Verona Pharma (VRNA) 10-K 25 Feb 21 2020 FY Annual report Financial data

Cover

Cover - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Feb. 19, 2021	Jun. 30, 2020
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2020
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	001-38067
Entity Registrant Name	Verona Pharma plc
Entity Incorporation, State or Country Code	X0
Entity Tax Identification Number	98-1489389
Entity Address, Address Line One	3 More London Riverside
Entity Address, City or Town	London
Entity Address, Postal Zip Code	SE1 2RE
Entity Address, Country	GB
Country Region	44
City Area Code	203
Local Phone Number	283 4200
Title of 12(b) Security	Ordinary shares, nominal value £0.05 per share*
Trading Symbol	VRNA
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
ICFR Auditor Attestation Flag	false
Entity Public Float			$ 37.5
Entity Common Stock, Shares Outstanding		463,478,446
Documents Incorporated by Reference	Portions of the registrant’s definitive proxy statement that the registrant intends to file with the Securities and Exchange Commission pursuant to Regulation 14A in connection with the registrant’s 2021 Annual Meeting of Shareholders are incorporated by reference into Part III of this Annual Report on Form 10-K to the extent stated herein.
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Entity Central Index Key	0001657312

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 187,986	$ 30,428
Short-term investments	0	10,380
Prepaid expenses	4,538	1,655
Tax and tax incentive receivables	8,260	9,814
Other current assets	1,720	2,021
Total current assets:	202,504	54,298
Non-current assets:
Furniture and equipment, net	107	63
Goodwill	545	585
Right-of-use assets	1,050	1,288
Total non-current assets:	1,702	1,936
Total assets	204,206	56,234
Current liabilities:
Accounts payable	178	1,931
Accrued expenses	10,863	8,971
Operating lease liability	798	611
Warrants	2,246	1,188
Other current liabilities	118	140
Total current liabilities	14,203	12,841
Non-current liabilities:
Term loan	4,635	0
Operating Lease, Liability, Noncurrent	514	652
Total non-current liabilities	5,149	652
Total liabilities	19,352	13,493
Commitments and contingencies
Shareholders' equity
Ordinary £0.05 par value shares; 488,304,446 and 105,326,638 issued, and 463,304,446 and 105,326,638 outstanding, at December 31, 2020 and 2019, respectively	31,794	7,265
Additional paid-in capital	366,411	179,535
Ordinary shares held in treasury	(1,700)	0
Accumulated other comprehensive loss	(4,601)	(2,280)
Accumulated deficit	(207,050)	(141,779)
Total shareholders' equity	184,854	42,741
Total liabilities and shareholders' equity	$ 204,206	$ 56,234

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - £ / shares	Dec. 31, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Common stock, par value (in pounds sterling per share)	£ 0.05	£ 0.05
Common stock, issued (in shares)	488,304,446
Common stock, outstanding (in shares)	463,304,446	105,326,638

Consolidated Statements of Oper

Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Operating expenses
Research and development	$ 44,505	$ 42,417
General and administrative	29,772	9,986
Total operating expenses	74,277	52,403
Operating loss	(74,277)	(52,403)
Other income / (expense)
Benefit from R&D tax credit	8,267	9,283
Interest income	121	964
Interest expense	(35)	0
Fair value movement on warrants	(1,136)	2,066
Foreign exchange gain / (loss)	2,060	(399)
Total other income, net	9,277	11,914
Loss before income taxes	(65,000)	(40,489)
Income tax expense	(146)	(72)
Net loss	(65,146)	(40,561)
Other comprehensive (loss) / income:
Foreign currency translation adjustments	(2,321)	1,348
Total comprehensive loss attributable to shareholders of the Company	$ (67,467)	$ (39,213)
Loss per share, basic and diluted (in dollars per share)	$ (0.25)	$ (0.39)

Consolidated Statements of Shar

Consolidated Statements of Shareholders’ Equity - USD ($) $ in Thousands	Total	Ordinary shares	Additional paid-in capital	Ordinary shares held in treasury	Accumulated other comprehensive loss	Accumulated deficit	Cumulative Effect, Period of Adoption, Adjustment	Cumulative Effect, Period of Adoption, AdjustmentAccumulated deficit	Cumulative Effect, Period of Adoption, Adjusted Balance	Cumulative Effect, Period of Adoption, Adjusted BalanceOrdinary shares	Cumulative Effect, Period of Adoption, Adjusted BalanceAdditional paid-in capital	Cumulative Effect, Period of Adoption, Adjusted BalanceOrdinary shares held in treasury	Cumulative Effect, Period of Adoption, Adjusted BalanceAccumulated other comprehensive loss	Cumulative Effect, Period of Adoption, Adjusted BalanceAccumulated deficit
Beginning balance (in shares) at Dec. 31, 2018		105,326,638								105,326,638
Beginning balance at Dec. 31, 2018	$ 78,861	$ 7,265	$ 176,416	$ 0	$ (3,628)	$ (101,192)	$ (26)	$ (26)	$ 78,835	$ 7,265	$ 176,416	$ 0	$ (3,628)	$ (101,218)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(40,561)					(40,561)
Effect of foreign currency translation adjustments	1,348				1,348
Share-based compensation	$ 3,119		3,119
Ending balance (in shares) at Dec. 31, 2019	105,326,638	105,326,638
Ending balance at Dec. 31, 2019	$ 42,741	$ 7,265	179,535	0	(2,280)	(141,779)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(65,146)					(65,146)
Effect of foreign currency translation adjustments	(2,321)				(2,321)
Issuance of ordinary shares, net of issuance costs (in shares)		355,831,184
Issuance of ordinary shares, net of issuance costs	187,360	$ 22,700	164,660
Issuance of ordinary shares to treasury (in shares)		25,000,000
Issuance of ordinary shares to treasury	0	$ 1,700		(1,700)
Issuance of ordinary shares from restricted share units and share options (in shares)		2,146,624
Issuance of ordinary shares from restricted share units and share options	43	$ 129	39			(125)
Share-based compensation	$ 22,177		22,177
Ending balance (in shares) at Dec. 31, 2020	463,304,446	488,304,446
Ending balance at Dec. 31, 2020	$ 184,854	$ 31,794	$ 366,411	$ (1,700)	$ (4,601)	$ (207,050)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Operating activities:
Net loss	$ (65,146)	$ (40,561)
Adjustments to reconcile net income to net cash used in operating activities:
Foreign exchange (gain) / loss	(2,060)	399
Amortization of debt issue costs	10	0
Accretion of redemption premium on debt	8	0
Fair value adjustment	1,136	(2,066)
Impairment of right-of-use asset	289	0
Share-based compensation	22,177	3,119
Depreciation and amortization	623	510
Changes in operating assets and liabilities:
Prepaid expenses	(3,065)	(158)
Tax and tax incentive receivables	768	(3,929)
Other current assets	187	(289)
Non-current assets	(703)	(1,325)
Accounts payable	(1,398)	(1,734)
Accrued expenses	1,940	2,454
Lease liabilities	110	849
Other liabilities	48	(137)
Net cash used in operating activities	(45,076)	(42,868)
Cash flows from investing activities
Purchases of furniture and equipment	(82)	(53)
Purchases of short-term investments	0	(9,777)
Sale of short-term investments	9,792	57,144
Net cash provided by investing activities	9,710	47,314
Cash flows from financing activities
Proceeds from issuance of ordinary shares	200,156	0
Payment of offering costs in connection with the issuance of ordinary shares	(12,748)	0
Proceeds from the issuance of term loan	5,000	0
Term loan issuance costs	(108)	0
Proceeds from exercise of share options	43	0
Net cash provided by financing activities	192,343	0
Effect of exchange rate changes on cash and cash equivalents	581	739
Net increase in cash and cash equivalents	157,558	5,185
Cash and cash equivalents at beginning of the year	30,428	25,243
Cash and cash equivalents at end of the year	187,986	30,428
Supplemental Cash Flow Information [Abstract]
Income taxes paid	8	0
Interest paid	$ 7	$ 0

Organization and description of

Organization and description of business operations	12 Months Ended
	Dec. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization And Business Description	Organization and description of business operations Verona Pharma plc (the "Company") is incorporated and domiciled in the United Kingdom. Verona Pharma plc has two wholly-owned subsidiaries, Verona Pharma, Inc., a Delaware corporation and Rhinopharma Limited ("Rhinopharma"), a Canadian company. The address of the registered office is 1 Central Square, Cardiff, CF10 1FS, United Kingdom. The Company is a clinical-stage biopharmaceutical group focused on developing and commercializing innovative therapeutics for the treatment of respiratory diseases with significant unmet medical needs. The Company listed its American Depositary Shares ("ADSs") on Nasdaq in April, 2017, which trade under the symbol “VRNA". The Company’s ordinary shares were also listed on the Alternative Investment Market of the London Stock Exchange (“AIM”) until October 30, 2020, when the shares were delisted from AIM in an effort to enhance liquidity of trading by combining all transactions on Nasdaq and to reduce costs through removing duplicative listing and compliance fees. Liquidity The Company has incurred recurring losses and negative cashflows from operations since inception, and has an accumulated deficit of $207.1 million as of December 31, 2020. The Company expects to incur additional losses and negative cash flows from operations until its products potentially gain regulatory approval and reach commercial profitability, if at all.

