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VRP Verona Pharma Plc

55.00
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Verona Pharma Plc LSE:VRP London Ordinary Share GB00BYW2KH80 ORD 5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 55.00 45.00 65.00 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Verona Pharma plc Verona Pharma Plc Operational Update And Financial Results For The Third Quarter Ended September 30, 2017

07/11/2017 7:00am

UK Regulatory


 
TIDMVRP 
 
 
 
   Emerging clinical data confirms the potential for RPL554 to be an 
important, novel treatment for patients with COPD 
 
   LONDON, Nov. 07, 2017 (GLOBE NEWSWIRE) -- Verona Pharma plc (AIM:VRP) 
(Nasdaq:VRNA) ("Verona Pharma" or the "Company"), a clinical-stage 
biopharmaceutical company focused on developing and commercializing 
innovative therapies for respiratory diseases, announces today an 
operational update and financial results for the third quarter ended 
September 30, 2017. 
 
   The Company's product candidate RPL554, is a first-in-class, inhaled, 
dual inhibitor of the enzymes phosphodiesterase 3 and 4, or PDE3 and 
PDE4, that acts as both a bronchodilator and an anti-inflammatory agent 
in a single compound. Verona Pharma is developing RPL554 for the 
treatment of chronic obstructive pulmonary disease ("COPD") and cystic 
fibrosis ("CF"), and potentially asthma. 
 
   OPERATIONAL HIGHLIGHTS 
 
   During the three months ended September 30, 2017 the Company: 
 
 
   -- Reported data from two clinical studies:-- Positive top-line data from a 
      Phase 2a clinical trial in COPD with RPL554 when dosed in addition to 
      tiotropium (Spiriva(R)):  -- Achieved significant and clinically 
      meaningful additional improvement in peak lung function when added to 
      tiotropium, a widely used drug to treat COPD;  -- Achieved faster 
      onset-of-action when added to tiotropium; and  -- Demonstrated 
      statistical significance across all primary and secondary efficacy 
      outcome measures, as well as a clear dose response at 6 mg dose compared 
      to 1.5 mg dose;-- Earlier than expected positive top-line data from U.S. 
      pharmacokinetic ("PK") trial demonstrated that nebulized RPL554 delivers 
      optimal clinical dose to patients:  -- Confirmed inhaled RPL554 is an 
      appropriate form of administration for patients with chronic COPD and 
      other respiratory disorders; and  -- Demonstrated absorption occurs 
      primarily in the lungs following inhaled administration, consistent with 
      optimal inhaled delivery of medications for the treatment of COPD and 
      asthma; 
 
   -- Commenced a 4-week, Phase 2b dose-ranging clinical trial in Europe in 
      approximately 400 patients to investigate the efficacy, safety, and 
      dose-response of nebulized RPL554 for the maintenance treatment of 
      COPD;-- Study has now enrolled ahead of schedule, more than 200 patients 
      (equivalent to 50% of the study) enrolled, see separate announcement 
      issued today; and-- Top-line data now expected in mid-2018, and 
      potentially sooner than previous guidance of second-half of 2018; 
 
   -- Continued the Phase 2a clinical study to evaluate the PK and 
      pharmacodynamic ("PD") profile and tolerability of RPL554 in up to 10 CF 
      patients as well as examine the effect on lung function;-- Top-line data 
      expected in the first half of 2018; 
 
   -- Continued development of RPL554 as dry powder inhaler ("DPI") and metered 
      dose inhaler ("MDI") formulations for maintenance treatment of COPD. 
 
 
   FINANCIAL HIGHLIGHTS 
 
 
   -- Net cash, cash equivalents and short-term investments at September 30, 
      2017 amounted to GBP85.5 million (December 31, 2016: GBP39.8 million); 
 
   -- For the nine months ended September 30, 2017, reported operating loss of 
      GBP19.1 million (first nine months of 2016: GBP4.1 million) and reported 
      loss after tax of GBP14.2 million (first nine months of 2016: loss after 
      tax of GBP4.2 million), reflecting the preparation, initiation and 
      completion of clinical trials and expansion of the team; 
 
   -- Reported loss per share of 17.4 pence for the nine months ended September 
      30, 2017 (first nine months of 2016: loss per share 15.4 pence); and 
 
   -- Net cash used in operating activities for the nine months ended September 
      30, 2017 of GBP15.8 million (first nine months of 2016: GBP3.3 million) 
      reflecting increased clinical activities. 
 
 
   Jan-Anders Karlsson, PhD, CEO of Verona Pharma, commented: 
 
   "We are delighted to report another period of significant progress for 
Verona Pharma. We reported positive top-line data from two clinical 
studies that we completed ahead of schedule during the third quarter. 
In a Phase 2a trial RPL554 demonstrated a significant and clinically 
meaningful improvement in lung function in COPD patients and faster 
onset of action when administered as an add-on treatment to tiotropium, 
one of the most widely prescribed LAMA bronchodilators in these 
patients. In the PK trial in the United States, we demonstrated that 
inhalation of RPL554 is an appropriate route of administration for 
people with COPD and other respiratory diseases. We are also pleased 
that we were able to update the market today on the solid progress being 
made in enrolling patients in our 4-week Phase 2b COPD trial and we now 
expect to report top line data in mid-2018." 
 
   Conference Call and Webcast Information 
 
   Verona Pharma will host an investment community conference call at 8:00 
a.m. Eastern Standard Time (1:00 pm Greenwich Mean Time) on November 7, 
2017. Analysts and investors may participate in the conference call by 
utilizing the conference ID: 1550110 and dialing the following numbers: 
 
 
   -- (877)-280-1254 or (646)-254-3388 for callers in the United States 
 
   -- 0800 279 5736 or 44 (0) 20 3427 1901 for callers in the United Kingdom 
 
   -- 0800 589 2673 or 49 (0) 69 2222 10619 for callers in Germany 
 
 
   Those interested in listening to the conference call live via the 
internet may do so by visiting the "Investors" page of Verona Pharma's 
website at www.veronapharma.com and clicking on the webcast link.  A 
webcast replay of the conference call [audio] will be available on the 
"Investors" page of Verona Pharma's website at www.veronapharma.com. 
 
   An electronic copy of the interim results will be made available today 
on the Company's website (http://www.veronapharma.com). This press 
release does not constitute an offer to sell or the solicitation of an 
offer to buy any of the Company's securities, and shall not constitute 
an offer, solicitation or sale in any jurisdiction in which such offer, 
solicitation or sale would be unlawful prior to registration or 
qualification under the securities laws of that jurisdiction. 
 
   This press release contains inside information for the purposes of 
Article 7 of Regulation (EU) No. 596/2014. 
 
   About Verona Pharma plc 
 
   Verona Pharma is a clinical-stage biopharmaceutical company focused on 
developing and commercializing innovative therapies for the treatment of 
respiratory diseases with significant unmet medical needs. Verona 
Pharma's product candidate, RPL554, is a first-in-class, inhaled, dual 
inhibitor of the enzymes phosphodiesterase 3 and 4 that acts as both a 
bronchodilator and an anti-inflammatory agent in a single compound. In 
clinical trials, treatment with RPL554 has been observed to result in 
statistically significant improvements in lung function as compared to 
placebo, and has shown clinically meaningful and statistically 
significant improvements in lung function when administered in addition 
to frequently used short- and long-acting bronchodilators as compared to 
such bronchodilators administered as a single agent. Verona Pharma is 
developing RPL554 for the treatment of chronic obstructive pulmonary 
disease (COPD) and cystic fibrosis (CF), and potentially asthma. 
 
