Verona Pharma plc Operational Update and Financial Results for the Three and Nine Months Ended September 30, 2020
Initiated ENHANCE Phase 3 clinical trials in COPD
Completed $200 million private placement
Commenced a pilot clinical study in U.S. patients hospitalized with COVID-19
Conference call today at 9:00 a.m. EDT / 1:00 p.m. GMT
LONDON and RALEIGH, N.C., Oct. 29, 2020 (GLOBE NEWSWIRE) -- Verona Pharma plc (AIM: VRP) (Nasdaq: VRNA) (“Verona Pharma” or the “Company”), a clinical-stage biopharmaceutical company focused on developing and commercializing innovative therapies for respiratory diseases, announces financial results for the three and nine months ended September 30, 2020 and provides a corporate update.
"We continue to make outstanding progress and are delighted to have started four clinical trials in the third quarter including our pivotal ENHANCE-1 and 2 (Ensifentrine as a Novel inHAled Nebulized COPD thErapy) Phase 3 studies," said David Zaccardelli, Pharm. D., President and Chief Executive Officer. "This important milestone brings us closer to potentially submitting a New Drug Application in the U.S. for ensifentrine and addressing the urgent need for a novel therapy for the treatment of chronic obstructive pulmonary disease ("COPD").
"In addition to the two ENHANCE clinical trials which have both enrolled patients, we started a pilot clinical study to investigate ensifentrine delivered via pressurized metered-dose inhaler ("pMDI") formulation in U.S. patients hospitalized with COVID-19. Clinical data from prior studies of ensifentrine have demonstrated that it improves lung function and reduces cellular markers of inflammation in the lungs. We believe ensifentrine, with its novel mechanism of action, has the potential to benefit patients suffering from COVID-19. Results are anticipated in the first half of 2021.
"Also during the third quarter, we initiated the second, multiple dose part of a Phase 2 study with the pMDI formulation of ensifentrine in COPD, which was postponed due to the pandemic. Results are expected in the first half of 2021.
"This clinical progress is supported by the $200 million raise we completed in July and we appreciate the highly experienced life science investors that participated in the offering. The funds are expected to support our operations and Phase 3 clinical programs into 2023."
OUTLOOK AND STRATEGY
Verona Pharma aims to improve health and quality of life for the millions of people affected by respiratory diseases. The Company's first-in-class development candidate, ensifentrine, has the potential to provide benefit to patients suffering from respiratory conditions such as COPD, COVID-19, cystic fibrosis ("CF") and asthma.
Ensifentrine is a novel, investigational inhaled therapy that has been shown to act as both a bronchodilator and an anti-inflammatory agent in one compound. Initially, the Company is advancing the development of nebulized ensifentrine for the maintenance treatment of COPD.
We are pleased to announce that Verona Pharma has met the following 2020 objectives that were established at the time of the management change:
- Completing an End-of-Phase 2 meeting with the FDA in May to receive guidance on the design of the Phase 3 program with nebulized ensifentrine.
- Securing $200 million in gross proceeds ($185.5 million net of commissions and expenses) through a private placement in July which we expect to be sufficient capital to fund the Phase 3 program for nebulized ensifentrine.
- Initiating the ENHANCE Phase 3 program with nebulized ensifentrine in moderate to severe COPD patients in September.
OPERATIONAL AND DEVELOPMENT HIGHLIGHTS FOR THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 2020
Financial
- In July, the Company completed a $200 million private placement of American Depositary Shares ("ADSs") and ordinary shares that resulted in net proceeds of approximately $185.5 million after giving effect to transaction related fees and expenses (the "Private Placement"). The Company expects the proceeds of the Private Placement to be sufficient to support its operations and clinical programs into 2023.
- In September, Verona Pharma announced plans to delist from the AIM stock market effective from 7:00 am GMT on October 30, 2020. The Company will retain its listing on the Nasdaq Global Market ("Nasdaq"). The move is expected to further enhance liquidity of trading by combining all trading transactions on Nasdaq and to reduce costs through removing duplicative listing and compliance fees.
- Also in September, Verona Pharma rang the Nasdaq closing bell in celebration of the Company's $200 million financing.
- In the third quarter the Company changed its accounting policy with regards to its presentational currency and is now presenting financial results in US dollars. Historical results, including the six months ended June 30, 2020, have been retrospectively presented in US dollars.
