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Verona Pharma plc Operational Update and Financial Results for the Three and Nine Months Ended September 30, 2019

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Reported positive Phase 2 data with dry powder inhaler formulation

Post period end, completed enrollment in Phase 2b study with nebulized ensifentrine as add-on to long-acting bronchodilator

LONDON, Nov. 05, 2019 (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 an operational update and financial results for the three months and nine months ended September 30, 2019.

The Company's first-in-class development candidate, ensifentrine, is an inhaled, dual inhibitor of the enzymes phosphodiesterase 3 and 4 that acts both as a bronchodilator and an anti-inflammatory agent in a single compound. Ensifentrine is currently in Phase 2b clinical development for the maintenance treatment of chronic obstructive pulmonary disease ("COPD") and is planned to enter Phase 3 trials for this indication in 2020. Verona Pharma may also develop ensifentrine for the treatment of cystic fibrosis and asthma.

OPERATIONAL AND DEVELOPMENT HIGHLIGHTS FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2019

Three months ended September 30, 2019

  • Reported positive results from the second part of the Phase 2 study of the Dry Powder Inhaler ("DPI") formulation of ensifentrine in COPD, delivered by handheld inhaler over one week of twice-daily treatment.

      °  The trial met all of its primary and secondary lung function endpoints.

      °  The magnitude of improvement in lung function and duration of action were highly statistically significant and support twice daily dosing of ensifentrine delivered in a DPI format for the treatment of COPD.

      •  Primary endpoint met: peak FEV1 corrected for placebo showed dose-dependent improvements over baseline of 102 mL for the 150 µg dose, 175 mL for the 500 µg dose, 180 mL for the 1500 µg dose and 260 mL for the 3000 µg dose, (p<0.0001 for all doses), all highly statistically significant.

      •  Secondary endpoints met:

        °  Statistically significant improvements in average FEV1 over 12 hours were observed over 7 days with all doses  (average FEV1 AUC(0-12hr) corrected for placebo: 36 mL for the 150 µg dose, 90 mL for the 500 µg dose, 80 mL for the 1500 µg dose and 147 mL for the 3000 µg dose; p<0.05 for all doses).

        °  Ensifentrine in a handheld dry powder format was well tolerated at all doses with an adverse event profile similar to placebo. The safety profile was comparable to that observed in prior studies with nebulized ensifentrine.

  • Presented at the European Respiratory Society ("ERS") International Congress in Madrid, Spain on the positive data from the Phase 2 study of the DPI formulation of ensifentrine in COPD.

      °  These single dose data were first announced in March 2019 and followed by positive multiple dose data in August 2019 where all the primary and secondary lung function endpoints were met in the Phase 2 trial.

      °  The magnitude of improvement in lung function and duration of action were highly statistically significant and support twice daily dosing of ensifentrine for the treatment of COPD.

Post-period end, the Company:

  • Announced that it had completed enrollment in its Phase 2b four-week dose-ranging study evaluating the effect of nebulized ensifentrine as an add-on to inhaled tiotropium, a long acting bronchodilator, in patients with moderate-to-severe COPD.

      °  Enrollment of 416 patients at 46 sites was completed on schedule with data expected around year end 2019.

      °  Preparations underway for End of Phase 2 meeting with the U.S. Food and Drug Administration ("FDA") expected in the first half of 2020.

      °  Commencement of Phase 3 trials expected in 2020.

FINANCIAL HIGHLIGHTS

  • Net cash, cash equivalents and short term investments at September 30, 2019, amounted to £41.1 million (December 31, 2018: £64.7 million).

  • For the nine months ended September 30, 2019, reported operating loss of £33.7 million (nine months ended September 30, 2018: £18.3 million) and reported loss after tax of £24.5 million (nine months ended September 30, 2018: £17.0 million). Operating expenses increased from £18.2 million to £33.7 million due primarily to development activities for ensifentrine.

  • Reported loss per share of 23.3 pence for the nine months ended September 30, 2019 (nine months ended September 30, 2018: 16.1 pence).

  • Net cash used in operating activities for the nine months ended September 30, 2019 was £24.5 million (nine months ended September 30, 2018: £13.1 million). The increase in cash used was due to pre-clinical and clinical studies with ensifentrine and the timing of supplier payments.

