Vernalis — 18 months ended 30 June 2015 Earnings Presentation
48 slides from Vernalis's earnings presentation, Sep 29, 2015
Slide 1: Slide 1
Slide 2: Vernalis plc 18 months ended 30 June 2015 Results Presentation to Analysts
Vernalis plc 18 months ended 30 June 2015 Results Presentation to Analysts Ian Garland, CEO David Mackney, CFO 29 September 2015 Vernalis is a revenue generating pharmaceutical company endorsed by partnerships with global pharmaceutical companies and funded to self -sustainability
Slide 3: Important Disclaimer
Important Disclaimer The distribution of this presentation in certain jurisdictions may be restricted by law, and persons into whose possession this presentation comes should inform themselves about, and observe, any such restrictions. Although reasonable care has been taken to ensure that the facts
Slide 4: Agenda for today's presentation
Agenda for today’s presentation 1. Highlights 2. Strategy 3. Business update • Commercial business • NCE pipeline • Research 4. Financial results 5. Newsflow 6. Q&A 4 Sept 2015 Analyst Presentation
Slide 5: Highlights
CVernalis Highlights OCO0OCG@
Slide 6: Highlights
Highlights Significant progress in transition to a commercial specialty pharmaceutical company • TuzistraTM XR approved by FDA on 30 April 2015 and launched in the US Rx cough cold market on 8 September • POC achieved for both CCP-07 and CCP-08 triggering milestone payments to Tris in April and July
Slide 7: Highlights (continued)
Highlights (continued) Research business remains strong and self financing • £2.2 million milestone income from collaborations with AKP and Servier for the 18 month period ended 30 June 2015 • New collaboration secured with Taisho Financial performance at the top end of market expectations • Change
Slide 8: Strategy
CVernalis Strategy OCO0OCG@
Slide 9: Strategy
Strategy 2) Realise value from NCE pipeline 1) Develop and commercialise low development risk late stage products 3) Continue balanced investment in research 9 Sept 2015 Analyst Presentation
Slide 10: Business update: Commercial business
Business update • Commercial business
Slide 11: Cough cold market – June 2015 TRx
Commercial business | Cough cold market – June 2015 TRx MAT Jun 2011 MAT Jun 2012 MAT June 2013 MAT June 2014 MAT June 2015 5-Year Average TRx % TRx % TRx % TRx % TRx % Mkt Shr TRx % vs 2011 Narcotics 19.1m 54% 17.0m 58% 19.0m 55% 16.3m 52% 16.1m 46% -8% 17.5m 53% Codeine 13.3m 38% 11.7m 40% 13.2m 3
Slide 12: Hydrocodone trend across 2014-15
Commercial business | Hydrocodone trend across 2014-15 Hydrocodone market share stepped down in September 2014, then stabilised, codeine and dextromethorphan benefited 45% 40% 35% 30% 25% 20% 15% 10% 5% Codeine Hydrocodone Dextromethorphan Benzonatate 0% Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan
Slide 13: Tuzistra XR potential peak sales
Commercial business | Tuzistra™ XR Potential peak sales – updated for June 2015 TRx data No impact on codeine but reduced potential in hydrocodone Codeine Codeine Hydrocodone All Narcotics (+antihistamine only) (all) (all) (all) 2015 Market TRx 5.0m 12.4m 3.7m 16.1m 2008 Net pricing $325.0m $806.0m
Slide 14: Tuzistra XR launch timeline
Commercial business | Tuzistra™ XR Launch timeline Approval triggered completion of multiple activity streams to launch ahead of cough cold season Promotion started 2015 2016 April May June July Aug. Sept. Oct. Nov. Dec. Jan Launch stocks Further Approved supplied from product 30 April 2015 Tris to
Slide 15: Tuzistra XR launch: supply chain
Commercial business | Tuzistra™ XR launch Supply chain Multiple batches manufactured and supplied to our 3PL warehouse • Launch batches manufactured by Tris, July 2015 • Inventory shipped to Cardinal SPS (3rd Party Logistic partner), July 2015 • Further batches manufactured and received, August 2015
Slide 16: Tuzistra XR launch: pricing
Commercial business | Tuzistra™ XR launch Pricing Wholesaler Acquisition Cost (WAC) set and listed in compendia • WAC price set at $499 per 473ml (16oz) bottle • Historic IMS NDTI data indicates average codeine TRx size ~180ml • We estimate 2.6 Rx per bottle • Average WAC per Rx therefore $192 • Gro
Slide 17: Tuzistra XR launch: pricing
