Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2024 | Aug. 02, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
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 Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 649,881,246 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001657312 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 404,599 | $ 271,772 |
Prepaid expenses | 5,433 | 3,617 |
Tax incentive receivable | 3,684 | 10,954 |
Other current assets | 2,576 | 3,365 |
Total current assets | 416,292 | 289,708 |
Non-current assets: | ||
Furniture and equipment, net | 44 | 24 |
Goodwill | 545 | 545 |
Equity interest | 15,000 | 15,000 |
Right-of-use assets | 2,242 | 2,847 |
Total non-current assets | 17,831 | 18,416 |
Total assets | 434,123 | 308,124 |
Current liabilities: | ||
Accounts payable | 4,152 | 3,492 |
Accrued expenses | 19,630 | 3,585 |
License agreement obligations | 21,322 | 0 |
Current operating lease liabilities | 1,031 | 1,180 |
Taxes payable | 1,011 | 0 |
Other current liabilities | 1,200 | 435 |
Total current liabilities | 48,346 | 8,692 |
Non-current liabilities: | ||
Term loan | 119,687 | 48,374 |
Revenue interest purchase security agreement | 96,338 | 0 |
Non-current operating lease liabilities | 1,478 | 1,775 |
Total non-current liabilities | 217,503 | 50,149 |
Total liabilities | 265,849 | 58,841 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Ordinary £0.05 par value shares; 667,659,630 and 667,659,630 issued, and 648,654,174 and 643,536,094 outstanding, at June 30, 2024 and December 31, 2023, respectively | 42,771 | 42,771 |
Additional paid-in capital | 616,618 | 601,063 |
Ordinary shares held in treasury | (1,203) | (1,517) |
Accumulated other comprehensive loss | (4,601) | (4,601) |
Accumulated deficit | (485,311) | (388,433) |
Total shareholders' equity | 168,274 | 249,283 |
Total liabilities and shareholders' equity | $ 434,123 | $ 308,124 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - £ / shares | Jun. 30, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in pounds sterling per share) | £ 0.05 | £ 0.05 |
Common stock, issued (in shares) | 667,659,630 | 667,659,630 |
Common stock, outstanding (in shares) | 648,654,174 | 643,536,094 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Operating expenses: | ||||
Research and development | $ 19,388 | $ (2,474) | $ 26,152 | $ 10,136 |
Selling, general and administrative | 49,035 | 12,439 | 69,469 | 22,028 |
Total operating expenses | 68,423 | 9,965 | 95,621 | 32,164 |
Operating loss | (68,423) | (9,965) | (95,621) | (32,164) |
Other income/(expense): | ||||
Research and development tax credit | 847 | (1,934) | 1,432 | 379 |
Loss on extinguishment of debt | (3,653) | 0 | (3,653) | 0 |
Interest income | 3,140 | 3,402 | 6,518 | 6,079 |
Interest expense | (1,757) | (740) | (3,343) | (1,033) |
Foreign exchange gain/(loss) | 25 | 740 | (194) | 1,672 |
Total other (expense)/income, net | (1,398) | 1,468 | 760 | 7,097 |
Loss before income taxes | (69,821) | (8,497) | (94,861) | (25,067) |
Income tax expense | (1,014) | (310) | (1,768) | (483) |
Net loss | $ (70,835) | $ (8,807) | $ (96,629) | $ (25,550) |
Profit/(loss) per share, basic (in dollars per share) | $ (0.11) | $ (0.01) | $ (0.15) | $ (0.04) |
Profit/(loss) per share, diluted (in dollars per share) | $ (0.11) | $ (0.01) | $ (0.15) | $ (0.04) |
Weighted-average shares outstanding, basic (in shares) | 648,217,000 | 634,469,000 | 646,959,000 | 627,996,000 |
Weighted-average shares outstanding, diluted (in shares) | 648,217,000 | 634,469,000 | 646,959,000 | 627,996,000 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders’ Equity - USD ($) $ in Thousands | Total | At-The-Market Sales Agreement | Ordinary shares | Ordinary shares At-The-Market Sales Agreement | Additional paid-in capital | Additional paid-in capital At-The-Market Sales Agreement | Ordinary shares held in treasury | Accumulated other comprehensive loss | Accumulated deficit |
Beginning balance (in shares) at Dec. 31, 2022 | 631,338,246 | ||||||||
Beginning balance at Dec. 31, 2022 | $ 230,466 | $ 40,526 | $ 529,187 | $ (1,549) | $ (4,601) | $ (333,097) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (16,743) | (16,743) | |||||||
Issuance of common shares (in shares) | 20,321,384 | ||||||||
Issuance of common shares | $ 56,909 | $ 1,227 | $ 55,682 | ||||||
Restricted share units vested | 270 | (270) | |||||||
Share options exercised | 1,827 | 1,756 | 71 | ||||||
Share-based compensation | 4,290 | 4,290 | |||||||
Ending balance (in shares) at Mar. 31, 2023 | 651,659,630 | ||||||||
Ending balance at Mar. 31, 2023 | 276,749 | $ 41,753 | 590,915 | (1,208) | (4,601) | (350,110) | |||
Beginning balance (in shares) at Dec. 31, 2022 | 631,338,246 | ||||||||
Beginning balance at Dec. 31, 2022 | 230,466 | $ 40,526 | 529,187 | (1,549) | (4,601) | (333,097) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (25,550) | ||||||||
Ending balance (in shares) at Jun. 30, 2023 | 651,659,630 | ||||||||
Ending balance at Jun. 30, 2023 | 273,093 | $ 41,753 | 596,059 | (975) | (4,601) | (359,143) | |||
Beginning balance (in shares) at Mar. 31, 2023 | 651,659,630 | ||||||||
Beginning balance at Mar. 31, 2023 | 276,749 | $ 41,753 | 590,915 | (1,208) | (4,601) | (350,110) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (8,807) | (8,807) | |||||||
Restricted share units vested | 226 | (226) | |||||||
Share options exercised | 77 | 70 | 7 | ||||||
Share-based compensation | 5,074 | 5,074 | |||||||
Ending balance (in shares) at Jun. 30, 2023 | 651,659,630 | ||||||||
Ending balance at Jun. 30, 2023 | $ 273,093 | $ 41,753 | 596,059 | (975) | (4,601) | (359,143) | |||
Beginning balance (in shares) at Dec. 31, 2023 | 643,536,094 | 667,659,630 | |||||||
Beginning balance at Dec. 31, 2023 | $ 249,283 | $ 42,771 | 601,063 | (1,517) | (4,601) | (388,433) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (25,794) | (25,794) | |||||||
Restricted share units vested | 170 | (170) | |||||||
Share options exercised | 816 | 751 | 65 | ||||||
Common shares withheld for taxes on vested stock awards | (3,338) | (3,338) | |||||||
Equity settled share-based compensation reclassified as cash-settled | (237) | (237) | |||||||
Share-based compensation | 4,258 | 4,258 | |||||||
Ending balance (in shares) at Mar. 31, 2024 | 667,659,630 | ||||||||
Ending balance at Mar. 31, 2024 | $ 224,988 | $ 42,771 | 602,497 | (1,282) | (4,601) | (414,397) | |||
Beginning balance (in shares) at Dec. 31, 2023 | 643,536,094 | 667,659,630 | |||||||
Beginning balance at Dec. 31, 2023 | $ 249,283 | $ 42,771 | 601,063 | (1,517) | (4,601) | (388,433) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | $ (96,629) | ||||||||
Ending balance (in shares) at Jun. 30, 2024 | 648,654,174 | 667,659,630 | |||||||
Ending balance at Jun. 30, 2024 | $ 168,274 | $ 42,771 | 616,618 | (1,203) | (4,601) | (485,311) | |||
Beginning balance (in shares) at Mar. 31, 2024 | 667,659,630 | ||||||||
Beginning balance at Mar. 31, 2024 | 224,988 | $ 42,771 | 602,497 | (1,282) | (4,601) | (414,397) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (70,835) | (70,835) | |||||||