"We are very pleased that our four-week Phase 2b dose-ranging clinical trial with nebulized ensifentrine is progressing according to plan and that we have completed enrollment of over 400 symptomatic patients with moderate to severe COPD. We anticipate completing this study around the end of 2019. Informed by this and prior studies in around 850 subjects, we plan to advance into our Phase 3 clinical trial program which we expect to commence in 2020 following an end of Phase 2 meeting with the FDA," commented Jan-Anders Karlsson, PhD, CEO of Verona Pharma.

"Millions of COPD patients in the US remain symptomatic and breathless despite being treated with currently available medicines. We believe ensifentrine, with its unique dual mode of action and bronchodilator and anti-inflammatory properties, has the potential to become an important additional treatment option for many of these patients. In particular, the strong reduction in COPD symptoms will be an attractive feature for many of these patients. Initially we will focus on nebulized treatment for more severe patients but we are very excited by the positive DPI formulation results that support our view that ensifentrine is an effective bronchodilator in COPD patients, whether administered as a dry powder via a handheld inhaler or as a suspension via a nebulizer."


GENERAL INFORMATION

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 Tuesday, November 5, 2019. Analysts and investors may participate in the conference call by utilizing the conference ID: 6498479 and dialing the following numbers:

  • 866-940-4574 for callers in the United States
  • 0800 028 8438 for callers in the United Kingdom
  • 0800 181 5287 for callers in Germany

A live webcast will be available on the Events and presentations link on the Investors page of the Company's website at www.veronapharma.com and an audio replay will be available there for 30 days.

An electronic copy of the interim results will be made available today on the Company's website. 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 Regulation (EU) No. 596/2014 in relation to revised timelines for the ongoing Phase 2 study of the pMDI formulation. The person responsible for its release is Mr Piers Morgan.

About Chronic Obstructive Pulmonary Disease (COPD)

COPD is a progressive and life-threatening respiratory disease without a cure. The World Health Organization estimates that it will become the third leading cause of death worldwide by 2030. The condition damages the airways and the lungs, leading to debilitating breathlessness that has a devastating impact on performing basic daily activities such as getting out of bed, showering, eating and walking. In the United States alone, the total annual medical costs related to COPD are projected to rise to $49 billion in 2020. About 1.2 million U.S. COPD patients on dual/triple inhaled therapy (long-acting beta-agonist (LABA)/long-acting muscarinic antagonist (LAMA) +/- inhaled corticosteroid (ICS)) remain uncontrolled, experiencing symptoms that impair quality of life. These patients urgently need better treatments.

About Ensifentrine

Ensifentrine (RPL554) is a first-in-class, inhaled, dual inhibitor of the enzymes phosphodiesterase 3 and 4 for the treatment of respiratory diseases. Verona is currently developing three formulations of ensifentrine for the treatment of COPD: nebulized, dry powder inhaler (DPI), and pressurized metered-dose inhaler (pMDI). Phase 2 studies of nebulized ensifentrine in patients with moderate-to-severe COPD have demonstrated significant and clinically meaningful improvements in both lung function and COPD symptoms, including breathlessness. Nebulized ensifentrine also has shown further improved lung function and reduced lung volumes in patients taking standard of care, short- and long-acting bronchodilator therapy, including maximum bronchodilator treatment with dual/triple therapy (LABA/LAMA +/- ICS). Nebulized ensifentrine is currently in a Phase 2b clinical study evaluating its effect as an add-on to treatment with a long-acting bronchodilator in patients with moderate-to-severe COPD, which is expected to be completed around year-end 2019. Verona Pharma reported positive results from its Phase 2 study of the DPI formulation of ensifentrine in August 2019. Its pMDI formulation is currently being evaluated in a Phase 2 study, with single dose data expected in the first quarter of 2020 and final data around the middle of 2020. Ensifentrine has potential applications in cystic fibrosis, asthma and other respiratory diseases. It has been well tolerated in clinical trials involving a total of around 850 people to date.

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, ensifentrine, has the potential to be the first novel class of bronchodilator in over 40 years, and the first therapy for the treatment of respiratory diseases that combines bronchodilator and anti-inflammatory activities in one compound. Verona Pharma is currently in Phase 2 development of three formulations of ensifentrine for the treatment of COPD: nebulized, dry powder inhaler, and pressurized metered-dose inhaler. Ensifentrine also has potential applications in cystic fibrosis, asthma and other respiratory diseases. For more information, please visit www.veronapharma.com.

