Earnings call transcript Q4 2022

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Operator

Welcome to Verona Pharma's, Fourth Quarter and Full Year 2022 Financial Results and Operating Highlights Conference Call. At this time all participants are in a listen-only mode.

Earlier this morning Verona Pharma issued a press release announcing its financial results for the three months and full year ended December 31, 2022. A copy can be found in the Investor Relations tab on the corporate website, www.veronapharma.com.

Before we begin, I'd like to remind you that during today's call, statements about the company's future expectations, plans and prospects are forward-looking statements. based current are statements forward-looking on expectations. management's These or nor involve other from known statements results, factors are forward-looking unknown our and promises neither performance actual implied our and These expectations, and expressed materially by guarantees risks, may cause to or achievements be that the different important statements. uncertainties date call. conference such statements management's represent this forward-looking estimates of Any as of the

obligations future, to to forward-looking company so, statements update at it may disclaims in point change. the subsequent any While if such the do views even events elect some its to cause

being As and a reminder, this call remain is days. for recorded XX available will

now I’d turn to over Dr. call David like Chief Officer. to Zaccardelli, Executive the

David Zaccardelli

Financial and today's Chief and everyone to Officer; With Chris you, Kathy Chief welcome call. Medical Senior Rickard, Commercial. Martin, our of today Vice President are our Officer; me Thank Dr. Mark our Hahn,

Verona momentous X the if Supported the the suffering change treatment of a patients year was potential COPD. approved results paradigm XXXX our and groundbreaking for for foremost believe to first ensifentrine millions trials we the from COPD. and from has Pharma for by ENHANCE Phase

We of on second the the FDA track quarter Application a to in Drug are New to XXXX. submit

a in in lung closer statistically line these past risk need us meaningful primary patient endpoint as trials improvements and enhanced of in from year to of treatment the new reductions the effective urgent providing and Ensifentrine significant success met the positive COPD rate ensifentrine population to options. patients. of successfully demonstrating top as The clinically function, well we evaluating in remarkable announced exacerbations. both in Phase of advances Over and X nebulized treatment our results trials maintenance for ensifentrine moderate-to-severe ENHANCE-X, COPD ENHANCE-X

financing upsized million Xrd, data clinical debt sales offering million from equity $XXX with under an our October, as through August $XXX allowed strengthen March Oxford $XX.X ATM strong as through well million in this and us non-dilutive a facility program. Finance financial in significantly position our to Additionally, ADS

a brief that take With let our me said, of review back and enhanced provide program. a step

the a in designed of Europe. subjects ENHANCE-X each United were subjects sites primarily for States enroll reminder, XXX trials symptomatic As and approximately and COPD a across total the approximately moderate-to-severe ENHANCE-X XXXX to

trials with efficacy XX longer-term placebo a either XX% or either also LAMA subjects long-acting ENHANCE-X and safety and muscarinic of or LABA, replicated a ensifentrine The and received approximately over long-acting monotherapy measurements subjects or of ENHANCE-X over approximately weeks. receiving weeks, to across XX% safety long-acting added in bronchodilator Subjects antagonist ENHANCE-X evaluated single on XX XXX in as agonist. beta

XX% of approximately LABA. subjects inhaled in Additionally, or XX% and LAMA corticosteroids received in with concomitant ENHANCE-X ENHANCE-X

and secondary previously key As endpoints successfully the lung trials announced, ENHANCE-X both demonstrating met in improvements function. and significant statistically ENHANCE-X primary

life, rate substantially was over well as of weeks. and ensifentrine risk both COPD addition, in exacerbations quality and tolerated as XX XX symptoms the reducing improved of In well trials, and and

in exacerbations data ENHANCE-X resulted COPD placebo exacerbation treatment a ENHANCE-X ensifentrine that rate statistically demonstrated pooled Importantly, of XX over with significant reduction XX% compared and from the in weeks.

the further activity in risk X anti-inflammatory of validates placebo an in COPD. in reduction magnitude to with by of and trials ensifentrine's first compared time Based non-steroidal addition when exacerbation risk delivering Phase by exacerbation exacerbation COPD treatment novel rate unprecedented the and decreased as this of for with study significantly the importance is ensifentrine mechanism Further, believe we patients the on of measured population bronchodilation XX%. to

support ENHANCE-X between this positive treatment the the totality paradigm of consistency an year. we trials. FDA ENHANCE-X in I'd second our profile of With the NDA COPD. belief data of studies coupled The and favorable also data to safety results both like ensifentrine positive from reiterate with for the hand, this of the that to submit quarter ensifentrine in plan the will change to