Clinical
- In July, the Company received a notice to proceed from the FDA for our Investigational New Drug Application to evaluate pMDI ensifentrine in a randomized, double-blind, placebo-controlled pilot clinical study for the treatment of patients hospitalized with COVID-19 and, in September, the Company initiated the study. The study will evaluate the effect of ensifentrine on key outcomes in patients hospitalized with COVID-19 including facilitation of recovery from the viral infection, clinical status improvement and reduction in supplemental oxygen use and progression to mechanical ventilation.
- In August, the Company initiated the second, multiple dose, part of a Phase 2 study to evaluate pMDI ensifentrine in patients with moderate to severe COPD. Results are expected in the first half of 2021.
- In September, the Company initiated its ENHANCE Phase 3 trials to evaluate the efficacy and safety of nebulized ensifentrine in patients with moderate to severe COPD. The two randomized, double-blind, placebo-controlled studies (ENHANCE-1 and ENHANCE-2) will evaluate ensifentrine as monotherapy and added onto a single bronchodilator. Each study will enroll approximately 800 moderate to severe, symptomatic COPD patients at sites primarily in the U.S. and Europe. The two study designs will replicate measurements of efficacy and safety data over 24 weeks, but ENHANCE-1 will also evaluate longer-term safety in 400 patients over 48 weeks.
- Additionally in September, a detailed analysis of symptom data from a previously reported Phase 2b clinical trial with nebulized ensifentrine as a maintenance treatment for COPD was published in the leading peer reviewed journal for specialists and healthcare professionals, International Journal of Chronic Obstructive Pulmonary Disease. The analyses demonstrate that ensifentrine meaningfully improved symptoms and quality of life after 4 weeks in patients with moderate to severe COPD.
- Also in September, Dr. Tara Rheault, Vice President, R&D and Global Project Management, presented new subgroup analysis from Phase 2b trials with nebulized ensifentrine in COPD at the European Respiratory Society International Congress. The data demonstrated that ensifentrine as monotherapy or added onto tiotropium (Spiriva® Respimat®) improved lung function in moderate or severe COPD patients regardless of smoking status or history of chronic bronchitis over 4 weeks.
FINANCIAL HIGHLIGHTS
- Net cash, cash equivalents and short term investments at September 30, 2020, amounted to $202.0 million (December 31, 2019: $40.8 million). The increase is due to the completion of the Private Placement with gross proceeds of approximately $200 million. The net proceeds of the Private Placement were approximately $185.5 million after deducting placement agent fees and other expenses. We continue to evaluate and consider other financing vehicles, including venture debt and other facilities, to potentially provide us with further financial flexibility.
- For the nine months ended September 30, 2020, the Company reported operating loss of $46.2 million (nine months ended September 30, 2019: $42.7 million) and reported loss after tax of $41.4 million (nine months ended September 30, 2019: $31.0 million). Research and development costs fell by $7.1 million in the nine months ended September 30, 2020, compared to the prior period, primarily due to significantly higher costs of an ongoing Phase 2b study in 2019 compared to the start up costs incurred in 2020 for the ENHANCE program. General and administrative costs increased by $10.6 million as the 2020 period had higher costs related to share based payment charges, executive changes and certain costs related to the Private Placement recorded as expenses in the Statement of Comprehensive Income.
- The Company reported loss per share of 21.0 cents for the nine months ended September 30, 2020 (nine months ended September 30, 2019: 29.4 cents).
- Net cash used in operating activities for the nine months ended September 30, 2020 was $25.7 million (nine months ended September 30, 2019: $31.3 million). Cash used was lower predominantly due to lower cash based operating costs and a higher cash tax credit received.
- Cash generated from financing activities of $188 million was primarily related to net cash proceeds from the Private Placement.
- In the nine months ended September 30, 2020 the Company re-evaluated its assumed contingent liability and In-Process Research and Development asset in light of its determination that ensifentrine had moved from Phase 2 to Phase 3 stage of clinical development. Future cashflows relating to a potential milestone payment and potential royalties payable were remeasured applying updated estimates of probabilities of success based on the assumed reduced clinical risk of moving into Phase 3. Accordingly the Company recorded an increase of $27.7 million to the assumed contingent liability and a corresponding increase to the related In-Process Research and Development intangible asset. There is no material effect on current period comprehensive loss, net assets or cashflows.