Forward Looking Statements

This press release, operational review, outlook and financial review contain forward-looking statements. All statements contained in this press release, operational review, outlook and financial review that do not relate to matters of historical fact should be considered forward-looking statements, including, but not limited to, statements regarding the design of clinical trials and the timing of clinical trials, trial results and an End of Phase 2 meeting with the FDA, ensifentrine as the first novel class of bronchodilator in over 40 years and the first therapy for the treatment of respiratory diseases that combines bronchodilator and anti-inflammatory activities in one compound, the efficacy of ensifentrine as a bronchodilator, ensifentrine's symptom benefit to all COPD patients, the progressive improvement in the post-hoc analysis of the data from the four-week Phase 2b study suggesting an anti-inflammatory benefit, the value of ensifentrine for COPD patients on dual or triple therapy or on maximum standard-of-care therapy, the number of COPD patients in the United States and China, the market opportunity for ensifentrine, the number of COPD patients who use inhalers for maintenance therapy, the expansion of the market for ensifentrine in a DPI or pMDI formulation and the size of such market, estimates of medical costs for COPD and it becoming the third leading cause of death worldwide by 2030, our goal to become a leading fully integrated biopharmaceutical company, the treatment potential for ensifentrine in asthma, cystic fibrosis and other respiratory disease, and strategic collaborations and their value.

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 ensifentrine, 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 ensifentrine, 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 ensifentrine, which could adversely affect our ability to develop or commercialize ensifentrine; potential delays in enrolling patients, which could adversely affect our research and development efforts; we may not be successful in developing ensifentrine for multiple indications; our ability to obtain approval for and commercialize ensifentrine in multiple major pharmaceutical markets; misconduct or other improper activities by our employees, consultants, principal investigators, and third-party service providers; the loss of any key personnel and our ability to recruit replacement personnel, 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 ensifentrine; and lawsuits related to patents covering ensifentrine and the potential for our patents to be found invalid or unenforceable.

These and other important factors under the caption "Risk Factors" in our Annual Report on Form 20-F filed with the Securities and Exchange Commission ("SEC") on March 19, 2019, 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, operational review, outlook and financial review. Any such forward-looking statements represent management's estimates as of the date of this press release, operational review, outlook and financial review. 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, operational review, outlook and financial review.

For further information please contact:

Verona Pharma plc Tel: +44 (0)20 3283 4200
Jan-Anders Karlsson, Chief Executive Officer info@veronapharma.com
Victoria Stewart, Director of Communications  
   
N+1 Singer Tel: +44 (0)20 7496 3000
(Nominated Adviser and UK Broker)  
Aubrey Powell / George Tzimas / Iqra Amin (Corporate Finance)  
Mia Gardner (Corporate Broking)  
   
Optimum Strategic Communications Tel: +44 (0)20 3950 9144
(European Media and Investor Enquiries) verona@optimumcomms.com
Mary Clark / Eva Haas / Hollie Vile  
   
Argot Partners  
(US Investor enquiries)  
Stephanie Marks / Kimberly Minarovich / Michael Barron Tel: +1 212 600 1902
  verona@argotpartners.com
   


OPERATIONAL REVIEW

Overview

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, ensifentrine, has the potential to be the first novel class of bronchodilator in over 40 years, and the first therapy for the treatment of respiratory diseases that combines bronchodilator and anti-inflammatory activities in one compound.

We intend to address the significant unmet medical need in moderate to severe COPD patients who remain symptomatic despite treatment with dual bronchodilators (LAMA and LABA) or triple therapy (with the addition of ICS). Our market research shows that nebulized delivery is the preferred route of administration for more severe COPD patients, especially in the U.S., where out of approximately three million COPD patients treated with dual/ triple inhaled therapy (LAMA/ LABA +/- ICS), about 1.2 million remain uncontrolled, experiencing symptoms that impair quality of life. These patients urgently need better treatments.

COPD is a progressive respiratory disease with no cure. Few therapeutic alternatives are available for these patients. The bronchodilator and anti-inflammatory properties of ensifentrine may be particularly helpful for these symptomatic patients suffering from chronic cough, excessive sputum production and breathlessness despite being treated with currently available medicines.

