Many AIM-listed biotech stocks find themselves struggling from one funding round to the next. So it’s good to see that Verona Pharma (AIM: VRP) raised £70 million earlier this year in conjunction with a NASDAQ listing. This gives it a cash runway through to 2021, by which time we should have a lot more data on its lead drug RPL554.
RPL554 is focused on lung-related disease, in particular COPD (chronic obstructive pulmonary disease), which is an umbrella term for conditions like chronic bronchitis and emphysema. Sufferers often need maintenance therapies in order to live their lives, while acute exacerbations can require hospitalisation and might prove fatal. There were 3.2 million deaths in 2015 and an estimated 174 million COPD sufferers around the globe.
Phase II trials
That funding is allowing Verona to proceed with four clinical trials. The first to read out is a study looking at RPL554 used in conjunction with an established drug called Spiriva which dilates the airways. We should have news of this trial in the fourth quarter where it’s hoped adding-on RPL554 to Spiriva will generate a more significant and longer-lasting response in patients.
The largest study is a phase II trial in 400 patients to determine the dosing and efficacy of RPL554 for the maintenance treatment of COPD. This is expected to report in the second half of 2018. The company is looking to understand its use in hospital situations and as a maintenance drug to prevent patients being readmitted to hospital. This information will inform the indications that Verona will target and the design of pivotal phase III trials. There’s also study underway in cystic fibrosis patients looking at dosage and the effect of RPL554 on their lung function.
The NASDAQ float brought in some new specialist biotech investors and also broadened the number of broking firms following the stock. However as is the case in these stories, people will need to be patient and have a stomach for risk. Broker N+1 has a value of 334p on the shares assuming RPL554 enters the market in 2023-24 for cystic fibrosis and COPD.