CONFERENCE CALL AND WEBCAST INFORMATION
Verona Pharma will host an investment community conference call at 9:00 a.m. EDT / 1:00 p.m. GMT on Thursday, October 29, 2020 to discuss the Q3 2020 financial results and the corporate update.
Analysts and investors may participate by dialing one of the following numbers and reference conference number: 2469127:
- +1-888-317-6003 for callers in the United States
- +1-412-317-6061 for international callers
A live webcast will be available on the Events and Presentations link on the Investors page of the Company's website, www.veronapharma.com, and an audio replay will be available there for 90 days. An electronic copy of the Q3 2020 results release will also be made available today on the Company’s website. This press release does not constitute an offer to sell or the solicitation of an offer to buy any of the Company’s securities, and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction.
For further information please contact:
Verona Pharma plc | Tel: +44 (0)20 3283 4200 |
Victoria Stewart, Director of Communications | info@veronapharma.com |
N+1 Singer | Tel: +44 (0)20 3283 4200 |
(Nominated Adviser and UK Broker) | |
Aubrey Powell / George Tzimas / Iqra Amin (Corporate Finance) | |
Tom Salvesen (Corporate Broking) | |
Optimum Strategic Communications | Tel: +44 (0)20 3950 9144 |
(European Media and Investor Enquiries) | verona@optimumcomms.com |
Mary Clark / Eva Haas / Shabnam Bashir | |
Argot Partners | Tel: +1 212-600-1902 |
(U.S. Investor Enquiries) | verona@argotpartners.com |
Kimberly Minarovich / Michael Barron | |
COVID-19 IMPACT AND BUSINESS CONTINUITY
To help protect the health and safety of the patients, caregivers and healthcare professionals involved in its ongoing clinical trials of ensifentrine, as well as its employees and independent contractors, the Company continues to follow guidance from the FDA and other health regulatory authorities regarding the conduct of clinical trials during the COVID-19 pandemic to ensure the safety of study participants, minimize risks to study integrity, and maintain compliance with good clinical practice (GCP). The Company continues to review this guidance and the effect of the COVID-19 pandemic on its operations and clinical trials and will provide an update if it becomes aware of any meaningful disruption caused by the pandemic to its clinical trials.
Verona Pharma is closely monitoring activities at the Company’s contract manufacturers associated with clinical supply for the ongoing clinical trials, and is satisfied that appropriate plans and procedures are in place to ensure uninterrupted future supply of ensifentrine to the clinical trial sites, subject to potential limitations on their operations and on the supply chain due to the COVID-19 pandemic. The Company is continuing to monitor this situation and will provide an update if it becomes aware of any meaningful disruption caused by the pandemic to the clinical supply of ensifentrine for its clinical trials.
Corporate Operations and Financial Impact
Verona Pharma has also implemented measures to help keep the Company’s employees, families, and local communities healthy and safe. All employees are working remotely and all business travel has been restricted.
The COVID-19 pandemic has caused significant disruption to the financial markets but Verona Pharma has successfully raised sufficient capital to fund the Phase 3 program for nebulized ensifentrine.
COVID-19 Risk Factor
Verona Pharma has assessed the potential impact on its business of the COVID-19 pandemic and updated its risk factor disclosures on a Report on Form 6-K filed with the SEC on April 30, 2020.
About Verona Pharma plc
Verona Pharma is a clinical-stage biopharmaceutical company focused on developing and commercializing innovative therapies for the treatment of respiratory diseases with significant unmet medical needs. If successfully developed and approved, Verona Pharma’s product candidate, ensifentrine, has the potential to be the first therapy for the treatment of respiratory diseases that combines bronchodilator and anti-inflammatory activities in one compound. The Company is evaluating nebulized ensifentrine in its Phase 3 clinical program ENHANCE ("Ensifentrine as a Novel inHAled Nebulized COPD thErapy") for COPD maintenance treatment. The Company raised gross proceeds of $200 million through a private placement in July 2020 and expects the funds to support its operations and Phase 3 clinical program into 2023. Two additional formulations of ensifentrine are currently in Phase 2 development for the treatment of COPD: dry powder inhaler ("DPI") and pressurized metered-dose inhaler ("pMDI"). Ensifentrine is being evaluated in a pilot clinical study in patients hospitalized with COVID-19 and has potential applications in cystic fibrosis, asthma and other respiratory diseases. For more information, please visit www.veronapharma.com.