Commercial business | Tuzistra™ XR launch Pricing Illustrative overview of pricing for Payers, Patients and Vernalis Received (Paid) Payer Patient Vernalis $ $ $ WAC price per Rx (192) 192 Patient Tier 3 co-pay 50 (50) Rebates xx (xx) Co-pay assistance 25 (25) Launch incentives (Year 1 only) (xx) Ot
Slide 18: Tuzistra XR launch: wholesalers
Commercial business | Tuzistra™ XR launch Wholesalers Customer relationships established with 15 wholesalers • Distribution Services Agreements with top three wholesalers – • account for 95% of US distribution • Supplying 12 other wholesalers • Orders shipped to all 15, already some re-orders 18 Sep
Slide 19: Tuzistra XR launch: pharmacy stocking
Commercial business | Tuzistra™ XR launch Pharmacy stocking Pharmacy stocking is critical to first year success Trade “Push” activity Field force “Pull” activity • Wholesaler launch incentives: • Pharmacy store calls: • Off-invoice discount on first orders • Detail pharmacists on Tuzistra™ XR • Exte
Slide 20: Pharmacy stocking: the Stock Now campaign
Commercial business | Tuzistra™ XR launch Pharmacy stocking The “Stock Now” campaign 20 Sept 2015 Analyst Presentation
Slide 21: Pharmacy stocking: Stock Now in use
Commercial business | Tuzistra™ XR launch Pharmacy stocking The “Stock Now” campaign – in use now… 21 Sept 2015 Analyst Presentation
Slide 22: Tuzistra XR launch: formulary access
Commercial business | Tuzistra™ XR launch Formulary access Ashfield staff trained ahead of approval, active from 1st May 2015 • Ashfield Market Access trained ahead of approval to begin engaging payers 1st May • Targeting ~55 plans to gain Tier 3 unrestricted coverage of ~75-80% of commercial lives
Slide 23: Tuzistra XR launch: co-pay assistance
Commercial business | Tuzistra™ XR launch Co-pay assistance Patient co-pay assistance programmes already available… • Two plans up and running: • eVoucher (covers ~80% of pharmacies) • Co-Pay cards (distributed to physicians by field force) • Plan design: • Pay as little as $25 • Up to $50 co-pay as
Slide 24: Tuzistra XR launch: field sales team
Commercial business | Tuzistra™ XR launch Field sales team Launch meeting held for the field force in Orlando at the end of August 24 Sept. 2015 Analyst presentation
Slide 25: Tuzistra XR launch: field sales team
Commercial business | Tuzistra™ XR launch Field sales team Field force initially focused on pharmacy stocking, now making physician calls… • Accelerated recruitment process, using inVentiv: • Regional Business Managers (RBMs) recruited July 2015 • Sales representatives employed mid-August • All repr
Slide 26: Tuzistra XR launch: 2015-16 goals
Commercial business | Tuzistra™ XR launch 2015-16 goals Key goals for first season are to establish US commercial capability and lay the foundation for accelerated growth in future seasons • Supply: - Manufacture launch stocks (ü) and establish routine commercial supply (ONGOING) - Set-up 3PL and be
Slide 27: Conferences & Regional Advisory Boards
Commercial business | Tuzistra™ XR launch Conferences & Regional Advisory Boards Conference representation in Autumn Conferences: • Primary Care • Pri-Med East Boston 9/17- 09/20 • AFPPA New Orleans 9/23 – 09/26 • AFPPA Denver 9/29 – 10/3 • Pri-Med West Chicago 10/14 – 10/17 • OMED Orlando 10/18 – 1
Slide 28: Cough cold programmes: summary of status
Cough cold programmes | Summary of status • CCP-07 on track for 2016 submission • Stability batches manufactured Q2 2015 • Next milestones for other programmes: • CCP-08 – completion of stability batches (H2 2015) • CCP-05 & -06 – proof of concept (by end 2016) Marketing Peak Product Indication Pre-
Slide 29: Business update: NCE pipeline
Business update • NCE pipeline
Slide 30: NCE Pipeline: Summary
NCE Pipeline |Summary Late Pre- Marketing Peak Product Indication Phase II Phase III Marketed research clinical Phase I Rights Sales* Next value event CNS Programmes Acute Frovatriptan migraine >>>>>>>>>>>>>>> Menarini Endo Pharma $ Composition of matter expiry December 2015 V158866 Pain >>>>>>>>>>
Slide 31: Business update: Research
CVernalis Business update A Research OCO0OCG@
Slide 32: Research: Summary of collaborations
