Verona Secures Up To $650M in Funding as it Gears Up for Potential COPD Approval and Launch

inhaler

Pictured: Hand holding an inhaler/iStock, Stephane Bureau du Colombier

Verona Pharma on Thursday announced that it had secured up to $650 million in a strategic financing agreement with Oaktree Capital Management and OMERS Life Sciences.

The funds will come as a $400 million debt facility available in five separate tranches, plus up to $250 million from the sale of a redeemable interest in future revenue associated with Verona’s investigational chronic obstructive pulmonary disease (COPD) therapy ensifentrine. This latter revenue interest purchase and sale agreement (RIPSA) is capped at 1.75 times the amount funded.

Varona CEO David Zaccardelli in a statement said that the financing deal “allows us to further strengthen our cash position and improve our financial flexibility,” in anticipation of the U.S. approval and subsequent commercial launch of ensifentrine.

“These funds, together with our existing cash of $255 million, are expected to support the Company through commercialization and growth beyond 2026,” Zaccardelli said.

Under the debt facility portion of Thursday’s deal, Verona will be able to draw $55 million upon closing the transaction and another $70 million if the FDA approves ensifentrine. The biotech is also eligible for $175 million, in two separate tranches, once it hits specific net sales milestones. The lenders can also approve an additional $100 million tranche to support certain “strategic initiatives.”

Meanwhile, the RIPSA will give Verona $100 million upon the FDA’s approval of ensifentrine, plus the right to draw $150 million more contingent on sales milestones.

Thursday’s funding agreement comes ahead of the FDA’s June 26 target action date for ensifentrine, an investigational inhaled dual inhibitor of the phosphodiesterase 3 and 4 enzymes. The candidate, would introduce a new mechanism of action for COPD treatment, combines bronchodilator and non-steroidal anti-inflammatory properties in one compound, according to the biotech’s website.

Ensifentrine is currently being reviewed by the FDA, backed by data from the Phase III ENHANCE trials, which showed that the drug candidate could significantly improve lung function, quality of life and symptom burden in COPD patients. Verona’s data also demonstrated a 36% drop in the rate and risk of COPD exacerbations over 24 weeks.

Thursday’s contract replaces an existing January 2024 $400 million debt facility managed by Oxford Finance and Hercules Capital.

Tristan Manalac is an independent science writer based in Metro Manila, Philippines. Reach out to him on LinkedIn or email him at tristan@tristanmanalac.com or tristan.manalac@biospace.com.

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