Basis of Presentation and Summa

Basis of Presentation and Summary of Significant Accounting policies	12 Months Ended
	Dec. 31, 2020
Accounting Policies [Abstract]
Basis of Presentation and Summary of Significant Accounting policies	Basis of Presentation and Summary of Significant Accounting policies Basis of presentation and consolidation The consolidated financial statements include the accounts of Verona Pharma plc and its wholly-owned subsidiaries Verona Pharma, Inc. and Rhinopharma. All inter-company balances and transactions have been eliminated. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. ("US GAAP") and the following accounting policies have been consistently applied. Previously, the Company prepared its consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS"). At the end of the second quarter of 2020, the Company determined that it no longer qualified as a Foreign Private Issuer under SEC rules. As a result, beginning January 1, 2020, the Company is required to report with the SEC on domestic forms and comply with domestic company rules in the United States. The transition to US GAAP was made retrospectively for all periods from the Company’s inception. Use of estimates The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual and prepayment of research and development expenses, the fair value of share-based compensation and the fair value of warrants. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from the Company’s estimates. Business combinations The Company applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Company. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. The excess of the cost of acquisition over the fair value of the Company's share of the identifiable net assets acquired is recorded as goodwill. Identifiable ass ets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs are expensed as incurred and included in administrative expenses. Cash and cash equivalents The Company considers all highly liquid investments purchased with original maturities of ninety days or less at acquisition to be cash equivalents. Cash and cash equivalents includes deposits held at call with banks, term deposits with maturities of less than three months at inception, and in money market funds investing in U.S. and U.K. government debt and liquid securities from highly rated institutions. Short-term investments Short-term investments include fixed term deposits held at banks with original maturities between three months and a year. They are classified as loans and receivables and are measured at amortized cost using the effective interest method. Furniture and equipment, net Furniture and equipment comprise office furniture and computer equipment and are stated at cost less accumulated depreciation, which is calculated on a straight-line basis over the expected useful economic lives, generally two Goodwill Goodwill consists of goodwill related to the acquisition of Rhinopharma. Goodwill is not amortized but periodically tested for impairment. Impairment of long-lived assets The Company reviews long lived assets for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of assets may not be fully recoverable. The Company initially compares the market capitalization of the Company to the book value of its assets. If the value of the market capitalization does not support the valuation of the assets, the Company reviews estimates of the cash flows over the remaining lives of its other intangible assets, or related group of assets where applicable, in measuring whether the assets to be held and used will be realizable. In the event of impairment, the Company would discount the future cash flows using its then estimated incremental borrowing rate to estimate the amount of the impairment. Leases Effective January 1, 2019, the Company adopted ASC 842, Leases (“ASC842”) using the modified retrospective transition approach and did not restate comparative periods. The Company determines if an arrangement is a lease at inception. Leases are classified as operating or finance leases in accordance with the recognition criteria in ASC 842-20-25. The Company’s lease portfolio consists entirely of operating leases as of December 31, 2020. The Company’s leases do not contain any material residual value guarantees or material restrictive covenants. Ligand agreement In 2006 the Company acquired Rhinopharma and assumed contingent liabilities owed to Ligand UK Development Limited (“Ligand”) (formerly Vernalis Development Limited). The Company refers to the assignment and license agreement as the Ligand Agreement. Ligand assigned to the Company all of its rights to certain patents and patent applications relating to ensifentrine and related compounds (the "Ligand Patents") and an exclusive, worldwide, royalty-bearing license under certain Ligand know-how to develop, manufacture and commercialize products (the "Licensed Products") developed using Ligand Patents, Ligand know-how and the physical stock of certain compounds. The Company is obligated to pay a milestone payment on obtaining the first approval of any regulatory authority for the commercialization of a Licensed Product, low single digit royalties based on the future sales performance of all Licensed Products and a portion equal to a mid-twenty percent of any consideration received from any sub-licensees for the Ligand Patents and for Ligand know-how. Royalties payable are based on the future sales performance so the amount payable is unlimited. At the time each contingency is resolved, the Company will record the contingent consideration payment (or payable) in connection with the Ligand Agreement as an expense and will classify it within R&D expenses. Research and development costs Research and development (“R&D”) costs are expensed as incurred. Research and development expenses include salaries, share-based compensation and benefits of employees, and other costs related to the Company’s R&D activities, including contracts with clinical research organizations and contract manufacturers. As part of the process of preparing financial statements the Company is required to estimate its expenses resulting from its obligation under contracts with vendors and consultants and clinical site agreements in connection with its R&D efforts. The financial terms of these contracts are subject to negotiations which vary contract to contract and may result in payment flows that do not match the periods over which materials or services are provided to the Company under such contracts. The Company’s objective is to reflect the appropriate clinical trial expenses in its financial statements by matching those expenses with the period in which services and efforts are expended. The Company accounts for these expenses according to the progress of the trials and other development activities measured by patient progression and the timing of various aspects of the trial. The Company determines prepaid and accrual estimates through discussions with applicable personnel and outside service providers as to the progress of clinical trials, or other services completed. During the course of a clinical trial, the Company adjusts its rate of clinical trial expense recognition if actual results differ from its estimates. The Company makes estimates of its prepaid and accrued expenses as of each balance sheet date in its financial statements based on facts and circumstances known at that time. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in the Company reporting amounts that are too high or too low for any particular period. The Company’s clinical trial prepaid and accrual expense is dependent upon the timely and accurate reporting of study recruitment from contract research organizations and activities carried out by other third-party vendors as well as the timely processing of any change orders from the contract research organizations. Share-based compensation The Company has a share-based compensation plan under which various types of equity-based awards may be granted, including stock options and restricted stock units (RSUs). The fair value of share options and RSUs, which are subject to service conditions with graded vesting, are recognized as compensation expense using the cliff vesting method; f orfeitures are recognized as they occur. The Company uses the fair-value based method to determine compensation for all arrangements under which employees receive shares. The fair value of each option and RSU is estimated on the date of grant using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatility is based on the historical volatility of the Company’s ordinary shares over the expected term of the options. The expected term of options granted is derived using the simplified method, which computes the expected term as the average of the sum of the vesting term plus the contract term. Historically the risk-free rate has been based on the appropriate U.K. government debt yield. After delisting its Ordinary shares from AIM on October 30, 2020, the Company began using U.S. government debt yields. Details of the assumptions used are set out in note 11 to the consolidated financial statements. Other income - United Kingdom R&D tax credits Other operating income relates to R&D tax credits receivable in the UK. As a company that carries out extensive research and development activities, Verona is subject to the UK R&D Small and Medium Enterprise (“SME”) Program. Qualifying expenditures largely comprise employment costs for research staff, consumables, a proportion of relevant, permitted sub-contract costs and certain internal overhead costs incurred as part of research projects for which it does not receive income. Tax credits related to the SME Program are received as cash and are recorded as other income, as they are akin to grant income, in the consolidated statements of operations and comprehensive loss. Income taxes The Company accounts for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”). This Topic prescribes the use of the liability method, whereby deferred tax assets and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value. ASC 740 establishes a single model to address accounting for uncertain tax positions. ASC 740 clarified the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. The Company has no uncertain tax positions. Comprehensive loss The Company accounts for comprehensive loss in accordance with ASC 220, “Income Statement - Reporting Comprehensive Income”. Comprehensive income represents all changes in stockholders’ equity during the period except those resulting from investments by, or distributions to, stockholders. Segment Reporting The Company has one operating and reportable segment, pharmaceutical development. The Company’s long-lived assets are held in the United Kingdom. Foreign Currencies Reporting currency The Company’s reporting currency is U.S. dollars. Prior to July 1, 2020, Verona Pharma plc’s functional currency was pounds sterling and its financial statements were translated to U.S. dollars. The statement of comprehensive income was translated at average rates for the period, assets and liabilities at the balance sheet date exchange rate and equity balances at historical rates. Translation differences were recorded in accumulated other comprehensive income / (loss). Functional currency The Company's consolidated financial statements are measured using the currency of the primary economic environment in which the entity operates, which was pounds sterling for Verona Pharma plc until June 30, 2020. In the six months to June 30, 2020, management changes resulted in lower people costs being paid in pounds sterling. Following the Private Placement the Company entered into contracts to commence Phase 3 trials for ensifentrine and the majority of the costs are incurred in U.S. dollars. Management reviewed budgeted activities over the next five years and identified that the majority of costs from the second half of 2020 onwards will be incurred in U.S. dollars. Furthermore, the Private Placement in July, 2020, raised funds in U.S. dollars and having delisted from AIM any future fundraises will be in U.S. dollars. Also, the commercial focus of Company is the U.S. market. As a consequence, management determined the Company's functional currency changed from pounds sterling to U.S. dollars and this has been accounted for prospectively from July 1, 2020. To convert Verona Pharma plc’s books and records into U.S. dollars income and expenses were translated at average rates, assets and liabilities at the June 30, 2020, exchange rate and equity balances at historical rates. Translation differences were recorded in accumulated other comprehensive income / (loss). Treasury shares In the year ended December 31, 2020, the Company incorporated a trust to facilitate the acquisition of shares, by or for the benefit of employees and former employees. The Company issued 25 million ordinary shares (equivalent to 3.125 million ADSs) to cover expected shares issued upon the vesting of share awards to employees. The Company has the indirect ability to control the trust as trustees are required to act in accordance with the trust deed and because the Company controls the issuance of shares to cover awards. As a consequence, the trust is consolidated into the Company’s consolidated financial statements. The shares that were issued to the trust that have not been issued to employees to satisfy vesting of share awards are included in the Consolidated Balance Sheet as treasury shares. Fair value of financial instruments US GAAP defines fair value and requires companies to establish a framework for measuring fair value and disclosure about fair value measurements using a three-tier approach. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Our financial instruments include cash equivalents, short-term investments, other assets, accounts payable and accrued expenses and other liabilities. Fair value estimates of these instruments are made at a specific point in time, based on relevant market information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgement and therefore cannot be determined with precision. The carrying amounts of these instruments are considered to be representative of their fair values because of their short-term nature. Concentration of credit risk Financial instruments that potentially subject the Company to concentration of credit risk consist of principally cash and cash equivalents, bank deposits and certain receivables. The Company holds cash and cash equivalents with highly rated financial institutions and in highly rated money market funds and the Company has not experienced any significant credit losses in these accounts and does not believe the Company is exposed to any significant credit risk on these instruments. Recently adopted accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02, “Leases” (Topic 842) (“ASC 842”). The standard requires lessees to recognize almost all leases on the balance sheet as right-of-use (“ROU”) assets and lease liabilities, and requires leases to be classified as either an operating or a finance type lease. The standard excludes leases of intangible assets or inventory. The standard became effective for the Company beginning January 1, 2019. The Company adopted ASC 842 using the modified retrospective approach, by applying the new standard to all leases existing at the date of initial application. Results and disclosure requirements for reporting periods beginning after January 1, 2019, are presented under ASC 842, while prior period amounts have not been adjusted and continue to be reported in accordance with our historical accounting under ASC 840 “Leases”. The Company elected the package of practical expedients permitted under ASC 842, which also allowed the Company to carry forward historical lease classifications. The Company also elected the practical expedient related to treating lease and non-lease components as a single lease component for all equipment leases as well as electing a policy exclusion permitting leases with an original lease term of less than one year to be excluded from the ROU assets and lease liabilities. As a result of the adoption of ASC 842 on January 1, 2019, the Company recorded an operating lease ROU asset of $415 thousand and an operating lease liability of $441 thousand. The adoption increased opening accumulated losses by $26 thousand but did not impact the Company's prior year financial statements. Under ASC 842, the Company determines if an arrangement is a lease at inception. ROU ass ets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As the Company's leases do not provide an implicit rate, the Company determined the incremental borrowing rate in determining the present value of lease payments. The ROU assets also include any lease payments made prior to commencement and are recorded net of any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease. When it is reasonably certain the Company will exercise such options the lease will be recognized as a liability and a corresponding ROU asset also recognized. Operating leases are included in operating lease ROU assets and current and non-current operating lease liabilities, on the Company's consolidated balance sheets. The FASB issued ASU 2020-04 to provide optional expedients and exceptions for applying US GAAP to contract modifications, hedging relationships, and other transactions affected by the anticipated transition away from LIBOR. There is no material impact of the adoption of ASU 2020-04 on our consolidated financial statements. Recently issued accounting pronouncements, not yet adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326)-Measurement of Credit Losses on Financial Instruments. This guidance replaces the current incurred loss impairment methodology. Under the new guidance, on initial recognition and at each reporting period, an entity is required to recognize an allowance that reflects its current estimate of credit losses expected to be incurred over the life of the financial instrument based on historical experience, current conditions and reasonable and supportable forecasts. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates (“ASU 2019-10”). The purpose of this amendment is to create a two tier rollout of major updates, staggering the effective dates between larger public companies and all other entities. This granted certain classes of companies, including Smaller Reporting Companies (“SRCs”), additional time to implement major FASB standards, including ASU 2016-13. Larger public companies will have an effective date for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. All other entities are permitted to defer adoption of ASU 2016-13, and its related amendments, until the earlier of fiscal periods beginning after December 15, 2022. Under the current SEC definitions, we meet the definition of an SRC as of the ASU 2019-10 issuance date and are deferring adoption for ASU 2016-13. The guidance requires a modified retrospective transition approach through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. We are currently evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements, but do not believe the adoption of this standard will have a material impact on our consolidated financial statements.

