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Verona Pharma plc (VRNA)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 net product sales accelerated to $36.6M from $5.6M in Q3; total Q4 revenue was $36.7M, with operating loss narrowing versus Q3 due to higher gross profit from launch momentum .
  • Ohtuvayre adoption broadened: 4,600+ unique prescribers, ~55% Tier 1 penetration, and >275 HCPs with 20+ patients; ~50% of patients are on triple therapy, reinforcing use across lines of COPD care .
  • Infrastructure tailwinds: permanent J-code became effective Jan 1, 2025, and management reported more prescriptions dispensed through February 2025 than in the entire Q4, pointing to sustained Q1 momentum .
  • Strategic progress: glycopyrrolate dose-ranging completed; Phase 2b fixed-dose combo planned H2’25; EU/UK regulatory activities underway; Macau approval and mid-2025 data read for China partner Nuance .
  • Estimates: S&P Global Wall Street consensus data were unavailable at time of analysis; on the call, an analyst referenced 2025 consensus of ~$254M, and CFO outlined cash-flow break-even at ~$250–$300M annualized run-rate by year end, implying continued ramp as the principal stock catalyst .
    Note: S&P Global consensus not retrieved due to data access limitations; comparisons to Street estimates are therefore not provided.

What Went Well and What Went Wrong

What Went Well

  • Rapid commercial ramp: Q4 net product sales reached $36.6M, totaling $42.3M for FY 2024 after launch in August, demonstrating strong early adoption .
  • Broad prescriber engagement: Over 4,600 unique HCPs prescribed, ~55% of Tier 1 HCPs engaged, and >275 HCPs prescribing to 20+ patients; “These early launch results are remarkable and support our belief that Ohtuvayre can become a blockbuster product.” — CEO .
  • Patient access/reimbursement: Management cited majority claims under medical benefit (Medicare B/Advantage), with “over 80%” of dispensed patients seeing co-pays < $10, reducing abandonment risk .

What Went Wrong

  • Elevated operating spend: Q4 SG&A rose to $45.1M (Q4 2023: $15.0M), driven by launch-related marketing, people costs, and share-based compensation; net loss widened YoY to $(33.8)M .
  • Gross-to-net sensitivity: While impact in Q1 expected to be limited, commercial co-pay assistance and deductible resets were flagged as toggles to monitor; CFO noted any effect should be small given commercial mix is a “very small portion” of shipments .
  • No quantitative revenue guidance: Management declined to provide quarterly revenue guidance, and S&P Global estimates were unavailable; investors must rely on operational KPIs and run-rate commentary for trajectory .
    Note: S&P Global consensus not retrieved due to data access limitations.

Financial Results

Quarterly Performance vs Prior Quarter

MetricQ3 2024Q4 2024
Net Product Sales ($USD Millions)$5.624 $36.637
Total Revenue ($USD Millions)$5.624 $36.655
Cost of Sales ($USD Millions)$0.543 $2.039
Operating Loss ($USD Millions)$(40.667) $(18.339)
Net Loss ($USD Millions)$(42.962) $(33.827)
Loss per Ordinary Share ($USD)$(0.07) $(0.05)
Loss per ADS ($USD)$(0.53) $(0.41)

Year-over-Year (Q4 2024 vs Q4 2023)

MetricQ4 2023Q4 2024
Net Product Sales ($USD Millions)$0.000 $36.637
Total Revenue ($USD Millions)$0.000 $36.655
Cost of Sales ($USD Millions)$0.000 $2.039
R&D Expense ($USD Millions)$4.122 $7.870
SG&A Expense ($USD Millions)$14.972 $45.085
Operating (Loss) ($USD Millions)$(19.094) $(18.339)
Other Income/(Expense), net ($USD Millions)$4.909 $(7.217)
Loss Before Income Taxes ($USD Millions)$(14.185) $(25.556)
Income Tax (Expense)/Benefit ($USD Millions)$0.053 $(8.271)
Net Loss ($USD Millions)$(14.132) $(33.827)
Loss per Ordinary Share ($USD)$(0.02) $(0.05)
Loss per ADS ($USD)$(0.18) $(0.41)

Revenue Breakdown (Q4 2024)

MetricQ4 2024
Product Sales, net ($USD Millions)$36.637
Other Revenue ($USD Millions)$0.018
Total Revenue ($USD Millions)$36.655

KPIs

KPIQ2 2024Q3 2024Q4 2024Through Feb 2025
Unique Prescribers (#)>100 >2,200 >4,600 —
Tier 1 HCP Penetration (%)—~30% ~55% —
Prescriptions Filled (#)—>5,000 (through Oct) —More prescriptions dispensed than entire Q4
HCPs with 20+ Patients (#)——>275 —
Patients on Triple Therapy (%)—~50% ~50% —
J-code EffectiveSubmitted (pending) Approved for Jan 1, 2025 Effective Jan 1, 2025 Effective

Guidance Changes

Metric/ItemPeriodPrevious GuidanceCurrent GuidanceChange
Ohtuvayre J-codeEffective Jan 1, 2025CMS approval received; effective Jan 1, 2025 J-code effective Jan 1, 2025 Maintained
Fixed-dose combo (ensifentrine + glycopyrrolate)H2 2025 start (Phase 2b)Dose-ranging trial to begin Q3’24 Dose-ranging completed; Phase 2b to initiate H2’25 Updated (milestone achieved; next step set)
Bronchiectasis Phase 2Ongoing (enrolling)Phase 2 to initiate Q3’24 Enrollment ongoing Maintained
EU/UK regulatory2025 activitiesNo specifics earlierProgress regulatory activities in 2025 for potential MAA submissions Initiated
Greater China (Nuance)Mid-2025Enrollment complete; results expected 2025 Macau approval; China Phase 3 results expected mid-2025 Updated

