Verona Pharma Secures Debt Financing of up to $150 Million from Oxford Finance

LONDON and RALEIGH, N.C., Oct. 17, 2022 (GLOBE NEWSWIRE) -- Verona Pharma plc (Nasdaq: VRNA) (“Verona Pharma” or the “Company”), announces it has entered into a debt financing facility (“debt facility”) providing the Company with access to up to $150 million from Oxford Finance LLC (“Oxford”). The non-dilutive capital provides further financial flexibility and support for commercialization activities for ensifentrine, the Company’s first-in-class product candidate, which recently reported positive Phase 3 data in the ENHANCE-2 trial in chronic obstructive pulmonary disease (“COPD”). The $150 million debt facility replaces the existing $30 million facility with Silicon Valley Bank (“SVB”).

“We believe the potential proceeds from this debt facility and from the U.K. tax credit program, along with our existing $231.7 million of cash at September 30, 2022, will provide more than 3 years of runway, funding the planned commercial launch of ensifentrine in the US,” said David Zaccardelli, Pharm. D., President and Chief Executive Officer. “We have already begun the early stages of launch preparation and, pending positive ENHANCE-1 results, we intend to submit a New Drug Application in the US for nebulized ensifentrine in the first half of 2023, and if approved, plan to launch in 2024.”

“Oxford is pleased to serve as a capital partner, supporting Verona Pharma’s development and commercialization activities for the unmet respiratory condition COPD and potentially other respiratory diseases,” said Adam K. Soller, Managing Director at Oxford. “The promising results from the recent Phase 3 ENHANCE-2 trial bolster ensifentrine’s prospects as a compelling therapy for millions of patients suffering from COPD worldwide.”

Under the terms of the debt facility, Verona Pharma drew $10 million at closing, a portion of which was used to repay the existing debt facility, prepayment fees and other associated costs to SVB. An additional $10 million is immediately available to be drawn at Verona Pharma’s discretion. The Company may draw an additional $80 million in two separate tranches upon achievement of near-term clinical and regulatory milestones. An additional $50 million may be drawn subject to the approval of Oxford. Verona Pharma will pay interest only for the first 36 months, extendable to 48 months on achievement of certain milestones. The debt facility is scheduled to mature on October 1, 2027.

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About Verona Pharma

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. If successfully developed and approved, Verona Pharma’s product candidate, ensifentrine, has the potential to be the first therapy for the treatment of respiratory diseases that combines bronchodilator and anti-inflammatory activities in one compound. The Company is evaluating nebulized ensifentrine in its Phase 3 clinical program ENHANCE (“Ensifentrine as a Novel inHAled Nebulized COPD thErapy”) for COPD maintenance treatment. Ensifentrine met the primary endpoint in ENHANCE-2 demonstrating a statistically significant and clinically meaningful improvement in lung function. In addition, ensifentrine significantly reduced the rate of COPD exacerbations in the ENHANCE-2 trial. Two additional formulations of ensifentrine are in Phase 2 development for the treatment of COPD: dry powder inhaler (“DPI”) and pressurized metered-dose inhaler (“pMDI”). Ensifentrine has potential applications in cystic fibrosis, asthma and other respiratory diseases. For more information, please visit www.veronapharma.com.

About Oxford Finance LLC

Oxford Finance is a specialty finance firm providing senior secured loans to public and private life sciences and healthcare services companies worldwide. For over 20 years, Oxford has delivered flexible financing solutions to its clients, enabling these companies to maximize their equity by leveraging their assets. Since 2002, Oxford has funded over $9 billion in loans. Oxford is headquartered in Alexandria, Virginia, with additional offices in California (San Diego, Palo Alto, and Los Angeles) and the greater Boston and New York City metropolitan areas. For more information, visit oxfordfinance.com.

Forward-Looking Statements

This press release contains forward-looking statements. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, but not limited to, statements regarding the expected use of the proceeds from the debt facility, the sources of financing for the planned commercial launch of ensifentrine, the cash runway period provided by the sources of financing and the fully funding of the commercial launch, and the timing of a New Drug Application submission for and commercial launch of ensifentrine.

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 and commercialization, 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 subjects, which could adversely affect our research and development efforts and the completion of our clinical trials; 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, third-party service providers and licensees; our inability to realize the anticipated benefits under licenses granted by us to third parties to develop and commercialize ensifentrine, our future growth and ability to compete depends on retaining our key personnel and recruiting additional qualified personnel; material differences between our “top-line” data and final data; our reliance on third parties, including clinical research organizations, clinical investigators, manufacturers and suppliers, and the risks related to these parties’ ability to successfully develop and commercialize ensifentrine; lawsuits related to patents covering ensifentrine and the potential for our patents to be found invalid or unenforceable; lawsuits related to our licensing of patents and know-how with third parties for the development and commercialization of ensifentrine; 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; and our vulnerability to natural disasters, global economic factors, geo-political actions and unexpected events, including health epidemics or pandemics like the COVID-19 pandemic, and conflicts such as the Russia-Ukraine conflict, which has and may continue to adversely impact our business. These and other important factors under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, and our other reports filed with the Securities and Exchange Commission, could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management's estimates as of the date of this press release. 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.