Verona Pharma Q3 2023 Earnings Call Transcript

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Provided by Quartr
November 2, 2023

There are 10 speakers on the call.

Operator

Welcome to Verona Pharma's Third Quarter 2023 Financial Results and Operating Highlights Conference Call. At this time, all participants are in a listen only mode. Earlier this morning, Verona Pharma issued a press release announcing its financial results for the 3 months ended September 30, 2023. A copy can be found in the Investor Relations tab on the corporate website, www. Veronapharma.com.

Operator

Before we begin, I'd like to remind you that during today's call, statements about the company's future expectations, plans and prospects are forward looking statements. These forward looking statements are based on management's current expectations. These statements are neither promises nor guarantees and 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. Any such forward looking statements represent management's estimates as of the date of this conference call. While the company may elect to update such forward looking statements at some point in the future, it disclaims any obligation to do so, even if subsequent As a reminder, this call is being recorded and will remain available for 90 days.

Operator

I'd now like to turn the call over to Doctor. David Zaccardelli, Chief Executive Officer. Please go ahead.

Speaker 1

Thank you, and welcome everyone to today's call. With me today are Mark Kahn, our Chief Financial Officer Doctor. Kathy Rickard, our Chief Medical Officer and Chris Martin, our Senior Vice President of Commercial. The Q3 continued our constant progress toward our goal of providing ensifentrine as a novel treatment for COPD patients. In August, the FDA accepted for review our new drug application seeking approval of ensifentrine for the maintenance treatment of patients with COPD.

Speaker 1

The agency assigned a PDUFA target action date of June 26, 2024 and is not currently planning to hold an advisory committee meeting to discuss the application. We look forward to continuing our work with the FDA during the review. If approved, ensifentrine is expected to be the 1st novel mechanism available for the treatment of COPD in more than 10 years. We believe its bronchodilator and non steroidal anti inflammatory activity has the potential to change the treatment paradigm for COPD. Recently, we hosted an in person investor meeting in New York to provide an overview of our commercial preparations for the potential U.

Speaker 1

S. Launch of ensifentrine with the company's senior management team and key opinion leader, Doctor. Jamie Rutland. During the meeting, we shared detailed overview of preparations for the planned launch of ensifentrine, including a review of the current COPD market, unmet treatment needs, launch access, distribution, reimbursement strategies and plans for field deployment. For those who may have missed it, a replay of the meeting is available on our website.

Speaker 1

Overall, we believe we are very well positioned to launch ensifentrine with many key hires already in place across our commercial team and strong relationships being built on both the physician and payer fronts. With this, we are confident we will be able to quickly capitalize on the U. S. Launch of ensifentrine, pending approval next June. In September, we presented additional analyses of the ENHANZE-one 24 week exacerbation data at ERS, which demonstrated treatment with ensifentrine resulted in a substantial decrease in the rate and risk of moderate and severe COPD exacerbations.

Speaker 1

In addition, it highlighted the impact of ensifentrine treatment on healthcare resource utilization related to COPD, including fewer physicians' office visits, emergency department visits and hospitalizations compared with placebo treatment. In October, we presented additional analyses from the ENHANCE 1 and ENHANCE 2 studies at the CHEST Annual Meeting. The data from pooled analyses demonstrated that treatment with ensifentrine resulted in substantial reductions in the rate and risk of COPD exacerbations regardless of recent exacerbation history, and the medication was well tolerated across patient groups. Additionally, subgroup data analyses demonstrated treatment with ensifentrine resulted in improvements in lung function, symptoms, quality of life endpoints and reductions in the rate and risk of exacerbations regardless of background therapy as well as reductions in daily rescue medication use. Also at Chest, we launched the disease awareness campaign titled unspoken COPD.

Speaker 1

The campaign highlights the severe impact COPD has on patients' daily life and encourages HCPs to engage in deeper conversations to fully understand COPD's impact on each patient in their practice. Turning to our global partnering strategy, Nuance Pharma, our development partner in Greater China, has continued their Phase 3 trial evaluating ensifentrine for the maintenance treatment of COPD in China. As a reminder, Nuance Pharma has exclusive rights to develop and commercialize ensifentrine in Greater China, and as such, will play a key role in addressing the global need for novel treatment for COPD. We look forward to providing updates as the trial progresses. Looking ahead, we are expanding our pipeline starting with a plan to initiate 2 clinical programs.

