Unaudited Interim Results for the six months ended 31 December 2016
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21 February 2017
Unaudited Interim Results for the six months ended 31 December 2016
Tuzistra® XR prescriptions growing steadily as 2016/2017 US cough cold season progresses
Two further NDAs from cough cold franchise accepted for review by FDA with potential approvals later this year
Vernalis plc (LSE: VER) today announces its unaudited consolidated results for the six month period ended 31 December 2016.
US Commercial performance:
- Tuzistra® XR prescriptions increased almost six-fold to 11,586 for the six month period (2015: 1,976), reflecting:
- increased insurance coverage and pharmacy stocking
- improved sales-force effectiveness following expansion to 100 representatives and refinement to both marketing messaging and physician targeting
- improved patient affordability following enhancements in our patient assistance program
- Validation of the potential of Tuzistra® XR seen across the US, with high performing sales representatives in all regions
- Focus for the second half of 2016/17 is to further improve sales-force effectiveness and increase the number of high performing representatives
- Reported revenues for Tuzistra® XR were £0.8 million (2015: £0.6 million)
- Underlying patient prescription demand has increased significantly and now accounts for ~64 per cent of sales volumes (2015 ~15 per cent)
- The remaining ~36 per cent (2015 ~85 per cent) reflects expanded pharmacy stocking (~29 per cent vs 2015 ~45 per cent) and expanded wholesaler inventories (~seven per cent vs 2015 ~40 per cent)
- Pharmacy stocking has continued to expand since the end of the half year
- Inventory levels with wholesalers are now approaching more normalised levels
Financial Highlights for the six months ended 31 December 2016
- Revenue was £5.6 million (2015: £6.1 million)
- US Commercial net revenues (including Tuzistra® XR and Moxatag®) were £0.9 million (2015: £0.6 million) and represents deliveries made to wholesalers
- Research collaboration income was £3.2 million (2015: £3.8 million) due to lower FTE income in the period
- Frovatriptan royalty income was down seven per cent at £1.5 million (2015: £1.6 million); as the expected market entry of generics resulted in a price reduction that was partially offset by a foreign exchange gain on translation
- Operating costs before exceptional items were £21.7 million (2015: £19.0 million) with the increase due to the further expansion of the US Commercial sales team
- Loss for the period was £11.0 million (2015: £10.2 million loss before exceptional items)
- Balance sheet remains strong with £74.2 million of cash resources and no debt at 31 December 2016
- Cash resources including cash and cash equivalents and held to maturity assets reduced by £9.8 million in the six months to 31 December 2016 and included:
- Cash used in operations of £12.8 million (2015: £10.7 million)
- $3.0 million (£2.3 million) milestone payment to Tris was made for the acceptance of CCP-07 NDA by FDA for review.
- £4.4 million unrealised foreign exchange gain (2015: £2.7 million)
US Commercial Pipeline:
- CCP-07 NDA filed and accepted for review by FDA with a PDUFA date of 20 April 2017
- CCP-08 NDA filed and accepted for review by FDA with a PDUFA date of 4 August 2017
- Two further programmes in active development at Tris, with proof-of-concept ("POC") targeted by the end of 2017
Other Operational Highlights:
- Frovatriptan (marketed): Underlying Menarini sales for the six months to 31 December 2016 down 31 per cent at €8.7 million (2015: €12.7 million) due to patent expiry and market entry of generics, as previously highlighted
- NCE Development Pipeline: The Company announced in February 2017 that Corvus Pharmaceuticals Inc had reached the predefined criteria for expansion of the cohort of patients with renal cell carcinoma treated with single-agent CPI-444 in the ongoing Phase 1/1b study. The expansion of this study triggered a $3 million milestone payment to Vernalis under the licensing deal with Corvus. Promising evidence of single-agent activity has also been seen in patients in other disease-specific cohorts, including lung cancer and melanoma
- Research Collaborations: Five active collaborations at 31 December 2016
Expected Newsflow (all dates calendar years):
- CCP-07: potential FDA approval (Q2 2017)
- CCP-08: potential FDA approval (Q3 2017)
- POCs on two remaining programmes in cough cold pipeline (CCP-05 and CCP-06) (by end of 2017)
- End of 2016/17 season Tuzistra® XR trading update (June/July)
- Receive payments for achieving milestones under existing collaborations
- Secure new research collaborations
- Continue to leverage our US commercial infrastructure with possible complementary new product acquisitions/in-licensing
Ian Garland, Chief Executive Officer, commented,
"We are encouraged with the progress we have made in the last six months as we continued to expand our sales and saw further progress in our cough cold development pipeline.
