VRNA - Earnings call transcript Q1 2024

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Operator

Hello, and welcome to Verona Pharma's First Quarter 2024 Financial Results and Operating Highlights Conference Call. [Operator Instructions] Earlier this morning, Verona Pharma issued a press release announcing its financial results for the 3 months ended March 31, 2024. 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 of this from known statements results, factors are forward-looking unknown our as and such promises neither performance actual implied our call. and conference These expectations and expressed materially by estimates guarantees risks, of forward-looking may statements cause the to management's or date achievements be that the different important statements. Any uncertainties represent

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

David As a Please go Chief available now remain I Executive reminder, will ahead. would call Dr. this like to recorded call Zaccardelli, and XX the days. being Officer. for turn is to over

David Zaccardelli

commercialization first progress to quarter, the continued preparations for of of we for the COPD. make ensifentrine on In excellent the treatment maintenance planned

a XX, are for the date PDUFA FDA action you to planning not has As and committee hold an assigned know, meeting. target advisory June indicated on ensifentrine they

FDA our their are continuing U.S. in ensifentrine our of forward of a with and third for quarter work the We launch the this to potential review. year activities finalizing look during

nonsteroidal for to treatment expected effects If the approved, and novel COPD available inhaled has mechanism the change the ensifentrine is the to paradigm maintenance over years. anti-inflammatory be mechanism We bronchodilator dual providing first XX for potential in of treatment COPD. believe its

in approximately symptoms than worldwide, of cause it death availability maintenance-treated days of for million of COPD more the million Currently, persistent from the per XX% XX experienced the is globally. than XXX U.S., leading month. third more X.X suffer treatments and the patients patients Despite COPD existing

new dissatisfied to patients to of for their maximally could providers' with effective triple XX% treatment. are therapy treated COPD on patients. approximately continued provide considered highlights need This relief dual and care therapies bronchodilators or health addition, be In who

launch care programs, commercial data strengthening finalizing and on sales during make engagement strategy, services and patient continue infrastructure aspects, including and to deployment progress preparation force to health key now professional and launch. insights internal capabilities actionable patient We quick enable our excellent our plan are distribution, pricing,

our actively the COPD. campaign, also severe on Unspoken optimize impact COPD disease highlighting to in to awareness and patients' encourages campaign their is better advanced help of This have care. We engage patients dialogue HCPs lives

to pending quarter summary, website. HCPs Through this X,XXX campaign year, XX% approval COPD targeted the in engaged the of Unspoken we June. reached In of HCPs, in ensifentrine, and successfully with launch strong position are first a over

novel deep COPD, Our based the and confidence the preparations is on significant unmet experience profile and commercial extensive the Verona the team. in of of capabilities ensifentrine, our need

will ensifentrine week, symposia, measures. will including X the demonstrating late-breaking the this in to symposium pooled and the rate of present conference with as As reductions the of risk the pooled of new treatment analyses lung and Phase oral symptoms we in A The later month. studies breakthroughs. mini be the COPD ATS Phase improvements function, X pooled quality life of ENHANCE ENHANCE III posters, analysis exacerbations highlight demonstrating presented part of ensifentrine in for analyses will studies, announced with last from posters at additional III highlight designed

as host clinical led lung well and the also presentations impairment by X in exploring function We'll exhibition inflammation hub an phosphodiesterase of experts. innovation role booth as COPD, in

of the second the we with half ensifentrine to addition planned this working II ensifentrine, initiate are of In Phase in year. U.S. X to programs launch

initiate the combination an for COPD submit second delivered adequate the Upon escalation via FDA and IND a for Phase of III. II an to dose a First, combination treatment clinical we are support glycopyrrolate, we developing to nebulizer. study confirmation XXXX intending plan formulation with to Phase the formulation, maintenance fixed-dose in ensifentrine LAMA, fixed-dose and a half a of of

patients, and in non-cystic be in effective the ensifentrine of of condition that observed XXX,XXX ensifentrine assess safety we trial and a in fibrosis Phase including patients the can no symptoms profile non-CF is reduction cough severe in sputum, currently patients affects of for U.S., of based XXXX. up exacerbation bronchiectasis an efficacy approved with clinical believe and bronchiectasis. a treatment II rate Additionally, a potentially chronic on COPD in This plan improvement and to in clinical second and ensifentrine there therapy. We the nebulized to to is start half the risk

strong sheet. I'm to on pleased Moving report balance on finances. our our to

In of cost million strengthened strategic our of enhanced the on million through and covenants. financial to lower our $XXX financing a OMERS. arrangement balance capital and sheet with recently favorable Capital a of Oaktree our addition million flexibility cash over hand end at and overall with refinanced to $XXX We facility one debt $XXX March, we more financial

