Verona files for $86M IPO to fund COPD, cystic fibrosis trials

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Verona wants the IPO money to trial PDE3/PDE4 inhibitor RPL554.

Verona Pharma has filed to raise up to $86 million (€81 million) through a Nasdaq IPO. The British respiratory disease specialist is seeking the money to bankroll midphase clinical trials of RPL554 in patients with chronic obstructive pulmonary disease (COPD) or cystic fibrosis.

Cardiff, U.K.-based Verona has yet to set the terms for the IPO, but has detailed how it plans to use the anticipated boost to its finances. The purpose of the listing is to secure the cash Verona needs to put PDE3/PDE4 inhibitor RPL554 through a clutch of trials to support its use as a maintenance treatment for COPD, including two phase 2b trials. Verona has also earmarked cash for testing the drug as a treatment for acute COPD exacerbations in phase 2. And to run phase 2a and 2b trials in cystic fibrosis.

Verona plans to start the first of the phase 2b COPD maintenance trials in the second half of the year, putting it on a track it expects to lead to top line-data in the first half of 2018. That trial will assess the effect of RPL554 compared to placebo in 400 COPD patients over four weeks. A second, 12-week phase 2b trial testing RPL554 as an add-on therapy to a long-acting bronchodilator is due to start in the second half of next year. Smaller phase 2a trials are also either already underway or in the offing.

In parallel to these activities, Verona will work to prepare RPL554 for assessments of its efficacy as a treatment for acute exacerbations of COPD and in patients with cystic fibrosis. The 150-person COPD study is scheduled to begin in the second half of 2018. By then, Verona should have wrapped up its active trial of the pharmacodynamics of RPL554 in cystic fibrosis patients and potentially have got a phase 2b proof-of-concept study underway.

Each trial will use a nebulized formulation of RPL554. Verona developed the nebulized formulation to overcome stability issues that marred the commercial viability of an earlier version of the drug, which was co-invented by the late Sir David Jack, who headed up R&D at Glaxo for close to 10 years. Interest in the drug stems, in part, from evidence it triggers bronchodilation and anti-inflammatory effects without side effects typically associated with PDE4 inhibitors, such as nausea and vomiting.

Early data backing up the hypothesis helped London-listed Verona broaden its investor base in June, when Vivo Capital, OrbiMed, Edmond de Rothschild Investment Partners, New Enterprise Associates, Novo A/S and Abingworth came on board to help it to raise £44.7 million. The terms of the financing tasked Verona with making “commercially reasonable efforts” to IPO on Nasdaq.

By filing its F-1, Verona has taken a big step toward fulfilling that commitment. But whether it ultimately lists—or like Braeburn Pharmaceuticals and Visterra swings and misses—will depend on its ability to persuade investors to bet on a single-asset pipeline.

Verona has secured commitments from its chairman and an existing shareholder to buy shares of an-as-yet-undisclosed value in a private placement separate from the IPO. But, as it stands, the company lacks the sort of insider support that has helped other companies pull off IPOs in the face of a reticent Wall Street. When Verona first revealed its Nasdaq IPO plans in June, CEO Jan-Anders Karlsson said there was a “good chance” existing backers would underwrite a “substantial part” of the planned offering.