China is estimated to have at least 70 million COPD patients, with many still undiagnosed. Importantly, over 90% of medications are prescribed in hospitals (in contrast to the U.S.) and at least a third of patients use nebulized drugs. We believe that by 2020 the Chinese COPD and asthma treated market will exceed 40 million patients. There is an urgent need for new effective and well-tolerated treatments to address this growing population.

Verona Pharma is developing ensifentrine for the treatment of COPD, cystic fibrosis (CF), and asthma and potentially other respiratory diseases. Ensifentrine has been observed to be well tolerated in clinical studies to date, having been studied in around 850 subjects in 14 completed clinical trials.

Clinical update

Lead product - nebulized ensifentrine

We are initially developing nebulized ensifentrine for the maintenance treatment of COPD. In our clinical trials we have observed that ensifentrine improves lung function in COPD patients when used either as a stand-alone treatment or as an add-on to treatment with single and dual bronchodilators. We believe that the addition of nebulized ensifentrine to symptomatic COPD patients already treated with standard-of-care medicines represents a very significant market opportunity.

In May 2019 we initiated a Phase 2b dose-ranging study evaluating nebulized ensifentrine as an add-on to treatment with a long-acting bronchodilator in patients with moderate-to-severe COPD. The four-week, randomized, double-blind, placebo-controlled dose-ranging trial is designed to evaluate the safety and efficacy of nebulized ensifentrine as an add-on to inhaled tiotropium, a LAMA commonly used to treat COPD, and to establish the dosing regimen for a potential Phase 3 program in COPD.

The primary endpoint of this study is improvement in lung function with ensifentrine, as measured by the change in peak forced expiratory volume in one second ("FEV1") from 0 to 3 hours, a standard measure of exhaled breath volume. Key additional endpoints include measurements of respiratory symptoms and quality of life via different patient-reported outcome tools.

On October 17, 2019, we announced that we have completed enrollment for the Phase 2b study, with 416 COPD patients across 46 sites in the US, and that data are expected around year end 2019. Preparations are underway for an End-of-Phase 2 meeting with the U.S. Food and Drug Administration ("FDA"), which we expect to take place in the first half of 2020. Subject to the FDA agreeing with our proposed plan, we expect to commence Phase 3 trials in 2020.

The post-hoc analysis of data from the 4-week Phase 2b (2018) study of ensifentrine as a maintenance treatment for COPD, published in May 2019 at the ATS 2019 International Conference, showed a significant and clinically meaningful improvement in symptom scores, measured using the E-RS scale. This was also observed among patients who did not show a large improvement in lung function to standard beta2-agonist bronchodilator treatment ('non-reversible' patients, who comprise the majority of COPD patients). Therefore we believe ensifentrine may offer a significant symptom benefit to all COPD patients, given that the symptom improvement we have observed is not necessarily linked to improvement in lung function. We also believe that the progressive improvement in symptoms over the four-week period observed in the post-hoc analysis suggests an anti-inflammatory benefit that would be additional to that of standard treatment with LAMA or LABA bronchodilator therapy.

In January 2019, we reported top-line data from a 3-day Phase 2 cross-over trial that enrolled 79 patients to investigate the efficacy and safety of two different doses (1.5 mg and 6.0 mg, twice daily) of nebulized ensifentrine on top of an inhaled LAMA/LABA therapy, tiotropium/olodaterol (Stiolto® Respimat®), for COPD maintenance treatment. Each patient received both doses and placebo during the three treatment periods and about 30% of patients also used stable inhaled corticosteroid (ICS) therapy throughout the study.

The average improvement in peak FEV1 on the morning of day 3 with the 1.5 mg dose was observed to be 46 mL, which was not statistically significant, so the primary endpoint of the study was not met.  However, the average improvement in FEV1 over the first 4 hours was 50 mL which was statistically significant (p<0.05). Also, the average improvement in FEV1 over 24 hours was statistically significant (p<0.05). A post-hoc analysis showed that more than 40% of patients reported an improvement in peak FEV1 of more than 100 mL, which we believe suggests that a significant number of COPD patients on dual or triple therapy could derive a substantial benefit from adding ensifentrine to their therapy. Importantly, in this and several other clinical trials, ensifentrine produced clinically relevant and statistically significant improvements in air trapping (residual volume), both on its own as well as when administered on top of single or dual bronchodilator treatment. We believe this may translate into further symptom improvement in these patients already on maximum standard-of-care therapy.