   Forward-Looking Statements 
 
   This press release contains forward-looking statements. All statements 
contained in this press release that do not relate to matters of 
historical fact should be considered forward-looking statements, 
including, but not limited to, statements regarding the expected timing 
of top-line data from our clinical trials of RPL554, development of 
RPL554 to treat asthma or other respiratory diseases, RPL554 as an 
important and promising therapy for COPD patients, the timing of 
commencement of clinical trials for RPL554, the ability of DPI and MDI 
formulations of RPL554 to address a larger COPD market segment and 
significantly extend RPL554's commercial opportunity, our ability to 
deliver a comprehensive package of Phase 2b data for nebulized RPL554, 
the broad potential applicability of RPL554 in COPD and other 
respiratory indications, and collaborations to acquire or in-license 
product candidates. 
 
   These forward-looking statements are based on management's current 
expectations. These statements are neither promises nor guarantees, but 
involve known and unknown risks, uncertainties and other important 
factors that may cause our actual results, performance or achievements 
to be materially different from our expectations expressed or implied by 
the forward-looking statements, including, but not limited to, the 
following: our limited operating history; our need for additional 
funding to complete development and commercialization of RPL554, which 
may not be available and which may force us to delay, reduce or 
eliminate our development or commercialization efforts; the reliance of 
our business on the success of RPL554, our only product candidate under 
development; economic, political, regulatory and other risks involved 
with international operations; the lengthy and expensive process of 
clinical drug development, which has an uncertain outcome; serious 
adverse, undesirable or unacceptable side effects associated with 
RPL554, which could adversely affect our ability to develop or 
commercialize RPL554; potential delays in enrolling patients, which 
could adversely affect our research and development efforts; we may not 
be successful in developing RPL554 for multiple indications; our ability 
to obtain approval for and commercialize RPL554 in multiple major 
pharmaceutical markets; misconduct or other improper activities by our 
employees, consultants, principal investigators, and third-party service 
providers; material differences between our "top-line" data and final 
data; our reliance on third parties, including clinical investigators, 
manufacturers and suppliers, and the risks related to these parties' 
ability to successfully develop and commercialize RPL554; and lawsuits 
related to patents covering RPL554 and the potential for our patents to 
be found invalid or unenforceable. These and other important factors 
under the caption "Risk Factors" in our final prospectus filed with the 
Securities and Exchange Commission ("SEC") on April 28, 2017 relating to 
our Registration Statement on Form F-1, and our other reports filed with 
the SEC, could cause actual results to differ materially from those 
indicated by the forward-looking statements made in this press release. 
Any such forward-looking statements represent management's estimates as 
of the date of this press release. While we may elect to update such 
forward-looking statements at some point in the future, we disclaim any 
obligation to do so, even if subsequent events cause our views to 
change. These forward-looking statements should not be relied upon as 
representing our views as of any date subsequent to the date of this 
press release. 
 
   For further information, please contact: 
 
 
 
 
Verona Pharma plc                                    Tel: +44 (0)20 3283 4200 
Jan-Anders Karlsson, Chief Executive Officer         info@veronapharma.com 
 
Stifel Nicolaus Europe Limited (Nominated Adviser    Tel: +44 (0) 20 7710 7600 
 and UK 
 Broker) 
Stewart Wallace / Jonathan Senior / Ben Maddison     SNELVeronaPharma@stifel.com 
 
FTI Consulting (UK Media and Investor enquiries)     Tel: +44 (0)20 3727 1000 
Simon Conway / Natalie Garland-Collins               veronapharma@fticonsulting. 
                                                     com 
 
ICR, Inc. (US Media and Investor enquiries) 
James Heins                                          Tel: +1 203-682-8251 
                                                     James.Heins@icrinc.com 
 
Stephanie Carrington                                 Tel. +1 646-277-1282 
                                                     Stephanie.Carrington@icrinc 
                                                     .com 
 
 
   OPERATIONAL REVIEW 
 
   We are a clinical-stage biopharmaceutical company focused on developing 
and commercializing innovative therapies for the treatment of 
respiratory diseases with significant unmet medical needs. Our product 
candidate, RPL554, is a first-in-class, inhaled, dual inhibitor of the 
enzymes phosphodiesterase 3 and 4, or PDE3 and PDE4, that acts as both a 
bronchodilator and an anti-inflammatory agent in a single compound, 
giving it a dual mechanism of action to improve lung function. If 
successful, RPL554 would represent the first novel class of 
bronchodilator developed in decades, and at the same time have 
anti-inflammatory effects. RPL554 has been well tolerated in our 
clinical trials, and has not been observed to result in the 
gastrointestinal or other side effects commonly associated with PDE4 
inhibition. 
 
   We are developing RPL554 for the treatment of COPD and CF. We may also 
explore, alone or with a collaborator, the development of RPL554 to 
treat asthma and other respiratory diseases. 
 
   We have initiated four clinical trials of nebulized RPL554 in 2017, of 
which two were successfully completed this quarter. In September 2017, 
we announced positive top-line data from our Phase 2a clinical trial of 
RPL554 as an add-on treatment to tiotropium, one of the most important 
current therapies for COPD. The data showed a significant improvement in 
peak lung function when RPL554 was added on top of tiotropium, 
supporting the continued development of RPL554 as a promising therapy 
for COPD patients. We have also shown in a pharmacokinetic, or PK, 
clinical trial that RPL554 is well-suited to inhaled administration. 
 
   Enrollment in our current study in 400 COPD patients in Europe, being 
treated for 4 weeks, is progressing well and the Company now expects to 
report top-line data in mid-2018, sooner than previous guidance of 
second-half of 2018. 
 
   Our ongoing Phase 2a study in CF patients, to evaluate PK and PD is 
progressing as planned and we expect to report top-line data in the 
first half of 2018. 
 
   The Company continues to review its development strategy for RPL554 in 
the context of additional data generated, including from clinical trials 
and market research, to identify opportunities to enhance the planned 
development and commercialization of RPL554 which may lead to changes in 
the planned future clinical development of RPL554. 
 
   In addition to our nebulized formulation of RPL554, we are also 
developing RPL554 in both DPI and MDI formulations for the maintenance 
treatment of COPD. We believe these formulations may enable the Company 
to address a larger COPD market segment than can be addressed through 
the nebulizer formulation. We may explore the development of RPL554 in 
these formulations for the treatment of CF and other respiratory 
diseases. 
 
   For the nine months ended September 30, 2017 the Company recorded a loss 
after tax of GBP14.2m (2016: loss of GBP4.2m) and a loss per share of 
17.4p (2016: loss of 15.4p). Net cash outflows from operating activities 
during the nine month period ended September 30, 2017 were GBP15.8m 
(2016: outflow of GBP3.3m), and at September 30, 2017 the Company held 
cash, cash equivalents and short-term investments of GBP85.5m (December 
31, 2016: GBP39.8m). 
 
