Vernalis : Announcement of Results for the year ended 31 December 2013

Announcement of Results for the year ended 31 December 2013

1 April 2014
LSE: VER

Vernalis plc (LSE: VER) today announces its audited results for the year ended 31 December 2013.

Financial Highlights

• Financial performance ahead of market expectations
  • Revenue was £14.1 million (2012: £14.6 million)
    • Frovatriptan royalty income was up 16 % at £6.7 million (2012: £5.7 million) primarily due to a 14% increase in volume of active pharmaceutical ingredient (API) supplied, with underlying in-market sales made by Menarini flat
    • Research collaboration income was £7.1 million (2012: £8.7 million) including £2.5 million of milestones payments (2012: £2.6 million) allowing our research organisation to remain self-funding
  • Operating costs before exceptional items were £19.3 million (2012: £18.2 million), up 6% due to preparatory activities for expansion into the US and investment in the NCE pipeline (V158866 and V81444)
  • Pre-exceptional loss for the year was £5.6 million (2012: £5.2 million) and £4.0 million (2012: £5.2 million) on a post-exceptional basis
  • Cash resources including cash and cash equivalents and held to maturity assets reduced by £4.7 million in the year following:
    • £2.0 million proof-of-concept milestone payment to Tris for CCP-01 and
    • £0.9 million foreign exchange loss on the conversion of cash held in US dollars into sterling
  • Balance sheet remains strong with £76.9 million of cash resources and no debt

Operational Highlights

Cough Cold Commercial Pipeline:

• CCP-01 proof-of-concept achieved and milestone paid to Tris (March 2013)
  • Successfully completed single and multi-dose pivotal bioavailability studies (November 2013 and February 2014), completing the clinical studies required for NDA filing 
  • Positive interim six months stability data for CCP-01 has been generated and NDA filing on track for mid-2014
• Four further programmes in active development at Tris, and we aim to achieve POC on all four of the remaining programmes during 2014

Frovatriptan (marketed) (Migraine):

• Underlying Menarini sales flat at €26.4 million (2012: €26.5 million)
• Menarini outlook for 2014 is for flat underlying sales vs 2013, both in tablet volumes and sales revenue
• We expect Menarini to reduce stock in 2014 with 2 shipments of API, one in each half of the year

NCE Development Pipeline:

V81444 (CNS diseases)

• Phase Ib/II POC study initiated (July 2013) with data anticipated in H1 2014

V158866 (Pain)

• Phase II POC study initiated (April 2013) and progressing well. Of a total of 36 subjects, 16 have completed and a further 4 are enrolled. Data now anticipated around the end of 2014

AUY922 (Cancer)

• Phase I and Phase II studies in multiple oncology indications including lung and breast continue with Novartis

Tosedostat - CHR2797 (Cancer)

• Cell Therapeutics reported positive interim results from an investigator-initiated Phase II trial at the 55th American Society of Haematology annual meeting (December 2013)
• The partial clinical hold on investigator led trials was removed by FDA in January 2014 enabling studies to resume

RPL554

• Anti-inflammatory study results announced by Verona Pharma (March 2013)
• Verona announced a successful £14 million fundraising in March 2014. Some of the proceeds are intended to be used to develop RPL554 in three clinical studies using a nebulised formulation in patients with severe COPD and additional studies are planned to prepare for a larger Phase IIb study in hospitalised COPD patients. Results are expected in 2015

Research Collaborations:

• New collaboration with AKP announced (October 2013) and £0.3 million milestone earned (March 2014)
• First Servier collaboration extended for a further 2 years (March 2013)
• £2.5 million of milestones earned from successful collaboration with Genentech (February and March 2013)

Expected 2014 Newsflow:

• V81444 (CNS diseases) - Complete Phase Ib/II POC study (Data H1 2014)
• CCP-01 - Filing of NDA (Mid 2014)
• Proofs-of-concept on all four remaining programmes in cough cold pipeline (by 2014 year end)
• V158866 (Pain) - Complete Phase II POC study (Data around 2014 year end)
• AUY922 (Cancer) - Multiple Phase I and II study results (Novartis) (undisclosed)
• Tosedostat - CHR2797 (Cancer)- Phase II study results (Chroma) (undisclosed)
• Achieve milestones under existing collaborations (undisclosed)
• Secure new research collaborations (undisclosed

Ian Garland, Chief Executive Officer, commented, "We made significant progress across all three elements of our strategy during 2013 and continued our strong financial and operational performance. Our lead cough cold programme, CCP-01, progressed rapidly achieving proof-of-concept, successfully completing both required pivotal clinical studies and achieving six month accelerated stability. We are on target therefore for an NDA filing in mid-2014. With four further cough cold programmes in development we aim to achieve POC on all four of these programmes in the coming year.

In the NCE pipeline we initiated two POC studies for V81444 and V158866 and expect data from both, during 2014. We also had another positive year in our research business following on from last year's record performance and continue to be self-funding.

The outlook for 2014 and beyond is extremely positive as we get closer to our first NDA filing from the cough cold portfolio and its potential approval in the first half of 2015."

Presentation & Conference Call
Vernalis management will host a presentation at 9.00am (UK) at Brunswick's offices, 16 Lincoln's Inn Fields, London WC2A 3ED today. It will also be available via webcast at http://www.vernalis.com/investor-centre/presentations-and-webcasts and www.cantos.com and via conference call, which can be joined by dialling: [phone], Passcode #35707904.

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Enquiries:

Vernalis plc:
Ian Garland, Chief Executive Officer	[phone]
David Mackney, Chief Financial Officer
Canaccord Genuity Limited (Nominated Adviser):	[phone]
Lucy Tilley
Dr Julian Feneley
Henry Fitzgerald-O'Connor
Shore Capital (Joint Broker)	[phone]
Bidhi Bhoma
Toby Gibbs
Brunswick Group:	[phone]
Jon Coles

Notes to Editors

About Vernalis
Vernalis is a revenue generating development stage pharmaceutical company with significant expertise in drug development. The Group has one marketed product, frovatriptan for the acute treatment of migraine, an exclusive licensing agreement to develop and commercialise multiple novel products focussed on the US prescription cough cold market as well as seven 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 and Tris.

Please click here to access the full PDF of this press release and here to access the Annual Report.

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 products, 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 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.