Verona Pharma PLC Half-year Report

 
TIDMVRP 
 
Verona Pharma plc 
 
                      ("Verona Pharma" or the "Company") 
 
             Interim results for the six months ended 30 June 2016 
 
Significant clinical progress and strong balance sheet bodes well for future of 
                                    RPL554 
 
13 September 2016, Cardiff - Verona Pharma plc (AIM: VRP.L), the drug 
development company focused on first-in-class medicines to treat respiratory 
diseases, today announces its interim results for the six months ended 30 June 
2016. 
 
OPERATIONAL HIGHLIGHTS 
 
·      Reported positive results from "add-on" Phase 2 study with RPL554 in 
COPD patients. Data continues to suggest drug could be a meaningful new 
addition, alone or in combination, for the treatment of COPD 
 
o  Primary objective of study met; RPL554 produced a highly significant (P< 
0.001) and a clinically meaningful additional (>50%) bronchodilation on top of 
the administered standard of care bronchodilators, salbutamol or ipratropium 
bromide 
 
o  The bronchodilator effects seen with the combinations were significantly (P< 
0.001) larger than those of either salbutamol or ipratropium bromide alone, 
which were in turn all significantly greater than placebo 
 
o  Secondary objectives also met; the combination of RPL554 with salbutamol or 
ipratropium bromide caused a significant reduction (p=0.0002 and p=0.004 
respectively) in trapped air in the lung (residual volume) as compared to 
salbutamol or ipratropium bromide alone, suggesting that RPL554 treatment may 
reduce dyspnea, a major debilitating symptom of COPD1 
 
o  Consistent with previous studies, RPL554 was well tolerated both alone and 
in combination 
 
- No effect on vital signs or ECG parameters 
 
- No gastro-intestinal adverse events recorded 
 
·      Reported positive results from dose finding study with RPL554 in 
asthmatic patients 
 
o  Primary objective of study met; nebulized RPL554 demonstrated a 
dose-dependent bronchodilator response in asthma patients; the response was 
highly statistically significant (p<0.0001) at all doses tested 
 
o  The maximum bronchodilator effect of RPL554 in this study was comparable to 
the effect observed with the supramaximal dose (7.5mg) of nebulized salbutamol 
used in the study 
 
o  Large dose range (0.4 to 24mg) examined; suggests RPL554 potentially has a 
large safety margin 
 
o  RPL554 did not elicit any serious adverse events or adverse events of 
concern at any dose 
 
- Fewer adverse events recorded with RPL554 than with nebulized salbutamol 
 
- No gastro-intestinal adverse events or cardiovascular events of concern 
 
·      Data from first Phase 1 study with RPL554 supporting the Company's view 
that RPL554 could become an important, novel and complementary inhaled medicine 
for the treatment of respiratory diseases such as COPD, asthma and cystic 
fibrosis presented at American Thoracic Society (ATS) 2016 International 
Conference in USA: 
 
o  Studies continue to demonstrate the excellent bronchodilator properties of 
RPL554 
 
o  Formulation is much better tolerated than the earlier solution formulation 
prototype, with no maximum tolerated dose observed even at 16 times the active 
bronchodilator dose 
 
o  New formulation is suitable for twice daily dosing 
 
o  Formulation provides for a longer pulmonary residence time, lower peak 
plasma exposure and longer half-life in blood than the earlier formulation 
suggesting a more pronounced effect locally in the lung and comparatively less 
effects in other organs in the body 
 
FINANCIAL HIGHLIGHTS 
 
·      Loss after tax for the period of GBP1.60 million (2015: GBP3.69 million) or 
0.16 pence (2015: 0.37 pence) per ordinary share, reflecting a tight control 
over costs. 
 
·      Net cash outflows from operating activities during the six month period 
of GBP2.23 million (2015: GBP3.92 million), with cash and cash equivalents as at 30 
June 2016 of GBP1.21million (2015: GBP6.09 million) with spending focused on RPL554 
clinical trials and related activities. 
 