Restricted share units vested | 79 | (79) | |||||||
Common shares withheld for taxes on vested stock awards | (1,273) | (1,273) | |||||||
Equity settled share-based compensation reclassified as cash-settled | (200) | (200) | |||||||
Share-based compensation | $ 15,594 | 15,594 | |||||||
Ending balance (in shares) at Jun. 30, 2024 | 648,654,174 | 667,659,630 | |||||||
Ending balance at Jun. 30, 2024 | $ 168,274 | $ 42,771 | $ 616,618 | $ (1,203) | $ (4,601) | $ (485,311) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash flows from operating activities: | ||
Net loss | $ (96,629) | $ (25,550) |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Foreign exchange loss/(gain) | 194 | (1,672) |
Other non-cash items | 285 | 88 |
Accretion of redemption premium on debt | 120 | 51 |
Loss on extinguishment of debt | 3,653 | 0 |
Share-based compensation | 19,852 | 9,364 |
Depreciation | 533 | 314 |
Changes in operating assets and liabilities: | ||
Prepaid expenses | (1,816) | 1,605 |
Tax incentive receivable | 7,201 | (380) |
Other current assets | 35 | (2,016) |
Accounts payable | 756 | (417) |
Accrued expenses | 11,617 | (6,285) |
License agreement obligations | 21,322 | 0 |
Operating lease liabilities | (365) | (305) |
Income taxes | 1,765 | (939) |
Other current liabilities | 765 | (951) |
Net cash used in operating activities | (30,712) | (27,093) |
Cash flows from investing activities: | ||
Purchases of furniture and equipment | 45 | 0 |
Net cash used in investing activities | (45) | 0 |
Cash flows from financing activities: | ||
Proceeds from issuance of stock | 0 | 56,909 |
Proceeds from Term Loans | 122,500 | 9,996 |
Proceeds From Revenue Interest Purchase And Sale Agreement ("RIPSA”) | 100,000 | 0 |
Payment of debt issuance costs | (2,303) | 0 |
Repayment of 2023 Term Loans | (52,256) | 0 |
Payments of withholding taxes from share-based awards | (5,048) | 0 |
Proceeds from exercise of share options | 816 | 1,904 |
Net cash provided by financing activities | 163,709 | 68,809 |
Effect of exchange rate changes on cash and cash equivalents | (125) | 1,184 |
Net change in cash and cash equivalents | 132,827 | 42,900 |
Cash and cash equivalents at beginning of the period | 271,772 | 227,827 |
Cash and cash equivalents at end of the period | 404,599 | 270,727 |
Supplemental Cash Flow Information [Abstract] | ||
Income taxes paid | 0 | 1,215 |
Interest paid | $ 2,021 | $ 685 |
Organization and description of
Organization and description of business operations | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and description of business operations | Organization and description of business operations Verona Pharma plc is incorporated and domiciled in the United Kingdom. Verona Pharma plc has one wholly-owned subsidiary, Verona Pharma, Inc., a Delaware corporation (together with Verona Pharma plc, the “Company”). The address of the registered office is 1 Central Square, Cardiff, CF10 1FS, United Kingdom. The Company is a biopharmaceutical group focused on developing and commercializing innovative therapeutics for the treatment of respiratory diseases with significant unmet medical needs. The Company’s American Depositary Shares (“ADSs”) are listed on the Nasdaq Global Market (“Nasdaq”) and trade under the symbol “VRNA”. On June 26, 2024, the FDA approved Ohtuvayre (ensifentrine) for the maintenance treatment of chronic obstructive pulmonary disease (“COPD”) in adult patients and the Company launched Ohtuvayre in the U.S. through an exclusive network of accredited specialty pharmacies in August 2024. Ohtuvayre is the Company’s first commercial product and the first inhaled therapy with a novel mechanism of action available for the maintenance treatment of COPD in more than 20 years. Ohtuvayre is a first-in-class selective dual inhibitor of the enzymes phosphodiesterase 3 and phosphodiesterase 4 that combines bronchodilator and non-steroidal anti-inflammatory effects in one molecule. Ohtuvayre is delivered directly to the lungs through a standard jet nebulizer without the need for high inspiratory flow rates or complex hand-breath coordination. Pipeline The Company is developing a fixed-dose combination formulation with ensifentrine and glycopyrrolate, a Long-Acting Muscarinic Antagonist (“LAMA”), for the maintenance treatment of patients with COPD via delivery in a nebulizer. The Company has filed patent applications in multiple jurisdictions including the U.S. In July 2024, the Company submitted an investigational new drug application (“IND”) to the FDA to allow initiation of the clinical program. Subject to clearance of the IND, the Company intends to initiate a Phase 2 dose-ranging trial in the third quarter of 2024. Additionally, based on the clinical results of ensifentrine observed in patients with COPD, including improvements in lung function and symptoms of cough and sputum, the Company believes ensifentrine could potentially be an effective treatment for non-cystic fibrosis bronchiectasis (“NCFBE”). The Company plans to commence a Phase 2 clinical trial to assess the efficacy and safety of nebulized ensifentrine in patients with NCFBE in the third quarter of 2024. Liquidity The Company has incurred recurring losses and negative cash flows from operations since inception, and has an accumulated deficit of $485.3 million as of June 30, 2024. The Company expects to incur additional losses and negative cash flows from operations until its products reach commercial profitability, if at all. The Company expects that its cash and cash equivalents as of June 30, 2024 will be sufficient to fund its operating expenses and capital expenditure requirements for at least the next 12 months from the date of issuance. Additionally, the Company may enter into out-licensing transactions from time to time but there can be no assurance that the Company can secure such transactions in the future. Accordingly, the Company may need to obtain substantial additional funds to achieve its business objectives including to further advance clinical and regulatory activities, to fund launch related costs and to create an effective sales and marketing organization to commercialize Ohtuvayre. Any such funding will need to be obtained through public or private financings, debt financing, collaboration or licensing arrangements or other arrangements. However, there is no guarantee the Company will be successful in securing additional capital on acceptable terms, or at all. |
Basis of presentation and summa
Basis of presentation and summary of significant accounting policies | 6 Months Ended |
Jun. 30, 2024 | |
