|
||
| |||||||
|
30th March 2004. Highlights ·
Vernalis reacquires the North American rights to frovatriptan from Elan ·
US sales in 2003 were US$37.5
million (Q4: US$13.7 million) ·
Vernalis sees significant
potential in the prophylaxis of menstrually associated migraine (second Phase
III ongoing) ·
Vernalis intends to seek a
pharmaceutical partner capable of exploiting the MAM potential ·
Elan to provide up to 12 months
transitional services in order to maintain product supply ·
The Company intends to raise
further funds by way of a rights issue in the next 12 months Vernalis
plc (LSE: VER; Nasdaq: VNLS) announces today that it has entered into an
agreement to reacquire in their entirety the North American rights for
frovatriptan from Elan Pharma International Ltd (Elan) for a total of US$50
million payable over 21 months. Completion of the transaction is subject to the
approval of Vernalis’ shareholders and, if required, US anti-trust clearance.
Vernalis intends to seek a major pharmaceutical partner to realise
frovatriptan’s significant commercial potential, including the new proposed
menstrually-associated migraine indication (see below).
Vernalis also intends to seek additional funding by way of a rights issue
to assist with the reacquisition of frovatriptan. Under
the terms of the agreement, Vernalis will make an initial payment of US$5
million to Elan on completion. This will be followed by payments of US$20
million on 31 December 2004 and US$25 million on 31 December 2005.
Vernalis will also purchase certain inventory from Elan at an expected
approximate cost of US$5 million payable no later than 31 December 2004. On
completion all rights and all product information on frovatriptan currently held
by Elan will revert to Vernalis. The licence previously granted by Vernalis to
Menarini International in respect of Europe and Central America remains in
place. Vernalis
Chief Executive Officer Simon Sturge said, "Regaining the rights to
frovatriptan in our most important market is an extremely exciting opportunity
for Vernalis and represents considerable potential. We look forward to realising
the very promising opportunities for frovatriptan as we continue to build value
for Vernalis’ shareholders." Overview
of frovatriptan
Frovatriptan
was launched in the US in the second quarter 2002, where it is marketed as Frova™
by Elan Corporation and UCB as an acute treatment for migraine.
US sales in 2003 were US$37.5 million and in Q4 2003 amounted to US$13.7
million. Under the current US
arrangements Vernalis receives a royalty return of approximately 10 per cent
linked to sales. Frovatriptan
is currently in Phase III development for the distinct label for prophylaxis of
menstrually-associated migraine (MAM) for which no existing triptans are
approved. In
April 2003 data were presented from an initial clinical study into the efficacy
of frovatriptan as a preventive treatment for MAM which affects around 50 per
cent of all women who suffer migraine. The
data demonstrated a highly statistically significant improvement in the number
of patients who were headache-free during the peri-menstrual period for both the
studied dose regimens of frovatriptan compared to placebo (p<0.0001). Over
half of the patients at the higher dose regimen were headache free during their
menstrual period. A
long-term Phase III safety study is under way and a confirmatory Phase III
efficacy trial is planned for Q2 2004 to support extension of the existing
frovatriptan label to include this novel indication.
If the positive initial results are confirmed, these studies should lead
to regulatory submissions in the US and Europe during 2005. In
January 2004, Vernalis commissioned independent market research to evaluate the
potential of frovatriptan both under the existing label as an acute treatment
for migraine and for the potential new MAM indication.
Importantly, the research concluded that the potential exists for
significant sales growth if a competitive marketing effort is targeted at
primary care physicians. The
research also highlighted that: ·
frovatriptan has achieved good penetration into the neurology market with
a market share of around 7%; and ·
the growing repeat prescription business (approximately 50% of scrips) is
evidence of strong patient satisfaction due, in part, to frovatriptan having the
longest half-life in the triptan class of drugs. Future
strategy for frovatriptan
As
a result of the transaction, Vernalis will exchange its royalty income and
potential milestone payments for enhanced cash flows arising from the full sales
of frovatriptan in North America. Elan
will no longer market the product but under a transitional services agreement
will provide Vernalis with continuity of product support in the US market for a
period of up to 12 months after completion.
