The issue of 80m new shares at 50p/share has raised £40m (gross), which enables Vernalis (LON:VER) to focus on executing its operational plan and removes uncertainty over whether it is sufficiently funded through to sustainable profitability in FY19 (on our new forecasts).
Near-term investment into the commercial cough cold platform will underpin future sales growth. Ongoing initiatives to improve physician awareness, stocking and formulary coverage should increase Tuzistra’s XR market share in the longer term.
Use of proceeds
With £40m of new funds and end-FY15 cash of £54m, Vernalis has sufficient working capital for a “conservative risk-adjusted roll-out plan” for Tuzistra XR, forthcoming Moxatag re-launch and the planned roll-out of the other four products in the cough cold franchise (two of which remain on track for NDA filing by end-2016).
The proceeds will also facilitate increased promotional activity, if appropriate.
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