Vernalis Share Discussion Threads

[jwoolley] 25/2/2010 08:46

Your kidding....sold all of my holding that have held since British Biotech days....there was no way they were getting another penny from me.....think you will find most people are just holding this now to recover CGT loss...may see a big sell off end of March.....good luck to you if you are still in this though....think you will need it...

[dpeach] 25/2/2010 08:38

did anyone buy the offer?

[dpeach] 17/2/2010 23:34

Vernalis Raising £30M to Buy Back EU Rights to Frovatriptan


By Nuala Moran

BioWorld International Correspondent

LONDON - Vernalis plc is raising £30 million (US$47.1 million) in a placing to buy back the European rights to frovatriptan, the drug which took the company to the brink when it failed to get FDA approval in treating menstrual migraine in 2007.

The move will leave the company debt-free, reduce cash burn, extend the cash runway beyond 2012 and give Vernalis "a significant royalty rate on a product that is growing well," Ian Garland, CEO, told analysts as he explained the rationale for the move.

Following frovatriptan's failure to win FDA approval in the additional indication of treating menstrual migraine in October 2007, Vernalis was forced into a major restructuring. Then CEO Simon Sturge left the company, and U.S. rights to frovatriptan, a selective 5-HT receptor agonist approved for acute use in treating migraine, were off-loaded in the U.S. to marketing partner Endo Pharmaceuticals Inc., of Chadds Ford, Pa.

In Europe the rights went to the investment firm Paul Capital Healthcare, which gave Vernalis €18.4 million (US$25.1 million), accounted for as a loan that was paid down as Paul Capital received royalties from frovatriptan sales. Now Vernalis is paying €24 million to take back all the frovatriptan rights, canceling the debt to Paul Capital, and giving Vernalis 25.25 percent of net European sales of the drug, which stood at €32.4 million in 2009. In addition, Paul Capital has agreed to subscribe for 2.1 million Vernalis warrants.

"As a result, we become debt-free and have a growing and sustainable revenue stream," Garland said. He noted that sales of frovatriptan grew by 15 percent in 2009 and the European marketing partner Menarini has plans to launch the product in more markets. The Italian company also has put significant effort into differentiating frovatriptan, which is long-lasting, from generic triptan drugs.

The 39.4 million new shares Vernalis is placing are priced at 76 pence, a discount of 6.7 percent to the closing price the day before the fundraising was announced. One of the major institutional shareholders, Invesco Asset Management, has agreed to increase its holding and could end up with 46 percent of Vernalis. The rule, saysany party acquiring 30 percent of more of a company must make an offer for it, has been waived.

Garland said that after paying Paul Capital there will be £7.5 million left to add to the £26.4 million cash Vernalis had at the end of December 2009. "The vast majority will be used to develop programs from ongoing R&D activities or [which are] in-licensed," Garland said.

The move also ensures Vernalis, in the event of negative results in the Phase IIb trial of V3381, a treatment for neuropathic pain. The data is expected at the end of March. "This substantially de-risks things if the study is negative, and if it is positive the upside is tremendous," Garland said. If the data are positive Vernalis intends to partner the program.


Published February 17, 2010

[dandl] 17/2/2010 23:32

quite an acronym H.... ROFLMAO... a lil P and d... ROFLMAO again...

[dpeach] 17/2/2010 23:30

IDS - are you getting your allowance?

[in despair sybil] 17/2/2010 23:02

dp - gap already closed. gaps now remaining are 77-81.5 83-4 and 100-1

af - i think you're right about that. it will never get closer to 500 than to 50. i really shouldn't be posting on this thread as i don't agree with the title ( and i'm a holder ), it's just always the one most recently posted on. technically, at one point, there was a shout with a saucer bottom ( and probably moreso to the 280 area rather than the 500 that shares magazine suggested ), but the charts don't take into account that the market cap had trebled after last year's open offer and now will be fivefold after the current open offer.

ah well, at least the board will able to live comfortably for a prolonged period, eventually selling the company on for a 50 to 100% premium to todays price and thinking that they did everyone a favour, whilst collecting nice bonuses for brokering the deal, whilst we continue living on bread and water.

bestest


IDS

[atflores] 17/2/2010 15:06

The author of this thread made a typo by misplacing the decimal point in the projected shareprice.

