Verona Pharma Announces $650 Million Strategic Financing with Oaktree and OMERS
Verona Pharma secured $650 million in strategic financing from Oaktree and OMERS to support the US commercial launch of ensifentrine and expand clinical activities. The non-dilutive funding extends the cash runway beyond 2026, providing financial flexibility for growth.
Access to up to $650 million provides financial flexibility for Verona Pharma to support the US launch of ensifentrine and continued growth.
The strategic financing agreements with Oaktree and OMERS offer non-dilutive capital, alleviating potential shareholder dilution.
Ensifentrine, under FDA review, could be the first novel inhaled mechanism for COPD maintenance treatment in over 20 years, presenting a significant market opportunity.
The debt facility and revenue interest purchase agreement support Verona Pharma's financial needs, ensuring access to capital for strategic initiatives.
The total funding amount of $650 million may impose financial obligations on Verona Pharma for future ensifentrine-related revenues, impacting the company's cash flows.
The revenue interest financing rate of 5% to 6.5% and the cap of 1.75x of the amount funded could lead to higher repayments to Oaktree and OMERS, affecting profitability.
Non-dilutive funding will support planned US commercial launch and expansion of ensifentrine’s clinical activities
Cash runway extended beyond 2026
LONDON and RALEIGH, N.C., May 09, 2024 (GLOBE NEWSWIRE) -- Verona Pharma plc (Nasdaq: VRNA) (“Verona Pharma”), announces it and its wholly-owned subsidiary, Verona Pharma, Inc. (“VPI” and together with Verona Pharma, the “Company”), have entered into strategic financing agreements providing access to up to
The agreements provide non-dilutive capital and additional financial flexibility ahead of Verona Pharma’s planned US launch of ensifentrine and will support the Company’s continued growth. Ensifentrine is currently under review by the US Food and Drug Administration (“FDA”), and, if approved, is expected to be the first novel inhaled mechanism for the maintenance treatment of chronic obstructive pulmonary disease in more than 20 years.
The strategic financing was led by Oaktree and is comprised of the following:
- Debt facility: Up to
$400 million in term loans available in five separate tranches via a term loan facility (“debt facility”). - Revenue interest purchase and sale agreement (“RIPSA”): Up to
$250 million in funding from the sale of a redeemable interest in future ensifentrine-related revenue, which is capped at 1.75x of the amount funded.
The debt facility replaces the existing facility of up to
Under the terms of the debt facility, VPI is drawing
Under the terms of the RIPSA, VPI will receive
“As we finalize preparations for the potential US approval and commercial launch of ensifentrine, we are pleased to be working with Oaktree and OMERS who are aligned with our view of ensifentrine’s importance to the COPD community and its commercial opportunity. This strategic agreement, with access to up to
“We believe ensifentrine’s impressive clinical data generated to date and unique mechanism of action position it well to become a paradigm-shifting advancement in the maintenance treatment of COPD, a condition with continued unmet need,” said Aman Kumar, Co-Portfolio Manager for Oaktree’s Life Sciences Lending platform. “This strategic investment in Verona Pharma underscores Oaktree’s commitment to provide flexible capital solutions to innovative life sciences companies that are working on bringing important therapies to patients and providers worldwide.”
Morgan Stanley & Co. LLC acted as sole structuring agent on the transaction. Latham & Watkins LLP served as legal counsel to Verona Pharma. Sullivan & Cromwell LLP served as legal counsel to Oaktree.
For further information please contact:
| Verona Pharma plc | US Tel: +1-833-417-0262 UK Tel: +44 (0)203 283 4200 |
| Victoria Stewart, Senior Director of Investor Relations and Communications | IR@veronapharma.com |
| Argot Partners US Investor Enquiries | Tel: +1-212-600-1902 verona@argotpartners.com |
| Ten Bridge Communications International / US Media Enquiries | Tel: +1-312-523-5016 tbcverona@tenbridgecommunications.com |
| Leslie Humbel |
About Verona Pharma
Verona Pharma is a biopharmaceutical company focused on developing and commercializing innovative therapies for the treatment of chronic respiratory diseases with significant unmet medical needs. In the third quarter of 2023, the US Food and Drug Administration accepted for review the Company’s NDA for ensifentrine for the maintenance treatment of patients with COPD and assigned a PDUFA target action date of June 26, 2024. If approved, ensifentrine has the potential to become the first inhaled non-steroidal therapy for the treatment of respiratory diseases that combines bronchodilator and anti-inflammatory activities in one molecule. The Company has evaluated 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 both ENHANCE-1 and ENHANCE-2 trials demonstrating statistically significant and clinically meaningful improvements in lung function. In addition, ensifentrine substantially reduced the rate and risk of COPD exacerbations in pooled analysis from ENHANCE-1 and ENHANCE-2. Two additional formulations of ensifentrine have been evaluated in Phase 2 trials for the treatment of COPD: dry powder inhaler (“DPI”) and pressurized metered-dose inhaler (“pMDI”); and a fixed-dose combination formulation with ensifentrine and glycopyrrolate, a LAMA, is currently under development, also for the treatment of COPD. Ensifentrine also has potential applications in cystic fibrosis, non-cystic fibrosis bronchiectasis, asthma and other respiratory diseases. For more information, please visit www.veronapharma.com.
About Oaktree
Oaktree is a leader among global investment managers specializing in alternative investments, with
About OMERS Life Sciences and OMERS
OMERS Life Sciences provides royalty financings and other non-dilutive solutions to biopharma companies and academic institutions, supporting their efforts to address unmet medical needs and improve the quality of life of patients around the world.
OMERS is a jointly sponsored, defined benefit pension plan, with 1,000 participating employers ranging from large cities to local agencies, and over 600,000 active, deferred and retired members. Our members include union and non-union employees of municipalities, school boards, local boards, transit systems, electrical utilities, emergency services and children’s aid societies across Ontario. OMERS teams work in Toronto, London, New York, Amsterdam, Luxembourg, Singapore, Sydney and other major cities across North America and Europe – serving members and employers, and originating and managing a diversified portfolio of high-quality investments in bonds, public and private credit, public and private equity, infrastructure and real estate.
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 debt facility providing non-dilutive capital and further financial flexibility to support Verona Pharma’s continued growth, including the planned commercial launch of ensifentrine, statements regarding the future availability of future draws under the debt facility, the timing of repayment and termination of the existing facility, the ability of Verona Pharma to reach certain net sales milestones, the potential for ensifentrine to be the first therapy for the treatment of respiratory diseases to combine bronchodilator and non-steroidal anti-inflammatory benefits in one compound, the potential for ensifentrine to be the first novel inhaled mechanism for the maintenance treatment of chronic obstructive pulmonary disease in more than 20 years and the potential of ensifentrine in the treatment of cystic fibrosis, non-cystic fibrosis bronchiectasis, asthma and other respiratory diseases, as well as the potential of the DPI and pMDI formulations 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, 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; 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, 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, 2023, as updated in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 and our other reports filed with the SEC, 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.
FAQ
What is the purpose of Verona Pharma's $650 million strategic financing with Oaktree and OMERS?
What is the expected impact of ensifentrine on the COPD treatment landscape?
How will Verona Pharma benefit from the debt facility and revenue interest purchase agreement?
Who led the strategic financing for Verona Pharma?
