Jan-Anders Karlsson – chief executive of Verona Pharma (VRP) – doesn’t do things in a rush. In April, his novel bronchodilator (a type of respiratory drug), RPL554, succeeded in a second-phase trial, paving the way for a pivotal trial and ultimate commercial launch in the US. But Mr Karlsson has decided that it’s better to check the drug’s efficacy alongside one or even two further treatments before heading into the final study late next year.
There’s sense in Mr Karlsson’s strategy. Phase 3 trials are high risk and very costly – ensuring a high chance of success by first completing a range of phase 2 studies is therefore very important. Plus, the bronchodilator market is about to be flooded with cheap, generic products that RPL554 would struggle to compete with on price. Approval as an additional therapy for the most difficult-to-treat patients therefore gives the drug far greater chance of commercial success.
Verona is beginning to consider its commercial options in the US, but first needs to source some funding for the expensive final phase trial. Chief financial officer Piers Morgan said the group is exploring a “range of alternatives” to supplement the existing £69m of net cash. Group research and development costs are already on the rise – recent Phase 2 trials sent operating expenses up 6 per cent to £11.5m, while a £6m one-off finance charge hit the bottom line.
| VERONA PHARMA (VRP) | ||||
| ORD PRICE: | 121p | MARKET VALUE: | £ 127m | |
| TOUCH: | 116-125p | 12-MONTH HIGH / LOW: | 198p | 101p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 64p | NET CASH: | £68.9m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | nil | -6.7 | -7.3 | nil |
| 2018 | nil | -16.5 | -13.9 | nil |
| % change | - | - | - | - |
| Ex-div: | na | |||
| Payment: | na |