Prepaid expenses

Prepaid expenses	12 Months Ended
	Dec. 31, 2020
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid expenses	Prepaid expenses Prepaid expenses consisted of the following (in thousands): Year ended December 31, 2020 2019 Clinical trial and other development costs $ 2,551 $ 874 Insurance 1,701 534 Other 286 247 Total prepaid expenses and other current assets $ 4,538 $ 1,655

Tax and tax incentive receivabl

Tax and tax incentive receivable	12 Months Ended
	Dec. 31, 2020
Receivables [Abstract]
Tax and tax incentive receivable	Tax and tax incentive receivables Taxes receivable consisted of the following (in thousands): Year ended December 31, 2020 2019 R&D tax credit receivable - U.K. $ 8,202 $ 9,618 Tax receivable - U.S. 58 196 Total tax receivable $ 8,260 $ 9,814

Property leases

Property leases	12 Months Ended
	Dec. 31, 2020
Leases [Abstract]
Property leases	Property leases The right-of-use assets (“ROU”) relate to rented office space in London and North Carolina, with leases ending in 2022 and 2024, respectively. In the year ended December 31, 2019, the Company determined that it was reasonably likely to extend its existing London lease. As a consequence it modified its accounting for the lease and recorded an additional $0.7 million ROU and associated liability. The Company has the option to further extend this lease but is not reasonably certain to do so and therefore has not recognized this extension as an asset and liability. In the year ended December 31, 2019, the Company entered in to a lease arrangement in New York for serviced offices and recognized a right of use asset and corresponding lease liability of $0.4 million. In the year ended December 31, 2020, the Company’s New York office was closed and the related ROU asset of $290 thousand was subsequently expensed in the consolidated statements of operations and comprehensive loss. The Company retains a liability of $195 thousand relating to this lease arrangement. In the year ended December 31, 2020, the Company entered into a lease arrangement in North Carolina for office space and recognized an ROU asset and corresponding lease liability of $0.7 million. To calculate lease liabilities the Company used a weighted average discount rate of 8%. The weighted average remaining lease term is 2.2 years. Minimum annual payments over the remaining lease periods as of December 31, 2020 are as follows (in thousands): 2021 $ 862 2022 281 2023 201 2024 44 Total minimum future lease payments $ 1,388 Less: imputed interest (76) Total operating lease liabilities $ 1,312 The total operating lease expense included in general and administrative costs was $692,000. Under the prior lease accounting guidance minimum rental commitments under non-cancelable leases, for each of the five years and total thereafter as of December 31, 2019, were as follows: 2020 2021 2022 2023 2024 Minimum lease payments $ 680 $ 862 $ 281 $ 201 $ 44

Accrued expenses

Accrued expenses	12 Months Ended
	Dec. 31, 2020
Payables and Accruals [Abstract]
Accrued expenses	Accrued expenses Accrued expenses consisted of the following (in thousands): Year ended December 31, 2020 2019 Clinical trial and other development costs $ 8,607 $ 6,394 Professional fees, listing and general corporate costs 2,149 2,191 People related costs 107 386 Total accrued expenses $ 10,863 $ 8,971 Other expenses include people costs, professional fees and other accrued costs.

Warrants

Warrants	12 Months Ended
	Dec. 31, 2020
Other Liabilities Disclosure [Abstract]
Warrants	Warrants In 2016, the Company issued 31,115,926 units to new and existing investors at the placing price of £1.4365 per unit. Each unit comprised one ordinary share and one warrant. The warrant holders can subscribe for 0.4 of an ordinary share at a per share exercise price of £1.7238 until May 2, 2022. The warrant holders can opt for a cashless exercise of their warrants, whereby the warrant holders can choose to exchange the warrants held for a reduced number of warrants exercisable at nil consideration. The reduced number of warrants is calculated based on a formula considering the share price and the exercise price of the warrants. At December 31, 2020, 31,003,155 warrants remain outstanding and entitle the investors to subscribe for, in aggregate, a maximum of 12,401,262 ordinary shares. If, after a transaction, should the warrants be exercisable for unlisted securities, the warrant holders may demand a cash payment instead of the delivery of the underlying securities. Accordingly, the warrants are accounted for as a liability under ASC 480 “Distinguishing Liabilities from Equity”.The warrants are measured at fair value, Level 3 in the fair value hierarchy, with movements recorded in finance income / (expense) in the consolidated statements of operations and comprehensive loss. In the years ended December 31, 2020, and 2019, no warrants were exercised or forfeited. The warrants had no intrinsic value as at December 31, 2020. There have been no changes in valuation techniques or transfers between fair value measurement levels during the years ended December 31, 2020 and 2019. The warrants are valued using the Black-Scholes model and the table below presents the assumptions used: Year ended December 31, 2020 2019 Shares potentially issued under warrants 12,401,262 12,401,262 Exercise price in pounds sterling £ 1.7238 £ 1.7238 Equivalent price of ordinary share (ADS price divided by eight) $ 0.64 $ 0.62 Risk-free interest rate — % 0.54 % Expected term to exercise 1.33 2.34 Annualized volatility 105.4 % 65.6 % Dividend rate — % — % Calculated value of the warrants, in thousands of U.S. dollars $ 2,246 $ 1,188 The following table shows the movement of the value of the warrants (in thousands): Year ended December 31, 2020 2019 At January 1 $ 1,188 $ 3,180 Fair value adjustment 1,114 (2,066) Foreign exchange differences recognized in loss for the period 22 — Translation differences recognized in other comprehensive loss (78) 74 At December 31 $ 2,246 $ 1,188 For the amount recognized at December 31, 2020, the effect when the following parameter deviates up or down is presented in the below table (in thousands): 10% volatility increase $ 2,734 Base case, reported fair value 2,246 10% volatility decrease $ 1,772

Term loan

Term loan	12 Months Ended
	Dec. 31, 2020
Debt Disclosure [Abstract]
Term loan	Term loan In November 2020, the Company and its wholly owned subsidiary, Verona Pharma, Inc. (the “Borrowers”) entered into a term loan facility of up to $30.0 million (the “Term Loan”), consisting of term loan advances in an aggregate amount of $5.0 million funded at closing, a term loan advance available subject to certain terms and conditions in an aggregate amount of $10.0 million (the “Term B Loan”) and a term loan advance available subject to certain terms and conditions in an aggregate amount of $15.0 million (the “Term C Loan”), with Silicon Valley Bank, a California corporation (“SVB”), the proceeds of which will be used for general corporate and working capital purposes. The Term Loan is governed by a loan and security agreement, dated as of November 19, 2020, between the Borrowers and SVB (the “Loan Agreement”). The Term B Loan will be available, subject to and customary terms and conditions, only during the period commencing upon the achievement of a specific clinical milestone relating to ensifentrine through and including June 30, 2022. The Term C Loan will be available, subject to customary terms and conditions, only during the period commencing upon the achievement of an additional specific clinical milestone relating to ensifentrine through and including June 30, 2023. The Term Loan will mature on November 1, 2024. Each advance under the Term Loan accrues interest at a floating per annum rate equal to the greater of (a) the sum of the prime rate reported in The Wall Street Journal plus 1.00% and (b) four and one-quarter of one percent (4.25%). The Term Loan provides for interest-only payments on a monthly basis until the payment date immediately preceding December 1, 2023. Thereafter, amortization payments will be payable monthly in equal installments of principal plus monthly payments of accrued interest. Upon repayment (whether at maturity, upon acceleration or by prepayment or otherwise), the Borrowers shall make a final payment to SVB in the amount of 10% of the aggregate Term Loans advanced (the "Final Payment"). The Borrowers may prepay the Term Loan in full but not in part provided that the Borrowers (i) provide ten days’ prior written notice to SVB, (ii) pays on the date of such prepayment (A) all outstanding principal plus accrued and unpaid interest, (B) a prepayment fee of $450,000 plus 3.0% of the Term C Loans advanced if paid on or before the first anniversary of the closing date; $300,000 plus 2.00% of the Term C Loans advanced if paid after the first anniversary of the closing date and on or before the second anniversary of the closing date; and $150,000 plus 1.00% of the Term C Loans advanced if paid thereafter and prior to maturity, (C) the Final Payment and (D) all other sums, if any, that shall become due and payable with respect to the Term Loan Advances, including interest at the Default Rate with respect to any past due amounts. Amounts outstanding during an event of default are payable upon SVB's demand and shall accrue interest at an additional rate of 3.0% per annum. The Term Loan is secured by a lien on substantially all of the assets of the Borrowers, other than the equity interests of Verona U.S. and other than intellectual property, provided that such lien on substantially all assets includes any rights to payments and proceeds from the sale, licensing or disposition of intellectual property. The Borrowers have also granted SVB a negative pledge with respect to its intellectual property. The Loan Agreement contains customary covenants and representations, including but not limited to financial reporting obligations and limitations on dividends, indebtedness, collateral, investments, distributions, transfers, mergers or acquisitions, taxes, corporate changes, deposit accounts, and subsidiaries. The Loan Agreement also contains other customary provisions, such as expense reimbursement, non-disclosure obligations as well as indemnification rights for the benefit of SVB. The Loan Agreement includes a minimum cash covenant triggered when Borrowers' consolidated cash and cash equivalents drop below $45.0 million at any time after the earliest to occur of any of the following: (i) the release of negative data from Enhance 2 and/or Enhance 1, which in the reasonable business discretion Borrowers’ senior management, would be considered insufficient to support submission of an NDA to the FDA, (ii) the FDA issues a complete response letter with respect to an NDA submitted for ensifentrine, or (iii) failure to achieve a specific regulatory milestone relating to ensifentrine by June 30, 2023 (extendable to March 31, 2024 upon the Borrowers receiving a specified amount of new cash proceeds after September 8, 2020 from the sale of equity securities in one or more public financings or other bona fide equity financings, subordinated debt and/or upfront/milestone payments from one or more collaboration agreements not prohibited in the Loan Agreement). Upon such trigger, Borrowers must cash collateralize an amount equal to the outstanding obligations to SVB plus the amount of any prepayment penalty and Final Payment which would be due in the event the Loan Agreement were prepaid in full with respect to the Term Loans advanced as of such time. The events of default under the Loan Agreement include, but are not limited to, the Borrowers’ failure to make any payments of principal or interest under the Loan Agreement or other transaction documents, the Borrowers’ breach or default in the performance of any covenant under the Loan Agreement or other transaction documents, the occurrence of a material adverse change, any Borrower making a false or misleading representation or warranty in any material respect under the Loan Agreement, any Borrower’s insolvency or bankruptcy, any attachment or judgment on any Borrower’s assets of at least $500,000, or the occurrence of any default under any agreement or obligation of any Borrower involving indebtedness in excess of $500,000. If an event of default occurs, SVB is entitled to take enforcement action, including acceleration of amounts due under the Loan Agreement. In connection with the Term Loan the Company incurred debt issuance costs totaling approximate ly $400 thousand which were deducted from the carrying amount of the debt and are being amortized over the estimated term of the debt using the effective interest method. As of December 31, 2020, the carrying value of the Term Loan was approximately $4.6 million, of which all was due in greater than 12 months. The debt balance has been categorized within Level 3 of the fair value hierarchy. The carrying amount of the debt approximates its fair value based on prevailing interest rates as of the balance sheet date.

