14 December 2017
LSE: VER

AGM Statement

Tuzistra® XR prescriptions continue to grow steadily, despite a reduction in narcotic prescribing

Vernalis plc ("Vernalis" or the "Company") provides an update ahead of its Annual General Meeting ("AGM") being held today at 10.30 am at the offices of Covington & Burling, 265 Strand, London WC2R 1BH.

Highlights

  • Tuzistra® XR prescriptions continue to grow steadily, up 85% on prior year (1 July to 1 Dec)
    • With c.70% of 2017/18 cough cold season remaining, Tuzistra® XR needs to see an acceleration in prescription growth to achieve the annual guidance of 105,000-115,000 prescriptions
    • Next update: end of Q1 2018 – in conjunction with interim results release
  • CCP-06, our non-narcotic cough cold product candidate, continues to progress
  • CCP-07 and CCP-08 NDAs remain on track for approval during 2018/19 financial year
  • Research business continues to perform well

Ian Garland, CEO of Vernalis commented: "We are encouraged by the steady growth in Tuzistra® XR prescriptions, despite the general negativity, in the US, surrounding the use of narcotic-based drugs. Whilst we need to see acceleration in prescription growth to achieve our total prescription market guidance of a threefold increase in prescription volume, we are early in the cough cold season and the US commercial team is executing a disciplined plan to accelerate growth over the coming months."

Tuzistra® XR and the cough cold franchise

Tuzistra® XR scripts grow 85%

Tuzistra® XR prescriptions for the 22 weeks from 1 July 2017 to 1 December 2017, the latest weekly data available, are up approximately 85% on the equivalent 22 week period of the prior year. Although we have seen steady growth, this growth will need to accelerate in the four months to March 2018, when typically almost half of the annual cough cold prescriptions are written (2016/17 approximately 49% of annual total), if we are to achieve our target growth of 200% over the prior year. We will provide a further update at the end of Q1 2018 when we announce our interim results for the six months to 31 December 2017.

Total cough cold market opportunity remains intact, however narcotic segment continues to decline

The growth in Tuzistra® XR prescriptions seen in the first 22 weeks of 2017/18 is against a background of a continuing decline in the narcotic portion of the prescription cough cold market. Year-to-date, the combined prescribing of codeine and hydrocodone-based cough cold products is down 13% compared to the same period in the prior year, which itself was down 14% compared to 2015/16. Over the past two years, the combined prescribing of codeine and hydrocodone cough products has fallen by 25%. This decline in prescribing reflects continued public focus on the level of usage of opiate based products that are prescribed to treat pain. Although the use of opiates in a short term acute setting to treat cough cold is not the principal area of concern, we are still seeing a significant impact on prescribing.

In addition to this decline in the level of narcotic prescribing, restrictions on the size of narcotic prescriptions have also been introduced by some US States, health insurance plans and physicians. This has resulted in a decline in the average size of a Tuzistra® XR prescription from approximately 160 mL in the prior year to approximately 145-150 mL in the current year-to-date. This decline in prescription size will have an impact on the net sales value of each Tuzistra® XR prescription.

CCP-06, our non-narcotic cough cold product continues to progress and will allow us to fully exploit potential of franchise

The prescription cough cold market comprises both narcotic and non-narcotic based products and the dynamics highlighted above only impact the narcotic portion. This is important because of the mix of cough cold products in our portfolio. We have one non-narcotic product in development (CCP-06) and our two most advanced pipeline products (CCP-07 and CCP-08), like Tuzistra® XR, are both targeting the narcotic portion of the market but include additional active ingredients that can extend their market reach.

CCP-07/08 NDAs still on track for approval during 2018/19 financial year

In April 2017 and August 2017, we announced that we had received Complete Response Letters (CRLs) for CCP-07 and CCP-08 respectively and would provide further information related to the issues raised by the FDA and the implications on the timing of their re-submissions and potential approvals. We are now able to provide updated information regarding these CRLs.