POST PERIOD AND OTHER EVENTS 
 
·      Fundraising completed in July 2016 to raise gross proceeds of GBP44.7 
million (approximately US$63.3 million at the exchange rate of 17 June 2016) by 
way of a placing to issue 1,555,796,345 placing shares at a price of 2.873 
pence per share (each placing share includes one warrant to subscribe for 0.4 
of a placing share) 
 
o  The net proceeds of the Placing of GBP41.9 million will predominantly be used 
to progress RPL554 through a Phase 2b clinical trial in COPD patients, and to 
fund additional clinical Phase 2 studies in COPD and cystic fibrosis as well as 
further supportive pre-clinical work 
 
o  The cornerstone investors in the Placing are specialist healthcare focused 
funds Vivo Capital, OrbiMed and Edmond de Rothschild Investment Partners 
 
o  Other new investors include New Enterprise Associates, Novo A/S, Abingworth 
and Aisling Capital with participation of existing investors including Arix 
Bioscience, Hargreave Hale and Polar Capital 
 
·      On 29 July 2016, three additional Non-Executive Directors joined the 
Verona Pharma Board as representatives of certain of the investors in the 
Placing: Mahendra Shah (Vivo Capital), Rishi Gupta (Orbimed) and Andrew 
Sinclair (Abingworth) 
 
·      On 12 September 2016, Vikas Sinha joined the Verona Pharma Board as an 
independent Non-Executive Director 
 
·      Clinical data from Phase 2a "add on" study with RPL554 presented at the 
European Respiratory Society (ERS) 2016 International Conference in London 
 
Dr. Jan-Anders Karlsson, CEO of Verona Pharma commented: "We have continued to 
make excellent progress with the clinical development of RPL554. The headline 
data reported from the two clinical trials during the period continues to 
support our belief that this first-in-class drug could be a meaningful new 
treatment for COPD patients. 
 
"The recent fund raise is a significant milestone in the Company's history 
which allows us to continue development in later stage Phase 2 trials. The 
fundraising has also brought a number of specialist healthcare investors as new 
shareholders. Several of them have now joined our Board and we look forward to 
benefiting from their multi-faceted experience in the sector." 
 
This announcement contains inside information. 
 
                                    -S- 
 
About Verona Pharma 
 
Verona Pharma plc is a UK-based clinical stage biotech company focused on the 
development of innovative prescription medicines to treat respiratory diseases 
with significant unmet medical needs, such as chronic obstructive pulmonary 
disease (COPD), asthma and cystic fibrosis. 
 
Verona Pharma's lead drug, RPL554, is a first-in-class drug currently in Phase 
2 trials as a nebulized maintenance treatment for COPD patients with moderate 
to severe disease and possibly as a treatment of acute exacerbations of COPD in 
the hospital setting. The drug is a dual phosphodiesterase (PDE) 3/4 inhibitor 
and therefore has both bronchodilator and anti-inflammatory effects, which are 
essential to the improvement of patients with COPD and asthma. 
 
Verona Pharma is also building a broader portfolio of RPL554-containing 
products to maximize its benefit to patients and its value. This includes the 
very significant markets for COPD and asthma maintenance therapy. The Company 
is also exploring the potential of the drug in different diseases, such as 
cystic fibrosis, where it is in pre-clinical testing and has received a Venture 
and Innovation Award from the Cystic Fibrosis Trust. 
 
For further information, please contact: 
 
Verona Pharma plc                      Tel: [phone] 
 
Jan-Anders Karlsson, CEO 
 
N+1 Singer                             Tel: [phone] 
 
Aubrey Powell / Jen Boorer 
 
FTI Consulting                         Tel: [phone] 
 
Simon Conway / Stephanie Cuthbert / 
Natalie Garland-Collins 
 
CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S JOINT STATEMENT 
 
INTRODUCTION 
 
Verona Pharma is a UK-based clinical stage biotech company focused on the 
development of innovative prescription medicines to treat respiratory diseases 
with significant unmet medical needs such as chronic obstructive pulmonary 
disease (COPD) and cystic fibrosis. The Company's lead product, RPL554, is a 
first-in-class, inhaled dual phosphodiesterase PDE3/PDE4 inhibitor that is 
ready to start Phase 2b as a nebulized formulation for treatment of patients 
with COPD. The drug has already demonstrated clinically relevant bronchodilator 
and anti-inflammatory effects which are essential to the improvement of 
symptoms in patients with COPD. 
 
The Board believes that broadening the development strategy for RPL554, to 
include new indications and combination products, together with strengthening 
the IP coverage around the program, has the potential to add significant value 
to the Company. To enable this larger development program and to broaden the 
investor base, to include healthcare focused funds based in the US as well as 
in the UK and Europe, the Company raised gross proceeds of GBP44.7 million via a 
placing post period (the Placing). The cornerstone investors in the Placing 
were the specialist healthcare focused funds Vivo Capital, OrbiMed and Edmond 
de Rothschild Investment Partners, with other new investors including New 
Enterprise Associates, Novo A/S, Abingworth and Aisling Capital and 
participation of the existing investors Arix Bioscience, Hargreave Hale and 
Polar Capital. 
 