Speaker 1

We are developing a fixed dose combination formulation with ensifentrine and glycopyrrolate, a LAMA, for the maintenance treatment of COPD delivered via nebulizer. 6 dose combination therapies are commonly used in the treatment of COPD, historically in DPI and PMDI therapies only. Based on market research, there is an unmet need for a nebulized fixed dose combination therapy. We believe the combination of ensifentrine with a LAMA will provide COPD patients with the 1st nebulized fixed dose combination that has bronchodilation through a dual mechanism and also non steroidal anti inflammatory effects via PDE inhibition. If a feasible formulation is developed, we plan to submit an investigational drug application to the FDA and if cleared, start a Phase 2 clinical trial assessing the safety and efficacy of a fixed dose formulation of ensifentrine and glycopyrrolate in the second half of twenty twenty four.

Speaker 1

Additionally, based on the clinical profile of ensifentrine in COPD patients, including data that supports reduction in exacerbation burden, improvement in lung function and the PDE3 and PDE4 mechanism of action supporting enhanced new ciliary clearance, we believe ensifentrine could be an effective treatment for non cystic fibrosis bronchiectasis. This is a severe chronic condition where the airways of the lung become abnormally wide leading to a cycle of infection, inflammation and exacerbations that cause lung tissue damage. The condition affects approximately 370,000 patients in the U. S. And there are currently no therapies approved specifically for non CF bronchiectasis.

Speaker 1

Physicians use bronchodilators, antibiotics, steroids and surgery to treat patients. If our NDA is approved, we plan to commence a Phase 2 clinical trial to assess the efficacy and safety of nebulized ensifentrine in patients with non CF bronchiectasis in the second half of twenty twenty four, subject to clearance by the FDA. We are pleased with our constant progress in all areas, including regulatory, commercial preparation and new program development. I will now turn the call over to Mark to review our financial results for the Q3.

Speaker 2

Thank you, Dave, and good morning, everyone. We ended the Q3 of 2023 with $257,400,000 in cash and equivalents. We believe our balance sheet remains strong with the cash currently on hand, expected cash receipts from the UK tax credit program and funding anticipated to be available under the Oxford loan facility, we expect to have sufficient runway at least through the end of 2025, including the planned commercial launch of ensifentrine in the U. S. Pending regulatory approval.

Speaker 2

For the quarter ended September 30, 2023, net loss after tax was $14,700,000 compared to a net loss after tax of $15,600,000 for the same period in 2022. This represents a loss of $0.02 per ordinary share or $0.18 per ADS for the quarter compared to a loss of $0.03 per ordinary share or $0.24 per ADS for the Q3 of 2022. Research and development costs were $3,000,000 for the quarter ended September 30, 2023, compared to costs of $9,800,000 for the Q3 of 2022. The decrease was primarily due to a $7,900,000 decrease in clinical trial costs as all study conduct and analyses under the Phase 3 ENHANCE program were complete, whereas in the same period in 2022, significant costs were incurred associated with the then ongoing study conduct. The 2023 Q3 clinical trial and other development costs also include the impact of $2,200,000 of credits received related to the final financial reconciliation of a Phase 3 ENHANZE program supplier.

Speaker 2

This decrease was partially offset by an increase of $700,000 in people related costs. Selling, general and administrative expenses were $13,400,000 for the quarter ended September 30, 2023, compared to $5,300,000 reported for the same period in 2022. This increase was primarily due to a $4,700,000 increase in people related costs as well as an increase of $2,900,000 for costs primarily related to the build out of the distribution network and work related to payer disease education as well as advancing the commercial and information technology infrastructure in preparation for potential commercial launch. I'll now turn the call back over to the operator for the Q and A.

Operator

Thank you. We will now begin the question and answer Our first question comes from Andrew Tsai with Jefferies. Please go ahead.

