Biotech Giant Verona Pharma announces IPO Terms in time for Trials
A few days after therapeutic magnate Tocagen announced its IPO, peer Verona Pharmaceuticals ‘Verona Pharma’ (NASDAQ: VRNA) has launched a similar plan. Tocagen’s announcement indicated that the clinical-trial level pharmaceutical intended to use its funding to advance research into its principal product. It seems that Verona may be doing the same.
Verona Pharma is a UK-based firm that was founded in 2005. The company trades in the London AIM under the handle VRP. Verona Pharma mainly deals in the development and hopeful manufacture of inhalants to fight respiratory diseases. Among the breathing disorders that the biopharmaceutical firm is conducting clinical trials on are cystic fibrosis (CF) and Chronic Obstructive Pulmonary Disease (COPD). The trials are funded by shareholder capital, with shareholders including Aviva, Novo, and OrbiMed.
According to CEO of Verona Pharma Dr. Sven Jan-Anders Karlsson, CF is a fairly common disease in the world. Additionally, almost half of CF cases being diagnosed worldwide are in the United States, with a close second being in the United Kingdom. The company already operates in Britain, and serving in the US seemed like the next logical step for Verona.
The company had a private filing in the US late last year but did not announce its debut issuance conditions until its trials were FDA-approved on Tuesday. Verona Pharma made its official filing with the SEC following the trial approval. According to Verona, a US IPO should be worth around $86 million. The company did not disclose its other terms of the issuance. However, the firm did confirm that it had offered up American Depositary Shares for US investors, as well as private placement shares for Europeans interested in the IPO.
Verona Pharma will use most of the proceeds from the IPO to kick off its clinical trials in the US. The trials will involve the use of the company’s chief product RPL554 on twelve US volunteers. The RPL554 is the compound the biopharmaceutical firm intends for use against CF and COPD. RPL554 has already been tested out in clinical trials in the UK. In Phase 2a of the UK trials, the drug was administered and had positive results in the trials’ volunteers. The drug enabled the subject to breathe and reduced their levels of inflammation. These two symptoms are common problems associated with CF and COPD.
The promising results of the RPL554 will likely create a favorable response to Verona Pharma’s IPO in the US. The country has the highest percentage of the CF-affected population in the world, and US investors will want to capitalize on the firm’s product success and recent FDA approval. In the AIM alone, Verona Pharma’s shares shot up by 4.4% after the FDA gave its approval for the trial. Stock prices are expected to be even more valuable in the US. Verona Pharma can then step into production of the drug if the trials prove successful. With the help of the IPO proceeds of course.
Launching its IPO might take Verona Pharma from a clinical-trial-only company like Tocagen to a pharmaceutical production company.