Forward Looking Statements
This press release, operational review, outlook and financial review contain forward-looking statements. All statements contained in this press release, with respect to our operational review, outlook and financial review that do not relate to matters of historical fact should be considered forward-looking statements, including, but not limited to, statements regarding the development and potential of ensifentrine, including its potential to help patients recover from COVID-19, the initiation, progress and timing of clinical trials and related data readouts, our expectations surrounding clinical trial results and responses from the FDA, the market opportunity for various formulations of ensifentrine, including estimates of the market size for COPD, the impact of the COVID-19 pandemic on our business and operations and the Company’s future financial results, the sufficiency of our cash and cash equivalents, and our expectations surrounding additional funding.
These forward-looking statements are based on management's current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from our expectations expressed or implied by the forward-looking statements, including, but not limited to, the following: our limited operating history; our need for additional funding to complete development and commercialization of ensifentrine, which may not be available and which may force us to delay, reduce or eliminate our development or commercialization efforts; the reliance of our business on the success of ensifentrine, our only product candidate under development; economic, political, regulatory and other risks involved with international operations; the lengthy and expensive process of clinical drug development, which has an uncertain outcome; serious adverse, undesirable or unacceptable side effects associated with ensifentrine, which could adversely affect our ability to develop or commercialize ensifentrine; potential delays in enrolling patients, which could adversely affect our research and development efforts; we may not be successful in developing ensifentrine for multiple indications; our ability to obtain approval for and commercialize ensifentrine in multiple major pharmaceutical markets; misconduct or other improper activities by our employees, consultants, principal investigators, and third-party service providers; the loss of any key personnel and our ability to recruit replacement personnel, as well as the impact of our management team transition; material differences between our “top-line” data and final data; our reliance on third parties, including clinical investigators, manufacturers and suppliers, and the risks related to these parties’ ability to successfully develop and commercialize ensifentrine; lawsuits related to patents covering ensifentrine and the potential for our patents to be found invalid or unenforceable; the impact of the COVID-19 pandemic on our operations, the continuity of our business and general economic conditions; and our vulnerability to natural disasters, global economic factors and other unexpected events, including health epidemics or pandemics like COVID-19.
These and other important factors under the caption “Risk Factors” in our Registration Statement on Form F-1 filed with the SEC on August 17, 2020, and our other reports filed with the SEC, could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release, operational review, outlook and financial review. Any such forward-looking statements represent management's estimates as of the date of this press release and operational and financial review. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release, operational review, outlook and financial review.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION (EU) NO 596/2014
OPERATIONAL REVIEW
Company Overview
Verona Pharma is focused on developing and commercializing our first-in-class Phase 3 candidate, ensifentrine, for the treatment of significant unmet respiratory needs such as chronic obstructive pulmonary disease (“COPD”). Ensifentrine has a novel mechanism of action and has the potential to be the first therapy for the treatment of respiratory diseases that combines bronchodilator and anti-inflammatory activities in one compound. As well as COPD, ensifentrine has potential applications in COVID-19, cystic fibrosis, asthma and other respiratory diseases.
Verona Pharma is evaluating nebulized ensifentrine in the Phase 3 clinical program ENHANCE (Ensifentrine as a Novel inHAled Nebulized COPD thErapy) for the maintenance treatment of COPD. The Company raised gross proceeds of $200 million through a private placement in July 2020 and expects the funds to support its operations and Phase 3 clinical program into 2023. Two additional formulations of ensifentrine are currently in Phase 2 development for the treatment of COPD: dry powder inhaler ("DPI") and pressurized metered-dose inhaler ("pMDI"). Ensifentrine is being evaluated in a pilot clinical study in U.S. patients hospitalized with COVID-19.
Ensifentrine has demonstrated significant and clinically meaningful improvements in both lung function and COPD symptoms, including breathlessness, in patients with moderate to severe COPD. In addition, ensifentrine showed further improved lung function and reduced lung volumes in patients taking standard short- and long-acting bronchodilator therapy, including maximum bronchodilator treatment with dual/triple therapy. Ensifentrine has been well tolerated in clinical trials involving more than 1,300 people to date.