Speaker 3

Hi, good morning. Thanks so much for taking our questions. Appreciate all the updates as well. So, first question is only to the extent you can share how are FDA discussions going about the NDA? What kinds of questions have the agency asked you since accepting the filing?

Speaker 3

And as it relates to the PDUFA, what exactly keeps you guys up at night? What would be the risks here really in your view? And then secondly, let's just say entichentrine is approved. As we think about your initial launch cadence, could it be realistic to think that an initial low hanging fruit could be patients who are taking an additional therapy after triple specifically dollar rest? So can we expect ensifentrine to immediately displace DollarRest specifically?

Speaker 3

Could that be the low hanging fruit immediately upon launch? Thanks.

Speaker 1

Great. Thanks, Andrew, for the questions. And maybe I'll start on the launch. With regard to the FDA questions, there what I would say is typical during a review process as you'd expect, the FDA asked for data, different questions, clarifications. And I would say it's very typical and normal in my experience, especially at this stage, of course, relatively early in the review, even prior to mid cycle.

Speaker 1

So I think it's going well from our view. With regard to what keeps us up at night and PDUFA risk, again, I think we feel we have an extremely strong package that we submitted across CMC non clinical, clinical and the total benefit to risk of ensifentrine, we believe is very compelling. So at this time, I think we're comfortable where we're at in the FDA review process. So with that, I'll turn it over to Chris and talk about the launch.

Speaker 4

Thanks, Dave. And Andrew, appreciate the question. As we think about kind of that launch cadence and who's the first patient that a physician may prescribe ensifentrine to. I think it's important to kind of just ground everybody in what's happening with these patients today. We know today there's 8.6 1,000,000 patients treated with COPD maintenance medications.

Speaker 4

We also know today that at least half of them either if they're on a single, a dual, a triple agent are remaining symptomatic. And when a patient has persistent symptoms, physicians are very likely to add new therapies or try to help these patients start to feel better and hopefully prevent the risk exacerbations in the future. So if we think about that $8,600,000 really what we hear in our market research is there are 2 groups of patients that the physician see as low hanging fruit or patients that they would try ensifentrine very quickly on. The first is the group of patients that are on single LAMA or Lava or Lava ICS product. And when they look at our data and they look at what the data Dave described, they think of ensifentrine as being the potential drug to add to these patients if it's approved.

Speaker 4

And they think about doing that at a very high rate. The second group of patients, which is the patients that potentially could even be on DALYRESP today, are these patients on dual and triple therapy that are looking for additional symptom relief and help. And the physicians add ensifentrine in about 20% to 45% of the time in these patients' treatment armamentarium. I think the important thing to keep in mind here is in that patient group that I'm talking about there, there's about 75,000 to 85,000 patients on DALU REST today, that are still that could potentially be an option for physicians to add a PDE3, four mechanism to. So we believe very strongly that there are 2 distinct patient populations, either those patients on single bronchodilator or LABA ICS and those patients are on dual and triple that ensifentrine could be added to very easily.

Speaker 4

And I think it's all driven by the fact that these patients remain symptomatic, they remain having issues in their daily lives and the physicians are actively looking for new mechanisms to be able to layer on top of the patient's treatment path, so they can get them going back to doing some of the normal things that they want to do in their daily lives.

Speaker 3

Thanks. Very clear. Thank you again.

Speaker 1

Thanks, Sandra.

Operator

Your next question comes from Yasmeen Rahimi with Piper Sandler. Please go ahead.

Speaker 5

Good morning, team. Thank you so much for all the updates. Would love to dig a little bit more into these 2 new studies that you spoke about. I guess, where are you in the formulation process at this junction? Like, if you could just give us some color beyond what you have said, like, and how soon could you have it completed?

Speaker 5

And then what would a design what would like the study design look like for a fixed combo like? What would the duration be and the size, etcetera? And then same goes for the 2nd Phase 2 study that you're also planning to kick off. So I think a lot of clients would love to hear maybe beyond the initial indication around size, costs associated with them and what sort of the cadence of the next steps, just a little bit more granular that would be really helpful for us.