The net proceeds of the Placing of approximately GBP41.9 million will be used 
predominantly to progress the Company's lead product, RPL554, through a Phase 
2b clinical trial in COPD patients, to fund additional clinical Phase 2 studies 
in COPD and cystic fibrosis, and to fund further supportive pre-clinical work, 
including the development of a dry powder inhaler (DPI) or metered dose inhaler 
(MDI). The Board believes that this funding provides a strong platform to 
accelerate the development of RPL554 for subsequent commercial use in 

multi-billion dollar markets and creates greater strategic flexibility to 
maximize future value for Shareholders. The Board further believes that the 
Company's strong balance sheet increases both Verona Pharma's flexibility in 
negotiating attractive commercial collaborations and its ability to expand 
patent protection for the emerging franchise. 
 
Industry Background 
 
The Company is initially developing RPL554 as a treatment for patients with 
COPD. These patients are commonly treated with bronchodilators to dilate the 
airways and thereby ease breathing and reduce breathlessness, a major symptom 
in these patients, and with glucocorticosteroids to reduce the chronic 
inflammation of the airways. For more severe patients that are not well 
controlled, an oral formulation of an anti-inflammatory PDE4 inhibitor is 
added. Despite the recently introduced novel maintenance treatments for COPD, 
many patients experience acute worsening with cough, sputum production and 
breathlessness, and become hospitalized. For many of these patients, a better 
and more effective maintenance treatment is required, that can control their 
symptoms and reduce the risk of exacerbations. For those patients that end up 
in hospital, older, short-acting nebulized bronchodilators are still used on 
hospital wards and there is clearly a need for effective treatments in this 
acute hospital setting. We believe RPL554 can become an attractive add-on 
therapy to provide extra clinical benefit in patients with acute exacerbations 
of COPD. There is little innovation in the form of novel classes of 
bronchodilator or anti-inflammatory drugs for these acutely ill patients, or 
for the maintenance treatment of COPD patients, and the Board therefore 
believes that these are very attractive commercial opportunities for Verona 
Pharma. 
 
An increasing awareness of the problem of COPD patients returning for hospital 
treatment within 30 days of discharge has triggered a strong interest from 
industry, regulators and healthcare administrators and payers in optimizing 
treatment of acute COPD exacerbations and beyond, when patients are discharged 
from hospital. This provides an opportunity for RPL554 that we intend to 
explore in further Phase 2 clinical studies. 
 
Almost 10% of COPD patients, most likely the more severely ill patients, prefer 
treatment with a nebulizer instead of using an MDI or DPI. Normal breathing 
through a mouthpiece or facemask is convenient and comforting when the patient 
is anxious about receiving the treatment. A nebulizer is both convenient and 
effective in delivering a large and effective dose. About 9% of COPD patients 
in the US prefer treatment with a nebulizer over a hand-held device MDI/DPI, 
while up to 30% of these patients use a nebulizer more intermittently. We are 
initially developing RPL554 as a nebulized treatment for more severe patients, 
at home or after they have been admitted to hospital. Importantly, the 
development and regulatory paths of a nebulized treatment is different from 
that of an MDI or DPI. Based on initial experiments, we have demonstrated that 
RPL554 can be used in a range of both jet and mesh nebulizers. 
 
Positive data with RPL554 in Phase 2a clinical studies in 2015 
 
As a nebulized treatment, RPL554 successfully completed a number of early 
clinical Phase 1 and Phase 2 studies. These single and multiple dose studies 
demonstrate that RPL554, when inhaled across a range of doses, is an effective 
bronchodilator in patients with COPD and asthma. RPL554 has a rapid onset of 
action and the magnitude of the bronchodilator effect seems to be at least as 
profound as that of other commonly used bronchodilator drugs.2 
 
RPL554 has also been demonstrated to have a potent anti-inflammatory effect in 
a clinical trial. This property is unique to RPL554 and is not shown by other 
bronchodilator drugs of the beta2 agonists or anti-muscarinic classes. RPL554 
showed a broad inhibitory effect on inflammatory cells in the airways, 
including a significant reduction in the number of neutrophils, a cell type 
thought to be involved in COPD (and cystic fibrosis). This effect sets RPL554 
apart from steroids as this class of drugs seem to have little effect on 
neutrophils and increasingly the use of inhaled steroids in COPD patients is 
being questioned as they seem to have limited beneficial effects. Therefore, 
RPL554 as a combined bronchodilator and anti-inflammatory agent offers unique 
benefits to COPD patients, both as a novel type of bronchodilator, and as an 
anti-inflammatory compound offering additional benefits over and above those of 
steroids. 
 