of interest percentage launch addition, a Withdraws us ensifentrine beyond runway expect XXXX. $XXX sales giving under potential access we based with approximately at have facility a approval, In million on transaction an a $XXX entered available to million, repayment revenue we $XXX million at future to this and revenues. capped into additional

quarter leading date, Lastly, XXXX, to PDUFA to a welcome June your mention entering go and we into so questions be ahead. call please in before that, Mark, Q&A period and Mark the over quiet XX I the the review I'd session. our With turn results first we'll the financial of for to like

Mark Hahn

have currently and and under and Dave runway and of with that II cash strategic balance on with the U.S. in we commercial believe sufficient Thank Oaktree XXXX, including first And X you, the planned in ended anticipated the We XXXX to moments million launch million sheet hand available ago. of current remains with funding new be ensifentrine strong. few financing expect quarter $XXX.X our equivalents. discussed to We Phase beyond our a Dave. the OMERS, cash $XXX the programs

financing Let the package. me a discussing minute of key spend terms

and look increase the package be our new cash on to providing company of decreasing and will shareholders this at hand to risk covenant cost to provide a establishing as ensifentrine, flexibility financial capital. in lower of goal primary launch while without launch additional quantum Our we diluting the

a The and and financing provides the repay we revenue facility and Oxford in facility. a loan million which to facility, $XX Hercules in the order refinance million the RIPSA. debt consists have interest we for sale, million as the of the we of refer cap Oxford/Hercules $XXX existing $XXX place at retire close drawing of are terms to Under with

additional eligible approval, strategic support $XXX We to will future in draw X and million available be to $XXX in million with $XX tranches million separate availability milestone-based at an initiatives.

X annum, principal the payments interest XXX% for bear thereafter. of under per years Draws and with the interest-only facility XX% due at

million Additionally, nonapproval, milestones. compared available the we with million existing facility. certain draw additional $XXX with been our Under an simplified covenant has commercial structure RIPSA, receive at discretion achieving and $XXX the will to eased upon of the

received years ranges global the company. with The The the company from to from total the amount ensifentrine the multiples engage is within first proceeds we from net X revenue sales at term to made RIPSA interest the of the outside during X% ability OMERS ex-U.S. interest by we lower financing X.X% payable of financing that revenue rate the funded, may of capped of at U.S. licensees of funding. much RIPSA redeem the and to the by X.XXx Oaktree

approximately that be retired drawn This in full, years. if it with X would expectation facility in was designed an

Now back to the results.

the XX, the tax loss a XXXX, $XX.X loss of ended to quarter for This a $XX.X quarter first net the quarter XXXX. For after a compared per or per ADS million $X.XX $X.XX March loss period in $X.XX ordinary share per was the after $X.XX net XXXX. to for of loss ADS tax or ordinary compared for share million per of same represents of

the to XX, $XX.X first ended million decrease for quarter reported Research III to for all XXXX. expenses the ENHANCE was compared matters of to for primarily million and finalizing $X.X development the $X.X XXXX, quarter the program. first were costs XXXX of related million of Phase due This quarter March in the

costs an As million $X.X increase by people-related was program manufacturing-related decrease share-based completed partially including in This of API costs, pre-approval in as million no XXXX. incurred the in similar were as well compensation. offset was $X.X of costs, XXXX,

and administrative expenses preparation other evolution quarter same of to reported $X.X Selling, activities, million other and support related driven $X.X which build-out million This and increase of pre-commercial $X.X was to professional ended continued expenses million XX, costs consulting fees, to $XX.X continued our compared technology general the XXXX. increases of marketing, and for and million infrastructure. commercial business growth million $X.X related the in our to by March administrative period for primarily were information the XXXX, related the

costs launch. increased our commercial of the compensation, people-related in our we including headcount commercial as share-based million, ahead support functions and increased planned $X.X Additionally, by

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

Operator

first Today's from Instructions] with [Operator Thank Tsai you very much. comes Andrew question Jefferies.