The learnings from our trials to date, including patient responses, treatment regimes, as well as endpoints, are being taken into account in the design of the Phase 3 trials.

We are also developing formulations of ensifentrine in both dry powder inhaler ("DPI") and pressurized metered-dose inhaler ("pMDI") formats, for the treatment of COPD patients who prefer administration using a handheld inhaler device.

Dry powder inhaler ("DPI") formulation

In August 2019, we reported top-line data from our study to evaluate the ensifentrine DPI formulation in patients with moderate-to-severe COPD over one week of twice-daily treatment. The trial met all its primary and secondary lung function endpoints. The magnitude of improvement in lung function and duration of action were both clinically meaningful and highly statistically significant and the data support twice daily dosing of ensifentrine delivered in DPI format for the treatment of COPD.

Peak FEV1, corrected for placebo, showed improvements over baseline of 102 mL for the 150 µg dose, 175 mL for the 500 µg dose, 180 mL for the 1500 µg dose and 260 mL for 3000 µg dose, (p<0.0001 for all doses), all highly statistically significant.

Average FEV1 0-12h, corrected for placebo, improved by 36 mL for the 150 µg dose, 90 mL for the 500 µg dose, 80 mL for the 1500 µg dose and 147 mL for the 3000 µg dose (p<0.05 for all doses).

Ensifentrine was well tolerated at all doses with an adverse event profile similar to placebo. The safety profile was comparable to that observed in prior studies with nebulized ensifentrine.

Metered-dose inhaler ("pMDI") formulation

In June 2019, we commenced a Phase 2 dose-ranging trial to evaluate the pharmacokinetic ("PK") profile, efficacy and safety of ensifentrine delivered by pMDI in patients with moderate-to-severe COPD. The trial has a randomized, double-blind, placebo-controlled, two-part design. We anticipate reporting data from the first part of the trial in the first quarter of 2020 and final data around the middle of 2020.

We believe the availability of ensifentrine in handheld inhaler formats (DPI and pMDI) will greatly expand the market potential for ensifentrine to the millions of COPD patients who prefer to use handheld devices. In the U.S., DPI and pMDI handheld inhalers are more commonly used than nebulizers for medication in COPD.

Other indications

Opportunities also exist to explore the development of ensifentrine for the treatment of asthma, cystic fibrosis and other respiratory diseases.

Enhancements to the senior team

Verona Pharma deepened the expertise available to the Company through a number of senior appointments. In April, Dr Martin Edwards was appointed to the Board as a Non-Executive Director. In June, we announced the expansion of our senior clinical team to lead and manage the late stage development of ensifentrine.

OUTLOOK

We intend to become a leading fully integrated biopharmaceutical company, focused on the treatment of respiratory diseases with significant unmet medical needs. Our initial focus, the nebulized formulation of ensifentrine, addresses a clear unmet medical need in moderate-to-severe COPD patients who remain symptomatic despite treatment with dual bronchodilators (LAMA and LABA) or triple therapy (with ICS added). We believe that this is a very large market opportunity in the US and also in China. In the US, we intend to pursue this market opportunity with a targeted sales force.

Following completion of the Phase 2b dose-ranging study evaluating nebulized ensifentrine as an add-on to treatment with inhaled tiotropium a long acting bronchodilator in patients with moderate-to-severe COPD, we expect to proceed to an End of Phase 2 meeting with the FDA in the first half of 2020. We expect to commence its Phase 3 clinical program with nebulized ensifentrine for the maintenance treatment of COPD in 2020, subject to the FDA's authorization to proceed. We are also developing ensifentrine for other respiratory diseases including CF and asthma.

After  the positive data from the Phase 2 DPI trial in patients with moderate-to-severe COPD, which was reported in August, and the successful development of the pMDI formulation of ensifentrine last year, which is currently being studied in an ongoing Phase 2 pMDI trial, again in patients with moderate-to-severe COPD, we believe these formulations could open up a much larger patient population to ensifentrine treatment. In the US, our market research suggests that about 5.5 million moderate-to-severe COPD patients currently use either DPI or pMDI devices for administering their COPD therapies. This market was valued at approximately $9 billion in 2018.

We may seek strategic collaborations with market leading biopharmaceutical companies to develop and commercialize the

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