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 unaudited condensed consolidated financial statements include the accounts of Verona Pharma plc and its wholly-owned subsidiary Verona Pharma, Inc. All inter-company balances and transactions have been eliminated. The accompanying unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K filed on February 29, 2024 (the “2023 Form 10-K”). The Consolidated Balance Sheet as of December 31, 2023, was derived from audited consolidated financial statements included in the 2023 Form 10-K but does not include all disclosures required by U.S. GAAP for complete financial statements. The Company’s significant accounting policies are described in Note 2 to those consolidated financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from these interim financial statements. The unaudited condensed consolidated financial statements reflect all adjustments which in the opinion of management are necessary for a fair statement of results of operations, comprehensive income, financial condition, cash flows and shareholders' equity for the periods presented. Except as otherwise disclosed, all such adjustments are of a normal recurring nature. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the full year. Segment reporting Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company has one operating and reportable segment, the development and commercialization of ensifentrine. Use of estimates The preparation of interim unaudited condensed consolidated financial statements in conformity with U.S. 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 unaudited condensed consolidated financial statements include, but are not limited to, the accrual and prepayment of research and development expenses, and the fair value of share-based compensation. 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, and actual results could differ from the Company’s estimates. Inventories, including Pre-Launch Inventories Prior to obtaining regulatory approval for Ohtuvayre, the Company expensed costs relating to production of pre-launch inventory as research and development expense in its condensed consolidated statements of operations and comprehensive loss in the period incurred. Inventory acquired and the related costs after June 26, 2024, the date of the FDA’s approval of Ohtuvayre, will be capitalized. Products used in clinical trials are expensed as research and development expense in the statement of operations and comprehensive loss. The Company will value its inventories at the lower-of-actual cost or net realizable value. Due to the timing of the approval of Ohtuvayre, the Company did not capitalize any inventory costs in the three or six months ended June 30, 2024. Revenue Interest Purchase and Sale Agreement The revenue interest purchase and sale agreement (the “RIPSA”) liability is eligible to be repaid based on royalties from net sales of Ohtuvayre (ensifentrine) and any other future products. Interest expense is accrued using the effective interest rate method over the estimated period the related liability will be paid. This requires the Company to estimate the total amount of future royalty payments to be generated from product sales over the life of the agreement. The Company imputes interest on the carrying value of the RIPSA and records interest expense using an imputed effective interest rate. The Company reassesses the expected royalty payments each reporting period and accounts for any changes through an adjustment to the effective interest rate on a prospective basis. The assumptions used in determining the expected repayment term of the debt and amortization period of the issuance costs require that the Company make estimates that could impact the carrying value of the liability, as well as the periods over which associated issuance costs will be amortized. A significant increase or decrease in forecasted net sales could materially impact each of the liability balances, interest expense and the time periods for repayment. Recently issued accounting standards not yet adopted In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. The amendments in this ASU are effective for annual periods beginning on December 15, 2024, and should be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. This ASU will have no impact on the Company's Consolidated Balance Sheets or Consolidated Statements of Operations and Comprehensive Loss. The Company is currently evaluating the impact to its income tax disclosures. In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the amendments is to enable investors to better understand an entity's overall performance and assess potential future cash flows. The amendments in this ASU are effective for annual periods beginning on December 15, 2023 and interim periods beginning on December 15, 2024 and should be applied on a retrospective basis for all periods presented. This ASU will have no impact on the Company's Consolidated Balance Sheets or Consolidated Statements of Operations and Comprehensive Loss. The Company is currently evaluating the impact to its segment disclosures. |
Equity Interest
Equity Interest | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Equity interest | Equity interest The Company entered into a collaboration and license agreement (the “Nuance Agreement”) with Nuance Pharma Limited (“Nuance Pharma”) effective June 9, 2021 (the “Effective Date”), under which the Company granted Nuance Pharma the exclusive rights to develop and commercialize ensifentrine in Greater China (China, Taiwan, Hong Kong and Macau). In return, the Company received an unconditional right to consideration aggregating $40.0 million consisting of $25.0 million in cash and an equity interest, valued at $15.0 million as of the Effective Date, in Nuance Biotech, the parent company of Nuance Pharma. The equity interest is recorded at cost as the Company has elected to use the measurement alternative for equity investments without readily determinable fair values. The Company evaluates this investment for indicators of impairment quarterly. The Company did not identify events or changes in circumstances that may have a significant effect on the fair value of the investment during the six months ended June 30, 2024. 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 “Ligand Licensed Products”) developed using Ligand Patents, Ligand know-how and the physical stock of certain compounds. The contingent liability assumed included a milestone payment on obtaining the first approval of any regulatory authority for the commercialization of a Ligand Licensed Product, low single digit royalties based on the future sales performance of all Ligand 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. At the time of the acquisition the contingent liability was not recognized as part of the acquisition accounting as it was immaterial. Due to the FDA approval of Ohtuvayre on June 26, 2024, the Company has recognized the following in the three and six months ended June 30, 2024: • $6.3 million in research and development costs related to a milestone payment for first approval of any regulatory authority for the commercialization of ensifentrine; and • $15.0 million related to a milestone payment for first commercial sale of ensifentrine. The Company has classified this as selling, general and administrative expense as it relates to the resolution of the 2021 dispute with Ligand. The Company has recognized the milestone payment for first commercial sale of ensifentrine in the three and six months ended June 30, 2024 as it considers the payment of this milestone probable due to the approval of ensifentrine and the progress towards commercialization including the first sale in the third quarter of 2024. |