   OUTLOOK 
 
   Having successfully completed earlier this year a global offering 
comprised of an initial public offering of our American Depositary 
Shares ("ADSs") on Nasdaq and an offering in Europe of our ordinary 
shares, we believe that we now have the team and funding in place to 
progress the development of nebulized RPL554 as maintenance therapy for 
both COPD and CF, as well as for the treatment of acute exacerbations of 
COPD. We are also developing DPI and MDI formulations of RPL554 which we 
believe has the potential to extend the commercial opportunity in COPD 
and other respiratory indications, as we believe RPL554's properties as 
a dual inhibitor of PDE3 and PDE4 give it broad potential applicability 
in this therapeutic area. Additionally, we intend to seek strategic 
collaborative relationships and opportunities to acquire or in-license 
product candidates for the treatment of additional unmet clinical needs 
in respiratory diseases. 
 
   FINANCIAL REVIEW 
 
   Financial review of the three and nine month periods ended September 30, 
2017 
 
   Three months ended September 30, 2017 
 
   The operating loss for the three months ended September 30, 2017 was 
GBP8.1m (three months ended September 30, 2016: GBP2.2m) and the loss 
after tax for the period was GBP9.1m (three months ended September 30, 
2016: GBP2.5m). 
 
   Research and development costs for the three months ended September 30, 
2017 were GBP6.1m (three months ended September 30, 2016: GBP1.4m), an 
increase of GBP4.7m. This increase related to the expense of preparation 
for, initiation, progression and completion of clinical trials as well 
as the build-out of the management team, including the expansion of 
clinical and regulatory capacity in the United States. Included in the 
increase was an amount of GBP0.5m related to share-based payment charges 
(2016: GBP0.1m). 
 
   General and administrative costs for the three months ended September 
30, 2017 were GBP2.0m (three months ended September 30, 2016: GBP0.8m), 
an increase of GBP1.2m. This increase was due to an expansion in the 
commercial and administrative structure and activities of the Company. 
Included in the increase was an amount of GBP0.5m related to share-based 
payment charges (2016: GBP0.0m). 
 
   Finance income for the three months ended September 30, 2017 was GBP0.1m 
(three months ended September 30, 2016: GBP0.1m). 
 
   Finance expense for the three months ended September 30, 2017 was 
GBP2.4m (three months ended September 30, 2016: GBP0.7m).  The increase 
in finance expense was due to an increase in the fair value of the 
warrant liability of GBP1.2m, increased losses following changes in 
exchange rates as well as an increase in the calculated value of the 
assumed contingent obligation resulting from the Vernalis licence 
agreement, offset by transaction costs relating to warrants in 2016. 
The increase in the value of the warrants was caused by changes in the 
underlying assumptions for measuring the liability of the warrants, 
predominantly the increase in the price of the Company's shares. The 
Company manages its exposure to movements in foreign exchange movements 
by holding its cash and short-term investments in a range of currencies. 
The movement in the sterling US dollar exchange rate resulted in a 
foreign exchange loss during the period. 
 
   Taxation for the three months ended September 30, 2017 amounted to a 
credit of GBP1.3m (three months ended September 30, 2016: GBP0.3m), an 
increase in the credit amount of GBP1.0m. The credits are obtained at a 
rate of 14.5% of 230% of our qualifying research and development 
expenditure, and the increase in the credit amount was primarily 
attributable to our increased expenditure on research and development. 
 
   Nine months ended September 30, 2017 
 
   The operating loss for the nine months ended September 30, 2017 was 
GBP19.1m (nine months ended September 30, 2016: GBP4.1m) and the loss 
after tax for the period was GBP14.2m (nine months ended September 30, 
2016: GBP4.2m). 
 
   Research and development costs for the nine months ended September 30, 
2017 were GBP14.0m (nine months ended September 30, 2016: GBP2.7m), an 
increase of GBP11.3m. This increase related to the expense of 
preparation for, initiation, progression and completion of clinical 
trials as well as the build-out of the management team, including the 
expansion of clinical and regulatory capacity in the United States. 
Included in the increase was an amount of GBP1.2m related to share-based 
payment charges (2016: GBP0.2m). 
 
   General and administrative costs for the nine months ended September 30, 
2017 were GBP5.0m (nine months ended September 30, 2016: GBP1.4m), an 
increase of GBP3.6m. This increase was due to an expansion in the 
commercial and administrative structure and activities of the Company. 
Included in the increase was an amount of GBP1.0m related to share-based 
payment charges (2016: GBP0.1m). 
 
   Finance income for the nine months ended September 30, 2017 was GBP4.1m 
(nine months ended September 30, 2016: GBP0.1m). The increase in finance 
income was primarily due to a decrease in the fair value of the warrant 
liability of GBP3.9m caused by changes in the underlying assumptions for 
measuring the liability of the warrant, predominantly the price of the 
Company's shares. 
 
   Finance expense for the nine months ended September 30, 2017 was GBP2.2m 
(nine months ended September 30, 2016:GBP0.9m).  The increase in finance 
expense was due to increased losses following changes in exchange rates 
as well as an increase in the calculated value of the assumed contingent 
obligation resulting from the Vernalis licence agreement, offset by 
transaction costs relating to warrants in 2016.  As part of our approach 
to risk management we hold cash and short-term investments in a mix of 
currencies.  The movement in the sterling US dollar exchange rate has 
resulted in the foreign exchange loss for the nine months ended 
September 30, 2017 (nine months ended September 30, 2016: gain). 
 
   Taxation for the nine months ended September 30, 2017 amounted to a 
credit of GBP2.9m (nine months ended September 30, 2016: GBP0.6m), an 
increase in the credit amount of GBP2.3m. The credits are obtained at a 
rate of 14.5% of 230% of our qualifying research and development 
expenditure, and the increase in the credit amount was primarily 
attributable to our increased expenditure on research and development. 
 
   Cash Flow - Operating activities: net cash used in operating activities 
increased by GBP12.5m to GBP15.8m for the nine months period ended 
September 30, 2017 compared to GBP3.3m for the nine month period ended 
September 30, 2016. This increase was due to the increases in both 
research and development, and general and administrative expenses 
described above. 
 
   Cash Flow - Investing activities: net cash used in investing activities 
for the nine month period ended September 30, 2017 amounted to GBP54.8m, 
reflecting the placing of funds on term deposits with maturity of 
greater than 3 months together with certain patent costs, compared to 
GBP0.1m for the nine months ended September 30, 2016. 
 
   Cash Flow - Financing activities: net cash inflow from financing 
activities for the nine month period ended September 30, 2017 amounted 
to GBP63.2m and relates to the net proceeds from the global offering of 
our ADSs and ordinary shares and a private placement of our ordinary 
shares, each of which completed on May 2, 2017. For the period ended 
September 30, 2016 the net cash inflow of GBP41.8m related to a 
financing that took place in July 2016. 
 
   Financial position 
 
   At September 30, 2017 Verona Pharma plc and its subsidiaries had 
approximately GBP85.5m in cash, cash equivalents and short-term 
investments (December 31, 2016: GBP39.8m). 
 