As the original proof of concept formulation could not be commercialized, a 
novel nebulized proprietary suspension formulation of RPL554 was developed 
which is stable, scalable and suitable for commercial use. The first Phase 1/2a 
study with the new nebulized formulation was a Single Ascending Dose (SAD) and 
Multiple Ascending Dose (MAD, 5 days, twice daily dosing) study in 80 healthy 
subjects and a 5 day MAD study in 32 COPD patients completed in 2015. The new 
formulation was well tolerated as 16 times the previously used bronchodilator 
dose (with the old formulation) could be administered without reaching a 
maximum tolerated dose. Pharmacokinetic analysis revealed a significantly 
longer pulmonary residence time, a substantially lower peak plasma 
concentration and a longer plasma half-life than the previously used 
formulation, suggesting longer exposure of the target organ (lung) to RPL554, 
less systemic activity and that twice daily dosing most likely could be 
achieved. The study also demonstrated the excellent bronchodilator properties 
of RPL554 indicating that it is able to produce large improvements in lung 
function in healthy subjects as well as patients with mild, moderate or severe 
lung disease. 
 
Successful Phase 2a and add-on study for RPL554 in interim period 
 
A single-dose, 7-way cross over Phase 2a dose-finding study with the new 
formulation was conducted in 29 asthma patients in 2016. The study was 
performed in asthma patients because typically a dose response relationship to 
bronchodilators can be more accurately established in this group of patients 
with highly reversible airways obstruction compared to patients with COPD. A 
wide range of RPL554 doses were compared to two different doses of salbutamol, 
a standard bronchodilator used in both asthma and COPD patients, and placebo. 
The primary objective of the study was met as nebulized RPL554 demonstrated a 
highly statistically significant and dose-dependent bronchodilator response in 
asthma patients. The maximum bronchodilator effect of RPL554 in this study was 
comparable to the effect observed with the supramaximal dose of nebulized 
salbutamol used in the study. RPL554 did not elicit any serious adverse events 
or adverse events of concern at any dose, suggesting that RPL554 potentially 
has a very large safety margin. There were also fewer adverse events recorded 
with RPL554 than with nebulized salbutamol and no gastro-intestinal adverse 
events or cardiovascular events of concern. 
 
In a second Phase 2a study in COPD patients, RPL554 produced a highly 
significant (P<0.001) and a clinically meaningful additional (>60%) 
bronchodilation when administered on top of standard of care bronchodilators, 
salbutamol or ipratropium bromide. The bronchodilator effects seen with the 
combinations were significantly (P?0.001) larger than those of either 
salbutamol or ipratropium bromide alone, which were in turn all significantly 
greater than placebo. In addition, the combination of RPL554 with salbutamol or 
ipratropium bromide caused a significant reduction (p=0.0002 and p=0.004 
respectively) of trapped air in the lung (residual volume) as compared to 
salbutamol or ipratropium bromide alone suggesting that RPL554 treatment may 
reduce dyspnea, a major debilitating symptom of COPD. Consistent with previous 
studies, RPL554 was well tolerated both alone and in combination. No effect on 
vital signs or ECG parameters or gastro-intestinal adverse events were 
recorded. 
 
We have investigated RPL554 as a combination product with an anti-muscarinic 
drug, such as glycopyrrolate, a class of drugs that is widely used in treating 
COPD patients. We have been strongly encouraged by data showing a synergistic 
effect of RPL554 in combination with anti-muscarinic drugs in isolated human 
airway smooth muscle. Such a combination product could have significant 
advantages over the many dual long-acting agonists/long acting-muscarinic 
antagonists (LABA/LAMA) bronchodilator inhalers available to COPD patients and 
could be used both in acute hospital care and in long-term maintenance 
treatment. 
 
In addition to treatment of acute exacerbations, RPL554 clearly has potential 
as a chronic maintenance therapy in patients with COPD. Both the bronchodilator 
and the anti-inflammatory properties would be beneficial to these out-patients 
and it is a larger market opportunity. The new nebulized formulation could be 
developed into an attractive maintenance treatment for those moderate to severe 
COPD patients that prefer to use a nebulizer. There is an even larger market 
for COPD patients that are routinely treated with a DPI or pressurized metered 
dose inhaler (pMDI) and we have previously demonstrated that RPL554 can be 
formulated for use in both a DPI and a pMDI. 
 