In planned. parallel, efforts our launch commercialization as U.S. proceeding and are activities pre-commercial

commercial, positions ENHANCE-X leadership two and in filling HR, begin strong our we key August, data Following finance. IT, across

We that we are be ensifentrine efforts accelerating NDA a will U.S. positioned well submission and for of potential confident our are as launch for and we in beyond, we XXXX. prepare

global our begin from to X ensifentrine in partnering in XXXX, X Turning Phase received and strategy Drug for Pharma for Evaluation COPD Nuance China. Center China's of to clearance Phase studies

the studies responsible commercializing reminder, and and for progress. Greater will to role a As such, forward in Nuance for Pharma a novel as We they look treatment a providing China, updates for as in addressing developing these ensifentrine global key need play COPD. is further

of from physicians the its and to availability suffer month, mechanism in selective of believe require PDEX effective million provide new relief to inhibitor, the per patients. treatments, novel their of more patients existing COPD approximately as COPD COPD is third if it therapies and management. Currently, field for patients leading action and we than symptoms of cause more days PDEX With experience will of COPD worldwide, groundbreaking than approved, and be the a Despite XXX XX death. ensifentrine XX%

advance COPD. We as of year for towards expect we another pivotal delivering mission ensifentrine to XXXX to our Verona be patients with

turn will to financial review Mark results now call to our for over I XXXX. the

Mark Hahn

in approximately time, XXXX Thank ATM of program was giving and net effect $XXX.X $XXX.X forma Friday, After we equivalents. December to million. cash last pro the morning. million. facility, XX, our from Good $XX.X that raised January, during proceeds equivalents ended you, XXXX million we ran the at in ATM Dave. and cash through proceeds We with Starting and the

million through at under launch of to currently cash expected the the be the XXXX, the including credit runway funding commercial least the planned the in States. will $XXX Between on cash believe from United the tax facility, receipts extend our UK of hand, end we ensifentrine program, Oxford loan available and expected

to December related For million of This due was $X.XX $XX per in higher for revenue XXXX. primarily the of net ordinary per $XX.X a the the year tax XXXX, prior in to tax loss more ADS share, compared loss million $XX share net of agreement, loss The loss or XXXX for after in compared than ended represents was $X.XX after higher, year. year, loss Nuance million non-recurring of $XX.X per to the the XXXX. XX, $X.XX ADS ordinary the a or a per which R&D spend to offset

enhanced compensation million lower of million the in year costs and December XXXX million decrease year nearing were ended XXXX resulting and was the trial Research compared $XX.X The and for from $XX.X for to a XXXX. XX, development charges. development decrease based share completion to other primarily $XX.X due reported in million $X.X the studies costs clinical

XX, compared million lower decrease to year reported XXXX The of expenses year. the incurred a based credit $XX.X The administrative and the the ended enhanced million in $XX.X qualifying million to for $X.X million prior December was expenditure was share lower XXXX general in for million primarily program UK Selling, year of line XX, were XXXX. $X.X R&D for The with compared credit of is charges. end for December compensation million to R&D $XX.X with $X our decrease tax XXXX. of the due

now back turn the call to Q&A. the I'll over the for operator

Operator

first and will We from answers will now with the come Securities. Argyrides begin Andreas session. question [Operator Instructions] Wedbush question Our

may now ahead. You go

Andreas Argyrides

our morning, thanks Good question. taking for and

Just here. us one from

top have as in being well about COPD So in XX% is line I The see Dupixent from X XX% meaningful, exacerbations moderate-to-severe results type later below X showed. study spoken a reduction have inflammation the month. clinically KOLs of gentlemen guided with the which Phase the this you we've ensifentrine

So the exacerbations. what have positive may the and and curious ensifentrine's impact thoughts and get your commercial to on Thanks. data readout landscape on positioning

David Zaccardelli

impact. to I'm morning, Kathy right. and going its for ask Thanks Andreas. pulmonologist question. her give Good the All a perspective as on Dupixent to

I that it? we ensifentrine intrigued the really so you we You know, addressed more with that need keep and a impact. think we by the want overall don't comment than but patient I study, to in that may we're see limited big much is But on to mind Kathy, population think

Kathleen Rickard

Sure.

they're COPD population, exaggerations total of about they're also. that different would medications or other what's smaller in population. doesn't you eosinophils So eosinophils as in front area In at patients looking differences. you a And be population is a having bronchitis so to because certainly population in looking have can't we in actually COPD much But be it said, good Dave have XX% that high XX% taking if, ensifentrine that. or remarkable so patients niche I a COPD who are whether bunch affect a this on whether a general usually in not, and be and high not, protocol a so have all not, a whole the see we since patients. whether But general forth, for matter you, tell might for generally you of steroids have decrease this without would about of remarkable they or inhaled population the chronic or you're

and compound So think between like Dupixent. the I makes a difference what ensifentrine at that's looking