   VERONA PHARMA PLC 
 
   CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE 
 
   INCOME FOR THE THREE AND NINE MONTHSING SEPTEMBER 30, 2016 AND 
SEPTEMBER 30, 2017 
 
 
 
 
                                                                 Three months         Three months     Nine months         Nine months 
                                                                     ended                ended            ended               ended 
                                                                 September 30,        September 30,    September 30,       September 30, 
                                                                     2016                 2017             2016                2017 
                                                         Notes    (unaudited)          (unaudited)      (unaudited)         (unaudited) 
                                                                     GBP                  GBP              GBP                 GBP 
Research and development costs                                      (1,408,726)       (6,084,999)         (2,653,441)        (14,027,854) 
General and administrative costs                                      (751,912)       (2,040,276)         (1,427,026)         (5,041,200) 
Operating loss                                                      (2,160,638)       (8,125,275)         (4,080,467)        (19,069,054) 
Finance income                                               6         139,803           114,079             147,178           4,130,934 
Finance expense                                              6        (711,285)       (2,360,885)           (859,195)         (2,151,329) 
Loss before taxation                                                (2,732,120)      (10,372,081)         (4,792,484)        (17,089,449) 
Taxation - credit                                            7         270,757         1,257,906             555,734           2,861,359 
Loss for period                                                     (2,461,363)       (9,114,175)         (4,236,750)        (14,228,090) 
Other comprehensive income/(expense): 
 Items that may be subsequently reclassified to profit 
 or loss. 
Exchange differences on translating foreign operations                   3,842           (13,654)             20,495             (27,691) 
Total comprehensive loss for the period attributable 
 to owners of the Company                                           (2,457,521)       (9,127,829)         (4,216,255)        (14,255,781) 
Loss per ordinary share - basic and diluted (pence)          8            (5.9  )p          (8.7  )p           (15.4  )p           (17.4  )p 
 
 
 
 
   The accompanying notes form an integral part of these condensed 
consolidated interim financial statements. 
 
   VERONA PHARMA PLC 
 
   CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION 
 
   AS OF DECEMBER 31, 2016 AND SEPTEMBER 30, 2017 
 
 
 
 
                               As of                 As of 
                          December 31, 2016    September 30, 2017 
                  Notes       (audited)           (unaudited) 
                                GBP                   GBP 
ASSETS 
Non-current 
assets: 
Property, plant 
 and equipment                       13,838                12,819 
Intangible 
 assets                           1,876,684             2,003,841 
Goodwill                            441,000               441,000 
                                  2,331,522             2,457,660 
Current assets: 
Prepayments and 
 other 
 receivables                      2,958,587             3,916,024 
Current tax 
 receivable                       1,067,460             3,068,523 
Short-term 
 investments          9                   -            54,064,942 
Cash and cash 
 equivalents                     39,785,098            31,393,327 
                                 43,811,145            92,442,816 
Total assets                     46,142,667            94,900,476 
 
EQUITY AND 
LIABILITIES 
Capital and 
reserves 
attributable to 
equity 
holders: 
Share capital                     2,568,053             5,250,870 
Share premium                    58,526,502           118,861,212 
Share-based 
 payment 
 reserve                          2,101,790             4,092,921 
Accumulated 
 loss                           (28,728,038)          (42,983,819) 
Total equity                     34,468,307            85,221,184 
 
Current 
liabilities: 
Trade and other 
 payables                         2,823,489             4,751,798 
Tax payable - 
 US operations                      126,063                78,091 
Derivative 
 financial 
 instrument          10           7,922,603             3,997,333 
Total current 
 liabilities                     10,872,155             8,827,222 
Non-current 
liabilities: 
Assumed 
 contingent 
 obligation          11             802,205               852,070 
Total 
 non-current 
 liabilities                        802,205               852,070 
Total equity 
 and 
 liabilities                     46,142,667            94,900,476 
 
 
 
 
   The accompanying notes form an integral part of these condensed 
consolidated interim financial statements. 
 
   VERONA PHARMA PLC 
 
   CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS FOR 
 
   THE NINE MONTHSED SEPTEMBER 30, 2016 AND SEPTEMBER 30, 2017 
 
 
 
 
                                                         Nine months           Nine months 
                                                            ended                 ended 
                                                      September 30, 2016    September 30, 2017 
                                                         (unaudited)           (unaudited) 
                                                             GBP                   GBP 
Cash used in operating activities: 
Loss before taxation                                          (4,792,484)          (17,089,449) 
Finance income                                                  (147,178)           (4,130,934) 
Finance expense                                                  859,195             2,151,329 
Share-based payment charge                                       307,929             1,991,131 
Increase in prepayments and other receivables                   (537,183)           (2,377,156) 
(Decrease)/increase in trade and other payables                 (551,100)            2,798,146 
Depreciation of plant and equipment                                7,288                 4,502 
Amortization of intangible assets                                 40,913                50,305 
Cash used in operating activities                             (4,812,620)          (16,602,126) 
Cash inflow from taxation                                      1,533,068               816,367 
Net cash used in operating activities                         (3,279,552)          (15,785,759) 
 
Cash flow from investing activities: 
Interest received                                                 48,166                87,356 
Purchase of plant and equipment                                   (3,825)               (3,483) 
Payments for patents                                             (99,719)             (177,461) 
Purchase of short-term investments                                     -           (54,689,344) 
Net cash used in investing activities                            (55,378)          (54,782,932) 
 
Cash flow from financing activities: 
Gross proceeds from issue of shares and warrants              44,702,197            70,031,506 
Transaction costs on issue of shares and warrants             (2,910,461)                    - 
Transaction costs on Global Offering                                   -            (6,785,749) 
Net cash generated from financing activities                  41,791,736            63,245,757 
 
Net increase / (decrease) in cash and cash 
 equivalents                                                  38,456,806            (7,322,934) 
Cash and cash equivalents at the beginning of the 
 period                                                        3,524,387            39,785,098 
Effect of exchange rates on cash and cash 
 equivalents                                                      99,012            (1,068,837) 
Cash and cash equivalents at the end of the period            42,080,205            31,393,327 
 
 
 
 
   The accompanying notes form an integral part of these condensed 
consolidated interim financial statements. 
 
   VERONA PHARMA PLC 
 
   CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY 
 
   FOR THE NINE MONTHSED SEPTEMBER 30, 2016 AND SEPTEMBER 30, 2017 
 
 
 
 
                                           Share-based     Total 
                    Share       Share        payment     Accumulated      Total 
                   capital     premium       reserve       losses         Equity 
                     GBP         GBP           GBP          GBP            GBP 
Balance at 
 January 1, 
 2016             1,009,923   26,650,098     1,525,897   (23,752,204)    5,433,714 
Loss for the 
 period                   -            -             -    (4,236,750)   (4,236,750) 
Other 
comprehensive 
income for the 
period: 
    Exchange 
     differences 
     on 
     translating 
     foreign 
     operations           -            -             -        20,495        20,495 
Total 
 comprehensive 
 loss for the 
 period                   -            -             -    (4,216,255)   (4,216,255) 
New share 
 capital issued   1,555,796   34,151,439             -             -    35,707,235 
Transaction 
 costs on share 
 capital issued           -   (2,325,035)            -             -    (2,325,035) 
Warrants 
 exercised 
 during the 
 period                 167        4,000             -             -         4,167 
Share-based 
 payments                 -            -       307,929             -       307,929 
Balance at 
 September 30, 
 2016             2,565,886   58,480,502     1,833,826   (27,968,459)   34,911,755 
 
Balance at 
 January 1, 
 2017             2,568,053   58,526,502     2,101,790   (28,728,038)   34,468,307 
Loss for the 
 period                   -            -             -   (14,228,090)  (14,228,090) 
Other 
comprehensive 
expense for the 
period: 
    Exchange 
     differences 
     on 
     translating 
     foreign 
     operations           -            -             -       (27,691)      (27,691) 
Total 
 comprehensive 
 loss for the 
 period                   -            -             -   (14,255,781)  (14,255,781) 
New share 
 capital issued   2,676,150   67,647,737             -             -    70,323,887 
Transaction 
 costs on new 
 share capital 
 issued                   -   (7,453,027)            -             -    (7,453,027) 
Warrants 
 exercised 
 during the 
 period               6,667      140,000             -             -       146,667 
Share-based 
 payments                 -            -     1,991,131             -     1,991,131 
Balance at 
 September 30, 
 2017             5,250,870  118,861,212     4,092,921   (42,983,819)   85,221,184 
 
 
 
 
   The currency translation reserve is currently not material and as such 
is not presented in a separate reserve but has been included in the 
total accumulated losses reserve. 
 
