LONDON (ShareCast) - Struggling drug group Vernalis has narrowed full year losses and reckons its recent restructuring will help it rebuild shareholder value in the mid-term.
The operating loss for 2007 was trimmed to £31.7m from £40.8m, while revenues from continuing operations grew to £19.8m from £12.4m. Cash at year end was down to £20.5m from £37.6m in 2006.
Vernalis said it is well advanced in implementing an extensive restructuring of its business following last October’s decision by the US Food and Drug Administration not to approve Frova for the short-term prevention of menstrual migraine.
Earlier this week, the firm said it will receive a cash injection of €18.4m from Paul Capital Healthcare relating to migraine treatment frovatriptan.
Under the agreement Paul Capital will receive around 90% of Menarini's payments to Vernalis under their exclusive license and supply agreement for the commercialisation of frovatriptan in Europe and certain other territories.
After completion of the restructuring, the company said it expects to have funds to pursue its planned R&D programmes for two years.
Detailed discussions are currently ongoing with parties interested in buying the firm’s Apokyn drug, currently marketed in the US for Parkinson's disease.
“I am very pleased that we have been able to strengthen our balance sheet substantially by utilising our frovatriptan revenues to raise cash and cancel our debt,” said executive chairman Peter Fellner.
“This, together with our recent restructuring, has significantly reinforced our financial position, enabling us to fund further investment in our pipeline of product candidates,” he added. “We are confident that we have now created a platform from which to rebuild shareholder value in the mid-term.”
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