vrna-20240630

false202412/31Q20001657312Subsequent events

[OPEN]

357359xbrli:sharesiso4217:USDiso4217:GBPxbrli:sharesiso4217:USDxbrli:sharesvrna:subsidiaryvrna:segmentxbrli:pure00016573122024-01-012024-06-3000016573122024-08-0200016573122024-06-3000016573122023-12-3100016573122024-04-012024-06-3000016573122023-04-012023-06-3000016573122023-01-012023-06-300001657312us-gaap:CommonStockMember2023-12-310001657312us-gaap:AdditionalPaidInCapitalMember2023-12-310001657312us-gaap:TreasuryStockCommonMember2023-12-310001657312us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001657312us-gaap:RetainedEarningsMember2023-12-310001657312us-gaap:RetainedEarningsMember2024-01-012024-03-3100016573122024-01-012024-03-310001657312us-gaap:TreasuryStockCommonMember2024-01-012024-03-310001657312us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001657312us-gaap:CommonStockMember2024-03-310001657312us-gaap:AdditionalPaidInCapitalMember2024-03-310001657312us-gaap:TreasuryStockCommonMember2024-03-310001657312us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310001657312us-gaap:RetainedEarningsMember2024-03-3100016573122024-03-310001657312us-gaap:RetainedEarningsMember2024-04-012024-06-300001657312us-gaap:TreasuryStockCommonMember2024-04-012024-06-300001657312us-gaap:AdditionalPaidInCapitalMember2024-04-012024-06-300001657312us-gaap:CommonStockMember2024-06-300001657312us-gaap:AdditionalPaidInCapitalMember2024-06-300001657312us-gaap:TreasuryStockCommonMember2024-06-300001657312us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-06-300001657312us-gaap:RetainedEarningsMember2024-06-300001657312us-gaap:CommonStockMember2022-12-310001657312us-gaap:AdditionalPaidInCapitalMember2022-12-310001657312us-gaap:TreasuryStockCommonMember2022-12-310001657312us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001657312us-gaap:RetainedEarningsMember2022-12-3100016573122022-12-310001657312us-gaap:RetainedEarningsMember2023-01-012023-03-3100016573122023-01-012023-03-310001657312us-gaap:CommonStockMembervrna:AtTheMarketSalesAgreementMember2023-01-012023-03-310001657312us-gaap:AdditionalPaidInCapitalMembervrna:AtTheMarketSalesAgreementMember2023-01-012023-03-310001657312vrna:AtTheMarketSalesAgreementMember2023-01-012023-03-310001657312us-gaap:TreasuryStockCommonMember2023-01-012023-03-310001657312us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001657312us-gaap:CommonStockMember2023-03-310001657312us-gaap:AdditionalPaidInCapitalMember2023-03-310001657312us-gaap:TreasuryStockCommonMember2023-03-310001657312us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001657312us-gaap:RetainedEarningsMember2023-03-3100016573122023-03-310001657312us-gaap:RetainedEarningsMember2023-04-012023-06-300001657312us-gaap:TreasuryStockCommonMember2023-04-012023-06-300001657312us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-300001657312us-gaap:CommonStockMember2023-06-300001657312us-gaap:AdditionalPaidInCapitalMember2023-06-300001657312us-gaap:TreasuryStockCommonMember2023-06-300001657312us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-300001657312us-gaap:RetainedEarningsMember2023-06-3000016573122023-06-300001657312vrna:NuanceShanghaiPharmaCoLtdMember2021-06-090001657312vrna:LigandUKDevelopmentLimitedMember2024-04-012024-06-300001657312vrna:LigandUKDevelopmentLimitedMember2024-01-012024-06-300001657312us-gaap:SecuredDebtMembervrna:A2023TermLoanMember2023-12-270001657312us-gaap:SecuredDebtMembervrna:A2023TermALoanMember2023-12-272023-12-270001657312us-gaap:SecuredDebtMembervrna:A2023TermLoanMember2024-05-090001657312us-gaap:SecuredDebtMembervrna:A2024TermLoanMember2024-05-090001657312us-gaap:SecuredDebtMembervrna:A2024TermALoanMember2024-05-092024-05-090001657312us-gaap:LineOfCreditMembervrna:A2024TermBMember2024-05-090001657312us-gaap:LineOfCreditMembervrna:A2024TermCMember2024-05-090001657312us-gaap:LineOfCreditMembervrna:A2024TermDMember2024-05-090001657312us-gaap:LineOfCreditMembervrna:A2024TermELoanMember2024-05-090001657312us-gaap:LineOfCreditMembervrna:A2024TermELoanMember2024-05-092024-05-090001657312us-gaap:SecuredDebtMembervrna:A2024TermLoanMember2024-05-092024-05-090001657312us-gaap:SecuredDebtMembervrna:A2023TermALoanMember2024-05-092024-05-090001657312us-gaap:SecuredDebtMembervrna:A2023TermLoanMember2024-05-092024-05-090001657312us-gaap:SecuredDebtMembervrna:A2024TermBMember2024-06-282024-06-280001657312us-gaap:LineOfCreditMembervrna:A2024TermLoanMemberus-gaap:BaseRateMembervrna:DebtInstrumentInterestRatePeriodOneMember2024-05-092024-05-090001657312us-gaap:LineOfCreditMembervrna:A2024TermLoanMember2024-05-092024-05-090001657312vrna:DebtPrepaymentPeriodOneMembervrna:A2024TermLoanMemberus-gaap:SecuredDebtMember2024-05-090001657312vrna:DebtPrepaymentPeriodTwoMembervrna:A2024TermLoanMemberus-gaap:SecuredDebtMember2024-05-090001657312vrna:DebtPrepaymentPeriodFourMembervrna:A2024TermLoanMemberus-gaap:SecuredDebtMember2024-05-090001657312srt:MinimumMemberus-gaap:LineOfCreditMembervrna:A2024TermLoanMember2024-05-090001657312vrna:A2024TermLoanMember2024-06-300001657312vrna:OaktreeFundAdministrationLLCMember2024-05-092024-05-090001657312vrna:OaktreeFundAdministrationLLCMember2024-05-090001657312us-gaap:ResearchAndDevelopmentExpenseMember2024-04-012024-06-300001657312us-gaap:ResearchAndDevelopmentExpenseMember2023-04-012023-06-300001657312us-gaap:ResearchAndDevelopmentExpenseMember2024-01-012024-06-300001657312us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-06-300001657312us-gaap:GeneralAndAdministrativeExpenseMember2024-04-012024-06-300001657312us-gaap:GeneralAndAdministrativeExpenseMember2023-04-012023-06-300001657312us-gaap:GeneralAndAdministrativeExpenseMember2024-01-012024-06-300001657312us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-06-300001657312us-gaap:RestrictedStockUnitsRSUMember2023-12-310001657312us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-03-310001657312us-gaap:RestrictedStockUnitsRSUMember2024-03-310001657312us-gaap:RestrictedStockUnitsRSUMember2024-04-012024-06-300001657312us-gaap:RestrictedStockUnitsRSUMember2024-06-300001657312vrna:PerformanceRestrictedStockUnitsPRSUsMember2024-01-012024-06-300001657312vrna:PerformanceRestrictedStockUnitsPRSUsMember2024-06-300001657312vrna:PerformanceRestrictedStockUnitsPRSUsMember2023-12-310001657312vrna:PerformanceRestrictedStockUnitsPRSUsMember2024-01-012024-03-310001657312vrna:PerformanceRestrictedStockUnitsPRSUsMember2024-03-310001657312vrna:DavidZaccardelliMember2024-04-012024-06-300001657312vrna:MarkHahnMember2024-04-012024-06-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM __________ TO __________

