Vernalis warns investors of 'slower than hoped for' sales

AIM-quoted commercial-stage pharmaceutical company Vernalis provided investors with an update on guidance for prescriptions of its Tuzistra XR cough and cold drug on Wednesday, warning that "slower than hoped for progress" led the group to look into alternative strategies for its US business.

Vernalis said, while prescriptions of Tuzistra XR had grown steadily over the prior year in the current cough and cold season, up 74% year-on-year for the first 33 weeks of trading, the Board had been monitoring week-on-week data closely, and whilst some initial acceleration in growth had been seen, it advised investors that there would need to be further acceleration to achieve its guidance of 105,000-115,000 prescriptions for 2017-18.

The firm said the previously issued guidance, provided at the time of its full-year ended 30 June 2017, was "unlikely" to be hit after seeing less than expected growth after two-thirds of the season, leading Vernalis to drop its guidance below the aforementioned range.

While it did not offer a revised figure for its guidance, Vernalis said, "In light of the Tuzistra XR performance described above and slower than hoped for progress with the cough-cold pipeline, the board has been considering alternative strategies for the US business and strategic options for the group. Although not finalised today, plans are well developed which will significantly reduce the cash burn of the business and a more detailed update will be provided in the coming weeks."

The group remains in a strong financial position with an unaudited cash balance of £44.0m at 31 January 2018," the Wednesday morning research note added.

As of 1000 GMT, shares had dropped 14.03% to 4.99p.