Speaker 1

Great. Good morning, guys. So let me just talk briefly about the formulation and then I'll turn it over to Kathy to talk about both the trial design concepts for fixed combo as well as for bronchiectasis. Within fixed combo product formulation development, we are advancing with the typical formulation development where we're co formulating both glycopyrrolate and antifentrine and the nebulized formulation. Of course, there's acute chemistry that we can look at.

Speaker 1

There's also longer term stability data that gets generated at 3 6 months typically under normal and accelerated conditions to convince us that we have a commercially acceptable formulation. So that work is ongoing as we speak. Certain aspects can't be sped up, especially when you're looking at 6 months stability time points. We expect to be more fully informed on the co formulation, somewhere in the Q1 of 2024. And that's why we provided the guidance that we'd be looking to initiate the studies actually for both fixed dose combo and bronchiectasis in the second half of twenty twenty four.

Speaker 1

So with that, I'll give turn it over to Kathy for her thoughts on the design.

Speaker 6

Sure. So let's talk about first the fixed dose combination. So certainly we're in early stages of development of what a protocol will look like. We know what in general we would like to do or need to do in a Phase 2 type program, so the initial studies for that. So our goals would be to first establish efficacy and some initial safety and probably designs that are similar to our Phase 2 studies that we did for ensifentures to begin with, more likely be a shorter design, maybe up to anywhere up to about 12 weeks or so.

Speaker 6

But also we need to establish dose ranging. So that would be the goals of the studies that we would do for Phase 2 is to look at initial efficacy and safety and dose ranging. If you look at the second study, the study for non CF bronchiectasis, it's slightly different disease, slightly different type of design. We certainly would need to establish in the Phase 2 again efficacy and safety. These studies may need to be a little longer because some of the primary endpoints for non CF prox accesses relate to exacerbations.

Speaker 6

So they may be up to a 6 month type of design. But again, keep in mind that we are in the early phase of developing these designs and we're starting to make more definite ideas about designs as we get further along into our development program.

Operator

Our next question comes from Andreas Argueridis with Wedbush Securities. Please go ahead.

Speaker 7

Good morning, guys, and thanks for taking my questions. Couple here. So in expectations of approval for ensifentrine, can you remind us what the label is like to look like from an efficacy and safety standpoint? And then while you don't expect an ADCOM, the FDA has a curious history of changing its mind on a whim. Is there a threshold at which point an AdCom would definitely not be held?

Speaker 7

And if there is an AdCom, would it necessarily be a bad thing? Thanks.

Speaker 1

Great. Good morning, Andreas. Thanks for the questions. With regard to the label for ensifentrine, again, just to remind everybody that we expect and have provided data support indication of the maintenance treatment of COPD, which

Speaker 2

is a

Speaker 1

fairly broad indication and consistent with recent approvals and we believe the data provided supports that indication. We'd of course expect the rest of the clinical data results to be in the clinical section in the label as appropriate. Clearly, the FDA needs to continue their review and that we're quite some time away from specific labeling conversations. And so I think we'll see how that comes out, I'm sure in 2024. So but otherwise, we think the indication is fairly broad.

Speaker 1

With regard an AdCom, yes, they've guided that they do not plan to have an AdCom. And yes, you're correct. I think the FDA can decide on how they want to address that during the review. We don't expect one as time passes by, especially after mid cycle review, for example, and even as we get into 2024, that timing gets shorter and shorter. So there's certain practicalities about it.

Speaker 1

But nonetheless, I wouldn't comment any further on the AdCom and of course it's in the FDA plan.

Speaker 7

All right. And just one last follow-up from us. With regard to the 2 new potential indications, maybe just some thoughts on how this potentially unlocks strategic value for the company and ensitentrine? Thanks.

Speaker 1

Yes. Well, sure. I mean, I think it speaks loudly to what we believe ensifentrine can do broadly in the treatment of COPD either by itself or as a combination therapy. We have seen an excellent data from the ENHANCE trials that combining ensifentrine with a LAMA is quite advantageous as well. And so I think it speaks loudly to to the power of ensifentrine, the PDE3, PDE4 mechanism and its application.