Commission File Number: 001-38067

Verona Pharma plc

(Exact name of Registrant as specified in its Charter)


United Kingdom									98-1489389
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)

3 More London Riverside London SE1 2RE United Kingdom									Not Applicable
(Address of principal executive offices)									(Zip Code)

Registrant’s telephone number, including area code: +44 203 283 4200

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary shares, nominal value £0.05 per share*	VRNA	The Nasdaq Stock Market LLC (Nasdaq Global Market)

* The ordinary shares are represented by American Depositary Shares (each representing 8 ordinary shares), which are exempt from the operation of Section 12(a) of the Securities Exchange Act of 1934, as amended, pursuant to Rule 12a-8 thereunder.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 2, 2024, the registrant had 649,881,246 ordinary shares, nominal value £0.05 per share, outstanding, which if all held in ADS form, would be represented by 81,235,156 American Depositary Shares, each representing eight (8) ordinary shares.


		Page
PART I - FINANCIAL INFORMATION
Item 1	Financial Statements	3
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4	Controls and Procedures	27
PART II - OTHER INFORMATION
Item 1	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	74
Item 3	Defaults Upon Senior Securities	74
Item 4	Mine Safety Disclosure	74
Item 5	Other Information	75
Item 6	Exhibits	75
Signatures		77

SUMMARY RISK FACTORS

Our business is subject to numerous risks and uncertainties, including those described in Part II, Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q. You should carefully consider these risks and uncertainties when investing in our common shares. The principal risks and uncertainties affecting our business include the following:

•We have a limited operating history and have never generated any product revenue.

•We may need additional funding to complete development and commercialization of any future product candidates and to commercialize Ohtuvayre. If we are unable to raise capital when needed, or if a failure of any financial institution where we maintain our cash and cash equivalents prevents or delays us from accessing uninsured funds, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts.

•We depend solely on the success of ensifentrine, which was recently approved by the FDA as Ohtuvayre. If we are unable to commercialize Ohtuvayre, or successfully develop ensifentrine for other indications, our ability to generate revenue and our financial condition will be adversely affected.

•The terms of our credit facility place restrictions on our operating and financial flexibility, and our existing and any future indebtedness could adversely affect our ability to operate our business.

•The terms of the revenue interest purchase and sale agreement ("RIPSA”) place restrictions on our operating and financial flexibility, and if we fail to comply with certain covenants in the RIPSA, our results of operations and financial condition may be harmed.

•Clinical drug development and regulatory approval involve a lengthy and expensive process, with uncertain outcomes.

•Our product and product candidates may have serious adverse, undesirable or unacceptable side effects which may delay or prevent marketing approval. If such side effects are identified during product development or following approval, if any, we may need to abandon our development programs, the commercial profile of any approved label may be limited, or we may be subject to other significant negative consequences following marketing approval, if any.

•We depend on enrollment of patients in our clinical trials. If we are unable to enroll patients in our clinical trials, or enrollment is slower than anticipated, our research and development efforts could be adversely affected.

•We may become exposed to costly and damaging liability claims, either when testing product candidates in the clinic or at the commercial stage, and our product liability insurance may not cover all damages from such claims.

•The regulatory approval processes of the FDA, the EMA and comparable foreign regulatory authorities are lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for ensifentrine for the maintenance treatment of COPD in adult patients in jurisdictions outside the U.S. or for ensiftentrine for additional targeted indications and formulations, our business will be substantially harmed.

•We may never obtain approval or commercialize ensifentrine in other major markets outside of the U.S., which would limit our ability to realize its full market potential.

•Enacted and future legislation and regulation may increase the difficulty and cost for us to commercialize our products and may affect the prices we may set.

•We operate in a highly competitive and rapidly changing industry, which may result in others discovering, developing or commercializing competing products before or more successfully than we do.

•If our products, including Ohtuvayre, do not gain market acceptance or if we fail to accurately forecast demand or manage our inventories, our business will suffer because we might not be able to fund future operations.

•Our commercial capabilities and infrastructure, including sales, marketing, operations, distribution, and reimbursement infrastructure, may not be adequate to successfully commercialize Ohtuvayre.

•We rely, and expect to continue to rely, on third parties, including independent clinical investigators and CROs, to conduct our pre-clinical studies and clinical trials.

•The collaboration and license agreement with Nuance Pharma is important to our business. If Nuance Pharma is unable to develop and commercialize products containing ensifentrine in Greater China, if we or Nuance Pharma fail to adequately perform under the Nuance Agreement, or if we or Nuance Pharma terminate the Nuance Agreement, our business would be adversely affected.