Benefit plans

Benefit plans	12 Months Ended
	Dec. 31, 2020
Retirement Benefits [Abstract]
Benefits plans	Benefit plansThe Company maintains a 401(k) defined contribution retirement plan in the U.S. and a defined contribution plan in the U.K. for its employees and executive director. The assets of the plans are held separately from those of the Company in independently administered funds. The retirement plan cost charge represents the contributions payable by the Company to the plans during the year. Defined contribution costs during the years ended December 31, 2020 and 2019 amounted to $315 thousand and $203 thousand, respectively.

Taxation

Taxation	12 Months Ended
	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Taxation	Taxation Verona Pharma plc operates in the United Kingdom and Verona Pharma, Inc. in the United States and they are subject to income taxes in those countries. U.K. corporation tax is charged at 19% and the U.S. Federal Income tax rate is 21%. The components of loss before income taxes are as follows (in thousands): Year ended December 31, 2020 2019 United States $ (3,191) $ 198 United Kingdom 68,191 40,291 Total $ 65,000 $ 40,489 The components of income tax expense are as follows (in thousands): Year ended December 31, 2020 2019 United States $ 146 $ 72 United Kingdom — — Total current tax expense $ 146 $ 72 United States — — United Kingdom — — Total deferred tax expense — — Total income tax expense $ 146 $ 72 A reconciliation of the U.K. statutory income tax rate to our effective income tax rate is as follows (in percentages): Year ended December 31, 2020 2019 U.K. tax rate 19.0 % 19.0 % Non-deductible expenses (8.9) % (0.7) % Research and development incentive (4.8) % (8.6) % Share options exercised 0.4 % — % Change in deferred tax valuation allowance (5.9) % (9.9) % Difference in overseas statutory tax rates — % (0.1) % Effective income tax rate (0.2) % (0.3) % Significant components of the Company’s deferred tax assets and liabilities were as follows (in thousands): Year ended December 31, 2020 2019 Deferred tax liabilities: Contingent liability (1) $ (5,860) $ (95) Total deferred tax liabilities (5,860) (95) Deferred tax assets: Net operating losses 19,855 12,835 IPR&D asset (1) 5,631 310 Future exercisable shares 10,480 273 Other 215 181 Total deferred tax assets 36,181 13,599 Less: valuation allowance (30,321) (13,504) Deferred tax assets, net of valuation allowance $ — $ — Movements in the deferred tax valuation allowance Valuation allowance at January 1 $ 13,504 $ 9,322 Change in tax rates 1,632 — Increase in valuation allowance 14,815 3,802 Foreign currency translation adjustments 370 380 Valuation allowance at December 31 $ 30,321 $ 13,504 (1) These relate to the difference in the tax base of the IP R&D asset and assumed contingent liability and the accounting base, which is nil under US GAAP. Management has reviewed cumulative tax losses and projections of future taxable losses and determined that it is not more likely than not that they will be realized. Accordingly, valuation allowances have been provided over deferred tax assets At December 31, 2020 and December 31, 2019, the Company had U.K. net operating losses (“NOLs”) of $95.7 million and $75.5 million, respectively. The NOLs can be carried forward indefinitely to be offset against future taxable profits, but this is restricted to an annual £5 million allowance after which there will be a 50% restriction in the profits that can be covered by losses brought forward. The Company files separate income tax returns in the U.K. and the U.S. All necessary income tax filings have been completed for all years up to and including December 31, 2019, and there are no ongoing tax examinations in any jurisdiction. No interest or penalties were recognized in the consolidated statements of operations or consolidated balance sheets. As of December 31, 2020, the Company has no uncertain tax positions.

Share based compensation

Share based compensation	12 Months Ended
	Dec. 31, 2020
Share-based Payment Arrangement [Abstract]
Share based compensation	Share-based compensation The Company operates various share based incentive plans for its staff and issues ordinary shares or ADSs when share-based awards are exercised. The Company records share-based compensation expense related to share options and RSUs granted to employees and directors. The expense is included in R&D and general and administrative costs, based on the nature of individual employees’ functions, and represents the relevant year's allocation of the expense. The costs of share-based compensation to employees are recognized in the consolidated statements of operations and comprehensive loss, together with a corresponding increase in equity over the vesting period. Options are issued with an exercise price of the market price on the day of grant and generally vest over a period of one The following table shows the allocation of share-based compensation between R&D and general and administrative costs (in thousands): Year ended December 31, 2020 2019 Research and development $ 9,319 $ 1,692 General and administrative 12,858 1,427 Total $ 22,177 $ 3,119 EMI Option Plan and Pre-IPO Option Plan The EMI Option Plan and the Pre-IPO Option Plan were adopted by our board of directors on September 18, 2006, and July 24, 2012, respectively. The total number of shares that may be issued under these plans is the current number of outstanding options, or 114,000 ordinary shares, or 14,250 ADSs, for the EMI Option Plan and 1,860,000 ordinary shares, or 232,500 ADSs, for the Pre-IPO Option Plan. No further awards have been granted since the 2017 Incentive Plan was adopted, and no further awards will be granted under them. 2017 Incentive Plan The 2017 Incentive Plan was adopted by our board of directors and became effective on April 26, 2017, in order to grant share based compensation to certain of the Company’s directors and employees. It provides for the grant of stock options, RSUs, and other share-based awards to Company’s directors, officers, employees and non-employee directors. In the year ended December 31, 2019, the Company modified the terms of all RSUs issued prior to January 1, 2019 to include a market based condition, which was also included in the terms of RSUs issued during 2019. The Company's stock price must be maintained above the equivalent of £2 per ordinary share for thirty days for the RSUs to vest, in addition to the existing service condition. The RSUs vest five years after the date of grant irrespective of whether the £2 market condition was met. This modification did not result in an increase in the fair value of the RSUs. Share option activity The number of options, the weighted average grant date fair value per stock option, and the weighted average exercise price are all shown below on a per ordinary shares basis. The Company’s ADSs that are listed on the Nasdaq Global Market each represent eight ordinary shares. The following table shows share option activity and includes the options outstanding from all three plans : Number of share options outstanding Weighted average exercise price (1) Weighted average remaining contractual term (years) Aggregate intrinsic value Outstanding at January 1, 2019 8,752,114 $ 2.02 Granted 5,569,050 0.72 Forfeited (121,970) 1.09 Expired (19,998) 2.65 Outstanding at December 31, 2019 14,179,196 $ 1.53 7.7 $ 933 Granted 2,096,285 0.73 Forfeited (2,506,017) 1.53 Expired (589,128) 1.93 Exercised (54,664) $ 0.75 Outstanding at December 31, 2020 13,125,672 $ 1.41 7.3 $ 914 Exercisable at December 31, 2020 7,749,296 $ 1.75 6.5 $ 220 (1) The exercise prices relate to the equivalent price for an ordinary share, calculated as one eighth of the ADS price. Determining the fair value of share options and RSUs The total fair values of the options and RSUs were estimated using the Black-Scholes option-pricing model for equity-settled compensation, amounted to $62.1 million for instruments granted in the year ended December 31, 2020 (2019: $3.1 million). The cost is amortized over the vesting period of the options and RSUs on a straight-line basis using the cliff-vesting method.The following assumptions were used for the Black-Scholes valuation of share options granted in 2020 and 2019. Expected volatility Volatility is calculated using historical weekly averages of the Company's share price over a period that is in line with the expected life of the options and RSUs. Fair value of ordinary shares. The fair value of ordinary shares has been based on the share price of the Company’s shares on AIM on the evening before the date of grant, as the Company’s primary listing was previously on this market. Risk-free interest rate The risk-free interest rate has been based on the U.K. Government debt yield for the relevant term at the time of grant, as the Company’s primary listing was previously on AIM. Effective from the delisting from AIM the Company will use appropriate U.S Government debt yields. Expected term. The expected term is determined using the simplified method. Expected dividend There are no expected dividends. A summary of the weighted-average assumptions applicable to the share options granted in the applicable years is as follows: Year ended December 31, 2020 2019 Risk-free interest rate 0% - 0.21% 0.39% - 0.82% Expected lives (years) 5.05 - 7 5.5 - 7 Expected volatility 65.83% - 75.40% 67.98% - 68.71% Expected dividend yield — % — % Grant date fair value (per share) $0.40 - $0.62 $0.31 - $0.49 Restricted stock units activity The following table shows RSU activity: Number of RSUs outstanding Weighted average remaining contractual term (years) Outstanding at January 1, 2019 862,473 Granted 740,496 Outstanding at December 31, 2019 1,602,969 3.4 Granted 62,566,271 Forfeited (84,920) Vested (2,091,960) Outstanding at December 31, 2020 61,992,360 1.5 Number of RSUs outstanding Weighted average remaining vesting Period Period in which the target must be achieved RSUs subject to time based vesting 61,416,336 1.5 n/a RSUs subject to milestone based vesting 576,024 2.5 2022 - 2024 The intrinsic and fair value of RSUs that vested in the year ended December 31, 2020, was $1.5 million (2019: $nil). As of December 31, 2020, total compensation cost related to share options and RSUs granted but not yet recognized was $41.8 million. This cost will be amortized to expense over a weighted average remaining period of 1.5 years and will be adjusted for subsequent forfeitures.

