Cash-rich Vernalis steps on drugs accelerator

Vernalis is accelerating a fresh raft of studies with new drug candidates as it steps up a relentless commercialisation programme from its Cambridge UK research base.

Its medical technology portfolio has already delivered a handsome payback for the balance sheet with interim results ahead of market expectations.

The business today posted a huge increase in revenues, slashed operating losses and flagged up one of biopharma’s healthiest warchests in its results for the six months to June 30.

Revenue was up 29 per cent – or £1.7 million – to £7.6m, driven by an increase in both collaboration income and frovatriptan royalties.

Collaboration income increased 26 per cent to £5m and the operating loss before exceptional items was reduced by 40 per cent to £2.6m year-on-year.

Profit for the period after exceptional items was £4.2m against a 2012 loss of £3.2m, including a foreign exchange gain of £4.4m.

Vernalis has £85.7m cash resources and is debt free; it reports a net increase in cash resources of £4.1m for the first six months of 2013.

The business reports tremendous progress with its cough cold commercial pipeline. Its first NDA (New Drug Agreement) remains on-track for filing mid-2014 and further programmes are in active development.

Vernalis has also struck gold with its research collaborations: A long-term collaboration with Servier was extended in March 2013 while $4m of milestone payments were earned from the company’s Genentech collaboration in the first half.

CEO Ian Garland said: “We have continued to make excellent progress with our cough cold programmes with CCP-01 on-track for NDA filing in mid-2014. We also expect to undertake multiple proof-of-concept studies during 2013 and 2014 on our other four cough cold candidates and the accelerated nature of these programmes positions us for further NDA filings during late 2014 and 2015.

“Our first half 2013 financial results were strong and we remain in an excellent position to deliver substantial value to our shareholders.”

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