Vernalis Share Discussion Threads

[quraishim] 22/2/2008 16:19

what a teaser this stock is??? everytime I sold to take a profit...it moved by 8% and I had to rebuy at much higher price.... mu own opinion is there is as big order being worked on for a week.....instituitions or a takeover scenario....all it matters its motoring ahead......25p....35p or 60p anyones guess..........its a recovery stock and I will not second guess again.

[4screws] 22/2/2008 15:49

how can the bid be higher than the current price shown??????????

[fhmktg] 22/2/2008 13:06

Number 9 in the % risers today should get some interest from traders looking to take up long positions?

[jweekes] 22/2/2008 12:12

From Endo results...strong growth in Frova sales. Vernalis should be on track to receive royalties in the next year. I expect a major re-rating soon.

FROVA. Net sales of FROVA were $14.1 million for the fourth quarter of 2007, up 22.6% from $11.5 million in the fourth quarter of 2006. Net sales were $52.4 million for the full year in 2007 versus $40.6 million in 2006, a 29.1% increase. Prescription growth was up 17% for the fourth quarter and 12% for the year in 2007 versus the comparable 2006 periods. The company estimates that prescription demand for FROVA in the fourth quarter of 2007 was approximately $13.5 million.

[quraishim] 22/2/2008 10:45

nice to see a steady rise....next week we should be looking at in its late teens.....

[joeblogg1000] 22/2/2008 10:28

Looks Chancer and other profit takers have moved on. Last year results around 12th Mar, no announce. so far on results.

[quraishim] 22/2/2008 08:35

4screws is right.....its silly to take any profits now...as for next week I can feel it will be 20p by next friday.

[joeblogg1000] 22/2/2008 08:34

Strange Directors have not been able to buy as most reecent buys were above 10p especially with results not far away and possible more news?

[quraishim] 22/2/2008 08:29

Good start...looks like a lot of interest on VER and nobody wants to sell at this silly price...jeffery puts it to 35p...

[4screws] 21/2/2008 18:58

chancer, dont be silly, hang on to them????? averaged down over the last few days from £1.20 to 17p.....just hope things keep improving.

[chancer6] 21/2/2008 18:11

Oops I've just realised that my Vernalis has gone up to 9p from my recommendation at 7p only last wk...will cash in my profits tomorrow and buy more LNX.

[vow] 21/2/2008 10:47

Clearouts help shares in Vernalis, Management Consulting Group
February 20, 2008 1:49 PM
The Guardian

Two companies have announced significant changes in their management team and overall structure today, and the news has sent their shares soaring.

First up - Vernalis, the biopharmaceutical company. The group has axed its chief executive Simon Sturge, who will step down at the end of the month.

The firm has become the latest victim of a turbulent biotechnology sector, which has been hit hard by the credit crunch. Yesterday, Ardana put itself up for sale, and at the beginning of the month, CeNeS Pharmaceuticals said it was in talks with a suitor.

Shares in Vernalis have fallen 88% since May last year. In October, troubles were compounded by the US drug regulator's rejection of its key Frova drug as a treatment for menstrual migraine.

The group has also announced a major restructuring plan that will see 120 people lose their jobs in the UK and US. It will divest of Apokyn, its drug for Parkinson's disease, and of the company's US commercial operations.

The restructuring is expected to be completed during the second quarter of the year.

Shares in Vernalis have risen 0.98p, or 13.4%, to 8.3p, as investors are relieved that action has been taken, and also on hope that the company might now be a prime takeover target.

Management Consulting Group is the other company to have been hit by the resignation of some of its management team. Its chairman, chief executive and finance director have all resigned following investor pressure.

The consulting company has said Dr Rolf Stomberg, chairman, and Kevin Parry, chief executive, have resigned with immediate effect.

Craig Smith, the finance director, has also resigned but will continue to work until August 19 or earlier if agreed.

Gartmore, a fund manager with a 20% stake in the company, had been particularly unhappy with Parry, and had requisitioned an EGM to remove him. But it seems the company has pre-empted the move.

Shares in the company rose 3p to 37p on the news

[vow] 21/2/2008 10:46

Vernalis proposes to slash jobs
By Salamander Davoudi of the FT

Published: February 20 2008 23:21 | Last updated: February 20 2008 23:21

Vernalis became the latest casualty in the UK biotechnology sector on Wednesday after its chief executive stepped down and it revealed plans to cut more than half its workforce, leaving the neurology and central nervous system specialist wide open for a takeover.

As part of its restructuring, Vernalis is offloading its US commercial operations along with its second best-selling drug Apokyn. Headcount will fall from 210 to 90.

Shawn Manning, analyst at Landsbanki, said: "The changes will effectively reposition Vernalis as a purely research-based biotech company."

Simon Sturge, chief executive, will step down this month. He will not be replaced and the company will be run by Peter Fellner, executive chairman.

Vernalis' outstanding $56m (£28.9m) loan from its US partner Endo Pharmaceuticals has been written off. Vernalis will pay Endo $7m and forgo further royalties on US sales of Frova, another lead product, until annual sales exceed $85m.

The restructuring is aimed at cutting costs by about £10m a year.

Sam Fazeli, analyst at Piper Jaffray, said the departure of the chief executive and the write-off of the Endo loan could make Vernalis "a takeover target for a company interested in fattening up its mid-late stage neurology pipeline".

The company was hit when Frova failed to gain approval for its menstrual migraine treatment from the US Food and Drug Administration last year.