Speaker 1

And then of course, broader than that and as we've reviewed today in non CF bronchiectasis, because of the underlying pharmacology, which has been demonstrated. So clearly in COPD, we think it's highly applicable in other diseases like bronchiectasis. I think ultimately any partner can see that ensifentrine's underlying pharmacology can be applied quite widely to various respiratory diseases, which we've really stated from the beginning as the full potential of ensifentrine.

Speaker 7

Thanks guys and congrats on all the progress.

Speaker 1

Thanks, Andrea.

Operator

The next question comes from June Lee with Tuohy Securities. Please go ahead.

Speaker 6

Good morning. This is Asim on for June. Thanks for taking the questions. My first question is, what are you looking for in a European partner and can you guide to any updates on that front? And then also just wondering if you could talk about the ramp in SG and A in preparation for launch and when we could expect hiring for the around 100 person sales force?

Speaker 6

Thank you.

Speaker 1

Great. Good morning. Thanks for the question. I'll speak to the partnering and then turn it over to Mark to talk about SG and A and Chris for the reps. But I think that with regard to European partner or in general, our partnering strategy, it continues to be the same that is we look to partner outside the U.

Speaker 1

S. Much as we've done in Greater China with Nuance Pharma. So the strategy has not changed. I think that ideally in our partner, European or otherwise, Besides, of course, elements around expertise in regulatory, clinical and commercial in the respiratory space, as you'd expect. We also are looking for opportunities in partners that have expertise in device PMDI or DPI, device development manufacturing and or IP, which I think could be quite advantageous as we look for the full lifecycle management and other indications for ensifentrine, as well as ability to manufacture specifically drug product, but also potentially drug substance or API.

Speaker 1

And I think that this would serve us well having of course a second source, potentially a source with a lower cost point. Keep in mind that we're looking to supply the world with ensifentrine in different markets. And so looking for somebody with that manufacturing capability is another feature of our partnering strategy. So with that, I'll turn it over to Mark for ramp on SG and A.

Speaker 2

Sure. Thanks for the question. So if you look at SG and A over the last couple of years, you'll see that it has been ramping. A year ago, it was $5 ish million in Q3, and this year, it's $13 ish million. And I think what you should expect is that, that ramp will continue for the next several quarters.

Speaker 2

Expense for Q2 of next year, I think that our total expense should be in the $20,000,000 to $25,000,000 range on a quarterly basis. That includes both SG and A and R and D. And then once we get to Q3, assuming approval at the end of June, you would see that the SG and A ramps again as we bring on the sales reps that Chris will talk about.

Speaker 4

Thanks, Mark. Thank you. Yes. Thanks, Mark, on that. As we think about, June, the reps and how we would potentially hire these people, And we first have to think about how a structure looks like for that type of an organization.

Speaker 4

And typically when we have a field force of about 100, you're going to look at 2 area executive directors or executive sales directors that cover the East and the West. We've brought those 2 individuals on. And then we are actively looking at the next level under that, which is the RSDs, our regional sales directors, which cover or directly rep managers. And you would expect those people to be hired maybe 3 to 4 months before PDUFA. And then our plan for reps is to hire them around at PDUFA or contingent on PDUFA.

Speaker 4

We've done this in the past as a team where we create a pool of candidates that we're able to hire and kind of hold until the drug is approved around the PDUFA date and quickly convert those offers into active employees with an organization. So our plan would be to have those reps come on right after PDUFA and then have them trained and ready to go sell ensifentrine if it's approved. I think the other important aspect reps, but also ways that we can interact with doctors virtually and also support the reimbursement pathway with field reimbursement managers. So I think as you think about the totality of the commercial organization, we want to make sure that we cover the physicians and the patients in a way that they can they see how the utility of the product, but then can also get the product to the patients that are most in need. And again, all those that large number of representatives and people to support that would be coming around PDUFA right after PDUFA.

Speaker 8

Thank you.

Operator

Next question comes from Tom Shrader with BTIG. Please go ahead.