Lin Tsai

questions A side. our on couple of

Regeneron's could have is they given not inclination because the on PDUFA questions you're could recently the a after notified the more you wanted they in any So yours, routinely, one -- wanted discussions with be said has as you the a extended PDUFA know FDA confirm, lot. FDA But to ask well? information. be I first the FDA extended just ensi's Regeneron, maybe PDUFA review. FDA

David Zaccardelli

I the towards would XX just we June Thanks the question. that for work continuing say to PDUFA. are

what we And that's doing. and we're what so know

Lin Tsai

Dupixent And is sell-side of estimates estimates. the very for Okay. high the

more do, you time do approved ensifentrine for do physicians the you So or upon GP on volume scripts does be around as that's the think a get question basis think will why is,, And writing launch? if immediately case? same you Dupixent the

David Zaccardelli

I'll my general Thanks. can Chris in then and thoughts, as well. weigh give

a treated. involve everybody been the I the under count, as treatment U.S. currently maintenance in that, think in those XXX,XXX million the That's that subset patients U.S. around think with I Dupixent patients, data eosinophil in to its of supports are estimated X.X of use knows, higher are has that which

overall it fairly the at population. of it's So look like small patient does targeted portion a

were studied. it U.S. course, studied much makes the the broader ensifentrine, And -- majority on it And around that XX% And it of LABA/ICS. treated in as in of and the we that actually up or was bulk of are that on as patients LABA patients view LAMA the used

we wide. So quite application its see

utilization want spectrum Chris, And add so anything to patients. across know, expect I of that? you we that don't to

Christopher Martin

Yes.

the described, PDEX only at the important in that have you get which, Andrew, very effects. important anti-inflammatory is across again, for X,XXX is is because it symptom activity, #X as they patients of research, that these a spectrum Dave persistent see patients add, effect our is, ensifentrine's because extremely is feature as bronchodilation look PDEX the patients, and That we and bronchodilation is has I about ensifentrine dyspnea. is symptoms. complain both physicians over market both today and both physicians think utility thing One I thing would they Dave,

and -- physician help So than Dupixent the much broader has ability to we these breathe believe across set better that a patient this patients application does. set

As are of are today. symptomatic. Dave X.X ensifentrine million patients least has utility exist those broad that And across still maintenance remember, patients therapies the stated, with half and treated at

our So that research, we in ensifentrine, treatment to on physicians believe the the market point. very at that based for algorithm fits nicely

Lin Tsai

Got take quick it think break question do you And even? launch Okay. really is, the to it. how much last will for

David Zaccardelli

Mark, want you comment? to do

Mark Hahn

Yes. I think calls. think this just it's not I And previous Yes. Andrew, we've addressed on ensifentrine.

has like single that structure. lab no discovery a overhead I Verona think it's space, any no engine, relatively company lean asset, a

think $XXX to the rate to in get $XXX is takes it profitability. I that sales run million and range million situation, in breakeven of what to

Lin Tsai

Great.

luck. for excited I'm Good you. Okay.

Operator

Rahimi comes your The Yasmeen with Yasmeen, Sandler. next Piper from is line question open.

Yasmeen Rahimi

question mute. Team, like quiet I mean enter X it XX, we on have I guess, the today, I June and Sorry first end more have and is of at was months to a between you're I the appears, now about period going left. that,

early? to a going us agency was so here? of kind That's don't for one. rationale the play-by-play? what's because want So you why to one. period have interactions What enter and with communication Like, rationale? That's you're stopping more the that the quiet Is the give

great a versus launch? one point is in successful think time? it's why you later Second that full me deal, versus optionalities more now equity the of on of what capital makes this also of give with but the financing, think strategic raise optionalities? Do doing a timing financing will other just maybe sufficient this again, So and deal you were this till maybe

is, presentations appreciate are I lineup ATS, one data new third key. key or be that of from to the any we're X questions. going my learn then points there things to that taking strong And going is

I'll back Sorry, the into move queue.

David Zaccardelli

for Thanks the very much questions.

quiet about the the on turn So maybe I'll strategic for just over I'll and it touch Mark period, financing the at Tara then ATS. can and data to talk

we on are where I and been this think are . launch we that where with plans we on our have our reviewing programs. call, commercial exactly development

financing course, the Of announcing just as well.

months FDA with out, quite be well. of active you the the As as point couple can last

to we've and And where are hopefully everything covered so I up on we think are. speed

overall, and And that to be PDUFA. until so updates time I really on going really, a no think have where focused we're it's substantial our execution

that's the quiet the about I talk So to know, timing? our on period. want you perspective strategic don't Mark, financing

Mark Hahn

Sure. Sure.