Accrued expenses
Accrued expenses | 6 Months Ended |
Jun. 30, 2024 | |
Payables and Accruals [Abstract] | |
Accrued expenses | Accrued expenses Accrued expenses consisted of the following (in thousands): June 30, December 31, 2024 2023 Clinical trial and other development costs $ 5,959 $ 752 Professional fees and general corporate costs 5,095 2,039 People related costs 3,964 794 Debt issuance costs 4,612 — Total accrued expenses $ 19,630 $ 3,585 |
Ligand license agreement obliga
Ligand license agreement obligations | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Ligand license agreement obligations | Equity interest The Company entered into a collaboration and license agreement (the “Nuance Agreement”) with Nuance Pharma Limited (“Nuance Pharma”) effective June 9, 2021 (the “Effective Date”), under which the Company granted Nuance Pharma the exclusive rights to develop and commercialize ensifentrine in Greater China (China, Taiwan, Hong Kong and Macau). In return, the Company received an unconditional right to consideration aggregating $40.0 million consisting of $25.0 million in cash and an equity interest, valued at $15.0 million as of the Effective Date, in Nuance Biotech, the parent company of Nuance Pharma. The equity interest is recorded at cost as the Company has elected to use the measurement alternative for equity investments without readily determinable fair values. The Company evaluates this investment for indicators of impairment quarterly. The Company did not identify events or changes in circumstances that may have a significant effect on the fair value of the investment during the six months ended June 30, 2024. 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 “Ligand Licensed Products”) developed using Ligand Patents, Ligand know-how and the physical stock of certain compounds. The contingent liability assumed included a milestone payment on obtaining the first approval of any regulatory authority for the commercialization of a Ligand Licensed Product, low single digit royalties based on the future sales performance of all Ligand 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. At the time of the acquisition the contingent liability was not recognized as part of the acquisition accounting as it was immaterial. Due to the FDA approval of Ohtuvayre on June 26, 2024, the Company has recognized the following in the three and six months ended June 30, 2024: • $6.3 million in research and development costs related to a milestone payment for first approval of any regulatory authority for the commercialization of ensifentrine; and • $15.0 million related to a milestone payment for first commercial sale of ensifentrine. The Company has classified this as selling, general and administrative expense as it relates to the resolution of the 2021 dispute with Ligand. The Company has recognized the milestone payment for first commercial sale of ensifentrine in the three and six months ended June 30, 2024 as it considers the payment of this milestone probable due to the approval of ensifentrine and the progress towards commercialization including the first sale in the third quarter of 2024. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Debt | Debt 2023 Term Loan On December 27, 2023 (the “2023 Effective Date”), Verona Pharma, Inc. entered into a term loan facility of up to $400.0 million (the “2023 Term Loan” or “Loan Agreement”), consisting of a term loan advance in an aggregate amount of $50.0 million funded on the 2023 Effective Date (the “Term A Loan”) and four additional term loan advances subject to certain terms and conditions. The 2023 Term Loan was repaid in full as of May 9, 2024. Verona Pharma, Inc. and the Company did not incur any penalties, but did incur a prepayment fee and final payment fee in the aggregate amount of $2.3 million . 2024 Term Loans On May 9, 2024 (the “2024 Effective Date”), Verona Pharma, Inc. (the “Borrower”) entered into a term loan facility of up to $400.0 million (the “2024 Term Loans” or “2024 Loan Agreement”), consisting of a term loan advance in an aggregate amount of $55.0 million funded on the 2024 Effective Date (the “Tranche A Term Loan”) and four additional term loan advances subject to certain terms and conditions, as discussed below, in the amounts of $70.0 million (the “Tranche B Term Loan”), $75.0 million (the “Tranche C Term Loan”), $100.0 million (the “Tranche D Term Loan”) and $100.0 million (the “Tranche E Term Loan”) with each tranche issued subject to an original issue discount of 2.0%. The 2024 Loan Agreement was entered into with Oaktree Fund Administration, LLC, a Delaware limited liability company, as administrative agent (in such capacity, the “Agent”), and certain funds managed by each of Oaktree Capital Management, L.P. (“Oaktree”) and OCM Life Sciences Portfolio LP (“OMERS”) party thereto (collectively, the “2024 Lenders”). The net proceeds of the 2024 Term Loans will be used for general corporate and working capital purposes and a portion of the proceeds from the Tranche A Term Loan was used by the Borrower on the 2024 Effective Date to repay, in full, the existing outstanding indebtedness owed under the 2023 Term Loan. The Tranche B Term Loan was available, subject to customary terms and conditions, during the period commencing on the date the Company received approval from the FDA for its new drug application for ensifentrine through and including the earliest of (i) the date that is 30 days immediately following the date the Company receives such approval and (ii) September 30, 2024. The Tranche C Term Loan will be available, subject to customary terms and conditions (including the prior borrowing of the Tranche B Term Loan), during the period commencing on the first business day following the achievement of a specified net sales milestone for ensifentrine and ending on December 31, 2025. The Tranche D Term Loan will be available, subject to customary terms and conditions (including the prior borrowing of the Tranche C Term Loan), during the period commencing on the first business day following the achievement of a specified net sales milestone for ensifentrine and ending on June 30, 2026. The Tranche E Term Loan will be available, subject to customary terms and conditions (including the prior borrowing of the Tranche D Term Loan) at the 2024 Lenders sole discretion and upon the Company’s request. The Company received $52.8 million in net proceeds at closing of the 2024 Loan Agreement and draw of the Tranche A Term Loan, which consisted of the Tranche A Term Loan face value of $55.0 million less the original issue discount of $1.1 million and lender and third-party fees related to the 2024 Loan Agreement and RIPSA, as defined and discussed below, of $1.1 million. $52.4 