Andreas Argyrides

maybe the market, would impact And has benefit would, followup quick would on compared a ensifentrine the Dupixent exacerbations to positive especially shown that any Dupixent? that given just I'm pricing, in there, data assuming

David Zaccardelli

Hello, where in are pricing? Chris, comment you want general with to we on

Christopher Martin

do Andreas. that. can I Yes,

current of we the products view kind nebulized for kind current we as somewhere we by of a about Entin, used I a nebulized the ensifentrine, month. Those will products time $X,XXX launch think think we've around floor when be ensifentrine. core Mc with pricing a for baseline products of we've, baseline the a

to results within a on and realized, current priced community, products. physician today at very Medicare exacerbations things we've but the the community. is they to expect those One not you of Part-D, ensifentrine are payer there, that And Medicare impactful, versus payers we to only talked the when premium Advantage, mentioned be the to just

which ensifentrine think lot we exacerbation, price us the for other in the the on here on of of that Reduction value results thing impact what pricing improvements think have we the the the that would provides launch. I provide price how as to as and flexibility in some is important about But into legislation ensifentrine, a Inflation about marketable as might Act that think are we symptoms, we dynamics profile that market. be get of we market the bronchodilation, and going play of

that the is is within great reception we think we feel to very rep So, feel a and ensifentrine like from a pricing receptivity as positive confident current versus the a I marketplace, very the payer also well. products premium value perspective, at ensifentrine's

Andreas Argyrides

Congrats the great. Thanks. progress. Okay all on

David Zaccardelli

Thanks, Andreas.

Operator

Joon Lee next Our will come question Securities. Truist with from

ahead. go now may You

Joon Lee

June. for questions. on Good Autumn for morning. Thanks is taking This the

board, about nature? process rate what's your Our the European that limiting is on getting Thank NDA and just also of first partner things European to is you. a just wondering for step how process then NDA, going? And question strategy wondering regulatory your the the

David Zaccardelli

tracking case Thanks All quarter. second it together, Sure. the rate the The and guided, not this one only progressing nonclinical, of for course, coming also, of is but we're well in of to to steps, is in we components have and NDA of as always the was CMC, are course, the so submission question. clinical, very the the which much the NDA. a the aspects and important, limiting it other

we're at looking So pleased very where with submission. forward to and that we're it

And United as that outside ensifentrine far partnering partner to the looking same as remains we our and strategy goes, are the States.

that Nuance As we know, China you done already Pharma. with in greater have

know, cetera. different, et scope, You are their partners these their needs are as different, are all conversations different their size,

And in. know, of our you can't we we're confident timings, very other so, sticking strategy, which control than some these with

I updating on strategy. we mentioned before. we so partnering, forward XXXX a I've is be focus report expect And but to have to more look it as partnering our of to as definitely articulated everyone And

Joon Lee

you. Thank

Operator

Tom from come Shrader with will question BTIG. next Our

ahead. go You now may

Thomas Shrader

morning. Good for taking the Thanks questions.

would to the Some us of pay what for Do preparedness? approval? a be questions, good that or And expect be a We're what or little you. at can of expect level area? on you for sense Chris, will look your drug? for in year you then give you something expect less a like And you ramp of to What you have do then general Thank this this in like a acceptance terms do launch that? experienced. should say, also copay

David Zaccardelli

take you do those? want and ahead to Chris, go

Christopher Martin

only progressing the talk, support I'll the been is commercial his including finance we commercial launch plan other start as organization, get departments, working that a but involved approval. very in well. launch, plan mentioned Across on not CMC Dave launch as readiness ready Yes. very for Tom, on and we've comprehensive that

in once And working a the an there toward We quickly -- and to approval plans, training. channel, after we're those is our launch time also hiring possible and plan is a at product get to does the get as so of and launch very is approval. reps will we approval, soon as launch possible quickly into have plan be organization as to we point as will It the But good is possible after we to shape approval, that weeks. as after take couple as that will approval. important our be then

that second the As Medicare very to see as to differently D in think Ensifentrine's launch with at you it's launches important those YUPELRI physicians. access launches tight physicians. your available caused our what as able access payer know see what channel we in launch. be payer and the typically that far Part that in to used or YUPELRI channels acceptance had as think on Part very be really involved B Medicare be tend And with can restrictions YUPELRI. typically primary products is acceptance, And Medicare that Part today, by we reimbursement and at within Dog within will boy. ensifentrine I today question product rates for with new with have at is and happen because about to will launch for high channel, than commercial B launch