   The accompanying notes form an integral part of these condensed 
consolidated interim financial statements. 
 
   VERONA PHARMA PLC 
 
   NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS 
 
   FOR THE THREE AND NINE MONTHSED SEPTEMBER 30, 2017 
 
   1. General information 
 
   On February 10, 2017 the Company effected a 50-for-1, reverse stock 
split, consolidation of its shares. All references to ordinary shares, 
options and warrants, as well as share, per share and related 
information in these consolidated financial statements have been 
retroactively adjusted to reflect the consolidation as if it had 
occurred at the beginning of the earliest period presented. 
 
   On May 2, 2017 the Company announced the closing of its global offering 
of an aggregate of 47,399,001 new ordinary shares, consisting of the 
initial public offering in the United States of 5,768,000 American 
Depositary Shares ("ADSs") at a price of $13.50 per ADS and the private 
placement in Europe of 1,255,001 ordinary shares at a price of GBP1.32 
per ordinary share, for gross proceeds of $80.0 million (the "Global 
Offering"). Each ADS offered represents eight ordinary shares of the 
Company. The ordinary shares offered were allotted and issued in a 
concurrent private placement in Europe and other countries outside of 
the United States and Canada. 
 
   In addition, the Chairman of Verona Pharma's board of directors, Dr. 
David Ebsworth, and an existing shareholder agreed to subscribe for 
254,099 new ordinary shares at a price of GBP1.32 per ordinary share in 
a shareholder private placement separate from the Global Offering (the 
"Shareholder Private Placement"), contingent on and concurrent with the 
Global Offering and generating additional gross proceeds of GBP335 
thousand. 
 
   On May 15 and May 23, 2017, pursuant to the Global Offering, the 
underwriters purchased an additional 733,738 ADSs, representing 
5,869,904 ordinary shares, at a price of $13.50 per ADS, for additional 
gross proceeds of $9.9 million bringing the total gross proceeds in the 
Global Offering to $89.9 million (GBP70.0 million). Including the 
Shareholder Private Placement, the total gross proceeds of the capital 
raising amounted to $90.3 million (GBP70.3 million). 
 
   The ADSs began trading on the NASDAQ Global Market under the ticker 
symbol "VRNA" on April 27, 2017. Verona Pharma's ordinary shares 
continue to trade on the AIM market of the London Stock Exchange ("AIM") 
under the symbol "VRP". 
 
   On September 22, 2017, 133,333 share options over 133,333 new shares 
were exercised at a price of 110p per share, resulting in proceeds of 
GBP147 thousand to the Company. 
 
   Following the Global Offering, the Shareholder Private Placement and the 
exercise of warrants, the number of ordinary shares in issue at 
September 30, 2017 was 105,017,401. 
 
   2. Basis of accounting 
 
   The unaudited condensed consolidated interim financial statements of 
Verona Pharma Plc (the "Company") and its subsidiaries, Verona Pharma, 
Inc., and Rhinopharma Limited (together "the Group"), for the nine 
months ended September 30, 2017, do not include all the statements 
required for full annual financial statements and should be read in 
conjunction with the consolidated financial statements of the Group as 
of December 31, 2016. 
 
   These unaudited condensed interim financial statements were authorized 
for issue by the Company's board of directors (the "Directors") on 
November 7, 2017. There have been no changes, except as otherwise stated, 
to the accounting policies as contained in the annual consolidated 
financial statements as of and for the year ended December 31, 2016, 
which have been prepared in accordance with international financial 
reporting standards ("IFRS") as issued by the International Accounting 
Standards Board ("IASB"). 
 
   The interim condensed consolidated financial statements have been 
prepared on a going-concern basis. Management, having reviewed the 
future operating costs of the business in conjunction with the cash held 
as of September 30, 2017, believes the Group has sufficient funds to 
continue as a going concern for at least 12 months from the end of the 
reporting period. 
 
   The Group's activities and results are not exposed to any seasonality. 
The Company operates as a single operating and reportable segment. 
 
   Dividend 
 
   The Directors do not recommend the payment of a dividend for the nine 
months ended September 30, 2017 (Nine months ended September 30, 2016: 
GBPNil; year ended December 31, 2016: GBPNil). 
 
   Update to accounting policies: Short-Term Investments 
 
   Short-term investments include fixed term deposits held at banks and 
other investments with original maturities of three months or more but 
less than a year. They are classified as loans and receivables and are 
measured at amortised cost using the effective interest method. 
 
   3. Segmental reporting 
 
   The Group's activities are covered by one operating and reporting 
segment: Drug Development, as detailed more fully in the annual 
consolidated financial statements as of and for the year ended December 
31, 2016. There have been no changes to management's assessment of the 
operating and reporting segment of the Group during the period. 
 
   4. Financial Instruments 
 
   The Group's activities expose it to a variety of financial risks: market 
risk (including foreign currency risk); cash flow and fair value 
interest rate risk; and credit risk and liquidity risk. The condensed 
consolidated interim financial statements do not include all financial 
risk management information and disclosures required in the annual 
financial statements, and they should be read in conjunction with the 
Group's annual financial statements for the year ended December 31, 
2016. 
 
   5. Estimates 
 
   The preparation of condensed consolidated interim financial statements 
require management to make judgments, estimates and assumptions that 
affect the application of accounting policies and the reported amounts 
of assets and liabilities, income and expenses. Actual results may 
differ from those estimates. 
 
   In preparing these condensed consolidated interim financial statements, 
the significant judgments made by management in applying the Group's 
accounting policies and the key sources of estimation uncertainty were 
the same as those applied to the consolidated financial statements for 
the year ended December 31, 2016. 
 