million of the net cash proceeds from the Tranche A Term Loan were used for the repayment in full of the existing outstanding indebtedness owed by the Company under the 2023 Term Loan of $52.3 million and interest amounts related to the 2023 Term Loan of $0.1 million. On June 28, 2024, the Company received $68.6 million in net proceeds related to the Tranche B Term Loan, which was available upon FDA approval for Ohtuvayre. The amount received consisted of the Tranche B Term Loan face value of $70.0 million less the original issue discount of $1.4 million. The 2024 Term Loans will mature on May 9, 2029 and each advance under the 2024 Loan Agreement accrues interest at a fixed per annum rate of 11.00%. The 2024 Loan Agreement provides for interest-only payments on a quarterly basis until maturity. Upon repayment (whether at maturity, upon acceleration or by prepayment or otherwise), the Borrower shall pay an exit fee to the 2024 Lenders in the amount of 2.50% of the aggregate principal amount of the 2024 Term Loans to be paid (the “Exit Fee”). The Borrower may prepay the 2024 Term Loans in full or in part provided that the Borrower (i) provides at least two (2) business days’ prior written notice to the Agent, (ii) pays on the date of such prepayment (A) all outstanding principal to be prepaid plus accrued and unpaid interest, (B) a prepayment fee of 7.00% of the 2024 Term Loans so prepaid if paid on or before the first anniversary of the 2024 Effective Date; 5.00% of the 2024 Term Loans so prepaid if paid after the first anniversary of the 2024 Effective Date and on or before the second anniversary of the 2024 Effective Date; 2.00% of the 2024 Term Loans so prepaid if paid after the second anniversary of the 2024 Effective Date and on or before the third anniversary of the 2024 Effective Date or 1.00% of the 2024 Term Loans so prepaid if paid after the third anniversary of the 2024 Effective Date and on or before the fourth anniversary of the 2024 Effective Date, (C) the Exit Fee and (D) all other sums, if any, that shall become due and payable under the 2024 Loan Agreement, including interest at the default rate with respect to any past due amounts. Amounts outstanding during an event of default are due upon the Majority Lenders’ (as defined in the 2024 Loan Agreement) demand (except during a payment or bankruptcy event of default, whereupon such default interest is automatically imposed) and shall accrue interest at an additional rate of 2.00% per annum, which interest shall be payable on demand in cash and (iii) any partial prepayment of the 2024 Term Loans shall be an aggregate amount at least equal to $5.0 million in a denomination that is a whole number multiple of $1.0 million in excess thereof. The 2024 Term Loans are secured by a lien on substantially all of the assets of the Borrower and the Company, including intellectual property, subject to customary exclusions and exceptions. The 2024 Loan Agreement contains customary representations and warranties, covenants and events of default, including two financial covenants: (i) commencing on the 2024 Effective Date, the Borrower is required to maintain certain levels of cash, and, after the Account Control Agreement Completion Date (as defined in the Loan Agreement) subject to control agreements in favor of the Agent, and (ii) commencing on the fiscal quarter of Company ending on September 30, 2025, the Borrower and the Company are required to maintain quarterly trailing twelve-month net sales from the sale of ensifentrine in the United States; provided that such revenue covenant will be waived at any time (x) the Borrower and the Company’s unrestricted cash balance subject to control agreements in favor of the Agent on the last business day of the applicable fiscal quarter is equal to or greater than the product of 1.25 multiplied by the aggregate principal amount of outstanding 2024 Term Loans on such date or (y) the average daily closing price of the Company’s American Depositary Shares for each of the thirty (30) trading days preceding the last trading day of such fiscal quarter multiplied by the total number of issued and outstanding American Depositary Shares of the Company is at least $1.0 billion. The 2024 Loan Agreement also contains other customary provisions, such as expense reimbursement, as well as indemnification rights for the benefit of the Agent and the 2024 Lenders. As of June 30, 2024, the effective interest rate was approximately 13% per annum and there was no material difference between the carrying value and the estimated fair value of the 2024 Term Loans. Revenue Interest Purchase and Sale Agreement On May 9, 2024, the Company and Verona Pharma, Inc. (collectively the “Sellers”) entered into the RIPSA with Oaktree Fund Administration, LLC, a Delaware limited liability company, as administrative agent and certain funds managed by each of Oaktree and OMERS (collectively, the “Purchasers”). Under the terms of the RIPSA, in exchange for each of the Purchaser’s payment to the Sellers of a purchase price of $100 million, in the aggregate, upon approval of ensifentrine by the FDA by a specified date and subject to certain labeling conditions (the “Tranche A Purchase Price”), the Sellers agreed to a true sale of assigned interests to the Purchasers, including a right for the Purchasers to receive 6.50% on the global net sales of ensifentrine by the Sellers (the “Royalty Interest Payments”) and 5% on certain proceeds the Sellers receive from licensees engaged during the term of the RIPSA outside of the U.S. (the “Ex-U.S. Payments”). The Sellers will begin payment of the Royalty Interest Payments and Ex-U.S. Payments in the first fiscal quarter after receipt of the Tranche A Purchase Price. The Sellers will also have a right to receive an additional funding tranche equal to $150 million (the “Tranche B Purchase Price”) upon achievement of a specified net sales milestone in any trailing six-month period after receipt of the Tranche A Purchase Price and subject to certain terms and conditions. The Royalty Interest Payments and Ex-U.S. Payments will cease upon reaching a multiple of 1.75 times the amounts actually funded by the Purchasers. The RIPSA includes a buy-out option, which provides the Sellers with the right to settle all outstanding liabilities at any time by paying a buy-out amount under various terms and conditions. As of any date of determination, the aggregate amount of payments received by the Purchasers under the RIPSA, divided by the amount funded as of such date (the “MOIC”) equals 1.20x, if such date is on or before the one-year anniversary of the funding of the first tranche of the RIPSA, the MOIC equals 1.40x if such date is after the one-year anniversary of the Tranche A Funding Date and on or before the two-year anniversary of the Tranche A Funding Date, the MOIC equals 1.55x if such date is after the two-year anniversary of the Tranche A Funding Date and on or before the three-year anniversary of the Tranche A Funding Date, and the MOIC equals 1.75x if such date is