Vernalis PLC

Unaudited Interim Results for the six months ended 31 December 2016

WINNERSH, UNITED KINGDOM--(Marketwired - Feb 21, 2017) - Vernalis PLC (LSE: VER)

LSE: VER

21 February 2017
Vernalis plc
Unaudited Interim Results for the six months ended 31 December 2016

Tuzistra^® XR prescriptions growing steadily as 2016/2017 US cough cold season progresses
Two further NDAs from cough cold franchise accepted for review by FDA with potential approvals later this year

Vernalis plc (LSE: VER) today announces its unaudited consolidated results for the six month period ended 31 December 2016.

US Commercial performance:

• Tuzistra^® XR prescriptions increased almost six-fold to 11,586 for the six month period (2015: 1,976), reflecting:
  • increased insurance coverage and pharmacy stocking
  • improved sales-force effectiveness following expansion to 100 representatives and refinement to both marketing messaging and physician targeting
  • improved patient affordability following enhancements in our patient assistance program
• Validation of the potential of Tuzistra^® XR seen across the US, with high performing sales representatives in all regions
• Focus for the second half of 2016/17 is to further improve sales-force effectiveness and increase the number of high performing representatives
• Reported revenues for Tuzistra^® XR were £0.8 million (2015: £0.6 million)
  • Underlying patient prescription demand has increased significantly and now accounts for ~64 per cent of sales volumes (2015 ~15 per cent)
  • The remaining ~36 per cent (2015 ~85 per cent) reflects expanded pharmacy stocking (~29 per cent vs 2015 ~45 per cent) and expanded wholesaler inventories (~seven per cent vs 2015 ~40 per cent)
  • Pharmacy stocking has continued to expand since the end of the half year
  • Inventory levels with wholesalers are now approaching more normalised levels

Financial Highlights for the six months ended 31 December 2016

• Revenue was £5.6 million (2015: £6.1 million)
  • US Commercial net revenues (including Tuzistra^® XR and Moxatag^®) were £0.9 million (2015: £0.6 million) and represents deliveries made to wholesalers
  • Research collaboration income was £3.2 million (2015: £3.8 million) due to lower FTE income in the period
  • Frovatriptan royalty income was down seven per cent at £1.5 million (2015: £1.6 million); as the expected market entry of generics resulted in a price reduction that was partially offset by a foreign exchange gain on translation
• Operating costs before exceptional items were £21.7 million (2015: £19.0 million) with the increase due to the further expansion of the US Commercial sales team
• Loss for the period was £11.0 million (2015: £10.2 million loss before exceptional items)
• Balance sheet remains strong with £74.2 million of cash resources and no debt at 31 December 2016
• Cash resources including cash and cash equivalents and held to maturity assets reduced by £9.8 million in the six months to 31 December 2016 and included:
  • Cash used in operations of £12.8 million (2015: £10.7 million)
  • $3.0 million (£2.3 million) milestone payment to Tris was made for the acceptance of CCP-07 NDA by FDA for review.
  • £4.4 million unrealised foreign exchange gain (2015: £2.7 million)

US Commercial Pipeline: