. Meanwhile, the company's most important revenue stream is its share of Frovatriptan pain killer sales, which is marketed in Europe by Menarini. Frovatriptan generated €13.3m (£11m) of sales in the half, with tablet volumes up an underlying 2.1 per cent.
Broker Singer Capital Markets forecasts a full-year adjusted pre-tax loss for of £10.5m and loss per share of 2p (from a 6.9p loss per share in 2011).
VERNALIS (VER) | ||||
|---|---|---|---|---|
| ORD PRICE: | 23p | MARKET VALUE: | £102m | |
| TOUCH: | 22-23p | 12-MONTH HIGH: | 49p | LOW: 18p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 20p | NET CASH: | £84.5m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 4.33 | -7.85 | -7.00 | nil |
| 2012 | 5.88 | -4.00 | -1.00 | nil |
| % change | +36 | - | - | - |
Ex-div: - Payment: - | ||||
