Verona Pharma Plc (LON: VRP) have reported in their most recent trading update that their third quarter loss is set to widen as research & development costs more than doubled.
For the three months ended September 30, Verona’s pretax loss totaled £12.8 million, more than three times the £3.5 million loss posted the the year before.
The massive loss will worry shareholders, and investors may not be so optimistic about the future performance of Verona looking at 2019 trading results.
The increasing costs in the Research and Development team was the main cause of the massive loss.
These costs inflated to £12.0 million from £5.3 million. Verona’s general & administrative costs also rose, jumping 43% to £2.0 million from £1.4 million.
This comes at a bad time for Verona Pharma, as rivals seem to be captivating the market and dominating the pharmaceutical scene.
Belgium’s UCB (EBR: UCB) are close to completing a move for RA Pharmaceuticals (NASDAQ: RARX), and the new super firm will pose strong competition to Verona.
Additionally, more established names such as Pfizer (NYSE: PFE) have smashed their third quarter, expanding their market dominance.
For the nine months to September 30, pretax loss widened to £33.7 million from £18.3 million after a more than doubling of R&D costs to £27.8 million from £13.6 million.
A 28% increase in general & administrative costs to £5.9 million from £4.6 million also saw the loss widen for Verona.
Chief Executive Jan-Anders Karlsson said: “We are very pleased that our four-week phase 2b dose-ranging clinical trial with nebulized ensifentrine is progressing according to plan and that we have completed enrollment of over 400 symptomatic patients with moderate to severe COPD. We anticipate completing this study around the end of 2019. Informed by this and prior studies in around 850 subjects, we plan to advance into our phase 3 clinical trial program which we expect to commence in 2020 following an end of phase 2 meeting with the [US Food & Drug Administration].
“Karlsson added: “Initially we will focus on nebulized treatment for more severe patients but we are very excited by the positive [dry powder inhaler] formulation results that support our view that ensifentrine is an effective bronchodilator in COPD patients, whether administered as a dry powder via a handheld inhaler or as a suspension via a nebulizer.”
As a result, shares of Verona sunk 3.08% to trade at 44p per share. 5/11/19 BST.