•We rely on patents and other intellectual property rights to protect our products and product candidates, the enforcement, defense and maintenance of which may be challenging and costly. Failure to enforce or protect these rights adequately could harm our ability to compete and impair our business.

•Our information technology systems, and those of our manufacturers, suppliers and other third parties that we use to perform services for us or otherwise collaborate with, may fail or suffer security breaches, which could distract our operations and cause delays in our research and development and commercialization activities, and may adversely affect our business, operations and financial performance.

•Our future growth and ability to compete depends on our ability to retain our key personnel and recruit additional qualified personnel.

•Certain of our shareholders, members of our board of directors, and senior management who own our ordinary shares (including ordinary shares represented by ADSs) may be able to exercise significant control over us.

•Changes in our tax rates, unavailability of certain tax credits or reliefs or exposure to additional tax liabilities or assessments could affect our profitability, and audits by tax authorities could result in additional tax payments for prior periods.

•The price of our ADSs may be volatile and may fluctuate due to factors beyond our control.

•Business interruptions could adversely affect our operations.

PART I - FINANCIAL INFORMATION

Item 1. Financial statements

Verona Pharma plc

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands, except share and per share amounts)


	June 30,		December 31,
	2024		2023
ASSETS
Current assets:
Cash and cash equivalents	$	404,599	$	271,772

Prepaid expenses	5,433		3,617
Tax incentive receivable	3,684		10,954


Other current assets	2,576		3,365
Total current assets	416,292		289,708

Non-current assets:
Furniture and equipment, net	44		24
Goodwill	545		545
Equity interest	15,000		15,000
Right-of-use assets	2,242		2,847
Total non-current assets	17,831		18,416
Total assets	$	434,123	$	308,124

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	4,152	$	3,492
Accrued expenses	19,630		3,585
License agreement obligations	21,322		—
Current operating lease liabilities	1,031		1,180
Taxes payable	1,011		—
Other current liabilities	1,200		435
Total current liabilities	48,346		8,692

Non-current liabilities:

Term loan	119,687		48,374
Revenue interest purchase security agreement	96,338		—
Non-current operating lease liabilities	1,478		1,775
Total non-current liabilities	217,503		50,149
Total liabilities	265,849		58,841

Commitments and contingencies

Shareholders' equity:
Ordinary £0.05 par value shares; 667,659,630 and 667,659,630 issued, and 648,654,174 and 643,536,094 outstanding, at June 30, 2024 and December 31, 2023, respectively	42,771		42,771
Additional paid-in capital	616,618		601,063
Ordinary shares held in treasury	(1,203)		(1,517)
Accumulated other comprehensive loss	(4,601)		(4,601)
Accumulated deficit	(485,311)		(388,433)
Total shareholders' equity	168,274		249,283
Total liabilities and shareholders' equity	$	434,123	$	308,124

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Verona Pharma plc

Condensed Consolidated Statements of Operations and Comprehensive Loss

(unaudited)

(in thousands, except per share amounts)


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023



Operating expenses:
Research and development	$	19,388	$	(2,474)	$	26,152	$	10,136
Selling, general and administrative	49,035		12,439		69,469		22,028
Total operating expenses	68,423		9,965		95,621		32,164
Operating loss	(68,423)		(9,965)		(95,621)		(32,164)
Other income/(expense):
Research and development tax credit	847		(1,934)		1,432		379
Loss on extinguishment of debt	(3,653)		—		(3,653)		—
Interest income	3,140		3,402		6,518		6,079
Interest expense	(1,757)		(740)		(3,343)		(1,033)
Foreign exchange gain/(loss)	25		740		(194)		1,672
Total other (expense)/income, net	(1,398)		1,468		760		7,097
Loss before income taxes	(69,821)		(8,497)		(94,861)		(25,067)
Income tax expense	(1,014)		(310)		(1,768)		(483)
Net loss	$	(70,835)	$	(8,807)	$	(96,629)	$	(25,550)




