Ebb & Flow

Vernalis (LSE:VER) fell 25p (14%) to 157.5p on Monday after U.S. marketing partner Elan (ELN) said it expects to launch Frova frovatriptan in April. In its interim results report to June 30, 2001, VER had said, "If either the approval or launch of frovatriptan is delayed beyond early 2002, we may need to reduce our expenditure and R&D activities until we have secured further financing." The drug received U.S. approval for acute migraine in November, and VER stands to receive sales milestones as well as royalties (see BioCentury, Nov. 12, 2001).

"The coffers are expected to run dry by year end," said WestLB Panmure analyst Nick Staples, who sees VER as an attractive acquisition target.

At June 30, VER had £14.9 million ($21 million) in cash compared to £20.8 million ($29.5 million) at June 30, 2000. At the time, VER also reported that it had increased a loan facility negotiated with ELN in 2000, bringing the loan to $10 million. The loan is repayable on the earlier of 12 months after FDA approval of frovatriptan or Dec. 31, 2002.

The stock continued down 41.5p (23%) to 141p on the week, on top of 32.5p (15%) lopped off the prior week. Its market cap is £60 million ($85 million).


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