   6. Finance income and expense 
 
 
 
 
                                                           Three months  Three months  Nine months  Nine months 
                                                               ended         ended        ended        ended 
                                                             September     September    September    September 
                                                             30, 2016      30, 2017      30, 2016     30, 2017 
                                                               GBP           GBP           GBP          GBP 
Finance income: 
Interest received on cash balances                               40,791       102,882       48,166      194,467 
Foreign exchange gain on translating foreign currency 
 denominated bank balances                                       99,012             -       99,012            - 
Fair value adjustment on derivative financial instrument 
 (note 10)                                                            -             -            -    3,925,270 
Other income                                                          -        11,197            -       11,197 
Total finance income                                            139,083       114,079      147,178    4,130,934 
 
 
 
 
 
 
 
 
 
 
 
 
                                                             Three months  Three months   Nine months  Nine months 
                                                                 ended         ended         ended        ended 
                                                               September     September     September    September 
                                                               30, 2016      30, 2017       30, 2016     30, 2017 
                                                                 GBP           GBP            GBP          GBP 
Finance expense: 
Transaction costs allocated to the issue of warrants              585,425             -       585,425            - 
Re-measurement of contingent arrangement (note 11)                      -             -        86,128            - 
Impact of changes in foreign exchange rates on the 
 contingent arrangement (note 11)                                   3,991        (7,418)       24,906      (20,221) 
Unwinding of discount factor related to the contingent 
 arrangement (note 11)                                             21,434        23,803        62,301       70,086 
Foreign exchange loss on receivables relating to financing 
 activities (note 12)                                                   -             -             -      408,277 
Foreign exchange loss on translating other foreign 
 currency denominated balances                                          -     1,156,837             -    1,693,187 
Fair value adjustment on derivative financial instrument 
 (note 10)                                                        100,435     1,187,663       100,435            - 
Total finance expense                                             711,285     2,360,885       859,195    2,151,329 
 
 
 
 
   For the three month period ended September 30, 2017, the value of the 
liability arising from the derivative financial instrument increased by 
GBP1,188 thousand, from GBP2,810 thousand on June 30, 2017 to GBP3,997 
thousand on September 30, 2017; the increase in the value of this 
liability is recorded as finance expense. 
 
   For the nine month period ended September 30, 2017, the value of the 
liability arising from the derivative financial instrument decreased by 
GBP3,926 thousand, from GBP7,923 thousand on January 1, 2017 to GBP3,997 
thousand on September 30, 2017; the decrease in the value of this 
liability is recorded as Finance income. (The change in value of this 
liability during the period comprised a reduction of GBP5,113 thousand 
during the six months ended June 30, 2017, partially offset by an 
increase of GBP1,188 thousand during the three months ended September 
30, 2017, as set out above.) 
 
   As a result, the movement in the value of the liability arising from the 
derivative financial instrument is recorded as finance expense in the 
three month period to September 30, 2017, and as finance income in the 
nine month period to September 30, 2017. 
 
   7. Taxation 
 
   The tax credit for the nine month period ended September 30, 2017, 
amounts to GBP2,861 thousand, and consists of the estimated research and 
development tax credit receivable on qualifying expenditure incurred 
during the nine month period ended September 30, 2017 for an amount of 
GBP3,079 thousand plus a tax expense of GBP218 thousand related to the 
US operations (nine month period ended September 30, 2016: GBP556 
thousand tax credit, comprising GBP572 thousand for research and 
development tax credit, less GBP16 thousand expense for tax on US 
operations). 
 
   The tax credit for the three month period ended September 30, 2017, 
amounts to GBP1,258 thousand, and consists of the estimated research and 
development tax credit receivable on qualifying expenditure incurred 
during the three month period ended September 30, 2017 for an amount of 
GBP1,336 thousand plus a tax expense of GBP78 thousand related to the US 
operations (three month period ended September 30, 2016: GBP270 thousand 
tax credit, comprising GBP282 thousand for research and development tax 
credit, less GBP11 thousand expense for tax on US operations). 
 
   8. Loss per share calculation 
 
   The basic loss per share of 17.4p (September 30, 2016: loss of 15.4p) 
for the nine months ended September 30, 2017 is calculated by dividing 
the loss for the nine months ended September 30, 2017 by the weighted 
average number of ordinary shares in issue of 81,923,920 during the nine 
months ended September 30, 2017 (September 30, 2016: 27,574,331). 
 
   The basic loss per share of 8.7p (September 30, 2016: loss of 5.9p) for 
the three months ended September 30, 2017 is calculated by dividing the 
loss for the three months ended September 30, 2017 by the weighted 
average number of ordinary shares in issue of 104,896,971 during the 
three months ended September 30, 2017 (September 30, 2016: 41,612,262). 
Since the Group has reported a net loss, diluted loss per ordinary share 
is equal to basic loss per ordinary share. 
 
   Each ADS represents 8 shares of the Company, so the loss per ADS is any 
period is equal to 8 times the loss per share. 
 
   9. Short-term investments 
 
   The short-term investments as at September 30, 2017 amounted to a total 
of GBP54,065 thousand (December 31, 2016: GBP nil) and consisted of 
fixed term deposits, in both US Dollars and UK Pounds. 
 
   10. Warrants 
 
   Pursuant to the July 2016 placement the Company issued 31,115,926 units 
to new and existing investors at the placing price of GBP1.4365 per 
unit. Each unit comprises one ordinary share and one warrant. The 
warrant holders can subscribe for 0.4 of an ordinary share at a per 
share exercise price of 120% of the placing price or GBP1.7238. The 
warrant holders can opt for a cashless exercise of their warrants. The 
warrant holders can choose to exchange the warrants held for a reduced 
number of warrants exercisable at nil consideration. The reduced number 
of warrants is calculated based on a formula considering the share price 
and the exercise price of the shares. The warrants were therefore 
classified as a derivative financial liability, since their exercise 
might result in a variable number of shares to be issued. 
 
   At December 31, 2016 warrants over 12,446,370 shares were in effect. 
During the 9 months ended September 30, 2017 warrants over 45,108 shares 
were forfeited. 
 
 
 
 
 
 
                           At December 31, 2016  At September 30, 2017 
Warrants                             12,446,370             12,401,262 
Stock price                           GBP1.5650              GBP1.4000 
Exercise price                        GBP1.7238              GBP1.7238 
Risk-free interest rate                  0.088%                  0.42% 
Expected life of options             2.43 years             1.92 years 
Annualized volatility                    73.53%                 55.17% 
Dividend rate                             0.00%                  0.00% 
 
 
 
 
   As at September 30, 2017, the Company updated the underlying assumptions 
and calculated a fair value of these warrants, using Black-Scholes 
(level 3), amounting to GBP3,997 thousand. 
 
   The variance for the nine month period ended September 30, 2017 was 
income of GBP3,925 thousand (nine month period ended September 30, 2016: 
expense of GBP100 thousand) and is recorded as finance income (nine 
month period ended September 2016: finance expense) in the Consolidated 
Statement of Comprehensive Income.  Of this amount a total of GBP12 
thousand related to the warrants that were forfeited (2016: GBPnil). The 
variance for the three month period ended September 30, 2017 was an 
expense of GBP1,188 thousand (three month period ending September 30, 
2016: GBP100 thousand) and is recorded as finance expense (2016: finance 
expense) in the Consolidated Statement of Comprehensive Income. 
 
 
 
 
 
                                                          Derivative 
                                                          financial 
                                                          instrument 
                                                             GBP 
At December 31, 2016                                      7,922,603 
Fair value adjustments recognized in profit or loss      (3,925,270) 
At September 30, 2017                                     3,997,333 
 
 
 
 
   For the amount recognized at September 30, 2017, the effect, when some 
of these underlying parameters would deviate up or down, is presented in 
the below table. 
 