Ensifentrine highlights:
- First-in-class dual bronchodilator and anti-inflammatory agent in a single molecule
- Potentially the first novel class of bronchodilator in COPD in over 40 years
- Potentially the only bronchodilator option as an add-on to existing dual / triple therapy
COPD is a common, progressive, and life-threatening respiratory disease without a cure. It damages the airways and lungs, leading to debilitating breathlessness, hospitalizations and death. COPD has a major impact on everyday life. Patients struggle with basic activities such as getting out of bed, showering and walking. COPD affects approximately 384 million people worldwide. It is the third leading cause of death globally, according to the World Health Organization.
COPD patients are frequently treated with bronchodilators, to relieve airway constriction and make it easier to breathe, and with corticosteroids, to reduce lung inflammation. Despite receiving maximum therapy, many patients, more than 1.2 million in the U.S. alone, remain symptomatic and urgently need additional treatment. We believe that ensifentrine can provide significant benefits for these patients.
The pharmacological profile of ensifentrine including its novel mechanism of action, which is complementary to existing classes, strong improvement in COPD symptoms and meaningful improvement in quality of life, addresses the large unmet need experienced by COPD patients today.
Ensifentrine is a dual phosphodiesterase (“PDE”) 3 and PDE4 inhibitor. It is delivered via inhalation, locally to the lung to maximize pulmonary exposure to ensifentrine while minimizing systemic exposure. This minimizes side-effects such as the gastrointestinal disturbance associated with oral PDE4 inhibitors and the cardiovascular side-effects seen with oral PDE3 inhibitors.
The nebulized formulation of ensifentrine can be used by adults of any age and dexterity and regardless of peak inspiratory flow, offering advantages to patients who may struggle to operate handheld inhaler devices or have low peak inspiratory flow. Nevertheless, handheld inhaler formats are also important delivery mechanisms in the approximately $9.6 billion U.S. market for maintenance COPD therapies. Verona Pharma has developed formulations of ensifentrine in DPI and pMDI formats and successfully demonstrated proof of concept in COPD patients with these formulations. The development of pMDI and DPI formulations of ensifentrine provides expanded opportunities in life cycle management including new indications, formulation combinations and collaborations.
Verona Pharma sees its initial market opportunity as the U.S. and the Company intends to commercialize nebulized ensifentrine itself in this market. Outside of the U.S., Verona Pharma intends to identify collaborators that can maximize ensifentrine's potential in those regions.
FINANCIAL REVIEW
Financial review of the nine and three month periods ended September 30, 2020
Nine months ended September 30, 2020
Research and Development Costs
Research and development costs were $28.1 million for the nine months ended September 30, 2020, compared to $35.2 million for the nine months ended September 30, 2019, a decrease of $7.1 million, predominantly attributable to a $9.9 million decrease in clinical trial expenses, partially offset by a $2.5 million increase in non-cash share based payment charges. While there were six clinical trials (ongoing, in preparation or closing down) in the nine months ended September 30, 2020 compared to four in the same period in 2019, the costs related to the Phase 2b four-week clinical study with ensifentrine added on to tiotropium in the 2019 period were significantly higher than the start-up costs of the ENHANCE program that were incurred in the 2020 period.
General and Administrative Costs
General and administrative costs were $18.1 million for the nine months ended September 30, 2020, compared to $7.5 million for the nine months ended September 30, 2019, an increase of $10.6 million. The increase included $2.7 million of costs relating to executive changes and relocation of our U.S. office to North Carolina, $1.7 million in higher Director's and Officers liability insurance costs, $1.6 million in costs relating to the Private Placement and a $4.4 million increase in non-cash share based payment charges. Other costs increased by $0.2 million.
Finance Income and Expense
Finance income and expense are driven by the changes in the fair value of the warrant liability, changes in the present value of the assumed contingent liability, foreign exchange movements on cash and cash equivalents and interest income and expense.
Finance income was $1.3 million for the nine months ended September 30, 2020, and $4.2 million for the nine months ended September 30, 2019. Finance income was lower in the nine months ended September 30, 2020 as the fair value of the warrant liability decreased by $2.7 million in the 2019 period, compared to an increase in the nine months ended September 30, 2020. The increase in the 2020 period was recorded in finance expense.