Earnings Call Themes & Trends

TopicQ2 2024 (Previous Mentions)Q3 2024 (Previous Mentions)Q4 2024 (Current Period)Trend
Launch pacingProduct available; >100 prescribers; early HCP interactions $5.6M net in Q3; Oct net > Q3; >2,200 prescribers; >5,000 fills $36.6M net in Q4; strong momentum into Q1 Accelerating
Reimbursement & co-paysExpect medical benefit majority; J-code submitted Permanent J-code approved for Jan 1, 2025 Majority under medical benefit; >80% co-pays < $10; J-code effective Improving access
Prescriber adoptionFocus on 14,500 HCPs; early interest ~30% Tier 1 prescribing ~55% Tier 1 prescribing; 4,600+ unique prescribers Broadening
Patient persistence/refills—Early refill signals noted Patients receiving >5 refills; mgmt sees upside vs 6 refills/yr benchmark Positive persistence
Gross-to-net/deductibles——Q1 deductible resets expected minimal impact; commercial mix small Manageable headwind
Nebulizer acceptance——Route of administration not a barrier; patient comfort cited Non-issue
EU/UK regulatory——Initiating regulatory activities for potential submissions Advancing
Greater ChinaNuance Phase 3 enrollment Enrollment complete; results expected 2025 Macau approval; China results mid-2025 Milestones achieved
Pipeline FDC (LAMA combo)IND submitted; Phase 2 dose-ranging planned Q3’24 Dose-ranging trial enrolled Dose-ranging completed; Phase 2b planned H2’25 On track
Pricing/WACCWACC $22,950; pharmacoeconomic support ——Stable pricing posture

Management Commentary

  • “We are very pleased to report the extremely strong start to the launch continues to build momentum with more prescriptions dispensed through February 2025 than in the entire fourth quarter of 2024.” — CEO .
  • “In the first full quarter of commercial availability, net sales of Ohtuvayre were $36.6 million in the fourth quarter and $42.3 million for the full year 2024.” — CEO .
  • “We continue to strengthen our prescriber base with over 4,600 unique HCPs… approximately 55% of our 2,500 Tier 1 HCPs.” — CEO .
  • “Our specialty pharmacy partners continue to maintain inventory at their contracted levels of 2 to 3 weeks.” — CFO .
  • “Cash flow breakeven… at a quarterly run rate that gets you to a $250 million to $300 million annual rate… we could be in that rate at the end of the year.” — CFO .
  • “Route of administration has become kind of a nonissue… many patients talk about how nebulizer is a comforting way to deliver their product.” — CCO .

Q&A Highlights

  • Pricing/gross-to-net/deductibles: Management expects minimal Q1 gross-to-net impact; momentum should outweigh deductible resets; commercial patients are a small share of total .
  • 2025 outlook and break-even: Analyst referenced ~$254M 2025 consensus; CFO targeted cash-flow break-even at ~$250–$300M annual run-rate by year end, suggesting stronger 2H’25 ramp if current trajectory persists .
  • Duration of therapy: Early persistency/refill data encouraging; management sees potential upside vs six-refill annual benchmark as specialty pharmacy support aids adherence .
  • Prescriber adoption and nebulizer: Nonissue with route of administration; physician adoption pattern follows early/mid/late adopters; broadening use, including earlier lines beyond triple .
  • Reimbursement/co-pays: Majority under medical benefit; >80% of dispensed patients seeing co-pays < $10; strong access posture early in launch .

Estimates Context

  • S&P Global consensus estimates were unavailable at the time of analysis due to data access limitations; no formal comparisons to Street estimates can be provided.
  • On the call, an analyst referenced 2025 revenue consensus of ~$254M; CFO indicated cash-flow break-even achieved at ~$250–$300M annualized run-rate, with potential to be at that rate by year end, consistent with observed momentum .
    Note: S&P Global consensus not retrieved due to request limits; comparisons vs estimates are therefore not provided.

Key Takeaways for Investors

  • Ohtuvayre’s launch trajectory is robust: Q4 net sales of $36.6M, broad prescriber uptake, and stronger dispenses into Q1 signal sustained ramp and potential for positive revisions to revenue run-rate expectations .
  • Access dynamics favorable: Medical-benefit predominance and low co-pays for a large majority of dispensed patients mitigate abandonment risk; J-code effective Jan 1 streamlines reimbursement workflows, supporting continued adoption .
  • Use across therapy lines: ~50% use atop triple therapy and meaningful use in earlier lines indicates wide clinical utility; this breadth reduces dependency on narrow subpopulations .
  • Operating leverage ahead: While SG&A elevated during launch, operating loss narrowed vs Q3; with growing revenue scale, cash-flow break-even at ~$250–$300M annual run-rate by year end appears achievable per CFO commentary .
  • Pipeline and global catalysts: Phase 2b FDC trial in H2’25, EU/UK regulatory activities in 2025, Macau approval, and Nuance China Phase 3 results mid-2025 provide medium-term optionality and incremental value drivers .
  • Monitor Q1 seasonality: Deductible resets expected to have limited impact; momentum in new starts and refills and J-code implementation should offset typical early-year headwinds .
  • Execution focus: Specialty pharmacy infrastructure, prescriber education, and omnichannel promotion remain central to deepening adoption and persistence, which are key to sustaining quarterly growth .