"Midway through the 2016/17 cough cold season we have seen Tuzistra® XR prescriptions continue to grow steadily. We believe the emergence of high performing sales representatives in all regions across the US validates the market potential for Tuzistra® XR. We are, however, still in the early stages of the launch and our focus for the second half of the season is to drive sales-force effectiveness and so further increase the proportion of high performing sales territories. With continued prescription growth expected, the annualised run-rate at the end of June 2017 should provide a more meaningful predictor of sales performance for future years.
"We expect to achieve a number of milestones from the remainder of the cough cold franchise in 2017, including potential approvals by FDA of CCP-07 and CCP-08. We also continue to seek other opportunities to leverage our US commercial infrastructure and remain very excited about the growth potential of the business."
Presentation & Conference Call
Vernalis management will host a presentation at 9.30am (UK) today at the offices of FTI Consulting 200 Aldersgate, Aldersgate Street, London, EC1A 4HD. It will also be available via webcast at http://www.vernalis.com/investor-centre/presentations-and-webcasts and www.cantos.com and via conferencecall, which can be joined by dialling: +44 (0) 20 3003 2666, Passcode 5780976# Please contact Jack Bower at FTI consulting +44 (0) 20 3727 1000 for details.
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Notes to Editors
Vernalis is a revenue generating, commercial stage pharmaceutical company with significant expertise in drug development. The Group has three approved products: Tuzistra® XR targeting the US prescription cough cold market; Moxatag®, a daily formulation of the antibiotic, amoxicillin, indicated for the treatment of tonsillitis and/or pharyngitis secondary to Streptococcus pyogenes in adult and paediatric patients 12 years of age or older; and frovatriptan for the acute treatment of migraine. It has an exclusive licensing agreement to develop and commercialise multiple novel products focussed on the US prescription cough cold market as well as eight programmes in its NCE development pipeline. Vernalis has also significant expertise in fragment and structure based drug discovery which it leverages to enter into collaborations with larger pharmaceutical companies. The Company's technologies, capabilities and products have been endorsed over the last five years by collaborations with leading pharmaceutical companies, including AKP, Biogen Idec, Endo, GSK, Genentech, Lundbeck, Menarini, Novartis, Servier, Taisho and Tris.
For further information about Vernalis, please visit www.vernalis.com.
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Vernalis Forward-Looking Statement
This news release may contain forward-looking statements that reflect the Company's current expectations regarding future events including the clinical development and regulatory clearance of the Company's products, the Company's ability to find partners for the development and commercialisation of its NCE pipeline, the Company's ability to successfully commercialise its cough cold products and Moxatag® through its own sales -force as well as the Company's future capital raising activities. Forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein and depend on a number of factors including the success of the Company's research strategies, the applicability of the discoveries made therein, the successful and timely completion of clinical studies, the uncertainties related to the regulatory process, the ability of the Company to identify and agree beneficial terms with suitable partners for the commercialisation and/or development of its products, as well as the achievement of expected synergies from such transactions, the acceptance of Tuzistra® XR, Moxatag®, frovatriptan and other products by consumers and medical professionals, the successful integration of completed mergers and acquisitions and achievement of expected synergies from such transactions, and the ability of the Company to identify and consummate suitable strategic and business combination transactions.