important There existing to that with Those that some within under which include covered believe Medicare policies, the case be things on coverage are channel, we steps but are working that Part will ensuring those we we're today. go that B through we're ensifentrine. the have

coverage use J-code We meantime, immediately That J-code we six nonspecific payment go J-code. upon get paperwork also submission get getting in product-specific to existing J-code for specific get the then should that three pharmacies. will In and to ready and the to And product are within expect approval. establishing to months. you a the our

overall very, the year. and launch physicians we ensifentrine first feel to high be be throughout ability is very So and confident used coverage that by the to going at high

and what that is of see we is discussed what channel side you we general, products. look patients for Medicare is extremely Part last for of for an there B Medicare when in other branded the the The physicians. that at prescriptions proposition attractive the over patients. nebulized This XX% copays their story paying of products than nebulized year for less these are $XX is And

So they get low costs. not out-of they only do pocket have access, but

we anticipate So be I think be to allow excited us how XXXX. about when launch uptake ensifentrine to very the for dynamics those in we

Thomas Shrader

clarification, And may to you approval? does be or quick can before start talk everything just one at payers approval

Christopher Martin

We can have discussions early with approval. payers before

can payers disease state is their move and but have with through early we that of discussions the needs, process. we Some about as the

Thomas Shrader

you. thank Great,

Christopher Martin

Tom. Thanks,

Operator

Wainwright. [Operator Instructions] from will Pachaiyappan Our come Boobalan next with H.C. question

now may go You ahead.

Boobalan Pachaiyappan

this is Can okay? me you Hi, Boobalan. hear

David Zaccardelli

Yes, perfectly.

Boobalan Pachaiyappan

All our for right, great. Good morning and thanks taking questions, few from us.

COGS to speak expected efficiently manufactured ensifentrine you can firstly, how LAMA So can be and to traditional related therapeutics? LABA and

David Zaccardelli

I the a Sure, we an in have very molecule process Anti-cancer ATI. blow I'll again make I are do sorted think as in fill and line over same process to a for And drug occurred. Mark in other The general the scale ampoules. comment that don't has drug the has that's comfortable small cost on manufactured plastic want or very the been products efficient COGS. can statement the Again, Mark, and years we extremely with well into described, manufactured manufacturing is substance way. manufacturing comment? with know, seal we're believe that very product and you well is, the

Mark Hahn

I'll echo molecule. just is a comments, Yes. that your Dave, it small

is COGS I of COGS. should So manufacturing you those fairly the expect or of sales think think consistent for percentage manufacturing, low are across And least compounds. the about at way cost generally single-digit

Boobalan Pachaiyappan

your the All versus right, combination great. role What ensifentrine will for monotherapy be of estimation? in

David Zaccardelli

it we think, or maybe clarify how I question. to often understand specifically? you question combination I Well, the would Are see sure in your make asking

Boobalan Pachaiyappan

respect with Yes, combination. to

David Zaccardelli

used LAMA can and has been I it we be you as the well think saw in combination ensifentrine as monotherapy LABA. that trial in studied -- and and used with as Yes. Well,

in think addition and all I it to works these ICS. settings even in

a safety benefit very going paradigm how change ensifentrine that's use we're exactly complete COPD. mentioned ensifentrine efficacy why my to effect triple comfortable to that avoiding in that have don't therapy, And with treatment think limited and we is So its COPD benefit role because again risk and remarks to to is in really choices, utilized a And ensifentrine's paradigm. is in think see you're where in overall play patients patients. those ICS. treatment the going we along addition, the with attribute, ensifentrine, other risk, who in in no And especially both treated, who in ICS to earlier those require I those can on always positive its are helping of

everywhere, a again treatment it see paradigm. used we the so little in And

Boobalan Pachaiyappan

for success vision One question me, the you to the balance company can years? final talk ensifentrine five over recent from program, your cash strategic next the given so three substantial and about of