Net loss per share

Net loss per share	12 Months Ended
	Dec. 31, 2020
Earnings Per Share [Abstract]
Net loss per share	Net loss per share Net loss per share is calculated on an ordinary share basis. The Company’s ADSs that are listed on the Nasdaq Global Market each represent eight ordinary shares.The following table shows the computation of basic and diluted earnings per share for 2020 and 2019 (net loss in thousands, loss per share in cents): Year ended December 31, 2020 2019 Numerator: Net loss $ 65,146 $ 40,561 Net loss available to ordinary shareholders - basic and diluted $ 65,146 $ 40,561 Denominator: Weighted-average shares outstanding - basic and diluted 262,932,653 105,326,638 Net loss per share - basic and diluted $ (0.25) $ (0.39)

Related party transactions and

Related party transactions and other shareholder matters	12 Months Ended
	Dec. 31, 2020
Related Party Transactions [Abstract]
Related party transactions and other shareholder matters	Related party transactions and other shareholder matters In the year ended December 31, 2019, Anders Ullman, a director of the Company, provided consultancy services to the Company for which the Company paid him $33 thousand. In the year ended December 31, 2020, certain directors and officers participated in the Private Placement, summarized below (in thousands, except for number of shares acquired): Participation in Private Placement Ordinary Shares Consideration Dr. Ebsworth 222,216 £ 100,000 Dr. Zaccardelli 444,440 $ 249,998 Mr. Sinha (through connected persons) 533,328 $ 299,997 Dr. Ullman 266,664 $ 149,983 Dr. Edwards 53,328 $ 29,997 Mr. Hahn 177,784 $ 100,004

Basis of Presentation and Sum_2

Basis of Presentation and Summary of Significant Accounting policies (Policies)	12 Months Ended
	Dec. 31, 2020
Accounting Policies [Abstract]
Basis of presentation and consolidation	Basis of presentation and consolidation The consolidated financial statements include the accounts of Verona Pharma plc and its wholly-owned subsidiaries Verona Pharma, Inc. and Rhinopharma. All inter-company balances and transactions have been eliminated. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. ("US GAAP") and the following accounting policies have been consistently applied. Previously, the Company prepared its consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS"). At the end of the second quarter of 2020, the Company determined that it no longer qualified as a Foreign Private Issuer under SEC rules. As a result, beginning January 1, 2020, the Company is required to report with the SEC on domestic forms and comply with domestic company rules in the United States. The transition to US GAAP was made retrospectively for all periods from the Company’s inception.
Use of estimates	Use of estimates The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual and prepayment of research and development expenses, the fair value of share-based compensation and the fair value of warrants. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from the Company’s estimates.
Business combinations	Business combinations The Company applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Company. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. The excess of the cost of acquisition over the fair value of the Company's share of the identifiable net assets acquired is recorded as goodwill. Identifiable ass ets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs are expensed as incurred and included in administrative expenses.
Cash and cash equivalents	Cash and cash equivalents The Company considers all highly liquid investments purchased with original maturities of ninety days or less at acquisition to be cash equivalents. Cash and cash equivalents includes deposits held at call with banks, term deposits with maturities of less than three months at inception, and in money market funds investing in U.S. and U.K. government debt and liquid securities from highly rated institutions.
Short term investments	Short-term investments Short-term investments include fixed term deposits held at banks with original maturities between three months and a year. They are classified as loans and receivables and are measured at amortized cost using the effective interest method.
Furniture and equipment, net	Furniture and equipment, net Furniture and equipment comprise office furniture and computer equipment and are stated at cost less accumulated depreciation, which is calculated on a straight-line basis over the expected useful economic lives, generally two
Goodwill	Goodwill Goodwill consists of goodwill related to the acquisition of Rhinopharma. Goodwill is not amortized but periodically tested for impairment.
Impairment of long-lived assets	Impairment of long-lived assets The Company reviews long lived assets for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of assets may not be fully recoverable. The Company initially compares the market capitalization of the Company to the book value of its assets. If the value of the market capitalization does not support the valuation of the assets, the Company reviews estimates of the cash flows over the remaining lives of its other intangible assets, or related group of assets where applicable, in measuring whether the assets to be held and used will be realizable. In the event of impairment, the Company would discount the future cash flows using its then estimated incremental borrowing rate to estimate the amount of the impairment.
Leases	Leases Effective January 1, 2019, the Company adopted ASC 842, Leases (“ASC842”) using the modified retrospective transition approach and did not restate comparative periods. The Company determines if an arrangement is a lease at inception. Leases are classified as operating or finance leases in accordance with the recognition criteria in ASC 842-20-25. The Company’s lease portfolio consists entirely of operating leases as of December 31, 2020. The Company’s leases do not contain any material residual value guarantees or material restrictive covenants.
Ligand agreement	Ligand agreement In 2006 the Company acquired Rhinopharma and assumed contingent liabilities owed to Ligand UK Development Limited (“Ligand”) (formerly Vernalis Development Limited). The Company refers to the assignment and license agreement as the Ligand Agreement. Ligand assigned to the Company all of its rights to certain patents and patent applications relating to ensifentrine and related compounds (the "Ligand Patents") and an exclusive, worldwide, royalty-bearing license under certain Ligand know-how to develop, manufacture and commercialize products (the "Licensed Products") developed using Ligand Patents, Ligand know-how and the physical stock of certain compounds. The Company is obligated to pay a milestone payment on obtaining the first approval of any regulatory authority for the commercialization of a Licensed Product, low single digit royalties based on the future sales performance of all Licensed Products and a portion equal to a mid-twenty percent of any consideration received from any sub-licensees for the Ligand Patents and for Ligand know-how. Royalties payable are based on the future sales performance so the amount payable is unlimited. At the time each contingency is resolved, the Company will record the contingent consideration payment (or payable) in connection with the Ligand Agreement as an expense and will classify it within R&D expenses.
Research and development costs	Research and development costs Research and development (“R&D”) costs are expensed as incurred. Research and development expenses include salaries, share-based compensation and benefits of employees, and other costs related to the Company’s R&D activities, including contracts with clinical research organizations and contract manufacturers. As part of the process of preparing financial statements the Company is required to estimate its expenses resulting from its obligation under contracts with vendors and consultants and clinical site agreements in connection with its R&D efforts. The financial terms of these contracts are subject to negotiations which vary contract to contract and may result in payment flows that do not match the periods over which materials or services are provided to the Company under such contracts. The Company’s objective is to reflect the appropriate clinical trial expenses in its financial statements by matching those expenses with the period in which services and efforts are expended. The Company accounts for these expenses according to the progress of the trials and other development activities measured by patient progression and the timing of various aspects of the trial. The Company determines prepaid and accrual estimates through discussions with applicable personnel and outside service providers as to the progress of clinical trials, or other services completed. During the course of a clinical trial, the Company adjusts its rate of clinical trial expense recognition if actual results differ from its estimates. The Company makes estimates of its prepaid and accrued expenses as of each balance sheet date in its financial statements based on facts and circumstances known at that time. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in the Company reporting amounts that are too high or too low for any particular period. The Company’s clinical trial prepaid and accrual expense is dependent upon the timely and accurate reporting of study recruitment from contract research organizations and activities carried out by other third-party vendors as well as the timely processing of any change orders from the contract research organizations.
Share-based compensation	Share-based compensation The Company has a share-based compensation plan under which various types of equity-based awards may be granted, including stock options and restricted stock units (RSUs). The fair value of share options and RSUs, which are subject to service conditions with graded vesting, are recognized as compensation expense using the cliff vesting method; f orfeitures are recognized as they occur. The Company uses the fair-value based method to determine compensation for all arrangements under which employees receive shares. The fair value of each option and RSU is estimated on the date of grant using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatility is based on the historical volatility of the Company’s ordinary shares over the expected term of the options. The expected term of options granted is derived using the simplified method, which computes the expected term as the average of the sum of the vesting term plus the contract term. Historically the risk-free rate has been based on the appropriate U.K. government debt yield. After delisting its Ordinary shares from AIM on October 30, 2020, the Company began using U.S. government debt yields.
Other income - U.K. R&D tax credits	Other income - United Kingdom R&D tax credits Other operating income relates to R&D tax credits receivable in the UK. As a company that carries out extensive research and development activities, Verona is subject to the UK R&D Small and Medium Enterprise (“SME”) Program. Qualifying expenditures largely comprise employment costs for research staff, consumables, a proportion of relevant, permitted sub-contract costs and certain internal overhead costs incurred as part of research projects for which it does not receive income. Tax credits related to the SME Program are received as cash and are recorded as other income, as they are akin to grant income, in the consolidated statements of operations and comprehensive loss.
Income taxes	Income taxes The Company accounts for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”). This Topic prescribes the use of the liability method, whereby deferred tax assets and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value. ASC 740 establishes a single model to address accounting for uncertain tax positions. ASC 740 clarified the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. The Company has no uncertain tax positions.
Comprehensive loss	Comprehensive loss The Company accounts for comprehensive loss in accordance with ASC 220, “Income Statement - Reporting Comprehensive Income”. Comprehensive income represents all changes in stockholders’ equity during the period except those resulting from investments by, or distributions to, stockholders.
Segment Reporting	Segment Reporting The Company has one operating and reportable segment, pharmaceutical development. The Company’s long-lived assets are held in the United Kingdom.
Foreign Currencies	Foreign Currencies Reporting currency The Company’s reporting currency is U.S. dollars. Prior to July 1, 2020, Verona Pharma plc’s functional currency was pounds sterling and its financial statements were translated to U.S. dollars. The statement of comprehensive income was translated at average rates for the period, assets and liabilities at the balance sheet date exchange rate and equity balances at historical rates. Translation differences were recorded in accumulated other comprehensive income / (loss). Functional currency The Company's consolidated financial statements are measured using the currency of the primary economic environment in which the entity operates, which was pounds sterling for Verona Pharma plc until June 30, 2020. In the six months to June 30, 2020, management changes resulted in lower people costs being paid in pounds sterling. Following the Private Placement the Company entered into contracts to commence Phase 3 trials for ensifentrine and the majority of the costs are incurred in U.S. dollars. Management reviewed budgeted activities over the next five years and identified that the majority of costs from the second half of 2020 onwards will be incurred in U.S. dollars. Furthermore, the Private Placement in July, 2020, raised funds in U.S. dollars and having delisted from AIM any future fundraises will be in U.S. dollars. Also, the commercial focus of Company is the U.S. market. As a consequence, management determined the Company's functional currency changed from pounds sterling to U.S. dollars and this has been accounted for prospectively from July 1, 2020. To convert Verona Pharma plc’s books and records into U.S. dollars income and expenses were translated at average rates, assets and liabilities at the June 30, 2020, exchange rate and equity balances at historical rates. Translation differences were recorded in accumulated other comprehensive income / (loss).
Treasury Shares	Treasury shares In the year ended December 31, 2020, the Company incorporated a trust to facilitate the acquisition of shares, by or for the benefit of employees and former employees. The Company issued 25 million ordinary shares (equivalent to 3.125 million ADSs) to cover expected shares issued upon the vesting of share awards to employees. The Company has the indirect ability to control the trust as trustees are required to act in accordance with the trust deed and because the Company controls the issuance of shares to cover awards. As a consequence, the trust is consolidated into the Company’s consolidated financial statements. The shares that were issued to the trust that have not been issued to employees to satisfy vesting of share awards are included in the Consolidated Balance Sheet as treasury shares.
Fair value of financial instruments	Fair value of financial instruments US GAAP defines fair value and requires companies to establish a framework for measuring fair value and disclosure about fair value measurements using a three-tier approach. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Our financial instruments include cash equivalents, short-term investments, other assets, accounts payable and accrued expenses and other liabilities. Fair value estimates of these instruments are made at a specific point in time, based on relevant market information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgement and therefore cannot be determined with precision. The carrying amounts of these instruments are considered to be representative of their fair values because of their short-term nature.
Concentration of credit risk	Concentration of credit risk Financial instruments that potentially subject the Company to concentration of credit risk consist of principally cash and cash equivalents, bank deposits and certain receivables. The Company holds cash and cash equivalents with highly rated financial institutions and in highly rated money market funds and the Company has not experienced any significant credit losses in these accounts and does not believe the Company is exposed to any significant credit risk on these instruments.
Recently adopted accounting pronouncements and Recently issued accounting pronouncements, not yet adopted	Recently adopted accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02, “Leases” (Topic 842) (“ASC 842”). The standard requires lessees to recognize almost all leases on the balance sheet as right-of-use (“ROU”) assets and lease liabilities, and requires leases to be classified as either an operating or a finance type lease. The standard excludes leases of intangible assets or inventory. The standard became effective for the Company beginning January 1, 2019. The Company adopted ASC 842 using the modified retrospective approach, by applying the new standard to all leases existing at the date of initial application. Results and disclosure requirements for reporting periods beginning after January 1, 2019, are presented under ASC 842, while prior period amounts have not been adjusted and continue to be reported in accordance with our historical accounting under ASC 840 “Leases”. The Company elected the package of practical expedients permitted under ASC 842, which also allowed the Company to carry forward historical lease classifications. The Company also elected the practical expedient related to treating lease and non-lease components as a single lease component for all equipment leases as well as electing a policy exclusion permitting leases with an original lease term of less than one year to be excluded from the ROU assets and lease liabilities. As a result of the adoption of ASC 842 on January 1, 2019, the Company recorded an operating lease ROU asset of $415 thousand and an operating lease liability of $441 thousand. The adoption increased opening accumulated losses by $26 thousand but did not impact the Company's prior year financial statements. Under ASC 842, the Company determines if an arrangement is a lease at inception. ROU ass ets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As the Company's leases do not provide an implicit rate, the Company determined the incremental borrowing rate in determining the present value of lease payments. The ROU assets also include any lease payments made prior to commencement and are recorded net of any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease. When it is reasonably certain the Company will exercise such options the lease will be recognized as a liability and a corresponding ROU asset also recognized. Operating leases are included in operating lease ROU assets and current and non-current operating lease liabilities, on the Company's consolidated balance sheets. The FASB issued ASU 2020-04 to provide optional expedients and exceptions for applying US GAAP to contract modifications, hedging relationships, and other transactions affected by the anticipated transition away from LIBOR. There is no material impact of the adoption of ASU 2020-04 on our consolidated financial statements. Recently issued accounting pronouncements, not yet adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326)-Measurement of Credit Losses on Financial Instruments. This guidance replaces the current incurred loss impairment methodology. Under the new guidance, on initial recognition and at each reporting period, an entity is required to recognize an allowance that reflects its current estimate of credit losses expected to be incurred over the life of the financial instrument based on historical experience, current conditions and reasonable and supportable forecasts. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates (“ASU 2019-10”). The purpose of this amendment is to create a two tier rollout of major updates, staggering the effective dates between larger public companies and all other entities. This granted certain classes of companies, including Smaller Reporting Companies (“SRCs”), additional time to implement major FASB standards, including ASU 2016-13. Larger public companies will have an effective date for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. All other entities are permitted to defer adoption of ASU 2016-13, and its related amendments, until the earlier of fiscal periods beginning after December 15, 2022. Under the current SEC definitions, we meet the definition of an SRC as of the ASU 2019-10 issuance date and are deferring adoption for ASU 2016-13. The guidance requires a modified retrospective transition approach through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. We are currently evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements, but do not believe the adoption of this standard will have a material impact on our consolidated financial statements.