Loss per ordinary share - basic and diluted	$	(0.11)	$	(0.01)	$	(0.15)	$	(0.04)


Weighted-average shares outstanding - basic and diluted	648,217		634,469		646,959		627,996

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Verona Pharma plc

Condensed Consolidated Statements of Shareholders’ Equity

(unaudited)

(in thousands except share data)


	Ordinary shares			Additional paid-in capital		Ordinary shares held in treasury		Accumulated other comprehensive loss		Accumulated deficit		Total shareholders' equity
	Number	Amount
Balance at December 31, 2023	667,659,630	$	42,771	$	601,063	$	(1,517)	$	(4,601)	$	(388,433)	$	249,283
Net loss	—	—		—		—		—		(25,794)		(25,794)

Restricted share units vested	—	—		—		170		—		(170)		—

Share options exercised	—	—		751		65		—		—		816
Common shares withheld for taxes on vested stock awards	—	—		(3,338)		—		—		—		(3,338)
Equity settled share-based compensation reclassified as cash-settled	—	—		(237)		—		—		—		(237)
Share-based compensation	—	—		4,258		—		—		—		4,258
Balance at March 31, 2024	667,659,630	$	42,771	$	602,497	$	(1,282)	$	(4,601)	$	(414,397)	$	224,988
Net loss	—	—		—		—		—		(70,835)		(70,835)



Restricted share units vested	—	—		—		79		—		(79)		—


Common shares withheld for taxes on vested stock awards	—	—		(1,273)		—		—		—		(1,273)
Equity settled share-based compensation reclassified as cash-settled	—	—		(200)		—		—		—		(200)
Share-based compensation	—	—		15,594		—		—		—		15,594
Balance at June 30, 2024	667,659,630	$	42,771	$	616,618	$	(1,203)	$	(4,601)	$	(485,311)	$	168,274

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


	Ordinary shares			Additional paid-in capital		Ordinary shares held in treasury		Accumulated other comprehensive loss		Accumulated deficit		Total shareholders' equity
	Number	Amount
Balance at December 31, 2022	631,338,246	$	40,526	$	529,187	$	(1,549)	$	(4,601)	$	(333,097)	$	230,466
Net loss	—	—		—		—		—		(16,743)		(16,743)
Issuance of common shares under at-the-market sales agreement	20,321,384	1,227		55,682		—		—		—		56,909
Restricted share units vested	—	—		—		270		—		(270)		—
Share options exercised	—	—		1,756		71		—		—		1,827



Share-based compensation	—	—		4,290		—		—		—		4,290
Balance at March 31, 2023	651,659,630	$	41,753	$	590,915	$	(1,208)	$	(4,601)	$	(350,110)	$	276,749
Net loss	—	—		—		—		—		(8,807)		(8,807)
Restricted share units vested	—	—		—		226		—		(226)		—
Share options exercised	—	—		70		7		—		—		77


Share-based compensation	—	—		5,074		—		—		—		5,074
Balance at June 30, 2023	651,659,630	$	41,753	$	596,059	$	(975)	$	(4,601)	$	(359,143)	$	273,093

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Verona Pharma plc

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)


	Six months ended June 30,
	2024		2023
Cash flows from operating activities:
Net loss:	$	(96,629)	$	(25,550)
Adjustments to reconcile net income to net cash used in operating activities:
Foreign exchange loss/(gain)	194		(1,672)
Other non-cash items	285		88
Accretion of redemption premium on debt	120		51
Loss on extinguishment of debt	3,653		—

Share-based compensation	19,852		9,364
Depreciation	533		314

Changes in operating assets and liabilities:


Prepaid expenses	(1,816)		1,605
Tax incentive receivable	7,201		(380)
Other current assets	35		(2,016)

Accounts payable	756		(417)
Accrued expenses	11,617		(6,285)
License agreement obligations	21,322		—
Operating lease liabilities	(365)		(305)
Income taxes	1,765		(939)
Other current liabilities	765		(951)
Net cash used in operating activities	(30,712)		(27,093)
Cash flows from investing activities:
Purchases of furniture and equipment	(45)		—