Speaker 9

Good morning. Thanks for holding the call. I have all combination questions. So the specific LAMA you used, how derisking is that for the class? The molecules ever not play together or is it really the mechanisms you're working out?

Speaker 9

And then there's some old data for ensifentrine. It was really quite striking that it made LAMA's work faster. Maybe for Kathy, does that data hold up in your mind? And is that something that you would be very eager to try to see if you can repeat? And I have a follow-up on bronchiectasis.

Speaker 1

Great. Thanks, Tom. Yes, I'll turn it over to Kathy to talk about her thoughts on glycopyrrolate in general and then potentially how ensifentrine and glycopyrrolate work together?

Speaker 6

Yes. Thanks, Tom, for the question. So glycopyrrolate is like other Llamas, works very similar. They've been in use for a long time. So we know a lot about them from that perspective and they all work fairly similar.

Speaker 6

So I don't expect to have any surprises from their efficacy or whatever that we look at in studies from that perspective. As far as acting faster, we do have some older data that shows that it's not just LAMB but also for beta agonists that when you combine the 2 together, you do get a shortening of the response time to peak efficacy. Again, those were done in shorter studies, but I wouldn't expect that that would go away. I would expect to still see that in the combination type of when we use them together from that perspective. I don't was there another question I'm forgetting?

Speaker 9

I haven't asked it yet. Okay.

Speaker 1

Okay.

Speaker 9

Just historically on bronchiectasis, have bronchodilators been tried and failed? Are you mostly betting or focused on the anti inflammatory properties to show this is an effective drug?

Speaker 6

So bronchiectasis have yes, bronchiectasis have not failed per se. As was mentioned, there are no approved drugs for non CF bronchiectasis. Bronchiectasis has some similar things that we see that are similar COPD, for example, infection, they have widening of the airways and they have destruction in the airways and increased mucus. So many of the things that they we see in bronchiectasis, we see effects of from ensifentrine and COPD. So for example, bronchodilation may help clear out the mucus better.

Speaker 6

It doesn't necessarily work like you would see in somebody with asthma where you're actually looking to actually bronchodilate the airways, but you're looking for increase in getting rid of the mucus and all that are sitting in the airways because that's what's causing all the underlying infections when you have stuff sitting there, it gets infected and then you at least turn exacerbations. So do we use them? Yes, we use them. We use everything we have because we don't have anything else to use. So we're going to use bronchodilators, we're going to use steroids, we're going to use whatever we have available because that's what we have to use to treat bronchiectasis.

Speaker 6

I think we also think from ensifentrine's perspective, in non steroidal anti inflammatory effects and its ability to increase mucociliary clearance will help clear mucus out of the airways and help prevent and decrease exacerbations that we may see with patients with bronchiectasis.

Speaker 9

Great. Thank you.

Speaker 1

Thanks,

Operator

Our next question comes from Dipesh Patel with H. C. Wainwright. Please go ahead.

Speaker 8

Hi, guys. This is Dipesh covering for Bubba and H. C. Wainwright. In one of the HCP focused market research slides that you presented last month, we see that ensifentrine's twice a day dosing schedule was the least preferred attribute among 7 others, though the score was not that bad.

Speaker 8

Thinking long term, how do you expect the twice a day regimen to potentially impact ensifentrine's market adoption?

Speaker 1

Great. Chris, do you want to speak to it?

Speaker 4

Yes. Thanks, Dave, and appreciate the question, Dipesh. I think you're referring to the slide on the attributes of drugs, attributes of ensifentrine and how physicians rated that. I think it's really important to just ground ourselves in how impressive the response was from physicians on the profile of ensifentrine. As you mentioned, that was the lowest score, but it's still well above the median.

Speaker 4

But for every attribute that's listed from least important to most important, ensifentrine score is extraordinarily high within a physician's mindset. And I think that plays based on what we've heard in qualitative and KOL interactions to the unmet need that still exists in the marketplace. As we discussed earlier, 50% of these patients are having persistent symptoms. So the physicians are looking for a drug for drugs that have the potential to have an effect on their patient lives that potentially ensifentrine could have. When we talk specifically to doctors about BID dosing, one of the things that's interesting is what we hear from them is that many patients struggle and Kathy can talk about this, but many patients struggle when they wake up in the morning, because single or once a day drugs tend to lose their effect over time.