Prepaid expenses (Tables)

Prepaid expenses (Tables)	12 Months Ended
	Dec. 31, 2020
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Summary of Prepaid Expenses	Prepaid expenses consisted of the following (in thousands): Year ended December 31, 2020 2019 Clinical trial and other development costs $ 2,551 $ 874 Insurance 1,701 534 Other 286 247 Total prepaid expenses and other current assets $ 4,538 $ 1,655

Tax and tax incentive receiva_2

Tax and tax incentive receivable (Tables)	12 Months Ended
	Dec. 31, 2020
Receivables [Abstract]
Components of Taxes Receivable	Taxes receivable consisted of the following (in thousands): Year ended December 31, 2020 2019 R&D tax credit receivable - U.K. $ 8,202 $ 9,618 Tax receivable - U.S. 58 196 Total tax receivable $ 8,260 $ 9,814

Property leases (Tables)

Property leases (Tables)	12 Months Ended
	Dec. 31, 2020
Leases [Abstract]
Minimum Annual Operating Lease Payments	Minimum annual payments over the remaining lease periods as of December 31, 2020 are as follows (in thousands): 2021 $ 862 2022 281 2023 201 2024 44 Total minimum future lease payments $ 1,388 Less: imputed interest (76) Total operating lease liabilities $ 1,312
Minimum Rental Commitments Under Non-cancelable Leases	Under the prior lease accounting guidance minimum rental commitments under non-cancelable leases, for each of the five years and total thereafter as of December 31, 2019, were as follows: 2020 2021 2022 2023 2024 Minimum lease payments $ 680 $ 862 $ 281 $ 201 $ 44

Accrued expenses (Tables)

Accrued expenses (Tables)	12 Months Ended
	Dec. 31, 2020
Payables and Accruals [Abstract]
Schedule of Accrued Expenses	Accrued expenses consisted of the following (in thousands): Year ended December 31, 2020 2019 Clinical trial and other development costs $ 8,607 $ 6,394 Professional fees, listing and general corporate costs 2,149 2,191 People related costs 107 386 Total accrued expenses $ 10,863 $ 8,971

Warrants (Tables)

Warrants (Tables)	12 Months Ended
	Dec. 31, 2020
Other Liabilities Disclosure [Abstract]
Fair Value Valuation Assumptions of Warrants	The warrants are valued using the Black-Scholes model and the table below presents the assumptions used: Year ended December 31, 2020 2019 Shares potentially issued under warrants 12,401,262 12,401,262 Exercise price in pounds sterling £ 1.7238 £ 1.7238 Equivalent price of ordinary share (ADS price divided by eight) $ 0.64 $ 0.62 Risk-free interest rate — % 0.54 % Expected term to exercise 1.33 2.34 Annualized volatility 105.4 % 65.6 % Dividend rate — % — % Calculated value of the warrants, in thousands of U.S. dollars $ 2,246 $ 1,188
Schedule of Movement of the Value of the Warrants	The following table shows the movement of the value of the warrants (in thousands): Year ended December 31, 2020 2019 At January 1 $ 1,188 $ 3,180 Fair value adjustment 1,114 (2,066) Foreign exchange differences recognized in loss for the period 22 — Translation differences recognized in other comprehensive loss (78) 74 At December 31 $ 2,246 $ 1,188
Fair Value Impact Of Increase Or Decrease in Volatility	For the amount recognized at December 31, 2020, the effect when the following parameter deviates up or down is presented in the below table (in thousands): 10% volatility increase $ 2,734 Base case, reported fair value 2,246 10% volatility decrease $ 1,772

Taxation (Tables)

Taxation (Tables)	12 Months Ended
	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Components of loss before income taxes	The components of loss before income taxes are as follows (in thousands): Year ended December 31, 2020 2019 United States $ (3,191) $ 198 United Kingdom 68,191 40,291 Total $ 65,000 $ 40,489
Components of income tax expense	The components of income tax expense are as follows (in thousands): Year ended December 31, 2020 2019 United States $ 146 $ 72 United Kingdom — — Total current tax expense $ 146 $ 72 United States — — United Kingdom — — Total deferred tax expense — — Total income tax expense $ 146 $ 72
Reconciliation of the U.K. statutory income tax rate	A reconciliation of the U.K. statutory income tax rate to our effective income tax rate is as follows (in percentages): Year ended December 31, 2020 2019 U.K. tax rate 19.0 % 19.0 % Non-deductible expenses (8.9) % (0.7) % Research and development incentive (4.8) % (8.6) % Share options exercised 0.4 % — % Change in deferred tax valuation allowance (5.9) % (9.9) % Difference in overseas statutory tax rates — % (0.1) % Effective income tax rate (0.2) % (0.3) %
Deferred tax assets and liabilities	Significant components of the Company’s deferred tax assets and liabilities were as follows (in thousands): Year ended December 31, 2020 2019 Deferred tax liabilities: Contingent liability (1) $ (5,860) $ (95) Total deferred tax liabilities (5,860) (95) Deferred tax assets: Net operating losses 19,855 12,835 IPR&D asset (1) 5,631 310 Future exercisable shares 10,480 273 Other 215 181 Total deferred tax assets 36,181 13,599 Less: valuation allowance (30,321) (13,504) Deferred tax assets, net of valuation allowance $ — $ — Movements in the deferred tax valuation allowance Valuation allowance at January 1 $ 13,504 $ 9,322 Change in tax rates 1,632 — Increase in valuation allowance 14,815 3,802 Foreign currency translation adjustments 370 380 Valuation allowance at December 31 $ 30,321 $ 13,504 (1) These relate to the difference in the tax base of the IP R&D asset and assumed contingent liability and the accounting base, which is nil under US GAAP.