 
 
 
 
 
                                                   Time to 
                                  Volatility       maturity 
                                   (up / down     (up / down 
                                   10 % pts)      6 months) 
                                 GBP thousands  GBP thousands 
 
Variable up .                            4,941          4,651 
Base case, reported fair value           3,997          3,997 
Variable down                            3,041          3,245 
 
 
 
 
   11. Assumed contingent obligation related to the business combination 
 
   The value of the assumed contingent obligation as of September 30, 2017 
amounted to GBP852,070 (December 31, 2016: GBP802,205). 
 
   The increase in value of the assumed contingent obligation during the 
nine months ended September 30, 2017 amounted to GBP49,865 (nine months 
ended September 30, 2016: GBP173,335) and was recognized as a finance 
expense.  The increase in value of the assumed contingent obligation 
during the three months ended September 30, 2017 amounted to GBP23,803 
(three months ended September 30, 2016: GBP21,434) and was recognized as 
a finance expense. 
 
 
 
 
                                 September 30, 2016  September 30, 2017 
                                        GBP                 GBP 
January 1,                                  593,941             802,205 
Re-measurement of contingent 
 arrangement                                 86,128                   - 
Impact of changes in foreign 
 exchange rates                              24,905             (20,221) 
Unwinding of discount factor                 62,301              70,086 
Period end                                  767,275             852,070 
 
 
 
 
   There is no material difference between the fair value and carrying 
value of the financial liability. 
 
   12. Issuance of Share Capital 
 
   On May 2, 2017 the Company announced the closing of its Global Offering 
of an aggregate of 47,399,001 new ordinary shares, comprising 5,768,000 
American Depositary Shares ("ADSs") at a price of $13.50 per ADS and 
1,255,001 ordinary shares at a price of GBP1.32 per ordinary share. 
During May 2017 the underwriters purchased an additional 733,738 ADSs, 
representing 5,869,904 ordinary shares, at a price of $13.50 per ADS. 
The total gross proceeds in the Global Offering amounted to $89.9 
million (GBP70.0 million). 
 
   In addition, the Chairman of Verona Pharma's board of directors, Dr. 
David Ebsworth, and an existing shareholder agreed to subscribe for 
254,099 new ordinary shares at a price of GBP1.32 per ordinary share in 
the Shareholder Private Placement, contingent on and concurrent with the 
Global Offering and generating gross proceeds of GBP0.3m. 
 
   Where there is a time and foreign exchange difference between proceeds 
from a share issue becoming due and being received, the movement is 
taken to Finance income or Finance expense as appropriate. In respect of 
the Global Offering and Shareholder Private Placement, the Company 
recorded a finance expense of GBP439,049 arising from movements in 
exchange rates on funds receivable, offset by a saving on commission 
payable of GBP30,822, for a net finance expense of GBP408,277. 
 
   On September 22, 2017, 133,333 existing warrants over 133,333 new shares 
were exercised at a price of 110p per share, resulting in proceeds of 
GBP146 thousand to the Company. 
 
   Following the Global Offering, the Shareholder Private Placement and the 
exercise of warrants, the number of ordinary shares in issue at 
September 30, 2017 was 105,017,401.  All new ordinary shares rank pari 
passu with existing ordinary shares. 
 
   13. Share option scheme 
 
   During the nine months ended September 30, 2017 and following the Global 
Offering the Company granted a total of 4,656,828 share options and 
1,052,236 Restricted Stock Units ("RSUs") (nine months ended September 
30, 2016 the Company granted a total of 1,701,990 share options, and nil 
RSUs). The numbers presented reflect ordinary shares although some 
grants made in 2017 are in ADSs. Each ADS represents eight ordinary 
shares. 
 
   The movement in the number of the Company's share options is set out 
below: 
 
 
 
 
              Weighted    Nine months     Weighted    Nine months 
               average        ended        average        ended 
               exercise   September 30,    exercise   September 30, 
                price         2016          price         2017 
                 GBP                         GBP 
Outstanding 
 at January 
 1                 1.78       1,792,000        1.87       3,037,333 
Granted 
 during the 
 period            1.97       1,701,990        1.32       4,656,828 
Exercised 
 during the 
 period            1.25          (3,330)       1.10        (133,333) 
Forfeited 
 during the 
 period            1.24        (150,000)                          - 
Expired 
 during the 
 period            2.46        (260,000)       1.90         (33,333) 
Number of 
 outstanding 
 options           1.84       3,080,660        1.53       7,527,495 
 
 
 
 
   The movement in the number of the Company's RSUs is set out below: 
 
 
 
 
 
 
              Weighted    Nine months    Weighted    Nine months 
               average        ended       average        ended 
               exercise   September 30,   exercise   September 30, 
                price         2016         price         2017 
                 GBP                        GBP 
Outstanding 
at January 
1                n/a           -             -            - 
Granted 
 during the 
 period               -               -       1.32       1,052,236 
Expired 
during the 
period                -               -          -               - 
Number of 
 outstanding 
 RSUs               n/a               -       1.32       1,052,236 
 
 
 
 
   The share-based payment expense for the nine months ended September 30, 
2017 was GBP1,991,131 (nine months ended September 30, 2016: 
GBP307,929).  The share-based payment expense for the three months ended 
September 30, 2017 was GBP1,022,832 (three months ended September 30, 
2016: GBP129,967). 
 
   The options and RSUs granted during the nine months ended September 30, 
2017, were awarded under the Company's 2017 Long Term Incentive Plan 
with total fair values estimated using the Black-Scholes option-pricing 
model of GBP5.3m. The cost is amortized over the vesting period of the 
options and the RSUs on a straight-line basis. The following assumptions 
were used for the Black-Scholes valuation of share options and RSUs 
granted in the nine months ended September 30, 2017. The only 
performance condition of the options and RSUs is the vesting period. 
 
 
 
 
                      Share options                         RSU 
             Issued in the nine months ended  Issued in the nine months ended 
                   September 30, 2017                September 30, 2017 
Options / 
 RSUs 
 granted                           4,656,828                        1,052,236 
Risk-free 
interest 
rate                         0.29 % - 0.62 %                  0.42 % - 0.62 % 
Expected 
life of 
options / 
RSUs                         5.5 - 7.0 years                  5.5 - 7.0 years 
Annualized 
volatility                   71.3 % - 73.3 %                   71.3 % - 73.1% 
Dividend 
 rate                                  0.00%                            0.00% 
Vesting                        3 and 4 years                    3 and 4 years 
 period 
 
 
 
 
   14. Related party transactions 
 
   In the nine months ended September 30, 2016, and 2017, executive 
directors received regular salaries, post-employment benefits and 
share-based payments. Additionally, non-executive directors received 
compensation for their services in the form of cash compensation and 
equity grants. The compensation costs for the Directors and senior staff 
for the three and nine months ended September 30, 2016 and 2017 were as 
follows: 
 
 
 
 
                                              Short-term                  Post- 
                                               employee   Share-based   employment 
                                               benefits    payments     benefits    Total 
 
                                                          (in GBP thousands) 
Three months ended 
 September 30, 2016     Directors                    325           88            5    418 
  Other key management 
   personnel                                         141           45            3    189 
                                                     466          133            8    607 
Three months ended 
 September 30, 2017     Directors                    244          355            5    604 
  Other key management 
   personnel                                         428          628            7  1,063 
                                                     672          983           12  1,667 
 
 
 
 
 
 
 
                                              Short-term                  Post- 
                                               employee   Share-based   employment 
                                               benefits    payments     benefits    Total 
 
                                                          (in GBP thousands) 
Nine months ended 
 September 30, 2016     Directors                    522          183           10    715 
  Other key management 
   personnel                                         594          118            6    718 
                                                   1,116          301           16  1,433 
Nine months ended 
 September 30, 2017     Directors                    738          697           13  1,448 
  Other key management 
   personnel                                       1,159        1,203           18  2,380 
                                                   1,897        1,900           31  3,828 
 
 
 
 
   David Ebsworth, a Non-Executive Director, purchased GBP18 thousand of 
our ordinary shares as part of the Shareholder Private Placement and 
GBP10 thousand of our ordinary shares from the market in the period. 
Vikas Sinha, a Non-Executive Director, purchased of GBP234 thousand of 
our ordinary shares, in the form of ADSs, as part of the Global 
Offering. 
 
