Vernalis to re-acquire EU frovatriptan royalties; Isogenica gains rights to commercialize drugs with MRSA potential

UK biotechnology firm Vernalis has announced the placing of £30 million ($46.3 million) in new shares to fund the reacquisition of European Union royalties on its antimigraine drug frovatriptan (trade name Frova) from Paul Capital, and to progress its development pipeline. This placing and transaction substantially strengthen Vernalis' cash position, ahead of IN STEP trial data in March, enabling the company to become debt free and to extend its cash runway beyond 2012, commented analysts at Edison Investment Research.

Vernalis will pay Paul Capital $32.57 million in cash and grant 2.1 million warrants in exchange for full economic rights to EU frovatriptan royalties from January 1, 2010. Following closure of the Paul Capital deal, Vernalis will be entitled to the entire royalty received from Italy's Menarini on EU frovatriptan sales from January 1 onwards. As Vernalis is also the supplier of the active pharmaceutical ingredient to Menarini, frovatriptan will become a 90% margin product for the UK company, up to its patent expiry in December 2015. Vernalis calculates that the product will generate an attractive 20% IRR over that period, based on undisclosed albeit conservative growth assumptions.

Results of indantadol program due in first half 2010