after the three-year anniversary of the Tranche A Funding Date. The Purchasers have the right to terminate the RIPSA under certain conditions, including the Company’s insolvency, and the Company’s divestment of ensifentrine, in which case the Sellers must pay the Purchasers up to 1.75 times the amounts actually funded by the Purchasers as of such default determination date. Pursuant to a security agreement signed in connection with the RIPSA, the Sellers granted to the Purchasers a security interest in certain assets to secure obligations under the RIPSA. On June 28, 2024, the Company received the Tranche A Purchase Price of $100.0 million. As of June 30, 2024, the effective interest rate was approximately 20% per annum and there was no material difference between the carrying value and the estimated fair value of the RIPSA. As of June 30, 2024, the Company had $4.6 million in accrued debt issuance costs related to the 2024 Term Loans and RIPSA which are considered non-cash financing activities for purposes of the Condensed Consolidated Statements of Cash Flows. |
Share based compensation
Share based compensation | 6 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Share based compensation | Share-based compensation The following table shows the allocation of share-based compensation between research and development and selling, general and administrative costs (in thousands): Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Research and development $ 3,664 $ 1,123 $ 4,680 $ 2,226 Selling, general and administrative 11,930 3,951 15,172 7,138 Total $ 15,594 $ 5,074 $ 19,852 $ 9,364 The following tables show the activity of each type of share-based compensation and are presented in ordinary shares. The Company’s ADSs that are listed on Nasdaq each represent eight ordinary shares. Share options activity Number of share options outstanding Balance as of December 31, 2023 24,689,624 Granted 2,432,000 Forfeited (64,000) Exercised (1,037,424) Balance as of March 31, 2024 26,020,200 Granted 7,924,000 Forfeited (72,000) Expired (160,000) Balance as of June 30, 2024 33,712,200 Restricted stock units (“RSU”) activity Number of RSUs outstanding Balance as of December 31, 2023 19,502,624 Forfeited (1,752) Vested (4,357,208) Balance as of March 31, 2024 15,143,664 Vested (2,045,384) Balance as of June 30, 2024 13,098,280 Performance restricted stock units (“PRSU”) activity PRSUs will begin to vest upon achievement of certain performance conditions and are subject to continued service. The fair value of PRSUs will be recognized over the remaining service period using the graded-vesting method once the performance conditions are determined to be probable of occurring. As of June 30, 2024, the performance conditions were assessed by the Company and considered probable of being met under the applicable accounting framework, and accordingly the Company recognized $9.9 million in share-based compensation expense related to the PRSUs in the three and six months ended June 30, 2024. The total compensation cost not yet recognized as of June 30, 2024 related to PRSUs was $7.9 million, which will be recognized over a weighted-average period of approximately one year. A summary of the Company’s PRSU activity for the period ended June 30, 2024 is as follows: Number of PRSUs outstanding Balance as of December 31, 2023 10,730,144 Forfeited (5,248) Balance as of March 31, 2024 10,724,896 Balance as of June 30, 2024 10,724,896 |
Capitalization and net loss per
Capitalization and net loss per share | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Capitalization and net loss per share | et loss per share Net loss per share is calculated on an ordinary share basis. The Company’s ADSs that are listed on Nasdaq each represent eight ordinary shares. The following table shows the computation of basic and diluted net loss per share for the three and six months ended June 30, 2024 and 2023 (in thousands except per share amounts): Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Numerator: Net loss $ (70,835) $ (8,807) $ (96,629) $ (25,550) Denominator: Weighted-average shares outstanding - basic and diluted 648,217 634,469 646,959 627,996 Net loss per share - basic and diluted $ (0.11) $ (0.01) $ (0.15) $ (0.04) During the three and six months ended June 30, 2024 and 2023, outstanding share options, RSUs and PRSUs over 57.5 million and 48.5 million ordinary shares, respectively, were not included in the computation of diluted earnings per ordinary share, because to do so would be antidilutive. |
Subsequent events
Subsequent events | 6 Months Ended |
Jun. 30, 2024 | |
Subsequent Events [Abstract] | |
Subsequent events | Subsequent events [OPEN] |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||||||
Net loss | $ (70,835) | $ (25,794) | $ (8,807) | $ (16,743) | $ (96,629) | $ (25,550) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
David Zaccardelli [Member] | |
Trading Arrangements, by Individual | |
Arrangement Duration | 357 days |
Mark Hahn [Member] | |
Trading Arrangements, by Individual | |
Arrangement Duration | 359 days |
Basis of presentation and sum_2
Basis of presentation and summary of significant accounting policies (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Basis of presentation and consolidation | Basis of presentation and consolidation The unaudited condensed consolidated financial statements include the accounts of Verona Pharma plc and its wholly-owned subsidiary Verona Pharma, Inc. All inter-company balances and transactions have been eliminated. The accompanying unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K filed on February 29, 2024 (the “2023 Form 10-K”). The Consolidated Balance Sheet as of December 31, 2023, was derived from audited consolidated financial statements included in the 2023 Form 10-K but does not include all disclosures required by U.S. GAAP for complete financial statements. The Company’s significant accounting policies are described in Note 2 to those consolidated financial statements. |
Segment Reporting | Segment reporting Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company has one operating and reportable segment, the development and commercialization of ensifentrine. |
