Vernalis raises £40m in placing

Specialty pharmaceutical company Vernalis announced a £40m placing on Tuesday, through the issue of 80 million new ordinary shares at a price of 50p apiece.

The AIM-traded firm said the placing shares have been conditionally placed by the joint bookrunners with institutional investors and certain directors.

Its board confirmed the placing price was set as equivalent to the closing middle market price of an ordinary share on 25 April.

The net proceeds of the placing, together with the company’s existing cash reserves, are intended to provide sufficient working capital to cover a conservative risk-adjusted roll-out plan for Tuzistra XR - a forthcoming relaunch of Moxatag - and the future launches of the remaining four US cough cold programmes under development with Tris, whilst enabling increased promotional activity.

Vernalis’s board said the placing is on a non pre-emptive basis and is conditional on the passing of certain resolutions at a general meeting, set down for 12 May.

"We continue our transition to a sustainably profitable specialty pharmaceutical company,” said Vernalis CEO Ian Garland.

“We have made significant investment in launching Tuzistra XR, our first extended release cough cold product, and we look forward to leveraging our focused primary care sales force with the forthcoming re-launch of Moxatag later this year.”

Garland said the company’s cough cold pipeline was maturing to plan with CCP-07 and CCP-08 on track to file new drug applications this year and two further cough cold programmes in active development, targeted to achieve proof-of-concept before the end of 2016.

Our cough cold pipeline is maturing to plan with CCP-07 and CCP-08 on track to file new drug applications (NDAs) this year and two further cough cold programmes in active development, targeted to achieve proof-of-concept before the end of 2016.

"We are emerging from the first cough cold season of selling Tuzistra XR with the product gaining commercial traction steadily, despite a mild US cough cold season,” Garland explained.

“With launch data now in hand, we expect the net proceeds of the placing together with our existing cash resources will provide sufficient working capital to support the planned roll-out of the other products in this franchise.”