50.0 looks prescient.

[dpeach] 17/2/2010 14:48

hey ids this should close that gap from July 09...

[in despair sybil] 15/2/2010 11:43

the report from edison values the company at 116p per share ( in its enlarged format ) and adds 'the internal drug discovery engine is difficult to value and remains as upside to the investment case'

IDS

[dpeach] 15/2/2010 11:10

Feb 15th 2010 - Edison Investment Research today published a report on Vernalis (VER.L, LSE:VER) entitled "Fundraising And Deal". In summary, the report says:

Vernalis announced the placing of £30m in new shares to fund the reacquisition of EU frovatriptan royalties from Paul Capital, and to progress its development pipeline. This placing and transaction substantially strengthen Vernalis's cash position, ahead of IN STEP trial data in March, enabling the company to become debt free and to extend its cash runway beyond 2012.

[steadyitgoes] 15/2/2010 10:30

Latest Ver report -

[dpeach] 14/2/2010 15:30

Dapper1 below is the Placing and Open offer & Publication of Prospectus

Dapper1, Daniel (whoever he is) wrote:

How long before yet another placing? Well read the prospectus section B/1

PLEASE READ PLACING CAREFULLY, IT DOES NOT INCLUDE THE ABOVE OR SECTION "THE GROUP MAY REQUIRE...."

Thought due to disclaimer to just add links...

[in despair sybil] 14/2/2010 14:09

probably nothing - but just a little chart observation

seperated at birth - check out the price action leading up to the open offer announcements both last year and this



bestest


IDS

[dpeach] 14/2/2010 13:15

dapper1 - thats some private investors blog....

[in despair sybil] 13/2/2010 22:09

another summary ....

Vernalis Emerges from Rough Patch with Royalty Stream, Cash

By Jennifer Boggs

Assistant Managing Editor

Vernalis plc is raising £30 million (US$47 million) in a stock sale to buy back its royalty stream for migraine drug frovatriptan and shore up its bank balance ahead of much-awaited data from its Phase IIb trial of V3381 in neuropathic pain.

The Winnersh, UK-based firm agreed to offer about 39.4 million shares priced at 76 pence each, marking a 6.5 percent discount, for net proceeds of about £28.5 million. Most of that - about £21 million - will be used to make the one-off cash payment to regain its frovatriptan royalty stream from Paul Capital Healthcare. Under the terms, Paul Capital also will get about 2.1 million Vernalis warrants.

Marketed in the European Union by partner Menarini Group, of Florence, Italy, frovatriptan brought in sales of about €32.4 million (US$44.1 million) in 2009, up 15 percent from 2008.

Of that, Vernalis is entitled to gross royalties of 25.25 percent under the companies' agreement. Royalties totaled about €8.2 million last year.

But Vernalis has been receiving only 10 percent of those royalties - just enough to cover supply expenses - since its 2008 deal with Paul Capital. A surprise FDA decision preventing frovatriptan's label expansion into menstrual migraine cost the firm a $40 million milestone payment from partner Endo Pharmaceuticals Inc., which had been intended to pay part of a $56 million loan from the Chadds Ford, Pa.-based company. (See BioWorld Today, April 9, 2008.)

Vernalis later settled the loan, paying $7 million to Endo and agreeing to forego future U.S. royalties on frovatriptan (marketed as Frova) until annual sales reach $85 million, an unlikely figure for 2009. Endo has not yet reported full-year 2009 sales, but Frova revenue for the first nine months totaled $42 million.

Other restructuring moves included divesting Parkinson's disease drug Apokyn and its U.S. commercial operations, shutting down clinical development work in Canada and reducing staff from 210 to 90, mostly in R&D.

In April 2008, the deal with Paul Capital provided the firm with $29.2 million in cash. (See BioWorld Today, April 22, 2008.)

Since then, Vernalis' luck has improved. In May, it closed a £22.1 million financing round, and signed deals with London-based GlaxoSmithKline plc and Neuilly-sur-Seine, France-based Servier. (See BioWorld Today, Aug. 7, 2009.)

As of Dec. 30, Vernalis had about £26.4 million on its balance sheet, sufficient to sustain operations until mid-2011.

The company said the remaining £7.5 million from the latest offering extends that runway beyond 2012.

