• Net Sales of Ohtuvayre (Q4 2024): $36.6 million
• Net Sales of Ohtuvayre (Full Year 2024): $42.3 million
• Cost of Ohtuvayre Sales (Q4 2024): $2 million
• Cost of Ohtuvayre Sales (Full Year 2024): $2.6 million
• Research and Development Costs (Q4 2024): $7.9 million
• Research and Development Costs (Full Year 2024): $44.6 million
• Selling, General and Administrative Expenses (Q4 2024): $45.1 million
• Selling, General and Administrative Expenses (Full Year 2024): $149.8 million
• Net Loss After Tax (Q4 2024): $33.8 million
• Net Loss After Tax (Full Year 2024): $173.4 million
• Cash and Equivalents (End of 2024): $400 million

• Warning! GuruFocus has detected 7 Warning Signs with VRNA.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Verona Pharma PLC (NASDAQ:VRNA) successfully launched Ohtuvayre, the first inhaled therapy with a novel mechanism for COPD in over 20 years, achieving $36.6 million in sales in Q4 2024.
• The company reported strong initial momentum for Ohtuvayre with more prescriptions dispensed in the first two months of Q1 2025 than in Q4 2024.
• Over 4,600 unique healthcare providers (HCPs) have prescribed Ohtuvayre, with 55% of Tier 1 HCPs prescribing it, indicating strong market penetration.
• Verona Pharma PLC (NASDAQ:VRNA) has a robust pipeline with two Phase 2 clinical programs advancing, including a fixed dose combination trial for COPD.
• The company maintains a strong balance sheet with $400 million in cash and equivalents, providing financial stability for future growth initiatives.

Negative Points

• Verona Pharma PLC (NASDAQ:VRNA) reported a net loss of $33.8 million for Q4 2024, reflecting increased expenses related to the launch of Ohtuvayre.
• Research and development costs increased significantly to $44.6 million for 2024, driven by clinical trial and development expenses.
• Selling, general, and administrative expenses rose to $149.8 million for 2024, primarily due to marketing and commercial activities for Ohtuvayre.
• The company faces potential headwinds from insurance resets and deductibles in Q1, which could impact sales and prescription fills.
• Despite the successful launch, Verona Pharma PLC (NASDAQ:VRNA) has not yet reached cash flow break-even, with expectations to achieve this at a $250-$300 million annual sales rate.

Q & A Highlights

Q: Can you help us understand the impact of insurance resets and deductibles on Q1 sales and whether it affects gross net or filled prescriptions? A: Mark Hahn, Chief Financial Officer: The main impact would be on commercial co-pay assistance due to high deductibles, but since commercial patients are a small portion, it won't significantly affect gross to net in Q1. Christopher Martin, Chief Commercial Officer: The momentum of the launch should outweigh any deductible resets, and we expect increasing new patients and refills despite these resets.

Q: How do you feel about the 2025 consensus of $254 million, and is it possible to break even this year? A: Mark Hahn, Chief Financial Officer: We could reach cash flow break-even at a quarterly run rate closer to $300 million annually. David Zaccardelli, CEO: While we don't comment directly on consensus, the trajectory is increasing, and we're confident in the uptake of Ohtuvayre.

Q: What are some potential headwinds for Ohtuvayre, and what is the market opportunity in Europe? A: David Zaccardelli, CEO: We don't see specific headwinds from competition or market dynamics. The unmet need in COPD is significant. In Europe, we're advancing regulatory processes but not starting operations. Our strategy involves partnering, and we'll gain clarity on this in 2025.

Q: How should we think about the average duration of therapy for Ohtuvayre, and is there upside to the six-month average duration assumption? A: David Zaccardelli, CEO: We use six refills per year as a benchmark, but early refill data suggests potential upside. It's early to characterize fully, but we're encouraged by the persistency and refill data.

Q: Are there any common themes among the 45% of HCPs not prescribing Ohtuvayre, and how significant is the nebulizer in peak sales? A: Christopher Martin, Chief Commercial Officer: The non-prescribers are typical late adopters. Market research shows all doctors see Ohtuvayre's benefits. The nebulizer is not a barrier; innovation trumps route of administration, and patients find it comforting.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.