Gains on cash and short term investments due to foreign exchange movements were $1.2 million in the nine months ended September 30, 2020, compared to $0.7 million in the same period in the prior year.
Interest received on cash and short term investments reduced by $0.7 million due to lower overall interest rates and a change in our investment policy to use government debt money market funds compared to term deposits previously utilized.
Finance expense was $2.2 million for the nine months ended September 30, 2020, compared to $0.1 million for the nine months ended September 30, 2019. The increase in the nine months ended September 30, 2020 was primarily related to a $1.4 million accounting charge relating to the unwind of the discount on the assumed contingent liability as the present value of the contingent liability increases as the estimated time to potential payment is becoming closer. Additionally, there was a $0.7 million charge relating to an increase in the fair value of the warrant liability in the nine months ended September 30, 2020. In the prior period the present value of the warrant liability decreased resulting in finance income.
Taxation
The tax credit in the Statement of Comprehensive Income is predominantly made up of the UK tax credit and a small tax charge relating to our US operations. The UK tax credits are calculated as a percentage of qualifying research and development expenditure and are payable in cash by the UK government to the Company. Credits recorded in the 2020 financial year are expected to be received in the 2021 financial year. We expect the magnitude of these credits to increase as expenditures on our Phase 3 program accelerate and they continue to be a significant element in our financing strategy.
The tax credit for the nine month period ended September 30, 2020 was $5.7 million compared to a credit of $7.6 million for the nine months ended September 30, 2019, a decrease of $1.9 million. The decrease in the credit amount was attributable to our decreased expenditures on research and development in 2020, compared to the same period in 2019.
Assumed contingent liability and In-Process Research and Development Asset
In the second quarter of 2020, the Company re-evaluated its contingent liability and In-Process Research and Development asset in light of its determination that ensifentrine has moved from Phase 2 to Phase 3 stage of clinical development. Future cashflows relating to a milestone payment and potential royalties payable were remeasured. After applying estimated probabilities of success, the assumed contingent liability that relates to these potential future cashflows was adjusted. Accordingly the Company recorded an increase of $27.7 million to the contingent liability and a corresponding increase to the related In-Process Research and Development asset. There is no material effect on current period comprehensive loss, net assets or cashflows.
The discount that is used to calculate the present value of the assumed contingent liability unwinds each quarter as the time to potential payment becomes closer and is recorded as a finance expense.
Private Placement
On July 17, 2020, Verona Pharma announced that it had raised approximately $200 million in a private placement with new and existing institutional and accredited investors. The Private Placement comprised a placement of 39,090,009 ADSs, each representing eight Ordinary Shares or non-voting Ordinary Shares of the Company, at a price of $4.50 per ADS, and 43,111,112 of the Company’s Ordinary Shares at the equivalent price per Ordinary Share of $0.5625.
The net proceeds of the Private Placement were approximately $185.5 million after deducting placement agent fees and associated expenses (including costs recorded to both equity and the Statement of Comprehensive Income). $1 million of such costs were paid in October 2020. Should the Company need to raise additional capital in the future, there can be no assurance that we will be able to do so on acceptable terms or at all.
Cash Flows
Net cash used in operating activities decreased to $25.7 million for the nine months ended September 30, 2020, from $31.3 million for the nine months ended September 30, 2019, a fall of $5.6 million. Operating loss in the nine months ended September 30, 2020 was $3.5 million higher which included $6.9 million higher non-cash share based payment charges, so cash related charges were approximately $3.4 million lower. In addition, the cash tax credit of $9.0 million received was $3.8 million higher than in the nine months ended September 30, 2019. Offsetting this, the timing of supplier payments led to $1.6 million higher cash outflow in the current period.
The decrease in net cash generated in investing activities to $9.7 million for the nine months ended September 30, 2020, from $49.0 million for the nine months ended September 30, 2019 was due to the net movement of funds from short term investments to cash being less in the 2020 period.
The $187.5 million increase in cash generated from financing activities was primarily due to net cash received from the Private Placement.