Share based compensation (Table

Share based compensation (Tables)	12 Months Ended
	Dec. 31, 2020
Share-based Payment Arrangement [Abstract]
Allocation of Share Based Compensation Expense	The following table shows the allocation of share-based compensation between R&D and general and administrative costs (in thousands): Year ended December 31, 2020 2019 Research and development $ 9,319 $ 1,692 General and administrative 12,858 1,427 Total $ 22,177 $ 3,119
Share Option Activity	The following table shows share option activity and includes the options outstanding from all three plans : Number of share options outstanding Weighted average exercise price (1) Weighted average remaining contractual term (years) Aggregate intrinsic value Outstanding at January 1, 2019 8,752,114 $ 2.02 Granted 5,569,050 0.72 Forfeited (121,970) 1.09 Expired (19,998) 2.65 Outstanding at December 31, 2019 14,179,196 $ 1.53 7.7 $ 933 Granted 2,096,285 0.73 Forfeited (2,506,017) 1.53 Expired (589,128) 1.93 Exercised (54,664) $ 0.75 Outstanding at December 31, 2020 13,125,672 $ 1.41 7.3 $ 914 Exercisable at December 31, 2020 7,749,296 $ 1.75 6.5 $ 220 (1) The exercise prices relate to the equivalent price for an ordinary share, calculated as one eighth of the ADS price.
Schedule of Weighted-Average Assumptions	A summary of the weighted-average assumptions applicable to the share options granted in the applicable years is as follows: Year ended December 31, 2020 2019 Risk-free interest rate 0% - 0.21% 0.39% - 0.82% Expected lives (years) 5.05 - 7 5.5 - 7 Expected volatility 65.83% - 75.40% 67.98% - 68.71% Expected dividend yield — % — % Grant date fair value (per share) $0.40 - $0.62 $0.31 - $0.49
Restricted Stock Unit Activity	The following table shows RSU activity: Number of RSUs outstanding Weighted average remaining contractual term (years) Outstanding at January 1, 2019 862,473 Granted 740,496 Outstanding at December 31, 2019 1,602,969 3.4 Granted 62,566,271 Forfeited (84,920) Vested (2,091,960) Outstanding at December 31, 2020 61,992,360 1.5 Number of RSUs outstanding Weighted average remaining vesting Period Period in which the target must be achieved RSUs subject to time based vesting 61,416,336 1.5 n/a RSUs subject to milestone based vesting 576,024 2.5 2022 - 2024

Net loss per share (Tables)

Net loss per share (Tables)	12 Months Ended
	Dec. 31, 2020
Earnings Per Share [Abstract]
Computation of Basic and Diluted Earning Per Share	The following table shows the computation of basic and diluted earnings per share for 2020 and 2019 (net loss in thousands, loss per share in cents): Year ended December 31, 2020 2019 Numerator: Net loss $ 65,146 $ 40,561 Net loss available to ordinary shareholders - basic and diluted $ 65,146 $ 40,561 Denominator: Weighted-average shares outstanding - basic and diluted 262,932,653 105,326,638 Net loss per share - basic and diluted $ (0.25) $ (0.39)

Related party transactions an_2

Related party transactions and other shareholder matters (Tables)	12 Months Ended
	Dec. 31, 2020
Related Party Transactions [Abstract]
Schedule of Private Placement to Related Parties	In the year ended December 31, 2020, certain directors and officers participated in the Private Placement, summarized below (in thousands, except for number of shares acquired): Participation in Private Placement Ordinary Shares Consideration Dr. Ebsworth 222,216 £ 100,000 Dr. Zaccardelli 444,440 $ 249,998 Mr. Sinha (through connected persons) 533,328 $ 299,997 Dr. Ullman 266,664 $ 149,983 Dr. Edwards 53,328 $ 29,997 Mr. Hahn 177,784 $ 100,004

Organization, Consolidation and

Organization, Consolidation and Presentation of Financial Statements (Details) $ in Thousands	Jul. 17, 2020USD ($)	Dec. 31, 2020USD ($)subsidiary	Nov. 30, 2020USD ($)	Dec. 31, 2019USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of wholly owned subsidiaries | subsidiary		2
Class of Stock [Line Items]
Accumulated deficit		$ 207,050		$ 141,779
Net proceeds from sale of stock	$ 185,500
Term Loan Facility | Secured Debt
Class of Stock [Line Items]
Debt instrument, face amount			$ 30,000
Amount drawn down		$ 5,000
Private Placement
Class of Stock [Line Items]
Consideration received from sale of stock	$ 200,000

Basis of Presentation and Sum_3

Basis of Presentation and Summary of Significant Accounting policies (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020USD ($)segmentshares	Dec. 31, 2019USD ($)	Jan. 01, 2019USD ($)	Dec. 31, 2018USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of operating segments | segment	1
Number of reportable segments | segment	1
Right-of-use assets	$ 1,050	$ 1,288
Operating lease liability	1,312
Total shareholders' equity	(184,854)	(42,741)		$ (78,861)
Accumulated deficit
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total shareholders' equity	$ 207,050	141,779		101,192
Ordinary shares
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Stock issued during period (in shares) | shares	355,831,184
Total shareholders' equity	$ (31,794)	$ (7,265)		(7,265)
Issuance of ordinary shares to treasury (in shares) | shares	25,000,000
Issuance of ordinary shares to treasury as ADS equivalent (in shares) | shares	3,125,000
Cumulative Effect, Period of Adoption, Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Right-of-use assets			$ 415
Operating lease liability			441
Total shareholders' equity				26
Cumulative Effect, Period of Adoption, Adjustment | Accumulated deficit
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total shareholders' equity			$ 26	$ 26
Minimum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Furniture and equipment, useful life	2 years
Maximum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Furniture and equipment, useful life	5 years

Prepaid expenses (Details)

Prepaid expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Clinical trial and other development costs	$ 2,551	$ 874
Insurance	1,701	534
Other	286	247
Total prepaid expenses and other current assets	$ 4,538	$ 1,655

Tax and tax incentive receiva_3

Tax and tax incentive receivable (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Receivables [Abstract]
R&D tax credit receivable - U.K.	$ 8,202	$ 9,618
Tax receivable - U.S.	58	196
Total tax receivable	$ 8,260	$ 9,814

Property leases - Narrative (De

Property leases - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Lessee, Lease, Description [Line Items]
Impairment of right-of-use asset	$ 289	$ 0
Operating lease liability	$ 1,312
Discount rate (in percent)	8.00%
Weighted average remaining lease term	2 years 2 months 12 days
Operating lease expense	$ 692
Building
Lessee, Lease, Description [Line Items]
Right-of-use assets recognized with associated liability	700
London | Building
Lessee, Lease, Description [Line Items]
Right-of-use assets recognized with associated liability		700
New York
Lessee, Lease, Description [Line Items]
Impairment of right-of-use asset	290
Operating lease liability	$ 195
New York | Building
Lessee, Lease, Description [Line Items]
Right-of-use assets recognized with associated liability		$ 400

Property leases - Maturity (Det

Property leases - Maturity (Details) $ in Thousands	Dec. 31, 2020USD ($)
Leases [Abstract]
2021	$ 862
2022	281
2023	201
2024	44
Total minimum future lease payments	1,388
Less: imputed interest	(76)
Total operating lease liabilities	$ 1,312

Property leases Maturity Under

Property leases Maturity Under ASC 840 (Details) $ in Thousands	Dec. 31, 2019USD ($)
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2020	$ 680
2021	862
2022	281
2023	201
2024	$ 44

Accrued expenses (Details)

Accrued expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Payables and Accruals [Abstract]
Clinical trial and other development costs	$ 8,607	$ 6,394
Professional fees, listing and general corporate costs	2,149	2,191
People related costs	107	386
Total accrued expenses	$ 10,863	$ 8,971

Warrants - Narrative (Details)

Warrants - Narrative (Details)	12 Months Ended
	Dec. 31, 2020£ / sharesshares	Dec. 31, 2019£ / sharesshares	Dec. 31, 2020USD ($)shares	Dec. 31, 2016£ / sharesshares
Other Liabilities Disclosure [Abstract]
Stock warrants (in shares)		12,401,262	12,401,262	31,115,926
Issue price of warrants (in pounds sterling per share) | £ / shares				£ 1.4365
Number of shares called by each warrant				0.4
Exercise price of stock warrant (in pound sterling per share) | £ / shares	£ 1.7238	£ 1.7238		£ 1.7238
Number of outstanding warrants			31,003,155
Number of warrants exercised and forfeited	0	0
Intrinsic value | $			$ 0

Warrants - Fair Value Assumptio

Warrants - Fair Value Assumptions (Details) $ / shares in Units, $ in Thousands	Dec. 31, 2020USD ($)$ / sharesshares	Dec. 31, 2020£ / shares	Dec. 31, 2019USD ($)$ / sharesshares	Dec. 31, 2019£ / shares	Dec. 31, 2016£ / sharesshares
Class of Warrant or Right [Line Items]
Stock warrants (in shares) | shares	12,401,262		12,401,262		31,115,926
Exercise price of stock warrant (in pound sterling per share) | £ / shares		£ 1.7238		£ 1.7238	£ 1.7238
Equivalent price of ordinary share (ADS price divided by eight) | $ / shares	$ 0.64		$ 0.62
Expected term to exercise	1 year 3 months 29 days		2 years 4 months 2 days
Calculated value of the warrants, in thousands of U.S. dollars | $	$ 2,246		$ 1,188
Risk-free interest rate
Class of Warrant or Right [Line Items]
Measurement Input	0		0.0054
Annualized volatility
Class of Warrant or Right [Line Items]
Measurement Input	1.054		0.656
Dividend rate
Class of Warrant or Right [Line Items]
Measurement Input	0		0

Warrants - Movement in Value (D

Warrants - Movement in Value (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Warrant Activity
At January 1	$ 1,188	$ 3,180
Fair value adjustment	1,114	(2,066)
Foreign exchange differences recognized in loss for the period	22	0
Translation differences recognized in other comprehensive loss	(78)	74
At December 31	$ 2,246	$ 1,188

Warrants - Effect of Change in

Warrants - Effect of Change in Volatility (Details) $ in Thousands	Dec. 31, 2020USD ($)
Other Liabilities Disclosure [Abstract]
10% volatility increase	$ 2,734
Base case, reported fair value	2,246
10% volatility decrease	$ 1,772

Term loan (Details)

