Biopharmaceutical company Verona Pharma entered into a debt financing facility providing the company with access to up to $400 million from funds managed by Oxford Finance and Hercules Capital. The debt facility provides non-dilutive capital and further financial flexibility to support Verona Pharma’s continued growth, including the planned commercial launch of ensifentrine, Verona Pharma’s first-in-class product candidate, which is under review by the U.S. Food and Drug Administration for the maintenance treatment of chronic obstructive pulmonary disease (COPD). The debt facility replaces an existing facility of up to $150 million with an affiliate of Oxford Finance.
Under the terms of the debt facility, the company drew $50 million at closing and may draw, subject to certain conditions precedent, an additional $100 million upon approval of ensifentrine, $150 million in two separate tranches upon achievement of certain net sales milestones and, subject to the approval of the lenders, $100 million to support strategic initiatives. Verona Pharma will pay only interest on the outstanding loans under the debt facility for the first 53 months, with the outstanding principal of the loans under the debt facility amortized over the subsequent seven months. The $20 million drawn and fees and associated costs due to Oxford on the discharge of the existing debt facility will be paid to Oxford on closing of the debt facility.
“We are pleased to have secured access to this expanded and flexible facility with Oxford, who has trusted us with debt finance over the past year, and having Hercules join as an additional financing partner. This new facility, along with our existing cash, which was $257.4 million at Sept. 30, 2023, provides us with additional financial flexibility to support Verona Pharma’s continued growth, including the planned launch of ensifentrine in the U.S., if approved,” David Zaccardelli, president and CEO of Verona Pharma, said. “We look forward to the Prescription Drug User Fee Act (PDUFA) target action date of June 26, 2024.”
“We are thrilled to announce our expanded financial support for our existing client, Verona Pharma,” Adam K. Soller, managing director at Oxford Finance, said. “As we anticipate their first potential approval of the company’s lead product candidate, ensifentrine, for the maintenance treatment of patients with COPD, our increased loan facility underscores our commitment to advancing ground-breaking solutions for respiratory health.”
“We are excited to collaborate with Verona Pharma as they take the next step in their important mission of bringing a novel treatment to COPD patients worldwide,” Michael McMahon, director of healthcare and life sciences with Hercules Capital, said.
“Verona Pharma has many of the underpinnings Hercules looks for when partnering with companies: the combination of an experienced team; a novel, efficacious treatment; and, most importantly, the potential to address a large, underserved patient population,” Kristen Kosofsky, senior managing director of healthcare and life sciences with Hercules Capital, said.