Use of estimates | Use of estimates The preparation of interim unaudited condensed consolidated financial statements in conformity with U.S. 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 unaudited condensed consolidated financial statements include, but are not limited to, the accrual and prepayment of research and development expenses, and the fair value of share-based compensation. 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, and actual results could differ from the Company’s estimates. Inventories, including Pre-Launch Inventories Prior to obtaining regulatory approval for Ohtuvayre, the Company expensed costs relating to production of pre-launch inventory as research and development expense in its condensed consolidated statements of operations and comprehensive loss in the period incurred. Inventory acquired and the related costs after June 26, 2024, the date of the FDA’s approval of Ohtuvayre, will be capitalized. Products used in clinical trials are expensed as research and development expense in the statement of operations and comprehensive loss. The Company will value its inventories at the lower-of-actual cost or net realizable value. Due to the timing of the approval of Ohtuvayre, the Company did not capitalize any inventory costs in the three or six months ended June 30, 2024. Revenue Interest Purchase and Sale Agreement The revenue interest purchase and sale agreement (the “RIPSA”) liability is eligible to be repaid based on royalties from net sales of Ohtuvayre (ensifentrine) and any other future products. Interest expense is accrued using the effective interest rate method over the estimated period the related liability will be paid. This requires the Company to estimate the total amount of future royalty payments to be generated from product sales over the life of the agreement. The Company imputes interest on the carrying value of the RIPSA and records interest expense using an imputed effective interest rate. The Company reassesses the expected royalty payments each reporting period and accounts for any changes through an adjustment to the effective interest rate on a prospective basis. The assumptions used in determining the expected repayment term of the debt and amortization period of the issuance costs require that the Company make estimates that could impact the carrying value of the liability, as well as the periods over which associated issuance costs will be amortized. A significant increase or decrease in forecasted net sales could materially impact each of the liability balances, interest expense and the time periods for repayment. Recently issued accounting standards not yet adopted In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. The amendments in this ASU are effective for annual periods beginning on December 15, 2024, and should be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. This ASU will have no impact on the Company's Consolidated Balance Sheets or Consolidated Statements of Operations and Comprehensive Loss. The Company is currently evaluating the impact to its income tax disclosures. In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the amendments is to enable investors to better understand an entity's overall performance and assess potential future cash flows. The amendments in this ASU are effective for annual periods beginning on December 15, 2023 and interim periods beginning on December 15, 2024 and should be applied on a retrospective basis for all periods presented. This ASU will have no impact on the Company's Consolidated Balance Sheets or Consolidated Statements of Operations and Comprehensive Loss. The Company is currently evaluating the impact to its segment disclosures. |
Recently adopted accounting standards and recent accounting standards not yet adopted | Recently issued accounting standards not yet adopted In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. The amendments in this ASU are effective for annual periods beginning on December 15, 2024, and should be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. This ASU will have no impact on the Company's Consolidated Balance Sheets or Consolidated Statements of Operations and Comprehensive Loss. The Company is currently evaluating the impact to its income tax disclosures. In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the amendments is to enable investors to better understand an entity's overall performance and assess potential future cash flows. The amendments in this ASU are effective for annual periods beginning on December 15, 2023 and interim periods beginning on December 15, 2024 and should be applied on a retrospective basis for all periods presented. This ASU will have no impact on the Company's Consolidated Balance Sheets or Consolidated Statements of Operations and Comprehensive Loss. The Company is currently evaluating the impact to its segment disclosures. |
Accrued expenses (Tables)
Accrued expenses (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following (in thousands): June 30, December 31, 2024 2023 Clinical trial and other development costs $ 5,959 $ 752 Professional fees and general corporate costs 5,095 2,039 People related costs 3,964 794 Debt issuance costs 4,612 — Total accrued expenses $ 19,630 $ 3,585 |
Share based compensation (Table
Share based compensation (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Allocation of Share Based Compensation Expense | The following table shows the allocation of share-based compensation between research and development and selling, general and administrative costs (in thousands): Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Research and development $ 3,664 $ 1,123 $ 4,680 $ 2,226 Selling, general and administrative 11,930 3,951 15,172 7,138 Total $ 15,594 $ 5,074 $ 19,852 $ 9,364 |
Share Option Activity | Number of share options outstanding Balance as of December 31, 2023 24,689,624 Granted 2,432,000 Forfeited (64,000) Exercised (1,037,424) Balance as of March 31, 2024 26,020,200 Granted 7,924,000 Forfeited (72,000) Expired (160,000) Balance as of June 30, 2024 33,712,200 |
Restricted Stock Unit Activity | Number of RSUs outstanding Balance as of December 31, 2023 19,502,624 Forfeited (1,752) Vested (4,357,208) Balance as of March 31, 2024 15,143,664 Vested (2,045,384) Balance as of June 30, 2024 13,098,280 A summary of the Company’s PRSU activity for the period ended June 30, 2024 is as follows: Number of PRSUs outstanding Balance as of December 31, 2023 10,730,144 Forfeited (5,248) Balance as of March 31, 2024 10,724,896 Balance as of June 30, 2024 10,724,896 |
Capitalization and net loss p_2
Capitalization and net loss per share (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earning Per Share | The following table shows the computation of basic and diluted net loss per share for the three and six months ended June 30, 2024 and 2023 (in thousands except per share amounts): Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Numerator: Net loss $ (70,835) $ (8,807) $ (96,629) $ (25,550) Denominator: Weighted-average shares outstanding - basic and diluted 648,217 634,469 646,959 627,996 Net loss per share - basic and diluted $ (0.11) $ (0.01) $ (0.15) $ (0.04) |
Organization, Consolidation and
Organization, Consolidation and Presentation of Financial Statements (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 USD ($) subsidiary | Dec. 31, 2023 USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of wholly owned subsidiaries | subsidiary | 1 | |
Accumulated deficit | $ | $ (485,311) | $ (388,433) |
Basis of presentation and sum_3
Basis of presentation and summary of significant accounting policies (Details) | 6 Months Ended |
Jun. 30, 2024 segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
Equity Interest (Details)
Equity Interest (Details) - Nuance (Shanghai) Pharma Co Ltd $ in Millions | Jun. 09, 2021 USD ($) |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Transaction price | $ 40 |