Term loan (Details) - USD ($)	1 Months Ended	12 Months Ended
	Nov. 30, 2020	Dec. 31, 2020	Dec. 31, 2019	Nov. 19, 2020
Debt Instrument [Line Items]
Funded advances		$ 5,000,000	$ 0
Secured Debt | Term Loan Facility
Debt Instrument [Line Items]
Debt instrument, face amount	$ 30,000,000
Funded advances	$ 5,000,000
Interest rate	4.25%
Final payment (in percent)	10.00%
Term of prior written notice	10 days
Interest rate in the event of default	3.00%
Loan covenant, minimum cash and cash equivalents	$ 45,000,000
Default threshold of attachment or judgment on any of borrower’s assets	500,000
Default indebtedness threshold for default of any agreement or obligation	$ 500,000
Debt issuance costs incurred				$ 400,000
Carry value of debt		$ 4,600,000
Secured Debt | Term Loan Facility | Prime Rate
Debt Instrument [Line Items]
Basis spread on variable rate	1.00%
Secured Debt | Term B Loan
Debt Instrument [Line Items]
Debt instrument, face amount	$ 10,000,000
Secured Debt | Term C Loan
Debt Instrument [Line Items]
Debt instrument, face amount	15,000,000
Secured Debt | Term C Loan | First Anniversary
Debt Instrument [Line Items]
Prepayment fee	$ 450,000
Prepayment fee (in percent)	3.00%
Secured Debt | Term C Loan | Second Anniversary
Debt Instrument [Line Items]
Prepayment fee	$ 300,000
Prepayment fee (in percent)	2.00%
Secured Debt | Term C Loan | After Second Anniversary and Prior to Maturity
Debt Instrument [Line Items]
Prepayment fee	$ 150,000
Prepayment fee (in percent)	1.00%

Benefit plans (Details)

Benefit plans (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Retirement Benefits [Abstract]
Contribution cost	$ 315	$ 203

Taxation - Loss Before Tax (Det

Taxation - Loss Before Tax (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
United States	$ (3,191)	$ 198
United Kingdom	68,191	40,291
Total	$ 65,000	$ 40,489

Taxation - Tax Expense (Benefit

Taxation - Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
United States	$ 146	$ 72
United Kingdom	0	0
Total current tax expense	146	72
United States	0	0
United Kingdom	0	0
Total deferred tax expense	0	0
Total income tax expense	$ 146	$ 72

Taxation - Reconciliation of St

Taxation - Reconciliation of Statutory Rate (Details)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
U.K. tax rate	19.00%	19.00%
Non-deductible expenses	(8.90%)	(0.70%)
Research and development incentive	(4.80%)	(8.60%)
Share options exercised	0.40%	0.00%
Change in deferred tax valuation allowance	(5.90%)	(9.90%)
Difference in overseas statutory tax rates	0.00%	(0.10%)
Effective income tax rate	(0.20%)	(0.30%)

Taxation - Deferred Tax Assets

Taxation - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Deferred tax liabilities:
Contingent liability	$ (5,860)	$ (95)
Total deferred tax liabilities	(5,860)	(95)
Deferred tax assets:
Net operating losses	19,855	12,835
IPR&D asset	5,631	310
Future exercisable shares	10,480	273
Other	215	181
Total deferred tax assets	36,181	13,599
Less: valuation allowance	(30,321)	(13,504)
Deferred tax assets, net of valuation allowance	0	0
SEC Schedule, 12-09, Valuation Allowance, Deferred Tax Asset
Valuation Allowance [Roll Forward]
Valuation allowance at January 1	13,504	9,322
Change in tax rates	1,632	0
Increase in valuation allowance	14,815	3,802
Foreign currency translation adjustments	370	380
Valuation allowance at December 31	$ 30,321	$ 13,504

Taxation - Narrative (Details)

Taxation - Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Net operating loss	$ 95,700,000	$ 75,500,000
Interest and penalties recognized	0	0
Interest accrued	0	0
Penalties accrued	$ 0	$ 0

Share based compensation - Shar

Share based compensation - Share-Based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total	$ 22,177	$ 3,119
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total	9,319	1,692
General and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total	$ 12,858	$ 1,427

Share based compensation - Narr

Share based compensation - Narrative (Details)	12 Months Ended			45 Months Ended
	Dec. 31, 2020USD ($)Rateshares	Dec. 31, 2019£ / shares	Dec. 31, 2019USD ($)shares	Dec. 31, 2020USD ($)Rateshares	Jul. 24, 2012shares	Sep. 18, 2006shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number granted (in shares)	2,096,285		5,569,050
Number of ordinary shares per ADS | Rate	800.00%			800.00%
Fair value for instruments granted during period | $	$ 62,100,000		$ 3,100,000
Cost related to share options and RSUs granted but not yet recognized | $	$ 41,800,000			$ 41,800,000
Expected period for recognition	1 year 6 months
EMI Option Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number granted (in shares)				0
Pre-IPO Option Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number granted (in shares)				0
Share Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Contract life	10 years
Share Options | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	1 year
Share Options | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	4 years
Share Options | EMI Option Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized						114,000
Number of American Depository Shares authorized						14,250
Further awards to be granted (in shares)	0			0
Share Options | Pre-IPO Option Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized					1,860,000
Number of American Depository Shares authorized					232,500
Further awards to be granted (in shares)	0			0
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Intrinsic and fair value, vested | $	$ 1,500,000		$ 0
Restricted Stock Units | 2017 Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period			5 years
Minimum stock price required to vest (in pound sterling per share) | £ / shares		£ 2
Period to maintain minimum stock price			30 days

Share based compensation - Sh_2

Share based compensation - Share Option Activity (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020USD ($)$ / sharesRateshares	Dec. 31, 2019USD ($)$ / sharesshares
Share-based Payment Arrangement [Abstract]
Number of ordinary shares per ADS | Rate	800.00%
Number of share options outstanding
Beginning balance outstanding | shares	14,179,196	8,752,114
Granted | shares	2,096,285	5,569,050
Forfeited | shares	(2,506,017)	(121,970)
Expired | shares	(589,128)	(19,998)
Exercised | shares	(54,664)
Ending balance outstanding | shares	13,125,672	14,179,196
Exercisable | shares	7,749,296
Weighted average exercise price
Outstanding, Beginning Balance, Weighted average exercise price (in dollars per share) | $ / shares	$ 1.53	$ 2.02
Granted, Weight average exercise price (in dollars per share) | $ / shares	0.73	0.72
Forfeited, Weight average exercise price (in dollars per share) | $ / shares	1.53	1.09
Expired, Weight average exercise price (in dollars per share) | $ / shares	1.93	2.65
Exercised, Weight average exercise price (in dollars per share) | $ / shares	0.75
Outstanding, Ending Balance, Weighted average exercise price (in dollars per share) | $ / shares	1.41	$ 1.53
Exercisable, Weight average exercise price (in dollars per share) | $ / shares	$ 1.75
Stock option activity, additional disclosures
Outstanding, Weighted average remaining contractual term (years)	7 years 3 months 18 days	7 years 8 months 12 days
Exercisable, Aggregate intrinsic value (in dollars) | $	$ 220
Outstanding, Aggregate intrinsic value (in dollars) | $	$ 914	$ 933
Exercisable, Weighted average remaining contractual term (years)	6 years 6 months

Share based compensation - Weig

Share based compensation - Weighted-Average Assumptions (Details) - Share Options - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate, minimum	0.00%	0.39%
Risk-free interest rate, maximum	0.21%	0.82%
Expected volatility, minimum	65.83%	67.98%
Expected volatility, maximum	75.40%	68.71%
Expected dividend yield	0.00%	0.00%
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected lives (years)	5 years 18 days	5 years 6 months
Grant date fair value (in dollars per share)	$ 0.40	$ 0.31
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected lives (years)	7 years	7 years
Grant date fair value (in dollars per share)	$ 0.62	$ 0.49

Share based compensation - RSU

Share based compensation - RSU Activity (Details) - shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Restricted Stock Units
RSU Activity
Outstanding, beginning balance	1,602,969	862,473
Granted	62,566,271	740,496
Forfeited	(84,920)
Vested	(2,091,960)
Outstanding, ending balance	61,992,360	1,602,969
Outstanding, Weighted average remaining contractual term	1 year 6 months	3 years 4 months 24 days
Number of RSUs outstanding	61,992,360	1,602,969
Time-Based Vesting
RSU Activity
Outstanding, ending balance	61,416,336
Number of RSUs outstanding	61,416,336
Weighted average remaining vesting Period	1 year 6 months
Milestone-Based Vesting
RSU Activity
Outstanding, ending balance	576,024
Number of RSUs outstanding	576,024
Weighted average remaining vesting Period	2 years 6 months

Net loss per share - Computatio

Net loss per share - Computation (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Numerator:
Net loss	$ 65,146	$ 40,561
Net loss available to ordinary shareholders - basic	65,146	40,561
Net loss available to ordinary shareholders - diluted	$ 65,146	$ 40,561
Denominator:
Weighted-average shares outstanding - basic and diluted (in shares)	262,932,653	105,326,638
Net loss per share - basic and diluted (in dollars per share)	$ (0.25)	$ (0.39)
Antidilutive securities excluded from computation of loss per share (in shares)	87,519,294	28,183,427

Related party transactions an_3

Related party transactions and other shareholder matters (Details)	Jul. 17, 2020USD ($)	Dec. 31, 2020USD ($)shares	Dec. 31, 2020GBP (£)shares
Private Placement
Related Party Transaction [Line Items]
Consideration received from sale of stock	$ 200,000,000
Director | Consultancy Services
Related Party Transaction [Line Items]
Amount paid to related party		$ 33,000
Director or Officer | Private Placement | Dr. Ebsworth
Related Party Transaction [Line Items]
Number of shares issued in sale | shares		222,216	222,216
Consideration received from sale of stock | £			£ 100,000
Director or Officer | Private Placement | Dr. Zaccardelli
Related Party Transaction [Line Items]
Number of shares issued in sale | shares		444,440	444,440
Consideration received from sale of stock		$ 249,998
Director or Officer | Private Placement | Mr. Sinha
Related Party Transaction [Line Items]
Number of shares issued in sale | shares		533,328	533,328
Consideration received from sale of stock		$ 299,997
Director or Officer | Private Placement | Dr. Ullman
Related Party Transaction [Line Items]
Number of shares issued in sale | shares		266,664	266,664
Consideration received from sale of stock		$ 149,983
Director or Officer | Private Placement | Dr. Edwards
Related Party Transaction [Line Items]
Number of shares issued in sale | shares		53,328	53,328
Consideration received from sale of stock		$ 29,997
Director or Officer | Private Placement | Mr. Hahn
Related Party Transaction [Line Items]
Number of shares issued in sale | shares		177,784	177,784
Consideration received from sale of stock		$ 100,004

Uncategorized Items - vrna-2020

Label	Element	Value
Accounting Standards Update [Extensible List]	us-gaap_AccountingStandardsUpdateExtensibleList	us-gaap:AccountingStandardsUpdate201602Member