It also strengthens the firm's position ahead of potential partnering discussions for V3381, a dual-acting NMDA antagonist and monoamine oxidase-A inhibitor licensed from Chiesi Farmaceutici SpA, of Parma, Italy. Vernalis completed enrollment in a Phase IIb trial last year and expects to report data in March.

Pain drugs historically have had a hard time in the clinic. Recent failures include Labopharm Inc.'s combo tramadol and acetaminophen, which missed in a Phase III study in back pain, and XenoPort Inc.'s XP13515, which stumbled in a Phase II diabetic nerve pain trial, with investigators citing a more robust than expected placebo response. But Vernalis is hoping that a placebo run-in period will help cut down on the number of placebo responders.

The company also is seeking partners for V1512, a levodopa methyl-ester formulation, which is in Phase II development for Parkinson's disease, and V85546, a macrophage elastase inhibitor, also in Phase II, for inflammatory disease.

Another Parkinson's drug, V2006 has found a partner in Cambridge, Mass.-based Biogen Idec Inc., which started a Phase II program testing the product in combination with L-dopa in late-stage patients and as a monotherapy in an early stage Parkinson's population.

Under the terms of its financing, company directors agreed to take up 125,529 new shares, investing in aggregate £95,402, while existing major shareholder Invesco Asset Management Ltd. will increase its holding, subject to clawback under the open offer, to up to 46 percent of the issue share capital.

The offering is expected to close upon approval of shareholders at a general meeting set for March 1. Following its close, Vernalis expects to have about 99.6 million shares outstanding.




IDS

[dpeach] 12/2/2010 10:59

also Vernalis biggest problem was cash, this for a considerable amount of time has been rectified imho.........

[in despair sybil] 12/2/2010 10:30

Drug company Vernalis is raising 30m via a placing, partly to repurchase the European royalty stream of its frovatriptan migraine treatment.


Singer says that despite dilution, the additional potential royalties make a positive impact on its SOTP-based valuation. It also expects the company to issue top-line Phase-IIb trial results for V3381 (diabetic neuropathic pain) with its April results.

With a lull in the share price, the broker upgrades its recommendation to buy.


Story provided by Business Financial Newswire




IDS

[dpeach] 12/2/2010 09:42

if they can extend the runway for 4 years thats a very big positive though.........

[jwoolley] 12/2/2010 09:15

I'm not so sure about giving any more money to this and now thinking of selling up. I go back to the British Biotech days and my current average is £1.65......it seems to me now that they want constant money every year or every other year and never gives anything back....just feel that money could be invested elsewhere with better returns rather than this jam that only may come eventually around 2012......and by jam I mean any kind of shareholder returns...........

I will look into this a little further before deciding what to do....

[dpeach] 12/2/2010 08:47

IDS - IMHO I hold at 90p and after reading the article 366 am pretty bullish, when you look at IG's history he has one of turning round and selling on at a profit, so will hold on for 12 months

[in despair sybil] 12/2/2010 01:06

another blog found on the WSJ blogspot - probably nothing in it we already don't know



For a small drug, Frova (frovatriptan) sure has had a busy couple of years. After it failed the entrance exam for a menstrual migraine label in the US late in 2007, Frova pushed its parent, UK biotech Vernalis, close to the edge of bankruptcy. (Frova's original parent, until 1994: SmithKline Beecham).

Fortunately, the likes of financiers Paul Capital Healthcare were to hand, willing to pony up emergency cash in exchange for future royalties on Frova in the regular migraine indication. Vernalis' April 2008 deal with Paul Capital brought the biotech a €18.4 million life-line, in the form of a loan, to be re-paid along with hefty interest with 90% of the Frova royalties that Vernalis was receiving from European commercialization partner Menarini.



After a good deal more asset-selling and cost-slashing, Vernalis staggered back to life. Ex-Acambis CEO Ian Garland took the reins in late 2008, creating a new management team around him.

So today, a more confident, nearly-back-on-its-feet Vernalis has agreed to pay Paul $32.57 million (£21 million) to regain 100% of those Frova royalties and wipe the debt off its books. Vernalis is seeking the funds to pay Paul off via a placing and open offer, designed to raise about £28.5 million after expenses. (The royalties would have gradually come back to Vernalis, according to a sales-linked formula, but not for another 3-4 years, and only if sales reached a certain level.)