David Zaccardelli

Yes, three has ensifentrine for we've been focused years, as Clearly, be to so. critical COPD execution been and two, sure. question. past continue good over Very the will on

of short term, in course, in the we the the term. for NDA medium in have approval So an launch looking We're COPD space. and

to groundbreaking in patients of to specifically but mentioned, I we U.S., think As incredible millions field world throughout that's over space, coming going in helping an COPD, I years. the ensifentrine and forward that look that's with opportunity of and also in the the the be

that. In to previously, development of on up everybody in the which plus forward sense. well, that, amount we combination ensifentrine, the look therapy we of have are forward progress for combination field we early incredible think addition of the stages a we is as to set makes of updating We product moving and LAMA know a mentioned and

lot in us respiratory ITF there In a example, has explore. course, asthma, other so diseases, for a of are for of to possibly ensifentrine lot and opportunity opportunities addition, of fibrosis, cystic

nebulized MDI will experience they or looking devices leveraging under as of primarily and into continue probably other DPI. and create through to strategy combination to to so proprietary partnership through mentioned, other our because to these lot a the own Pharma COPD include value expanding are sense regard for ensifentrine think the look partner's devices, I via we a indications makes the while forward delivery and Verona partnership We in We we these or indications development. our product route, with

Boobalan Pachaiyappan

for All questions. and right. my taking thanks Congrats

David Zaccardelli

so much. Thanks

Operator

Our next question with Piper will come Yasmeen from Rahimi Sandler.

You ahead. may go now

Unidentified Analyst

on is guys. Hi Yas. This Lauren for

Just questions. a few

based focus to is at utilization would the to ensifentrine potential have which on feedback commented narrow they And second, then moment, Thanks. and want payers on ensifentrine? first, the patients healthcare physician COPD the all overall about more The reduce put at or short-term?

David Zaccardelli

do on those take you down to two? Chris, want

Christopher Martin

do Yes, that. I can

for Lauren, the question. So thanks

at used physician done, do us addition have we patients patients nurse the haven't us think we if practitioners Dave think very care be are And to -- XX treatment that today about, symptomatic they a research, PAs. talked of very broadly to and risk about that we've exacerbations. the years. the is for something market ensifentrine, They that can in reiterate mechanism been is to look feedback practice, and is think physicians, also in new they XXX but in I able paradigm. XX to many of talked to when them the extensive, over to -- to idea year, at reiterate their across which that pulmonologists, I remain these And they this and XX as well plus primary physicians, both we've the continue which past thing

So do ability this something gives them different. very to

treated know many there's about today, if million are about treated X.X So patients. we we patients think how

trial is either those there's and of about population, rate. LAMA those LABA ensifentrine physicians million consider or the very which patients, on high that know or also see a adding We LABA/ICS would what patients on ENHANCE patients in at you X you

a and patients patients, symptomatic. these at the response which then group other provide where exacerbation. in no patient And sustained the well to on physicians know of very we therapy, these triple of described at still gives to dual as are, an have it Dave are The early earlier, as could bronchodilation and add-on the bronchodilator them and mechanism rate because what look rate options, symptoms those physicians additional on an ensifentrine risk in the patients and are that ability layer high patients those patients them this on the

on occurring COPD based and broadly So we treatment the KOLs with the feel ensifentrine that confidently is really research our used paradigm and that within today. will interactions be patient population change market across very the

care your payers second question think I was and around utilization. health

the to products I and pricing, think reasons premium versus ensifentrine one priced payers -- when overall is be question plans. at believing around has a is are within ensifentrine back of current healthcare that earlier, benefit the will that's exacerbations go utilization a we that which their because the potentially of on why

We payer system. a COPD to that the is and high know the burden

check, $XX billion I direct complications worth the costs of COPD data -- think and indirect there's or COPD. associated over last of with

benefit. improve rate ability is for and the ensifentrine lung and help a exacerbations So to and risk the of very reduce symptoms patient function attractive

what looking just at those as accept well. at they're they as for also to about it price as they're not would but ensifentrine implications how think cover as a long-term they So it looking and short-term, a

Unidentified Analyst

Great. much. Thank so you

Operator

concludes are Zaccardelli turn to appears to no back our questions. further David I'd question-and-answer closing remarks. over the any It conference This for session. like

David Zaccardelli

and you, questions, you patients Thank who in program. professionals the everyone and participated for to ENHANCE the your Great. healthcare thank

and you We Biotech are including many on and conferences, to upcoming the Summit Bay then. speaking to ATS attending forward of look several Jefferies

the quarter launch continuing our and near-term U.S. include NDA second our submitting planned FDA to commercial preparations As milestones the a of in reminder, ensifentrine. our for

our today's their Verona continued like team to shareholders that and I'd commitment. support at and call. for the thank for their talented concludes dedicated Finally, Operator,

Operator

for you presentation. The today's attending Thank conference now has concluded.

disconnect. now may You

Verona Pharma (VRNA) 7 Mar 232022 Q4 Earnings call transcript