Vernalis
intends to seek a new commercialisation partner (or partners) to develop
frovatriptan and the proposed MAM indication in North America and other
territories not licensed to Menarini. A
key criterion in the selection of a partner will be its ability to realise the
significant potential of frovatriptan and Vernalis expects this opportunity to
be attractive to a wide range of potential partners.
During
the process of selecting such new partners, Vernalis intends to put in place
appropriate arrangements to promote and market frovatriptan in the short term. Transaction
rationale
The
Board of Vernalis believes that reacquiring the North American rights to
frovatriptan has the following benefits: ·
regains control of the Company’s most valuable asset in its most
important market; ·
allows the Company to influence the future strategy for frovatriptan and
the potential MAM indication in the North American markets; and ·
significantly enhances cashflow through exchanging the current royalty
based income and milestones for access to the underlying cashflows of the
product. Additional
capital requirements Following
completion, Vernalis will pay Elan a total of US$50 million in instalments over
the period to 31 December 2005, and purchase certain inventory at an expected
approximate cost of US$5 million. During that period, the Company expects to
benefit from substantially increased cash flows which may include upfront and
milestone payments from commercialisation partners.
However, in order to meet its obligations to Elan, Vernalis will require
additional funds during the next 12 months. Due
to its size in relation to the Company, the acquisition is conditional on the
approval of Vernalis’ shareholders. A
circular containing further details of the acquisition and convening the
Extraordinary General Meeting will be posted shortly. ---ends--- Enquiries: Vernalis
plc
Simon
Sturge, Chief Executive Officer Tony
Weir, Chief Financial Officer Tel:
+44 (0)118 977 3133 Brunswick
Group (for analyst, financial media enquiries)
Jon
Coles; Wendel Carson Tel: +44 (0)20 7404 5959
Northbank Communications (for trade media enquiries) Peter Colley Tel: +44 (0)1260 296500 This
document is not an offer of securities for sale in the United States of America.
Securities may not be offered or sold in the United States of America
absent registration or an exemption from registration. Safe
Harbour statement: this news release may contain forward-looking statements that
reflect the Company's current expectations regarding future events, including
the clinical development and regulatory clearance of the Company's products,
including that of frovatriptan for menstrually-associated migraine, the
Company's ability to find partners for the development and commercialisation of
its products, including a new commercialisation partner (or partners) for
frovatriptan, as well as the terms of such partnership(s), the projected
benefits of reacquiring the rights to frovatriptan in North America and/or any
new partnership arrangement(s) on the Company's liquidity and results of
operations, as well as the Company's working capital requirements and future
capital raising activities. Forward-looking statements involve risks and
uncertainties. Actual events could differ materially from those projected herein
and depend on a number of factors, including the success of the Company's
research strategies, the applicability of the discoveries made therein, and the
successful and timely completion of clinical studies, including with respect to
frovatriptan and the Company's other products, the uncertainties related to the
regulatory process, the ability of the Company to identify and agree beneficial
terms with suitable partners for the commercialisation and/or development of
frovatriptan and other products, as well as the achievement of expected
synergies from such transactions, the acceptance of frovatriptan and other
products by consumers and medical professionals, the ability of the Company to
obtain additional financing for its operations and the market conditions
affecting the availability and terms of such financing, the successful
integration of completed mergers and acquisitions and achievement of expected
synergies from such transactions, and the ability of the Company to identify and
consummate suitable strategic and business combination transactions and the
risks described in our most recent annual report on Form 20-F filed with the
U.S. Securities and Exchange Commission (File No 0-20104). About
Vernalis Vernalis plc was established in September 2003 following the merger of British Biotech plc and Vernalis Group plc. Operating from state-of-the-art R&D facilities at its headquarters in Reading (UK) and in Cambridge (UK), the company is equipped to undertake the full development of compounds from discovery through to product registration. Its first product – frovatriptan – is approved and marketed in the US and Europe, and is backed by an innovative research and development portfolio. Vernalis’ current market capitalisation is approximately £90 million, and it is pursuing a growth strategy based upon successful pipeline development and further consolidation within the biotechnology sector.
|
|
| ||||||||