Paul Capital, of course, has done well out of Vernalis' troubles. For starters, it charged a cheeky 42% or so interest on its initial loan--over which troubled Vernalis, with no option at the time of raising money from the disgruntled capital markets, would have had little negotiating power. Second, the financing group has nearly doubled its money in under two years--an ultra-fast return which likely helped the deal meet Paul's required internal return hurdle. "Paul Capital was under no obligation to do the [second] deal," explains Vernalis' CFO David Mackney, "and initially they didn't want to," he adds.

But Vernalis' new management didn't want, either, to miss out on the growth of one of its assets--Frova's sales were up 15% in 2009, to €32.4 million. And the last thing it needed, as a cash-burning biotech, was heavy debt on its books (although as Mackney admits, Vernalis wouldn't likely exist today if it wasn't for that initial Paul transaction). This deal, with the placing, eliminates Vernalis' debt, reduces its cash burn (since it doesn't have to hand money over to Paul anymore) and extends its cash runway beyond 2012, potentially for as long as four years.

As for dilution: who cares? This is a company starting from scratch, whose original investors have already lost out, but whose newer backers may have something to gain, if all goes to plan. Besides, UK pre-emption laws mean existing shareholders can avoid dilution if they want by putting up more money; Vernalis' existing major shareholder, Invesco, has agreed to increase its holding to up to 46% of issued share capital by subscribing to two thirds of the offer.

Vernalis plans to use most of the remainder of the placing proceeds (about £7, by our calculation) to invest in its own pipeline and/or to seize in-licensing or acquisition opportunities. Such a move would reduce the firm's cash runway, sure. But although having an enormous runway is a nice story, particularly amid the rest of the UK's rather shaky biotech sector, it's not really the point of the business, is it?


IDS

[in despair sybil] 12/2/2010 01:02

KERPOW - where did that come from - wasn't expecting anything like that

after seeing the announcement in the morning, i guess my initial reaction ( just as last year ) was more negative than positive, but as i put more thought into it, my opinions have changed ( just as last year ) slightly - though i'm still unhappy ( from a short term perspective ) as we get even more diluted.

from one perspective, buying something back ( for a large premium ) that you already had and sold, and losing a couple of years of income from it in the proccess ( circa £6m per annum ) seems a little foolhardy - don't understand why the company didn't come to the market and/or its shareholders at the time. after all, early 2008, the credit crunch was a mere embryo still hiding in the earth's crust. yet we keep hearing about enhancing shareholder value ?

but at least we have it back now, and even though we are going to have a market cap of £75m ( ouch ), i guess an annual income stream of circa £8m ( assuming sales are still growing ) can only be seen as a bonus. it will pay the director's salaries at least ( ho hum ). all we need now are a few more partnerships and collaberations.

to get the backing of some if not all of VER's major holders, means there's probably some news in the pipeline.

will be interesting to see if any analysts come out with new forecasts after the presentation.

i suppose the foundations for the medium / long term are now more solid - but what for me was to be a 3 to 12 month investment ( subject to review ) has now passed the 2 year mark. and only thanks to some trading in and out over the last year, i'm only slightly out of pocket.

my heart goes out to the long term holders - who will probably never see their initial investments back in full.

i won't be increasing my holding.

bestest

IDS

[dpeach] 11/2/2010 13:39

Vernalis plc

· Announces agreement to regain 100% of Frovatriptan Royalty Stream

· Announces GBP30 million Fully Underwritten Placing and Open Offer

Vernalis plc (LSE: VER), a development stage pharmaceutical company with a broad
pipeline of clinical and early stage programmes, announces today that it has
reached an agreement to regain the right to 100% of the royalties from
Menarini's sales of frovatriptan by terminating agreements entered into with
Paul Capital Healthcare in 2008 ("Paul Capital Healthcare Agreements") in
exchange for a one-off net cash payment of $32.57 million (approximately GBP21
million). In addition, Paul Capital Healthcare has agreed to subscribe for 2.1
million Vernalis warrants. Vernalis also announced that it is raising
approximately GBP30 million (approximately GBP28.5 million net of expenses)
through a fully underwritten Placing and Open Offer of 39,413,722 New Ordinary
Shares at a price of 76 pence per New Ordinary Share, a portion of the proceeds
of which will be used to make the payment to Paul Capital Healthcare.