Net cash used in investing activities	(45)		—
Cash flows from financing activities:
Proceeds from issuance of ordinary shares	—		56,909

Proceeds from Term Loans	122,500		9,996

Proceeds from RIPSA	100,000		—
Payment of debt issuance costs	(2,303)		—
Repayment of 2023 Term Loans	(52,256)		—


Payments of withholding taxes from share-based awards	(5,048)		—
Proceeds from exercise of share options	816		1,904

Net cash provided by financing activities	163,709		68,809
Effect of exchange rate changes on cash and cash equivalents	(125)		1,184
Net change in cash and cash equivalents	132,827		42,900
Cash and cash equivalents at beginning of the period	271,772		227,827
Cash and cash equivalents at end of the period	$	404,599	$	270,727
Supplemental disclosure of cash flow information:
Income taxes paid	$	—	$	1,215
Interest paid	$	2,021	$	685

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Verona Pharma plc

Notes to Condensed Consolidated Financial Statements

(unaudited)

Note 1 - Organization and description of business operations

Verona Pharma plc is incorporated and domiciled in the United Kingdom. Verona Pharma plc has one wholly-owned subsidiary, Verona Pharma, Inc., a Delaware corporation (together with Verona Pharma plc, the “Company”). The address of the registered office is 1 Central Square, Cardiff, CF10 1FS, United Kingdom.

The Company is a biopharmaceutical group focused on developing and commercializing innovative therapeutics for the treatment of respiratory diseases with significant unmet medical needs. The Company’s American Depositary Shares (“ADSs”) are listed on the Nasdaq Global Market (“Nasdaq”) and trade under the symbol “VRNA”.

On June 26, 2024, the FDA approved Ohtuvayre (ensifentrine) for the maintenance treatment of chronic obstructive pulmonary disease (“COPD”) in adult patients and the Company launched Ohtuvayre in the U.S. through an exclusive network of accredited specialty pharmacies in August 2024. Ohtuvayre is the Company’s first commercial product and the first inhaled therapy with a novel mechanism of action available for the maintenance treatment of COPD in more than 20 years.

Ohtuvayre is a first-in-class selective dual inhibitor of the enzymes phosphodiesterase 3 and phosphodiesterase 4 that combines bronchodilator and non-steroidal anti-inflammatory effects in one molecule. Ohtuvayre is delivered directly to the lungs through a standard jet nebulizer without the need for high inspiratory flow rates or complex hand-breath coordination.

Pipeline

The Company is developing a fixed-dose combination formulation with ensifentrine and glycopyrrolate, a Long-Acting Muscarinic Antagonist (“LAMA”), for the maintenance treatment of patients with COPD via delivery in a nebulizer. The Company has filed patent applications in multiple jurisdictions including the U.S. In July 2024, the Company submitted an investigational new drug application (“IND”) to the FDA to allow initiation of the clinical program. Subject to clearance of the IND, the Company intends to initiate a Phase 2 dose-ranging trial in the third quarter of 2024.

Additionally, based on the clinical results of ensifentrine observed in patients with COPD, including improvements in lung function and symptoms of cough and sputum, the Company believes ensifentrine could potentially be an effective treatment for non-cystic fibrosis bronchiectasis (“NCFBE”). The Company plans to commence a Phase 2 clinical trial to assess the efficacy and safety of nebulized ensifentrine in patients with NCFBE in the third quarter of 2024.

Liquidity

The Company has incurred recurring losses and negative cash flows from operations since inception, and has an accumulated deficit of $485.3 million as of June 30, 2024. The Company expects to incur additional losses and negative cash flows from operations until its products reach commercial profitability, if at all.

The Company expects that its cash and cash equivalents as of June 30, 2024 will be sufficient to fund its operating expenses and capital expenditure requirements for at least the next 12 months from the date of issuance.

Additionally, the Company may enter into out-licensing transactions from time to time but there can be no assurance that the Company can secure such transactions in the future. Accordingly, the Company may need to obtain substantial additional funds to achieve its business objectives including to further advance clinical and regulatory activ

SEC Form 10-Q filed by Verona Pharma plc