spoken to it we think strategy I've of sure do. people past, about asked sufficient like our I capital. There's of cash you into We in of always the types never So over make past on a me that been as financing have we hand? we'd a is that and investors want what couple Those part have to And there's quarters, overhang. talk where questions. get amongst have situation do the financing enough

at sure were overhang, least situation, that address so that financing there concerned. far wanted And is no we as to as we make

is almost lowered doing and of structures yet at we're one don't RIPSA by basis, to if the that's This but my quite on the the -- we because lenders. things repayment of we -- word, things that did the the talked terms -- nice. we of of subject presented went with $XXX about cash to out know package And one launch, royalty debt is million amount exploratory an are, opinion, -- bringing an fixed And in million. being so of the that itself, actually debt will a I And in. terms and $XX financing additional covenant lowering and we're exploratorily we have,

also those taken significantly for covenants we've made more favorable the them and company. And

capital that to We when focused approval, that's what why -- XXX% launch. days whole that's I of be as early will take those did you focused we we of in won't team the it we did package raising together, distracting So And think rationale and on and be on Tara? we we launch. get we're and now.

Tara Rheault

Mark. Thanks,

this quite So more I about, including excited think subgroup. about exacerbation across data more baseline analyses what's coming of talking all at ATS data, that our reduction we're exacerbation eosinophil is

to is infrequent there. exacerbator our an ensifentrine is ENHANCE of what exacerbator data a from Group important delayed B and that's looking Gold Progression progression to there this essentially think get frequent signal to showing I and Gold progression for data. through analysis So out patients Group from a E strong at with a

life X lung showing subgroup, in into LAMA presentations, symptoms, these exacerbation taking we're the represent medication, function program. being the of classes looking in a subgroup that some ENHANCE ATS separately In deep and doing the very LAMA have also so as significant background data already of dive additional in our data today impact course, in the And with the of also quality largest therapies and the improvement dyspnea and subgroup studies across LABA/ICS United States. dyspnea the the do we are at a the large ensifentrine, finally, used then

look do please presentation our that. and So a have follow ATS at

Operator

BTIG. with Shrader Tom from is question Next

Thomas Shrader

a And deal it's a other we are to at going say have Would XX XX should to I take take refinance at odds You'd XXX deal? the than the I that the little the take, anything bit, you're then of question. high? to other plus And Back you all approval? are that disease think to assume very you required approval?

Mark Hahn

Yes.

nothing required. is actually, So really

at under $XX All expectation approval withdrawals approval. under potential the milestones should think debt other the million deal the at be discretion. are and our take RIPSA $XXX would completely million that and the we at I the the

Thomas Shrader

Is that do given that And for are, good disease it these the headline? seems really question treat Chris. your early? from ATS focus they think things you of exacerbation that be a now be, drug might disease awareness, to then like with but that on is on Where no the on there's focus big might focused kind focused? really understanding It you're awareness? able exacerbations for is Great. The patients what

Christopher Martin

for you thank the Tom, question.

the and that that in we've these earlier, month, the about from to are the course algorithm. persistent wants symptoms their the on days and a patient physicians year, patients, of the get understand maximal see And more I report treatment is the learned really of you meaningful insights and that patients think Dave how XX point campaign to, if change that exist the symptomatic the a to it's patient within persistently are dissatisfied is existing therapies. a patients at think of that current needs things with for when they physician treatment up described dialogue how to patients over with progress the one and we XX% least is be persistent they're these Unspoken and the about in literature COPD patients treatment as data last how to the these we have and there really engage that highlight symptoms with to of in

patient that PDEX but she PDEX PDEX, the to bronchodilation that to long-term the better back he mechanism the anti-inflammatory gain. experience up to open potentially of also both which physician The some is or the activities. is and to a the important is about breathe occur, able ensifentrine with are the hoping able ability allows they exacerbations thing should These with just a the for of get through to that effects airways They being non-steroidal play symptoms. patients, is And by allows about are exacerbations to the care care what breathe. here to mailbox, allow bronchodilation grandchild. to care a walk that fact us mechanism, learned activities being and patient the and that tell activities they potentially that talk things we worsening is day-to-day to are about when what to And outside we've and about they dealt symptoms

Thomas Shrader

useful. very think I agree, that's I

Operator

Ram The Wainwright. next comes Selvaraju H.C. with from question

Raghuram Selvaraju

around clarificatory case? couple in RIPSA. It Could just was in be the you will you the give up if it points works of repaying ahead of stated repayment formula what clarity additional release applies on and that a press mechanism how modified schedule. the that total Just such precisely some a amount wind us

Mark Hahn

Ram. Sure, Sure.

a hard cap there's So on repayments.

