Vernalis Plc Vernalis ANNUAL REPORT and ACCOUNTS 2015/16

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Vernalis Plc Vernalis ANNUAL REPORT and ACCOUNTS 2015/16 Vernalis plc Vernalis ANNUAL REPORT AND ACCOUNTS 2015/16 Vernalis plc ANNUAL REPORT AND ACCOUNTS 2015/16 Vernalis plc Annual report and accounts 2015/16 Overview Who we are Vernalis is a commercial stage Our business model balances risk pharmaceutical company with and innovation, with the aim of three marketed products; Tuzistra® XR creating value through a focused in the US prescription cough cold and disciplined three-tier strategy: market, Moxatag® the only once- daily amoxicillin approved in the Building a profitable and cash- US for tonsillitis and pharyngitis, and generative business by developing and commercialising low development-risk, frovatriptan an acute treatment for late-stage differentiated pharmaceutical migraine. The Company also has products for unmet medical needs. four further prescription cough cold Partnering our NCE drug candidates, products under development with earning milestones and royalties as Tris and a broad pipeline of NCE partners progress them to the market. development programmes and Leveraging our fragment- and structure- based drug discovery expertise and proven research collaborations. record of success to enter into revenue generating collaborations with larger pharmaceutical companies with potential to receive milestone payments and royalties. Overview Directors’ report Financial statements 01 2015/16 at a glance 26 Board of directors 49 Independent auditors’ report 02 Chairman’s and Chief Executive 28 Directors’ report 51 Consolidated income statement Officer’s statement 51 Consolidated statement of Corporate governance comprehensive income Strategic report 32 Corporate governance 52 Balance sheets 04 Our strategy and business model 37 Remuneration report 53 Statements of changes in equity 06 Business review 48 Statement of directors’ responsibilities 54 Cash flow statements 18 Financial review 55 Notes to the financial statements 22 Principal risks and uncertainties Additional information 91 Shareholder information 92 Glossary of abbreviations/definitions ibc Addresses and advisers Vernalis plc Annual report and accounts 2015/16 Annual report and accounts 2015/16 Vernalis plc Vernalis plc Annual report and accounts 2015/16 Annual report and accounts 2015/16 Vernalis plc Vernalis plc Annual report and accounts 2015/16 Annual report and accounts 2015/16 Vernalis plc Overview Corporate governance Overview Corporate governance Overview Corporate governance Overview Corporate governance Overview Corporate governance Overview Corporate governance 08 Strategic report Financial statements Strategic report Financial statements 09 10 Strategic report Financial statements Strategic report Financial statements 11 12 Strategic report Financial statements Strategic report Financial statements 13 Directors’ report Additional information Directors’ report Additional information Directors’ report Additional information Directors’ report Additional information Directors’ report Additional information Directors’ report Additional information Business review Business review Business review COMMERCIAL PIPELINE COMMERCIAL PIPELINE COMMERCIAL PIPELINE CONTINUED 2015/16 TUZISTRA® XR LAUNCH GOALS CONTINUED CONTINUED Recognising that our evolution to a full their prescription fi lled. These programmes commercial stage company would are working well and we continue to trigger signifi cant operational changes monitor the level of benefi t provided to THE FACE THE FACE THE FACE THE FACE to what had been a development stage ensure Tuzistra® XR remains affordable. company, we set ourselves realistic goals Supply • Routine supply from Tris ® OF VERNALIS OF VERNALIS OF VERNALIS OF VERNALIS for Tuzistra XR’s fi rst year on the market. The fi nal area of focus for 2015/16 was • Routine 3PL operations ® These include goals across: supply chain; to establish our fi eld sales force and to Sandy Sommer* Jillian Armenti* Dr Louis J Citarelli, MD* Tuzistra XR patient* trade distribution; patient access and begin building awareness of Tuzistra® President and Chief Operating Professional Sales Physician/Internal Medicine, Mary, NJ affordability; and sales force effectiveness. XR with high cough cold prescribing Trade • Wholesaler contracts physicians. Our expectations for our Offi cer, VTI Representative, Orange, NJ Nutley, NJ distribution • In supply chain, the 2015/16 focus was fi rst year were very modest, recognising National distribution to establish routine supply from Tris and that the sales representatives were new • Pharmacy stocking Ongoing warehousing and distribution at our 3PL and did not have existing familiarity partner. Both of these were completed or relationships with our target in early summer 2015 and have been physicians. In addition, Tuzistra® XR is • Tier 3 non-restricted coverage Ongoing fully operational for the whole of the a new brand with which neither the Patient year. Our fi rst year commercial goals sales representatives nor physicians access • Patient access coupon