RPL554 shows promise as a treatment of cystic fibrosis 
 
Additional pre-clinical data continue to demonstrate the potential usefulness 
of RPL554 as a treatment of cystic fibrosis. RPL554 is an activator of the 
cystic fibrosis transmembrane conductance regulator (CFTR) that is 
dysfunctional in cells of cystic fibrosis patients (because of different types 
of gene mutations). A direct effect on the CFTR, an anti-inflammatory effect on 
many of the key inflammatory cells in the lungs of cystic fibrosis patients and 
a direct bronchodilator effect may collectively improve mucociliary clearance 
(reduce phlegm in the airways), reduce symptoms of chronic inflammation and 

ease breathing. This adds a further dimension to the potential utility of the 
drug. Further studies exploring the potential of RPL554 in cystic fibrosis are 
being planned. 
 
FINANCIALS 
 
The loss from operations after tax for the six month period ended 30 June 2016 
(the "Period") was GBP1.60 million (2015: GBP3.69 million) or 0.16 pence (2015: 
0.37 pence) per ordinary share. The reported loss includes a non-cash 
share-based payment charge of GBP0.18 million (2015: GBP0.26 million) and a 
research and development tax credit receivable of GBP0.28 million (2015: GBP0.74 
million). 
 
Research and development expenditure, which was expensed as incurred, amounted 
to GBP1.24 million (2015: GBP3.48 million). Development program expenditures during 
the period amounted to GBP1.24 million for RPL554 (2015: GBP3.37 million), and the 
2015 results include GBP0.11 million for VRP700 as a result of the discontinuance 
of the VRP700 program. 
 
Expenditures in RPL554 reduced by GBP2.13 million as a result of the clinical 
trials ceasing as the Company came to the end of Phase 2a. 
 
Administrative expenses for the period were GBP0.66 million (2015: GBP0.99 
million). The reduction of GBP0.33 million over the prior period was due to a 
decrease in share-based payment charge and other administrative items. 
 
As at 30 June 2016, the Group had approximately GBP1.21 million (2015: GBP6.09 
million) in cash and cash equivalents. 
 
FURTHER DEVELOPMENT & COMMERCIALIZATION STRATEGY 
 
The Company has made significant progress since the fundraising in March 2014 
which enabled us to advance the new commercial formulation of RPL554 through 
clinical studies up to the start of Phase 2b, which is expected in the second 
half of 2016. Additional pre-clinical and manufacturing work will be performed 
to satisfy certain regulatory guidelines. In parallel, we are continuing to 
strengthen the IP coverage to provide comprehensive patent protection for 
RPL554 in its various forms, with the intention of expanding the use of RPL554 
in new indications and in combination products. 
 
Our focus on developing the nebulized formulation of RPL554 for hospital use is 
motivated in part by the increasing concern and intent to tackle the high rates 
of 30-day hospital re-admissions for COPD. This has recently gained impetus 
following the implementation by the US Government in the fourth quarter of 2014 
of a new policy which penalizes hospitals with high 30-day re-admission rates 
for select conditions, including COPD. Interestingly, such a policy has already 
been introduced by the NHS in the UK. In our clinical studies in hospitalized 
patients, we will explore the possibility that treatment with RPL554 will 
reduce such re-admission rates and so demonstrate a clear health-economic 
benefit of treatment with the drug. 
 
The Board believes that products combining RPL554 with other classes of 
bronchodilators are potentially highly attractive for the respiratory market 
and expand the RPL554 product franchise. Indeed, while there has been 
significant interest in the novel dual bronchodilator products containing a 
LABA and a LAMA recently introduced as chronic treatments for COPD, a 
combination between RPL554 and, for example, the LAMA glycopyrrolate, would 
contain two different bronchodilator components, with the added benefit that 
RPL554 would also provide an anti-inflammatory component to create in essence a 
triple-combination product. 
 
We further plan to expand the use of RPL554 beyond COPD, and explore the 
possible use of RPL554 in the treatment of other respiratory conditions. 
Pre-clinical work demonstrating a potentiating activity on CFTR suggests that 
cystic fibrosis could be a potential novel indication. We will further explore 
this opportunity in pre-clinical and exploratory clinical trials. In addition, 
we plan to explore the possible use of nebulized RPL554 to treat acute asthma 
attacks in the A&E unit. When used as an addition to standard treatment, it is 
expected that RPL554 would rapidly improve lung function, reduce symptoms and 
reduce the number of hospital admissions from the A&E unit. Again, this 
treatment would generate a clear health-economics benefit. 
 