Research | Summary of collaborations Target Indication Partner Research Phase Next value event Undisclosed Oncology >>>>>> FTE funding, potential milestones and royalties Undisclosed Oncology >>>>>> Potential milestones and royalties LRRK2 Parkinson’s Disease >>>>>> FTE funding ,potential milestones
Slide 33: Financial results 18 months ended 30 June 2015
Financial results 12 months ended 30 June 2015
Slide 34: Financial highlights
12 months ended 30 June 2015 - Financial highlights 2015 2014 % Change £m £m Total revenues 13.7 12.7 +8% Research collaboration income 7.9 6.6 +20% Frovatriptan royalty 4.9 5.9 -17% Other Collaboration income 0.9 0.2 n/a Operating costs (21.7) (19.8) -10% Operating loss (8.2) (8.6) +4% Loss after t
Slide 35: Strong balance sheet
Strong balance sheet 30 June 30 June 2015 2014 % Change £m £m Total Assets 86.6 86.7 - *Cash 61.3 70.3 -13% Total Liabilities (9.5) (8.6) -10% Net Assets 77.1 78.0 -1% * Includes cash and cash equivalents as well as held-to-maturity financial assets 35 Sept 2015 Analyst Presentation
Slide 36: Key cash flow movements
12 months to 30 June 2015 - Key cash flow movements £m 70.0 £2.7 £4.3 60.0 £9.3 £0.8 £7.5 Underlying net cash burn £8.5m 50.0 Cash utilised in business £13.3m 40.0 £70.3 30.0 Reduction in reported cash £9.0m £61.3 20.0 10.0 0.0 Opening cash 1 Jul Cash utilised by Tax interest and fx Collaboration Tr
Slide 37: Impact of currency movements
Impact of currency movements for 12 months to 30 June 2015 Cash holding by currency 30 June 2015 • Majority of cash remains denominated in USD GBP 24% • £4.1million unrealised fx gain on retranslation of cash balances during the year to 30 June 2015 EUR 4% USD 72% • 8% movement in USD: Sterling fx r
Slide 38: Guidance for 12 months to 30 June 2016
Guidance for 12 months 30 June 2016 • Revenue • Frovatriptan royalties – 3 batches of API projected by Menarini but patent expiry will likely impact volume and pricing • Research collaboration income • Tuzistra™ XR sales from September (likely to be on a deferred revenue basis) • Operating costs • W
Slide 39: Newsflow
CVernalis Newsflow OCO0OCG@
Slide 40: Potential Newsflow: Cough Cold
Potential Newsflow | Cough Cold Event Timing CCP-07: Single and multi-dose PK study 2016 results and NDA submission CCP-08: Completion of submission batches 2015 CCP-08: Single and multi-dose PK study 2016 results and NDA submission CCP-05: Target POC 2016 CCP-06: Target POC 2016 40 Sept 2015 Analys
Slide 41: Potential Newsflow: NCE and Research
Potential Newsflow | NCE and Research Event Timing Frovatriptan: • Expiry of composition of matter patent End of 2015 Partnered: • Tosedostat: Potential partner newsflow Undisclosed • RPL554: Potential partner newsflow Undisclosed • Research: Potential milestones & new Undisclosed collaborations 41
Slide 42: Summary and outlook
Summary and outlook • Significant progress made across all three elements of our strategy • Financial performance remains strong • Cough cold pipeline maturing well • On-time approval and launch of Tuzistra™ XR • Proof-of-concept delivered on CCP-07 & CCP-08 • Two further active cough cold programme
Slide 43: Q&A
SGVO0000 CVernalis Q&A
Slide 44: Appendices
CVernalis Appendices OCO0OCG@
Slide 45: Achievements for 18 months to 30 June 2015 - Commercial
Achievements for 18 months to 30 June 2015 - Commercial Event Achieved • Tuzistra™ XR: Filing June 2014 • Tuzistra™ XR: Acceptance September 2014 • Tuzistra™ XR: Approval April 2015 • Recruitment and deployment of sales force August/ September 2015 • Launch of Tuzistra™ XR September 2015 • POC for C
Slide 46: Achievements for 18 months to 30 June 2015 - NCE
Achievements for 18 months to 30 June 2015 - NCE Event Achieved • V81444: Phase Ib/II study results April 2014 • V81444: Partnering February 2015 • Servier 1 (S55746): Start of Phase I June 2014 • V158866: Phase II study results August 2015 • V2006: Partnering with RedoxTherapies October 2014 • Tose
Slide 47: Achievements for 18 months to 30 June 2015 - Research
Achievements for 18 months to 30 June 2015 - Research Event Achieved • AKP Milestone March 2014 • Queens Award April 2014 • Two Servier Milestones August 2014 • AKP Milestone March 2015 • Taisho collaboration April 2015 47 Sept 2015 Analyst Presentation
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Vernalis — 18 months ended 30 June 2015 Earnings Presentation on 6ix