Accounts receivable | 25 |
Equity interest receivable | $ 15 |
Accrued expenses (Details)
Accrued expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Payables and Accruals [Abstract] | ||
Clinical trial and other development costs | $ 5,959 | $ 752 |
Professional fees and general corporate costs | 5,095 | 2,039 |
People related costs | 3,964 | 794 |
Debt issuance costs | 4,612 | 0 |
Total accrued expenses | $ 19,630 | $ 3,585 |
Organization, Consolidation a_2
Organization, Consolidation and Presentation of Financial Statements (Details) - Ligand UK Development Limited - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2024 | Jun. 30, 2024 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Research and development | $ 6,300 | $ 6,300 |
Selling, general and administrative expense | $ 15,000 | $ 15,000 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | 6 Months Ended | |||||
Jun. 28, 2024 | May 09, 2024 | Dec. 27, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Line of Credit Facility [Line Items] | ||||||
Proceeds from Term Loans | $ 122,500 | $ 9,996 | ||||
Lender and third-party fees | $ 2,303 | $ 0 | ||||
Effective interest rate | 20% | |||||
Debt issuance costs | $ 4,612 | $ 0 | ||||
Oaktree Fund Administration, LLC | ||||||
Line of Credit Facility [Line Items] | ||||||
Purchase price | $ 100,000 | |||||
Percentage of global net sales | 6.50% | |||||
Licensees | 5% | |||||
Additional funding | $ 150,000 | |||||
Multiple | 1.75 | |||||
Multiple before year one | 1.20 | |||||
Multiple after year one, before year two | 1.40 | |||||
Multiple after year two, before year three | 1.55 | |||||
Multiple after year three | 1.75 | |||||
2023 Term Loan | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, face amount | $ 400,000 | |||||
Debt instrument, fee amount | $ 2,300 | |||||
Principal outstanding | 52,300 | |||||
Interest expense | 100 | |||||
2023 Term A Loan | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Proceeds from Term Loans | $ 50,000 | |||||
Net proceeds | $ 1,100 | |||||
2024 Term Loan | ||||||
Line of Credit Facility [Line Items] | ||||||
Effective interest rate | 13% | |||||
2024 Term Loan | Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Exit fee percentage | 2.50% | |||||
2024 Term Loan | Line of Credit | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Minimum american depository shares value | $ 1,000,000 | |||||
2024 Term Loan | Line of Credit | Debt Instrument Interest Rate, Period One | Base Rate | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on variable rate | 11% | |||||
2024 Term Loan | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, face amount | $ 400,000 | |||||
Net proceeds | 52,800 | |||||
Lender and third-party fees | $ 1,100 | |||||
Debt default stated percentage | 2% | |||||
Prepayment cost | $ 5,000 | |||||
Denomination multiple | $ 1,000 | |||||
Multiple of aggregate principle amount | 1.25 | |||||
2024 Term Loan | Secured Debt | Debt Prepayment Period One | ||||||
Line of Credit Facility [Line Items] | ||||||
Early repayment penalty | 7% | |||||
2024 Term Loan | Secured Debt | Debt Prepayment Period Two | ||||||
Line of Credit Facility [Line Items] | ||||||
Early repayment penalty | 5% | |||||
2024 Term Loan | Secured Debt | Debt Prepayment Period Four | ||||||
Line of Credit Facility [Line Items] | ||||||
Early repayment penalty | 1% | |||||
2024 Term A Loan | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Proceeds from Term Loans | $ 55,000 | |||||
Net proceeds | 52,400 | |||||
2024 Term B | Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | 70,000 | |||||
2024 Term B | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Proceeds from Term Loans | $ 70,000 | |||||
Net proceeds | 68,600 | |||||
issuance discount | $ 1,400 | |||||
2024 Term C | Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | 75,000 | |||||
2024 Term D | Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | 100,000 | |||||
2024 Term E Loan | Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 100,000 | |||||
Issuance discount | 2% |
Share based compensation - Shar
Share based compensation - Share-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total | $ 15,594 | $ 5,074 | $ 19,852 | $ 9,364 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total | 3,664 | 1,123 | 4,680 | 2,226 |
Selling, general and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total | $ 11,930 | $ 3,951 | $ 15,172 | $ 7,138 |
Share based compensation - Sh_2
Share based compensation - Share Option Activity (Details) - shares | 3 Months Ended | |
Jun. 30, 2024 | Mar. 31, 2024 | |
Number of share options outstanding | ||
Beginning balance outstanding | 26,020,200 | 24,689,624 |
Granted | 7,924,000 | 2,432,000 |
Forfeited | (72,000) | (64,000) |
Exercised (in shares) | (1,037,424) | |
Expired (in shares) | (160,000) | |
Ending balance outstanding | 33,712,200 | 26,020,200 |
Share based compensation - RSU
Share based compensation - RSU Activity (Details) - shares | 3 Months Ended | |
Jun. 30, 2024 | Mar. 31, 2024 | |
Restricted Stock Units | ||
RSU Activity | ||
Outstanding, beginning balance | 15,143,664 | 19,502,624 |
Forfeited | (1,752) | |
Vested | (2,045,384) | (4,357,208) |
Outstanding, ending balance | 13,098,280 | 15,143,664 |
Performance restricted stock units (PRSUs) | ||
RSU Activity | ||
Outstanding, beginning balance | 10,724,896 | 10,730,144 |
Forfeited | (5,248) | |
Outstanding, ending balance | 10,724,896 | 10,724,896 |
Share based compensation - Narr
Share based compensation - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 15,594 | $ 5,074 | $ 19,852 | $ 9,364 |
Performance restricted stock units (PRSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 9,900 | |||
Cost related to share options and PRSUs granted but not yet recognized | $ 7,900 | $ 7,900 | ||
Expected period for recognition | 1 year |
Capitalization and net loss p_3
Capitalization and net loss per share - Computation (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 USD ($) $ / shares shares | Mar. 31, 2024 USD ($) | Jun. 30, 2023 USD ($) $ / shares shares | Mar. 31, 2023 USD ($) | Jun. 30, 2024 USD ($) $ / shares shares | Jun. 30, 2023 USD ($) $ / shares shares | |
Earnings Per Share [Abstract] | ||||||
Number of ordinary shares per ADS | 8 | 8 | ||||
Numerator: | ||||||
Net loss | $ | $ (70,835) | $ (25,794) | $ (8,807) | $ (16,743) | $ (96,629) | $ (25,550) |
Denominator: | ||||||
Weighted-average shares outstanding, basic (in shares) | 648,217,000 | 634,469,000 | 646,959,000 | 627,996,000 | ||
Weighted-average shares outstanding, diluted (in shares) | 648,217,000 | 634,469,000 | 646,959,000 | 627,996,000 | ||
Net loss per share, basic (in dollars per share) | $ / shares | $ (0.11) | $ (0.01) | $ (0.15) | $ (0.04) | ||
Net loss per share, diluted (in dollars per share) | $ / shares | $ (0.11) | $ (0.01) | $ (0.15) | $ (0.04) | ||
Antidilutive securities excluded from computation of loss per share (in shares) | 57,500,000 | 48,500,000 | 57,500,000 | 48,500,000 |