LONDON ¿ Shares in Vernalis Group plc fell by 46 percent last week after it said financial prospects are ¿heavily dependent on a successful outcome¿ of the FDA¿s review of its lead product, frovatriptan. If either this approval, or the European launch, is delayed beyond early 2002, the company may need to make cuts until further funding is secured.
The shares dropped by 32 percent to #1.12 when the announcement was made Sept. 18, and in common with the rest of the market, fell further over the week, to close at 90 pence on Friday.
Frovatriptan, for the treatment of migraine, was granted ¿approvable¿ status by the FDA in May 2000. It is licensed to Elan Corp. plc, of Dublin, Ireland, and FDA approval would trigger an immediate milestone payment to Vernalis of US$15 million. However, as part of the deal, Elan made a $10 million loan to Vernalis, which is payable upon the earlier of approval or Dec. 31, 2002.
Three further milestone payments totaling $30 million would be due upon reaching agreed sales levels for frovatriptan in North America, expected to be within three years of the launch.
Vernalis has experienced delays regarding the labeling for frovatriptan in Europe, but is preparing to launch it in the first half of 2002.
As of June 30, Vernalis, based in Wokingham, Berkshire, had #14.89 million (US$21.9 million) cash, sufficient for just over six months operations. The company, a specialist in central nervous system diseases, has a partnership with Eli Lilly and Co. for VML 670 for the treatment of sexual dysfunction experienced by patients taking selective serotonin reuptake inhibitors for the treatment of depression. Phase I studies are under way, with patient trials expected to commence early next year.
There is a further agreement with Hoffmann-La Roche for 5-HT2c receptors in the treatment of obesity. In June, Vernalis announced the selection of a clinical candidate, which Roche is fast tracking with the intention of starting Phase I trials early in 2002.