The future looks a bit brighter for UK drugmaker Vernalis following a solid set of results for the first six months of the year, with strong sales growth and substantial reductions in operating costs and losses.

Shares in the group were given a boost on news that revenues for the period had jumped 26% to £7.2 million and that this, coupled with an 18% cut in operating costs, helped to slash operating loss to £1.1 million from £5.3 million a year ago.

Sales of the migraine drug Frova (frovatriptan) in the European Union and Central American, markets in which it is currently sold by Italy’s Menarini, climbed a respectable 9% to 16.2 million euros, but the group warned that price cuts in Germany in October following a new reference price for all triptans will hamper growth for 2010 as a whole.

In another positive move, Vernalis said it was able to trim its underlying cash burn from £8.2 million to £2.7 million, and the group closed the period with a strong balance sheet that showed zero debt and £33.8 million cash in its back pocket.

These cash resources, taken together with a continuing stream of royalties, will provide the company with funds to sustain the amount it currently spends on development until 2013, thereby removing any reliance on future milestone income to feed this area and thus placing the group in good financial stead for further progress.

Strong position
Commenting on the results, the group’s chief executive officer Ian Garland said the company had ended the first half of 2010 “in a strong financial position having successfully completed an equity financing and regaining all rights to the growing Menarini royalty stream”, and that now the “key medium term priority is to leverage this financial strength to expand the pipeline through in-licensing or acquisition”.

News of its strong financial performance was no doubt a welcome sweetener for Vernalis’ shareholder after disappointment last week on the failure of vipadenant for Parkinson’s disease, mid-stage development of which was discontinued because of findings in preclinical toxicology studies.