The Company recognizes that an experienced and resourceful commercial 
collaborator could bring significant value to the development of RPL554 for 
chronic maintenance treatment in COPD and perhaps asthma and therefore 
continues to be involved in business development discussions around the RPL554 
program. However, the Company intends to collaborate in respect of its drug 
candidates only when it can extract a commercially attractive return for the 
Company and its Shareholders. 
 
BOARD CHANGES 
 
Post period; we were pleased to announce the appointment of Mahendra Shah, 
Rishi Gupta, Andrew Sinclair and Vikas Sinha, as Non-Executive Directors to the 
Board. The new Board members are highly experienced directors and entrepreneurs 
with invaluable expertise in the field of drug development, commercialization, 
corporate development and financial management. We very much look forward to 
working with them as we continue our focused clinical development of the lead 
pipeline asset RPL554. 
 
OUTLOOK 
 
We continue to develop the Company by exploring opportunities to expand RPL554 
across multiple disease areas and in combination with other products to enhance 
our pipeline, and by recruiting additional expertise (particularly in the 
development and commercialization of respiratory products) across both our 
management team and Board of Directors. The Company operates with a strong 
focus and financial discipline, and with a well-financed Balance Sheet coupled 
with our additional expertise we remain very positive about progress to date in 
our lead drug development program, RPL554, and the opportunities for its 
further development and commercialization. 
 
Dr. David Ebsworth                        Dr. Jan-Anders Karlsson 
 
Chairman                                  Chief Executive Officer 
 
12 September 2016                         12 September 2016 
 
1 Dyspnea (shortness of breath) in COPD patients is often associated with 
hyperinflation of the lungs resulting from a higher residual volume of air 
 
2 Pre-clinical studies in isolated airway muscle have demonstrated that RPL554 
is an effective bronchodilator also in highly constricted airways, to some 
extent mimicking bronchospasm in patients with respiratory disease, where other 
bronchodilators of the currently used beta2-agonist and anti-muscarinic types 
are less effective. If a similar effect is seen in patients with highly 
obstructed airway muscles, RPL554 has the potential to be advantageous compared 
to other types of bronchodilators. 
 
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME 
 
FOR THE SIX MONTHSED 30 JUNE 2016 
 
                                       6 months ended  6 months ended        Year ended 
 
                                         30 June 2016    30 June 2015  31 December 2015 
 
                               Notes      (unaudited)     (unaudited)         (audited) 
 
                                                    GBP               GBP                 GBP 
 
Research and development                  (1,244,715)     (3,477,322)       (7,268,847) 
 
Administration expenses                     (661,114)       (987,792)       (1,705,944) 
 
Operating loss                            (1,905,829)     (4,465,114)       (8,974,791) 
 
Finance income                                  7,375          27,169            44,791 
 
Loss before taxation                      (1,898,454)     (4,437,945)       (8,930,000) 
 
                                              284,977         743,762         1,509,448 
Taxation - credit                2 
 
Loss for the period                       (1,613,477)     (3,694,183)       (7,420,552) 
attributable to owners of the 
parent 
 
 
Other comprehensive gains 
 
Exchange differences on                        15,866           5,593             3,784 
translating foreign 
operations 
 
Total Comprehensive loss for              (1,597,611)     (3,688,590)       (7,416,768) 
the period attributable to 
owners of the parent 
 
Loss per ordinary share -        3            (0.16)p         (0.37)p           (0.73)p 
basic and diluted (pence) 
 
 
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION 
 
AS AT 30 JUNE 2016 
 
                                                  As at          As at            As at 
 
                                           30 June 2016   30 June 2015 31 December 2015 
 
                                            (unaudited)    (unaudited)        (audited) 
 
                                                      GBP              GBP                GBP 
 
ASSETS 
 
Non-current assets 
 
Property, plant and equipment                     9,962         17,343           13,162 
 
Intangible assets                               403,232        286,186          344,645 
 
Goodwill                                      1,469,112      1,469,112        1,469,112 
 
                                              1,882,306      1,772,641        1,826,919 
 
Current assets 
 
Prepayments and other                           518,522        494,780          513,300 
receivables 
 
Current tax receivable                        1,824,788      1,385,414        1,534,788 
 