In early 2017, FDA undertook an inspection at Tris and identified certain non-product related issues needed to be addressed. Given the issues identified, FDA determined that it was unable to approve CCP-07 on its 20 April 2017 PDUFA date and instead issued a CRL, indicating that these issues needed to be addressed before re-submission of the NDA could occur. On 4 August 2017, although Tris had made good progress in addressing the issues, FDA was unable to approve the CCP-08 NDA and issued a CRL for that product. The CRL for CCP-08 indicated that the FDA wanted evidence that the issues identified in its inspection at Tris did not impact the CCP-08 NDA. This evidence includes manufacturing new batches of CCP-08 and could require repeating the pivotal bio-equivalence studies on which approval was sought.

Tris is working diligently to address the issues raised by FDA and specifically as they relate to the NDAs for CCP-07 and CCP-08. This includes the support of external expert consultants and regular discussions with FDA. We continue to believe that both NDAs are approvable and could potentially be resubmitted and subsequently approved during our 2018/19 financial year.

Moxatag®

We continue to progress qualification of a new supplier of Moxatag® and expect to be back in supply during 2018. We continue to focus on increasing pharmacy stocking since its re-launch in September and will provide a more detailed update when we announce our interim results at the end of Q1 2018.

Research Business continues to perform well

The research business continues to perform to plan having secured a €1m milestone from the third collaboration with Servier (as recently announced) as well as two new collaborations, including one recently announced with Daiichi Sankyo.

Cash position is in line with expectations

The Company's unaudited cash position (including cash and cash equivalents and held to maturity assets), remains strong and at 11 December 2017, was £48.9 million. The cash position has been negatively impacted by the weakening of the US dollar since 30 June 2017, with a significant proportion of our cash denominated in that currency.

No additional material information or updates on trading will be given at Vernalis' AGM today. The presentation to be given will be available on the company website after the AGM.

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The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement this inside information is now considered to be in the public domain.

Enquiries

Vernalis plc:

+44 (0) 118 938 0015

Ian Garland, Chief Executive Officer

David Mackney, Chief Financial Officer

 

Canaccord Genuity Limited (Nominated Adviser and Joint Broker):

+44 (0) 20 7523 8000

Henry Fitzgerald-O'Connor

Emma Gabriel

 

Shore Capital (Joint Broker):

+44 (0) 20 7408 4090

Mark Percy

Toby Gibbs

 

FTI Consulting:

+44 (0) 20 3727 1000

Ben Atwell

Simon Conway

Stephanie Cuthbert

 

Notes to Editors

About Vernalis
Vernalis is a revenue generating, commercial stage pharmaceutical company with significant expertise in drug development. The Group has three approved products: Tuzistra® XR targeting the US prescription cough-cold market; Moxatag®, a once-daily formulation of the antibiotic, amoxicillin, indicated for the treatment of tonsillitis and/or pharyngitis secondary to Streptococcus pyogenes in adults and pediatric patients 12 years and older; and frovatriptan for the acute treatment of migraine. It has an exclusive licensing agreement to develop and commercialise multiple novel products focused on the US prescription cough-cold market as well as eight programmes in its NCE development pipeline. Vernalis has also significant expertise in fragment and structure based drug discovery which it leverages to enter into collaborations with larger pharmaceutical companies. The Company's technologies, capabilities and products have been endorsed over the last five years by collaborations with leading pharmaceutical companies, including Asahi Kasei Pharma, Biogen Idec, Endo, GSK, Genentech, Lundbeck, Menarini, Novartis, Servier, and Tris.

For further information about Vernalis, please visit www.vernalis.com

 

Vernalis Forward-Looking Statement
This news release may contain forward-looking statements that reflect the Company's current expectations regarding future events including the clinical development and regulatory clearance of the Company's products, the Company's ability to find partners for the development and commercialisation of its NCE pipeline, the Company's ability to successfully commercialise its cough-cold products and Moxatag® through its own sales force, as well as the Company's future capital raising activities. Forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein and depend on a number of factors including the success of the Company's research strategies, the applicability of the discoveries made therein, the successful and timely completion of clinical studies, the uncertainties related to the regulatory process, the ability of the Company to identify and agree beneficial terms with suitable partners for the commercialisation and/or development of its products, as well as the achievement of expected synergies from such transactions, the acceptance of Tuzistra® XR, Moxatag®, frovatriptan and other products by consumers and medical professionals, the successful integration of completed mergers and acquisitions and achievement of expected synergies from such transactions, and the ability of the Company to identify and consummate suitable strategic and business combination transactions.