Respiratory disease drug company Verona Pharma relocating to Wales
Mar 06, 2014 By Sion Barry
The £100m Wales Life Sciences Investment Fund has made its third investment in a deal that will see London-based Verona Pharma relocating its headquarters to Cardiff.Read more
The Aim-listed firm is developing a range of medicines to treat respiratory diseases.
The fund which is managed on a discretionary basis by Arthurian Life Sciences, chaired by Port Talbot-born biotech serial entrepreneur and investor Sir Chris Evans, is the lead investor in the deal which will see a £14m cash injection into Verona.
The company currently has a number of its drugs in clinical trials.
The funding will be raised through the placing of new shares, with leading institutional investors in the US and UK having already committed funding alongside Arthurian – in what will be an oversubscribed placing.
The deal represents the third investment made from the Wales Life Investment Fund, which Arthurian is currently in the process of securing match funding to take it to an initial target of £100m. As the cornerstone investor in a placing, subscription and open offer Arthurian is investing £4.6m from the fund, which will give it a 20.8% stake in the enlarged share capital of Verona.
The Welsh Government has already committed £50m to the fund, which as well as attracting life sciences firms into Wales will also seek to back indigenous firms in the sector, including those in biotech, pharma, life sciences and medical devices.
Arthurian has already made investments into Merthyr-based Simbec Research and was the lead investor in a £25m rights issue which will see Surrey-based Aim-listed cell therapy firm ReNeuron relocating to South Wales.
Sir Chris said: “We are delighted that we have a great pharmaceutical company like Verona coming to Wales. This is one of the greatest things I have done in Wales in the last few years. In the last couple of deals [Arthurian] we have brought to Wales some of world’s biggest investors in the sector such as Abingdon, who have hundreds of billions in funds.
“It really is a case of wow that these leading funds are coming to Wales for the first time and there is more [co-investment with Arthurian] to come.
“Verona has the potential to be worth hundreds of millions in value. We have invested roughly £10m from the fund to date. but the value added is that this has brought more than £50m in cash into Wales from our co-investors.”
As part of the deal within the next couple of months Verona will establish a new headquarters in Cardiff.
An element of Verona’s drug formulation and clinical trial work will also be coming to South Wales. Simbec is expected to be supporting Verona in its clinical trials.
Verona is developing drugs to treat conditions such as chronic asthma and severe cough, as well as chronic obstructive pulmonary disease.
Sir Chris said: “With 10% of the population in Wales suffering from a respiratory disease bringing this world class company here is particularly relevant.”
Chief executive of Verona Dr Jan-Anders Karlsson said: “I am delighted at the strong demand for shares form institutions in both the UK and US for this proposed fund raising. which was significantly oversubscribed.
“The monies raised will allow us to progress our lead pipeline asset, RPL554, in further phase two studies through the next significant value inflection point.
“We would like to thank our existing investors for their continuing support and look forward to welcoming our new shareholders to the company.
“We are confident that the progress we will make in the medium and longer term will not only result in important new medicines for patients with respiratory, disease but will also translate into the creation of significant value for our shareholders.”
Speaking earlier at the BioWales 2014 event at the Wales Millennium Centre in Cardiff Bay, Sir Chris said that Arthurian has 360 targets on its deal flow database. He added: “Of these we are talking seriously to 42 companies.”
Sir Chris told the conference, attended by 600 delegates, that Wales was working on a much needed life sciences brand which would be recognised by companies, researchers and investors globally.
He added: “We have to think international and that is all that I think about. I see that as my principle role within the life science sector in Wales.”
He said that Wales needed to develop a “truly iconic” Welsh science park, which he is confident will be realised.
He added: “At the moment we are one of the few countries in the world that doesn’t have a national science park. We have to bring the world to embrace Wales and they have to come here because we are brilliant.”