Vernalis shares, which have lost nearly 90 per cent of value over the the past 12 months, rose 1.03p to 8.35p on Wednesday.


FT Comment


● Vernalis has negotiated a good settlement with Endo – which could have squeezed more or bought the UK biotech cheaply but interestingly decided not to do so. There is a case to buy if you think Vernalis will be bought over the next six to 12 months. The divestments may generate a bit more money but in terms of catalysts driving value, nothing clinical is immediately obvious. Even if a deal does not occur, there is little to drive the share price much lower. But there is no acquisition premium in the share price. Peter Fellner is associated with M&A activity and there is no suggestion of replacing the chief executive. Vernalis will be burning less cash and be a leaner business – it looks like it is being primed for a sale. The stock certainly appears cheap.

Copyright The Financial Times Limited 2008

[jwoolley] 21/2/2008 09:13

From The TimesFebruary 21, 2008

Vernalis shake-up leaves it vulnerable to bidPatrick Foster
Vernalis became the latest takeover target in the biotechnology sector yesterday after it cut 60 per cent of its workforce, parted with its chief executive and put its American operations up for sale.

Vernalis also said that it had settled a $56 million (£28.8 million) loan from Endo Pharmaceuticals, its partner, and would dispose of Apokyn, its Parkinson's disease drug.

However, the refusal of the US Food and Drug Administration to license Frova, its painkiller, as a treatment for menstrual migraine meant that Vernalis missed out on about $40 million in payments from Endo, leaving its funding unclear.

Small, cash-hungry biotech companies have felt the squeeze of the credit crunch. Ardana, based in Scotland, said on Tuesday that it was seeking a sale or merger. Two weeks ago CeNeS Pharmaceuticals revealed that it had received a takeover approach. There have also been rumours that Oxford Biomedica will be bought by Sanofi-Aventis, its French partner.

Vernalis, based in Barkshire, said that Simon Sturge, the chief executive, would step down at the end of the month and that it would reduce staff from 210 to 90 to focus on research and development. The company settled the loan with Endo by making a cash payment of $7 million and agreeing to forgo future royalties on Frova unless American sales exceeded $85 million.

Peter Fellner, the executive chairman, said: "The loan was very much at the front, middle and back of the market's mind. That's gone and we will end up with a cash life that is better than many other companies. It's true that it makes the company very much more attractive, but we're really not setting out to be bought; we're setting the company up for a long life."

Vernalis said that the restructuring would leave it with enough cash for two years. Its shares closed up 1.03p at 8.35p, valuing the business at £27.4 million. "The strategic restructuring will enable the company to focus upon its innovative discovery programmes and progress its development programmes to the point at which they can be partnered," Vernalis said in a statement. "The headcount reductions ... will be larger in corporate and other areas than in research and development, where it is planned to retain a critical mass that will ensure that Vernalis' ongoing programmes are effectively pursued and remain fully competitive."

Analysts said that the restructuring paved the way for Vernalis to be bought. Sam Fazeli, senior research analyst at Piper Jaffray, said: "Looking at Vernalis, you now see a company where the CEO has left and where they've got rid of the Sword of Damocles hanging over their head by restructuring and giving themselves a long cash life. The company is very cheap and people aren't blind to that.

"There are also quite a lot of companies going into this downturn with sizeable cash balances, like Vectura, Protherics, Antisoma, BTG, Biocompatibles."

[joeblogg1000] 21/2/2008 09:08

Big write in Times today as possible take over target after the update yesterday

[quraishim] 20/2/2008 20:33

Shawn Manning at Landsbanki maintained his 'Hold' stance on the stock and as
the market opened he predicted that the announcement would be well received by
investors.
House broker Piper Jaffray kept its 'Buy' rating and and 31 pence price
target.
In an interview with Thomson Financial following the announcement, Vernalis'
executive chairman Peter Fellner said the company had enough cash to last for a
minimum of two years, and that it had plans to sell off further assets to extend
the company's cash life.

[filbert3] 20/2/2008 17:30

Forgot about that one.

[dr biotech] 20/2/2008 15:36

Vavesca - for gauchers disease and some other genetic disorders. I think it had a name change after it wasn't approved the first time.

[filbert3] 20/2/2008 15:00

What products did OGS get to market? - can't remember any myself

(Acambis only managed it after they had already failed having spend vast sums and destroyed great shareholder value as Peptide Therapeutics - biodefence is also not a sustainable revenue stream either, more of a 'grant' type funding in my view, although admittedly a big grant)

[spacecowboy3] 20/2/2008 14:44

Dr. Biotech - agree about those three actually getting something to market but did they show a decent return on the capital invested? CAT were around from the year dot and had countless rounds of finance before they were finally bought out - I very much doubt that a DCF analysis would produce an IRR of more than a few %.

I used to work in the industry (as i guess so do/did you from you username!) but now i'm a full time investor i won't trust any of my money to it for more than a short-term punt. The industry's track investment track record is abysmal IMO - certainly not somewhere i'm prepared to invest in management growing a business over say 3-5 years.

[dr biotech] 20/2/2008 14:10

Acambis and CAT have done OK as did Oxford Glycosciences - all 3 got a product to market. Chiroscience I would say were moderately successful too at the time of their merger.

More dogs than racehorses certainly, but some made it.

[vow] 20/2/2008 10:51

Yep held a few of those stinkers. Tax loses most of them now.