Cash, cash equivalents and short-term investments
Net cash, cash equivalents and short-term investments at September 30, 2020, increased to $202.0 million from $40.8 million at December 31, 2019 due to net receipts from the Private Placement, partially offset by utilization of cash in ordinary operating activities.
Net assets
Net assets increased to $197.7 million at September 30, 2020, from $44.9 million at December 31, 2019. This was predominantly due to the increase in equity from the Private Placement, partially offset by Company's operating activities.
Three months ended September 30, 2020
The operating loss for the three months ended September 30, 2020, was $21.2 million (September 30, 2019: $17.2 million) and the loss after tax for the three months ended September 30, 2020, was $19.9 million (September 30, 2019: $12.5 million).
Research and Development Costs
Research and development costs were $12.7 million for the three months ended September 30, 2020, compared to $14.7 million for the three months ended September 30, 2019, a decrease of $2.0 million.
This decrease was primarily attributable to a $4.2 million decrease in clinical trial expenses partially offset by a $2.4 million increase in the share based payment charge recorded in the three months ended September 30, 2020. There were costs relating to four clinical trials (ongoing, in preparation or closing down) in the three months ended September 30, 2020, compared to two in the comparative period, however, the costs related to the Phase 2b four-week clinical study with ensifentrine added on to tiotropium in the 2019 period, were significantly higher than the start-up costs of the ENHANCE program that were incurred in the 2020 period.
General and Administrative Costs
General and administrative costs were $8.5 million for the three months ended September 30, 2020, compared to $2.4 million for the three months ended September 30, 2019, an increase of $6.1 million. The increase was attributable to $1.6 million of costs related to the Private Placement which were recorded as expenses, a $1.0 million increase in Directors and Officers liability insurance costs and a $3.4 million increase in non-cash share based payment charges.
Finance Income and Expense
Finance income was $0.9 million for the three months ended September 30, 2020, and $1.5 million for the three months ended September 30, 2019. Finance income in the three months ended September 30, 2020, predominantly comprised a $0.8 million foreign exchange gain on cash and cash equivalents, which was broadly similar to the gain in the prior period. Also, the prior period included $0.4 million relating to movements in the fair value of the warrants (recorded in finance expense in the 2020 period) and $0.2 million of interest on cash balances.
Finance expense was $1.9 million for the three months ended September 30, 2020, compared to $54 thousand for the three months ended September 30, 2019. The increase was primarily due to a $1.0 million charge relating to the revaluation of the warrants and a $0.9 million charge relating to the unwind of the discount on the assumed contingent liability in the 2020 period.
Taxation
Taxation for the three months ended September 30, 2020, amounted to a credit of $2.3 million compared to a credit of $3.2 million for the three months ended September 30, 2019.
VERONA PHARMA PLC
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
AS OF SEPTEMBER 30, 2020, DECEMBER 31, 2019 AND JANUARY 1, 2019
Restated* | Restated* | ||||||||||||
Notes | As of September 30, 2020 | As of December 31, 2019 | As of January 1, 2019 | ||||||||||
$'000s | $'000s | $'000s | |||||||||||
ASSETS | |||||||||||||
Non-current assets: | |||||||||||||
Goodwill | 545 | 585 | 563 | ||||||||||
Intangible assets | 10 | 31,507 | 3,659 | 3,340 | |||||||||
Property, plant and equipment | 107 | 57 | 27 | ||||||||||
Right-of-use asset | 11 | 1,194 | 1,288 | 415 | |||||||||
Total non-current assets | 33,353 | 5,589 | 4,345 | ||||||||||
Current assets: | |||||||||||||
Prepayments and other receivables | 4,668 | 3,676 | 3,144 | ||||||||||
Current tax receivable | 5,838 | 9,814 | 5,741 | ||||||||||
Short term investments | 12 | — | 10,380 | 57,320 | |||||||||
Cash and cash equivalents | 13 | 201,968 | 30,428 | 25,243 | |||||||||
Total current assets | 212,474 | 54,298 | 91,448 | ||||||||||
Total assets | 245,827 | 59,887 | 95,793 | ||||||||||
EQUITY AND LIABILITIES | |||||||||||||
Capital and reserves attributable to equity holders: | |||||||||||||
Share capital | 30,054 |
By: GlobeNewswire
- 29 Oct 2020
Return to news
Upcoming Life Sciences Events
|