Cash and cash equivalents                     1,205,724      6,093,913        3,524,387 
 
                                              3,549,034      7,974,107        5,572,475 
 
Total assets                                  5,431,340      9,746,748        7,399,394 
 
EQUITY AND LIABILITIES 
 
Capital and reserves 
attributable to equity holders 
 
Called up share capital                       1,009,923      1,009,923        1,009,923 
 
Share premium account                        26,650,098     26,650,098       26,650,098 
 
Share-based payments reserve                  1,113,694        912,016        1,022,440 
 
Retained losses                           (24,606,707)    (19,396,536)     (23,095,806) 
 

Total equity                                  4,167,008      9,175,501        5,586,655 
 
Current liabilities 
 
Trade and other payables                      1,264,332        571,247        1,812,739 
 
                                              1,264,332        571,247        1,812,739 
Total liabilities 
 
Total equity and liabilities                  5,431,340      9,746,748        7,399,394 
 
 
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS 
 
FOR THE SIX MONTHS ENDED 30 JUNE 2016 
 
                                         6 months ended  6 months ended        Year ended 
 
                                           30 June 2016    30 June 2015  31 December 2015 
 
                                            (unaudited)     (unaudited)         (audited) 
 
                                                      GBP               GBP                 GBP 
 
 
Reconciliation of operating loss to 
net cash outflow from operating 
activities 
 
Operating loss                              (1,905,829)     (4,465,114)       (8,974,791) 
 
Exchange differences on translating 
 
foreign operations                               15,866           5,593             3,784 
 
Share based payment expense                     177,962         259,611           398,943 
 
Decrease/(increase) in prepayments              (5,221)          76,153            57,633 
and other receivables 
 
(Decrease)/increase in trade and              (539,372)          46,934         1,274,370 
other 
 payables 
 
Depreciation of plant and equipment               5,095           4,951             9,854 
 
Write-off of intangible assets                        -         134,533           134,533 
 
Amortization of intangible assets                26,092          21,688            43,262 
 
Net cash outflow from operating             (2,225,407)     (3,915,651)       (7,052,412) 
activities 
 
 
 
Net cash outflow from operating             (2,225,407)     (3,915,651)       (7,052,412) 
activities 
 
Cash (outflow)/inflow from taxation            (14,057)          69,150           699,519 
 
Cash flow from investing activities 
 
Finance income                                    7,375          32,969            50,591 
 
Purchase of property, plant and                 (1,838)           (616)           (1,830) 
equipment 
 
Payment for patents                            (84,736)        (61,698)         (141,240) 
 
Net cash outflow from investing                (79,199)        (29,345)          (92,479) 
activities 
 
                                            (2,318,663)     (3,875,846) 
Net decrease in cash and cash                                                 (6,445,372) 
equivalents 
 
Cash and cash equivalents at the              3,524,387       9,969,759 
beginning of the period                                                         9,969,759 
 
Cash and cash equivalents at the 
end of the period                             1,205,724       6,093,913         3,524,387 
 
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY 
 
FOR THE SIX MONTHS ENDED 30 JUNE 2016 
 
                                                    Share-based 
                                                        payment 
                                  Share       Share                  Retained 
 
                                capital     premium     reserve        losses       Total 
 
                                      GBP           GBP           GBP             GBP           GBP 
 
Balance at 1 January 2016     1,009,923  26,650,098   1,022,440  (23,095,806)   5,586,655 
 
Loss for the period                   -           -           -   (1,613,477) (1,613,477) 
 
Other comprehensive income 
for the period: 
 
   Exchange differences on            -           -           -        15,866      15,866 
   translating foreign 
operations 
 
                              1,009,923  26,650,098   1,022,440  (24,693,417)   3,989,044 
 
                                      -           -     177,962             -     177,962 
 
Share-based payments 
 
Transfer of previously                -           -    (86,708)        86,708           - 
 expensed share-based 
payment 
 charge upon lapse of 
options 
 
Balance at 30 June 2016       1,009,923  26,650,098   1,113,694  (24,606,709)   4,167,006 
(unaudited) 
 
                              1,009,923  26,650,098     677,946  (15,733,487)  12,604,480 
Balance at 1 January 2015 
 
Loss for the period                                               (3,694,183) (3,694,183) 
 
Other comprehensive income            -           -           -         5,593       5,593 
for the period: 
   Exchange differences on 
   translating foreign 
operations 
 
                              1,009,923  26,650,098     677,946  (19,422,077)   8,915,890 
 
Share-based payments                  -           -     259,611             -     259,611 
 