for trade distribution were to establish are familiar. Performance in the fi rst 12 national wholesale distribution and months since launch was modest with widespread pharmacy stocking. Although approximately 12,000 prescriptions fi lled. we achieved our wholesale distribution SUPPORTED BY PHYSICIAN MARKET goals with 15 customers holding Our goals for the approaching cough Brand • Establish fi eld force RESEARCH FROM CODEINE AND our inventory in over 70 distribution cold season are to secure wider formulary awareness • Field force effectiveness Ongoing centres, achieving pharmacy stocking coverage and pharmacy distribution HYDROCODONE PRESCRIBERS and usage • Build brand awareness Ongoing has been much slower than we had and to build sales force effectiveness INDICATING SIGNIFICANT hoped. This has limited early Tuzistra® XR within our target physician audience • Grow prescriptions Ongoing POTENTIAL USAGE AND MARKET prescriptions because physicians are less whilst maintaining patient affordability. SHARE likely to prescribe until stocking is more We will monitor performance against widespread. We estimate that ~25 per these goals which, if achieved, will cent of prescriptions written by physicians position us favourably for accelerated are abandoned by patients, some of growth in prescription volume in the TUZISTRA® XR US PRESCRIPTION COUGH COLD MARKET which is due to lack of pharmacy stocking. 2016/17 cough cold season. MAT June 2016 ONE DOSE A DAY MAT June MAT June MAT June MAT June MAT June • Our fi rst year patient access and Moxatag® 2011 TRx m 2012 TRx m 2013 TRx m 2014 TRx m 2015 TRx m TRx m % vs 2011 % • INDICATED FOR THE TREATMENT affordability goals focused on establishing The US rights to Moxatag®, a once-daily Narcotics 19.1 17.0 19.0 16.3 16.1 14.1 42 (26) OF TONSILLITIS AND/OR formulary coverage under commercial formulation of amoxicillin, were acquired Codeine 13.3 11.7 13.2 11.4 12.4 11.1 33 (16) PHARYNGITIS SECONDARY TO healthcare insurance plans and in October 2015, to expand our primary +Antihistamines 5.6 4.9 5.3 4.6 4.7 4.3 13 (22) STREPTOCOCCUS PYOGENES providing patients with co-pay assistance care product portfolio and leverage +Expectorants 6.8 6.0 7.1 6.2 7. 2 6.4 19 (5) FOR ADULTS AND PAEDIATRIC programmes to make their out-of-pocket our US commercial infrastructure. +Others 0.9 0.8 0.8 0.6 0.5 0.4 1 (59) • costs affordable. We anticipate that it will PATIENTS (12 YEARS OF AGE take 24 months to achieve our formulary Following the acquisition, we successfully Hydrocodone 5.8 5.3 5.8 4.9 3.7 3.0 9 (48) OR OLDER) coverage goals of unrestricted tier-3 re-established product supply from +Antihistamines 2.7 2.5 2.7 2.3 1.7 1.4 4 (49) coverage on formularies covering 75 per its FDA approved manufacturing +Anticholinergics 2.9 2.5 2.8 2.5 1.9 1.6 5 (44) +Others 0.2 0.3 0.3 0.1 0.1 0.0 0 (96) cent of commercial lives. We made good partner, Suir, in March 2016. ® ® progress in 2015/16 with ~60 per cent of “ As the President and COO of Vernalis Therapeutics, Inc., I am in the privileged “ I am a Sales Representative for VTI and work within the Northeast region in “ I recommend Tuzistra XR to my patients when they are suffering with cough “ I was prescribed Tuzistra XR about a month ago. Before that I had tried various Non-narcotics 16.2 12.4 15.2 15.2 18.6 19.4 58 20 ® commercial lives covered with unrestricted In May 2016, Suir entered liquidation and position of leading the US organisation through an exciting period of growth. the Orange, New Jersey territory. I speak to Healthcare Practitioners (HCPs) and cold symptoms because one dose every 12 hours provides extended treatments but nothing stopped my cough. Tuzistra XR made me feel so much access. However, there are notable so activities are underway to establish Dextromethorphan 9.7 6.3 7.3 7.2 8.9 8.9 27 (8) We have a unique portfolio of cough and cold medications that offer patients about prescribing Tuzistra® XR to provide extended-relief to patients suffering cough relief. I have a good working relationship with Jillian Armenti, my local better and it allowed me to fi nally get on with my life without coughing.” gaps which, together with maintaining and qualify an alternative manufacturing +Antihistamines 2.6 2.7 3.5 3.4 4.2 4.4 13 68 a distinct dosing advantage over what is currently available today. With the from cough and symptoms of the common cold or upper respiratory allergies Vernalis Therapeutics representative, whom I fi nd knowledgeable about the coverage already achieved, will be site for ongoing supply of the product. Triple-combinations 7.1 3.6 3.8 3.8 4.7 4.5 13 (36) talented team we have in place, coupled with a rapidly expanding portfolio while ensuring pharmacies have the product on-shelf for patients to get Tuzistra® XR and helpful in addressing any access concerns.” priorities for 2016/17. During 2015/16 ® we have made available two parallel The product will be relaunched into the Benzonatate 5.7 5.9 7.8 7.9 9.4 10.3 31 81 of approved products, we are poised to become one of the leading cough on treatment right away.
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