Verona Pharma plc

Welcome to Verona Pharma's fourth quarter and full year quarter 2023 financial results and operating highlights conference call. At this time, all participants are in a listen-only mode. Earlier this morning, Verona Pharma issued a press release announcing its financial results for the three months and full year ended December 31, 2023. A copy can be found in the Investor Relations tab on the corporate website. www.veronapharma.com. Before we begin, I'd like to remind you that during today's call, statements about the company's future expectations, plans, and prospects are forward-looking statements. These forward-looking statements are based on management's current expectations. These statements are neither promises nor guarantees and involve known and unknown risks, uncertainties, and other important factors. that may cause our actual results, performance, or achievements to be materially different from our expectations expressed or implied by the forward-looking statements. Any such forward-looking statements represent management's estimates as of the date of this conference call. While the company may elect to update such forward-looking statements at some point in the future, it disclaims any obligation to do so, even if subsequent events cause its views to change. As a reminder, this call is being recorded and will remain available for 90 days. I'd now like to turn the call over to Dr. David Zacardelli, Chief Executive Officer. Please go ahead.

Thank you and welcome everyone to today's call. With me today are Mark Hahn, our Chief Financial Officer, Dr. Kathy Rickard, our Chief Medical Officer, Chris Martin, our Chief Commercial Officer, and Dr. Tara Rowe, our Chief Development Officer. 2023 was a pivotal year for Verona Pharma, and importantly, for millions of patients suffering from COPD. Following a very positive data from our phase three enhanced program, we submitted a new drug application to the FDA seeking U.S. approval of ncfentrin for the maintenance treatment of patients with COPD. As you know, the FDA accepted our NDA for review, and assigned a PDUFA target action date of June 26, 2024, and indicated they are not planning to hold an advisory committee meeting to discuss the NDA. We continue to advance our preparations for the planned commercial launch of ncFentrin in the U.S. and look forward to continuing our work with the FDA during their review. If approved, ncFentrin is expected to be the first novel inhaled mechanism available for the treatment of COPD in over 20 years. We believe its dual mechanism providing bronchodilator and non-steroidal anti-inflammatory activity has the potential to change the treatment paradigm for COPD. Currently, more than 390 million patients suffer from COPD worldwide, and it is the third leading cause of death globally. Despite the availability of existing COPD treatments in the U.S., approximately 50% of patients experience persistent symptoms for more than 24 days per month. In addition, approximately 60% of patients who could be considered maximally treated on dual bronchodilators or triple therapy are dissatisfied. This highlights HCP's continued need for new and effective COPD therapies to provide relief to their patients. In October, we hosted an investor event where we presented a comprehensive update on our commercial launch preparation. We continue to make excellent progress on this front, including strengthening our commercial and sales team and continuing to finalize key tactics, including our distribution and patient service programs, our branded HCP and patient engagement plans, and our internal data infrastructure capabilities to allow quick and actionable insights during launch. We have also continued the rollout of our disease awareness campaign, Unspoken COPD, which launched at the CHEST meeting. The campaign is actively highlighting the severe impact of COPD on patients' lives and encourages HCPs to engage patients in a better dialogue to help optimize their care. Overall, we believe we are in a strong position to successfully launch NC-Fentron pending approval in June. This confidence is based on the novel profile of NC-Fentron, the significant unmet need in COPD, our commercial preparation, and the deep experience and capabilities of the Verona team. In addition to the planned US launch of NC-Fentron, we've progressed development of two new phase two programs. First, we are developing a fixed dose combination formulation with ncfentrin and glycopyrrolate, ALAMA, for the maintenance treatment of COPD delivered via nebulizer. Fixed dose combination therapies are commonly used in the treatment of COPD, historically in DPI and PMDI formulations. Based on market research, an unmet need exists for a nebulized fixed-dose combination therapy. We believe the combination of NC-fentrin with ALAMA could provide COPD patients with the first nebulized fixed-dose combination that provides bronchodilation through two complementary mechanisms and also non-steroidal anti-inflammatory effects. This combination was assessed in the enhanced program where NC-fentrin added onto ALAMA a demonstrated robust efficacy and safety compared with placebo added onto a lot. Upon confirmation of an adequate fixed dose combination formulation, we plan to submit an investigational new drug application to the FDA in the second half of 2024 and plan to start a Phase IIb clinical program intending to support dose selection for Phase III. In this program, we anticipate a dose-ranging trial in patients with COPD to identify the appropriate dose of nebulized glycoparylate in the fixed-dose combination, and a second dose-ranging trial with a fixed-dose combination versus individual components using a factorial design. Both trials are planned as randomized double-blind crossover trials in approximately 50 patients, each with lung function endpoints. Additionally, based on the clinical profile of ncfentrin observed in COPD patients, including a reduction in exacerbation rate and risk, and improvement in symptoms of cough and sputum, we believe ncfentrin could potentially be an effective treatment for non-cystic fibrosis bronchiectasis. This is a severe chronic condition where the airways of the lung become abnormally widened leading to a cycle of infection, inflammation, and exacerbation that cause lung tissue damage. The condition affects up to 500,000 patients in the U.S., and there is currently no approved therapy. Despite the lack of approved treatments, ACPs use bronchodilators, antibiotics, steroids, mucus thinners, and surgery to treat patients. We plan to commence a phase two clinical trial to assess the efficacy and safety of nebulized NC-Pentrin in patients with non-CF bronchiectasis in the second half of 2024. The trial is planned as a randomized, double-blind, placebo-controlled trial in approximately 180 patients with non-CF bronchiectasis over approximately 24 weeks. Endpoints including exacerbations, symptoms and lung function will be assessed in this trial. Moving on to our finances, I am pleased to report on our strong balance sheet. In support of our commercialization activities, as well as our continued pipeline expansion, in December, we enhanced our financial flexibility through a debt financing facility providing access to up to $400 million. We borrowed $50 million at closing and may draw an additional $100 million upon approval of NCFentron. Future draws are available upon certain commercial milestones and other conditions. With our current cash balance and the expected proceeds available under this debt facility, we believe we are in a strong financial position as we prepare to launch NCFentron in the U.S. and advance new clinical programs. Turning to our global partnering strategy, our development partner, Nuance Pharma, is continuing enrollment in a pivotal phase three trial of MC-Fentrin for the maintenance treatment of COPD in China. As a reminder, Nuance Pharma has exclusive rights to develop and commercialize MC-Fentrin in greater China, and as such, will play a key role in addressing the global need for a novel treatment for COPD. We look forward to providing updates as Nuance Nuance's trial progresses. We are pleased with our progress in important areas, including regulatory accomplishment, commercial preparation, and new program development. I will now turn the call over to Mark to review our financial results for 2023. Thank you, Dave.

We ended 2023 with $271.8 million in cash and equivalents.