Transfer of previously                -           -    (25,541)        25,541           - 
 expensed share-based 
payment 
 charge upon lapse of 
options 
 
Balance at 30 June 2015       1,009,923  26,650,098     912,016  (19,396,536)   9,175,501 
(unaudited) 
 
                              1,009,923  26,650,098     677,946  (15,733,487)  12,604,480 
 
Balance at 1 January 2015 
 
Loss for the year                     -           -           -   (7,420,552) (7,420,552) 
 
Other comprehensive income            -           -           -         3,784       3,784 
for the year: 
   Exchange differences on 
   translating foreign 
operations 
 
                              1,009,923  26,650,098     677,946  (23,150,255)   5,187,712 
 
Share-based payments                  -           -     398,943             -     398,943 
 
Transfer of previously                -           -    (54,449)        54,449           - 
 expensed share-based 
payment 
 charge upon lapse of 
options 
 
Balance at 31 December 2015   1,009,923  26,650,098   1,022,440  (23,095,806)   5,586,655 
(audited) 
 
NOTES TO THE FINANCIAL STATEMENTS 
 
FOR THE SIX MONTHS ENDED 30 JUNE 2016 
 
1.      Publication of non-statutory accounts 
 
i)       This interim financial information for the six months ended 30 June 
2016 is unaudited and does not constitute statutory accounts within the meaning 
of Section 434 of the Companies Act 2006. It was approved by the Board of 
Directors on 12 September 2016. The figures for the year ended 31 December 2015 
have been extracted from the audited statutory accounts which have been 
reported on by the Company's auditor. The financial statements for the year 
ended 31 December 2015 have been delivered to the Registrar of Companies and 
the auditor's report on those financial statements was unqualified and did not 
contain a statement made under section 498(2) or section 498(3) of the 
Companies Act 2006. 
 
ii)       Accounting policies 
 
The interim financial statements for the six months ended 30 June 2016 includes 
the results of Verona Pharma plc and its wholly-owned subsidiaries, Verona 
Pharma Inc. and Rhinopharma Limited. The unaudited results for the period have 
been prepared on the basis of accounting policies adopted in the audited 
accounts for the year ended 31 December 2015 and expected to be adopted in the 
financial year ending 31 December 2016. 
 
In the opinion of the Directors, the interim financial information for the 
period presents fairly the financial position and the results from operations 
and cash flows for the period. 
 
No new IFRS standards, amendments or interpretations became effective in the 
six months to the 30 June 2016 which had a material effect on this interim 
financial information. 
 
iii)      During the period two restatements have been made to the primary 
statements as follows: 
 
 
-     Exchange differences arising on translating foreign operations have 
      been reclassified from research and development to other comprehensive 
      gains due to an error in the prior period amounting to GBP5,593 (30th 
      June 2015) and GBP3,784 (31st December 2015). 
 
-     Computer software has been reclassified from property, plant and 
      equipment to intangible assets amounting to GBP603 (30 June 2016), GBP169 
      (30 June 2015) and GBP660 (31 December 2015). 
 
 
The impact of both these restatements is immaterial to the financial 
statements. 
 
 
iv)      The directors do not recommend the payment of a dividend (period to 30 
June 2015 - GBPNil; year ended 31 December 2015 - GBPNil). 
 
v)      A copy of the interim report is available on the Company's website 
www.veronapharma.com. 
 
2.      Taxation 
 
The current period tax credit, GBP0.28 million, represents the estimated research 
and development tax credit receivable on qualifying expenditure incurred during 
the six month period ended 30 June 2016. 
 
(period to 30 June 2015: GBP0.74 million; year ended 31 December 2015: GBP1.51 
million). 
 
3.      Loss per share 
 
i)       The basic loss per share of 0.16p (30 June 2015: loss of 0.37p; 31 
December 2015: loss of 0.73p) for the Group is calculated by dividing the loss 
for the period by the weighted average number of ordinary shares in issue of 
1,009,923,481 (30 June 2015: 1,009,923,481; 31 December 2015: 1,009,923,481). 
 
ii)       Since the Group has reported a net loss, diluted loss per ordinary 
share is equal to basic loss per ordinary share. 
 
4.      Comparatives 
 
The comparatives include audited figures for the year ended 31 December 2015 
and unaudited figures for the six months ended 30 June 2015. 
 
 
 
END 
 

(END) Dow Jones Newswires

September 13, 2016 02:00 ET (06:00 GMT)