Speaker 4

So in their mind, sometimes the BID dosing is very beneficial for the patient because they get that evening dose that allows them to wake up in a better place than maybe they would have with a single once a day type product. So when we look at overall adoption and how physicians look at the profile, we don't believe that a BID dose is a hindrance at all. And you can see that on the second part of that slide, which basically says that 90% of the HCPs believe that they'll be adopting ensifentrine within the 1st year of launch. And that's a remarkably high adoption rate. And it again speaks to the unmet need and the overall differentiated profile that ensifentrine has.

Speaker 8

Great. Thank you for the details. I have a couple more questions. You may have touched on this in some of the prior questions, but can you discuss the challenges you anticipate solving as you work on testing the combinability of ensifentrine plus LAMA in a single nebulizer formulation. And I think you had noted earlier on, just to confirm that you're going to be expecting the clinical trial to begin second half of 'twenty four on that?

Speaker 1

Yes. Thanks for the question. Yes, our general cadence for that development would be getting through the formulation development activities, which takes some time because you want to see the durability of the formulation. That's nothing new in drug development. And that work is ongoing.

Speaker 1

With regard to challenges, I think it's nothing that we know of other than getting the work done and having the data to support the plan forward. We believe the formulation can work, but we need the data to formulated is where we want it to be. So there's a lot of technical aspects in a formulation, the chemistry, the dose delivered, the particle size generation, all of that work, which of course we've done previously with ensifentrine, we need to do with the combination. So that work will be ongoing. And that's why it puts us in looking at a clinical trial in the second half of twenty twenty four.

Speaker 1

Got it.

Speaker 8

Thank you. And final question, how should we think about R and D expenses moving forward? Specifically, what will the remaining R and D expense relate to?

Speaker 1

Go ahead, Mark.

Speaker 2

Yes. Thanks for the question. So I think in the very near term, you should expect R and D expenses to be fairly limited because we're not running any clinical trials. As we get into the back half of next year, they should go up marginally. These Phase II programs that we're talking about are not of the same scope that you're seeing at ensifentrine during our Phase 3 program.

Speaker 2

They're much smaller. So the expense levels will be back more like Varona had in the 2019 timeframe. I think single digit, low to mid single digit quarterly R and D expense for the foreseeable future until we get to a Phase 3 program.

Operator

This concludes our question and answer session. I would like to turn the conference back over to Doctor. David Zachertelli for any closing remarks.

Speaker 1

Great. Thank you everybody for attending today's call. We appreciate your support and we look forward to updating you in the future at conferences. Have a great day.

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Key Takeaways

  • FDA NDA acceptance: The FDA has accepted Verona Pharma’s NDA for ensifentrine in maintenance COPD with a PDUFA date of June 26, 2024, and is not planning an advisory committee meeting.
  • Positive Phase 3 results: ENHANCE-1 & ENHANCE-2 data showed ensifentrine significantly reduced moderate and severe COPD exacerbations, lowered healthcare resource use and improved lung function, symptoms and quality of life versus placebo regardless of background therapy.
  • Commercial readiness: Verona hosted an investor meeting outlining U.S. launch preparations—including key hires, distribution, reimbursement strategies and plans to deploy a ~100-person sales force contingent on approval.
  • Strong financial position: As of September 30, 2023, the company had $257M in cash, expects runway through 2025, and reported a Q3 net loss of $14.7M driven by lower R&D spend and increased SG&A for launch build-out.
  • Pipeline expansion: Plans are underway to initiate Phase 2 trials in H2 2024 for a nebulized fixed-dose combo of ensifentrine and glycopyrrolate in COPD, as well as for nebulized ensifentrine in non-CF bronchiectasis.
A.I. generated. May contain errors.
Earnings Conference Call
Verona Pharma Q3 2023
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