News Column

Vernalis Swings To First-Half Loss On Sterling Strength

August 5, 2014

Rowena Harris-Doughty

LONDON (Alliance News) - Vernalis PLC Tuesday said it swung to a loss in the first half of the year, on the back of lower revenue and a big hit from the strength of sterling.

The development-stage pharmaceutical company posted a pretax loss of GBP5.5 million for the six months to June 30, compared with a pretax profit of GBP2.6 million a year earlier.

Vernalis said it swung to a loss after being hit by a GBP1.7 million unrealised foreign exchange loss due to the strength of sterling. The prior year it booked a foreign exchange gain of GBP4.4 million.

Revenue in the year came in at GBP6.2 million, compared with GBP7.6 million the prior year, held back by lower collaboration and frovatriptan royalty income.

Revenues comprised GBP1.8 million from the supply of its frovatriptan active pharmaceutical ingredient to Menarini, and collaboration income of GBP4.4 million. Frovatriptan was developed by Vernalis and is approved as an acute oral treatment for migraine headache and its associated symptoms.

The company said its research and development spend during the year remained largely flat at GBP6.9 million, but said external research and development expenditure increased slightly due to investments on certain projects.

"Research continues to perform well and remains self-funding with more milestones earned and five collaborations active during the period... We are well positioned for the launch of our first cough cold product into the US market in 2015," said Chief Executive Ian Garland in a statement.

Vernalis said its cough/cold commercial pipeline advanced significantly during the period, and it aims to achieve proof-of-concept on its two remaining cough cold products before the end of 2014.

"With our first product launch potentially in the next 12 months, the company is rapidly transitioning into a specialty pharma company. Cash resources of GBP70.3 million, no debt and tight financial control provide a very strong platform for delivering on our cough cold strategy without the need to seek further funding. We look forward to the future with confidence," the company said.

Vernalis shares were trading 0.8% lower at 30.75 pence before midday Tuesday.

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Source: Alliance News

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