   The Company recognizes Vivo Capital and Novo A/S as related parties. 
Both these funds participated in the Global Offering, as per the table 
below presenting their equity contributions: 
 
 
 
 
                 Equity Contributions at Global Offering 
                              GBP thousands 
 
Novo A/S                                           7,791 
Vivo Capital                                       7,407 
 
 
 
 
   15. Convenience translation 
 
   We maintain our books and records in pounds sterling and we prepare our 
financial statements in accordance with IFRS, as issued by the IASB. We 
report our results in pounds sterling. For the convenience of the reader 
we have translated pound sterling amounts in the tables below as of 
September 30, 2017 and for the three and nine month periods ended 
September 30, 2016 and 2017 into US dollars at the noon buying rate of 
the Federal Reserve Bank of New York on September 29, 2017, which was 
GBP1.00 to $1.3402. These translations should not be considered 
representations that any such amounts have been, could have been or 
could be converted into US dollars at that or any other exchange rate as 
of that or any other date. 
 
   The loss per ADS is calculated on the basis of 8 ordinary shares per 
ADS. 
 
   CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME FOR THE 
THREE AND NINE MONTHS ENDING SEPTEMBER 30, 2016 AND SEPTEMBER 30, 2017 
 
 
 
 
                                                         Three months          Three months          Three months 
                                                             ended                 ended                 ended 
                                                         September 30,         September 30,         September 30, 
                                                             2017                  2017                  2016 
                                                          (unaudited)           (unaudited)           (unaudited) 
                                                                $                  GBP                   GBP 
Research and development costs                              (8,155,116)           (6,084,999)           (1,408,726) 
General and administrative costs                            (2,734,378)           (2,040,276)             (751,912) 
Operating loss                                             (10,889,494)           (8,125,275)           (2,160,638) 
Finance income                                                 152,889               114,079               139,803 
Finance expense                                             (3,164,058)           (2,360,885)             (711,285) 
Loss before taxation                                       (13,900,663)          (10,372,081)           (2,732,120) 
Taxation - credit                                            1,685,846             1,257,906               270,757 
Loss for period                                            (12,214,817)           (9,114,175)           (2,461,363) 
Other comprehensive (expense) / income: 
Exchange differences on translating foreign 
 operations                                                    (18,299)              (13,654)                3,842 
Total comprehensive loss for the period attributable 
 to owners of the Company                                  (12,223,116)           (9,127,829)           (2,457,521) 
Loss per ADS - basic and diluted                        $        (0.93)  GBP           (0.70)  GBP           (0.48) 
 
 
 
 
 
 
 
 
 
 
 
                                                         Nine months      Nine months      Nine months 
                                                             ended            ended            ended 
                                                         September 30,    September 30,    September 30, 
                                                             2017             2017             2016 
                                                          (unaudited)      (unaudited)      (unaudited) 
                                                              $               GBP              GBP 
Research and development costs                          (18,800,130)        (14,027,854)      (2,653,441) 
General and administrative costs                         (6,756,216)         (5,041,200)      (1,427,026) 
Operating loss                                          (25,556,346)        (19,069,054)      (4,080,467) 
Finance income                                            5,536,278           4,130,934          147,178 
Finance expense                                          (2,883,211)         (2,151,329)        (859,195) 
Loss before taxation                                    (22,903,279         (17,089,449)      (4,792,484) 
Taxation - credit                                         3,834,793           2,861,359          555,734 
Loss for period                                         (19,068,486)        (14,228,090)      (4,236,750) 
Other comprehensive (expense) / income: 
Exchange differences on translating foreign 
 operations                                                 (37,111)            (27,691)          20,495 
Total comprehensive loss for the period attributable 
 to owners of the Company                               (19,105,597)        (14,255,781)      (4,216,255) 
Loss per ADS - basic and diluted                              (1.86)              (1.39)           (1.23) 
 
 
 
 
   CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION 
 
 
 
 
                        As of            As of            As of 
                     September 30,    September 30,    December 31, 
                         2017             2017             2016 
                      (unaudited)      (unaudited)      (audited) 
                          $               GBP              GBP 
ASSETS 
Non-current 
assets: 
Property, plant 
 and equipment              17,180           12,819          13,838 
Intangible assets        2,685,548        2,003,841       1,876,684 
Goodwill                   591,028          441,000         441,000 
                         3,293,756        2,457,660       2,331,522 
Current assets: 
Prepayments and 
 other 
 receivables             5,248,255        3,916,024       2,958,587 
Current tax 
 receivable              4,112,435        3,068,523       1,067,460 
Short-term 
 investments            72,457,835       54,064,942               - 
Cash and cash 
 equivalents            42,073,337       31,393,327      39,785,098 
                       123,891,862       92,442,816      43,811,145 
Total assets           127,185,618       94,900,476      46,142,667 
 
EQUITY AND 
LIABILITIES 
Capital and 
reserves 
attributable to 
equity holders: 
Share capital            7,037,216        5,250,870       2,568,053 
Share premium          159,297,796      118,861,212      58,526,502 
Share-based 
 payment reserve         5,485,333        4,092,921       2,101,790 
Accumulated loss       (57,606,914)     (42,983,819)    (28,728,038) 
Total equity           114,213,431       85,221,184      34,468,307 
 
Current 
liabilities: 
Trade and other 
 payables                6,368,359        4,751,798       2,823,489 
Tax payable - US 
 operations                104,658           78,091         126,063 
Derivative 
 financial 
 instrument              5,357,226        3,997,333       7,922,603 
Total current 
 liabilities            11,830,243        8,827,222      10,872,155 
Non-current 
liabilities: 
Assumed contingent 
 obligation              1,141,944          852,070         802,205 
Total non-current 
 liabilities             1,141,944          852,070         802,205 
Total equity and 
 liabilities           127,185,618       94,900,476      46,142,667 
 
 
 
 
   16. Subsequent Events 
 
   No events occurred after the reporting date that would have a material 
impact on the financial position of the Company. 
 
 
 
 
 
   This announcement is distributed by Nasdaq Corporate Solutions on behalf 
of Nasdaq Corporate Solutions clients. 
 
   The issuer of this announcement warrants that they are solely 
responsible for the content, accuracy and originality of the information 
contained therein. 
 
   Source: Verona Pharma plc via Globenewswire 
 
 
  http://www.veronapharma.com/ 
 

(END) Dow Jones Newswires

November 07, 2017 02:00 ET (07:00 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.

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