So any they here X.XXx and from investment. of partners. receive X.X% they'll in return X% a get sales ex-U.S. bring of their the we of Until monies U.S. in

much so pay each to can if and -- that, want repayment it different on the cap earlier, depending that if becomes do we how we of early year, is. Now repay there's a we level it amount lower

year, a this little specific second a of first But the But choice. bit lowest, years. third higher. couple much don't year the it lower the beyond at caps be disclosed And then those higher, -- years. the bit it paid X.XXx. cap's we've our in into is could in I specific think is little So the could the be in at first earlier a that, cost

Raghuram Selvaraju

base But where Is maturity. until the that probably debt especially now, scenario least case the stand at the correct? royalty that right would currently things percentage, be you given hold

Mark Hahn

how Yes, repay you make the to and will to whether be decision as you model. to I the think both revenue your first and the sales from in I as think that one, you in think ramp order quickly in sales or depends ensifentrine, just look of it. the But have have take ensifentrine you your draws how built launch then ramp coming at we'll on

Raghuram Selvaraju

be any the for factors commercial asked look need kind intensive anything to at any in you more put earlier. that new or as But that that that see the the indicated in related would like there echoes launch need way facility, to any to Just there place you this questions were to you information led Also that. and overall was specific wanted now? activities if were to of market the this

Mark Hahn

Yes. Great. Great question.

the Verona, the financing and understanding of we on the that. of felt said of the couple did capitalized we on it that in before the for based operating that would execute are when last we've adequately the over marketing take. very cost And full launch, the amount years So that -- that this field deployment, support even we financing order to to strategy designed we model expectations of

really This of in us the broaden or gas we're we provides terms providing bit other additional and stepping provides -- think financial accelerate in pursuing financing, if by the say, we're us sales for that should it in launch, could we a this it you do look the flexibility oh, I as on early little at if area, to as portfolio, that assets capital to well. that, more flexibility interested that themselves present do us in we to

Raghuram Selvaraju

you that. bring advertising advertising would about stage anything in being from And one in earlier equation? DTC at for on be element ensifentrine know respect following triggers -- might I have read should anything of we of indicative about you lastly, And see with you this that are elect to your should the do And you what commercialization we just all are this how advertising? thinking whether Or later? the comment at really DTC the expect then potentially what into folks with of thinking to the as to other. of the wanted And that? if rather which doesn't scenario could we to the to be you there's deciding launch DTC really to begin if than on examination

Mark Hahn

Okay.

talk talk And financing financing start I'd do financial any to how say additional can the element nothing Chris really on with But already So plans that maybe, components. perspective, question, about what's can a DTC? you're DTC plan. thinking other and then this about DTC known of I'll to ideas Chris, any the you the about had maybe than about or the with from on respect

Christopher Martin

or through as -- I patients to long-term I we the can Ram, and is last some new looking we help over at need tremendous novel the well. unmet physicians, what research. When of we potentially question. Yes, quantitative that and this see better And patient breathe think the with like of the something within see patient just the for either prevent effects thousands year, to inflammation the we've continue talked through now charts of appreciate

to banner about but the today be about I plan to going able always patient satellite channels. in to various launch, ways you lot of networks, described, reaching today. ads As the potentially cable into reach your local TV patient have the as consider on TV in we exists a as planned other We think DTC, or we that, of patient Internet think more on course it's be it's that is, patients over And the reach a always advertisements potentially to to the is through able channels. right planned manner, XX you months. direct-to-patient last places, that in which reaching something we've do the if social

what the And with is see the continue we our exists also very research that I The think ensifentrine. to interest interest patients over tremendous very course the is high. HCPs but of with with interest is high,

engaging XX So XX to always included months. our next or form the fashion the in -- course plans of launch some patient over have included the

going molecule when important think asking their is we get I and Because what think how how for ensifentrine, to have the have the able think that it. to how you engage molecule we in molecule doctor to works patients to be you the our is prescribe physicians actually the and if making thing then about understand for patients. is, sure patients do we need about that

across standpoint, all fully have awareness when so the that's physicians have we engage launch. something comes before activation patient to it sure that make we a to And that the the timing right

Operator

closing Thank our remarks. to back turn you. now Zaccardelli the like I for over question-and-answer would David concludes This session. to conference

David Zaccardelli

us your and for everyone, questions. for joining you, Thank today

for heard you confident maintenance data conclusion, we're And very we treatment ensifentrine I of our today, think the the for We support of date we XX of June approval very successful look in positioned well as forward proceed. as a updating launch. and that you've to are upcoming PDUFA COPD.

So a great day. have

Operator

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

your disconnect now lines. may You

Verona Pharma (VRNA) 9 May 242024 Q1 Earnings call transcript