A shareholder circular (which is also a prospectus) being issued by the Company
and containing details of the Placing and Open Offer is expected to be posted to
Shareholders shortly. In addition, the Company is carrying out a Share Capital
Reorganisation to reduce the nominal value of its Ordinary Shares from 20 pence
to 1 pence.

Highlights

· Vernalis has reached an agreement to regain the rights to 100% of
Menarini royalties (25.25% of net sales) by terminating the Paul Capital
Healthcare Agreements in exchange for a one time net payment of $32.57 million
(approximately GBP21 million) in cash; in addition, Paul Capital Healthcare has
agreed to subscribe for 2.1 million Vernalis warrants

o Menarini sales of frovatriptan increased 15% in 2009 to EUR32.4 million

· Announces Placing and Open Offer of 39,413,722 New Ordinary Shares
at a price of 76 pence per share, raising GBP30 million (approximately GBP28.5
million net of expenses), a portion of which will be used to make the payment to
Paul Capital Healthcare

· Open Offer to Qualifying Shareholders on the basis of 19 New
Ordinary Shares for every 29 Existing Ordinary Shares

· Offer price of 76 pence represents a discount of approximately 6.7%
to the closing price of an Existing Ordinary Share at the close of business on
10 February 2010

· Vernalis becomes debt-free, reduces cash burn and extends cash
runway beyond 2012

· The Directors have agreed to take up a total of 125,529 New
Ordinary Shares, through their entitlements under the Open Offer ("Directors'
Shares"), investing in aggregate GBP95,402

· Existing major Shareholder, Invesco Asset Management Ltd ("IAML"),
has agreed to increase its holding in the Company, subject to clawback under the
Open Offer, to up to 46 per cent of the issued share capital

· Placing and Open Offer has been fully underwritten by Piper
Jaffray, which intends to place shares with new and existing Shareholders,
subject to clawback to satisfy valid applications by Qualifying Shareholders
under the Open Offer

· A waiver has conditionally been granted by the Takeover Panel from
the usual requirements under Rule 9 of the Takeover Code for a person acquiring
an interest in 30% or more of a company to make a general offer to all
Shareholders, subject to Independent Shareholder approval

· A General Meeting to approve the Placing and Open Offer and other
Resolutions is to be held on 1 March 2010

A prospectus being issued by the Company and containing details of the Placing
and Open Offer, the Share Capital Reorganisation and the Rule 9 Waiver will be
posted to Shareholders shortly. Shareholders in the United States, Canada,
Australia, New Zealand, Japan, South Africa or any other excluded territory will
not, subject to certain exceptions, be able to participate in the Placing and
Open Offer but will be able to vote on the Rule 9 Waiver.

Reasons for the Placing and Open Offer and use of net proceeds

Vernalis had cash resources of GBP26.4 million as of 31 December 2009 which will
provide a cash runway until mid 2011. The Directors currently expect to use
approximately GBP21 million of the net proceeds from the Placing and Open Offer
to terminate the Paul Capital Healthcare Agreements and settle the outstanding
debt arising from them, which will extend Vernalis' cash runway beyond 2012.

The remaining net proceeds of the Placing and Open Offer will be used as
follows:
· approximately 75% to develop programmes sourced either from ongoing
research, in-licensing or acquisition activities; and
· approximately 25% to be used for general working capital to further
extend the Company's cash runway inclusive of administrative overheads and
associated costs.
Ian Garland, Chief Executive Officer of Vernalis, commented:
"Regaining the full frovatriptan royalties will make Vernalis debt-free and put
us in the enviable position of having a sustainable and growing revenue stream.
Together with the cash we will receive from the successful fundraising announced
today, this gives us the financial security to progress our pipeline, to
diversify our asset base through in-licensing and acquisition opportunities and
to continue to re-build shareholder value".
A conference call for analysts will be held today at 9.00 a.m. BST. For details,
contact Valerie Mugridge at Brunswick on telephone number [phone].
An instant replay of the call will be available via Vernalis' website at
www.vernalis.com. The replay will be available for 30 days.