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Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: Thank you for standing by and welcome to the Vernalis Interim Results conference call. At this time all participants are in a listen only mode. There will be a presentation followed by a question and answer session. I must advise you that this conference is being recorded today, Friday 17, September 2004. I would now like to hand the conference over to your first speaker today Simon Sturge. Please go ahead sir.
SIMON STURGE, CHIEF EXECUTIVE OFFICER, VERNALIS PLC: Hello everybody, I'd like to welcome you to the Vernalis' Interim Results. We have a number of people here in the room, plus I think about 11 or 12 people listening in on the conference call. For those listening in, if you have access to a computer, I understand the presentation is up on the Vernalis website.
What I'd like to do today is to very briefly go through the strategic and operational issues of the Company over the last few months, and then in the end hand over to Tony Weir, our Finance Director, who will take you through the numbers.
We have the opportunity at the end to take questions. I think the plan is that we'll do those, initially take any questions from in the room and then move, if there are any questions, from people coming in on the conference call. In that the people on the conference call are in a listen only mode, I'm just assuming you can hear me, because there's nothing that we can do about it if you can't.
So, just to, very briefly, go back. Obviously this time last year was the conclusion of bringing together of the 3 companies RiboTargets, British Biotech and Vernalis. And at that time we put forward a quite comprehensive list of objectives that we wanted to do with the new Vernalis Group and, I think, fairly uniquely for saw a biotech company. I'm delighted to say that we have achieved all of those objectives.
The key initially was for us to undertake quite a rapid restructuring of the Company, in terms of reducing the head count, and how that then affected the cost base of the Company. And you'll see from the numbers that we've released to date that the losses the Company has had in the first half of this year compared to the previous time last year, have almost halved.
We reduced the development portfolio of the Company by 50%, really analyzing those products that we felt were competitive, and effectively stopping the investment or outlicensing those programs that we didn't feel competitive.
One of the essential aspects of the acquisition, or the merger of British Biotech and Vernalis was to look at the major asset of Frovatriptan. An asset that we felt was being under exploited in the hands of Elan, as they moved away from a CNS franchise.
And I think it was essential for the Company to reacquire those rights and put them in the hands of a party that we really feel could exploit that product. And obviously we did that with the collaboration with Endo, and I'll take you through that.
Moving on to the next slide. I feel that Vernalis today is a transformed organization compared to this time last year. Where we've really established a strong foundation, be it in terms of the research capability we have, the competitiveness of those products in development and also now with Frovatriptan in the hands of Endo. All that has done in terms of doing those 3 quite important deals is to really secure the financial position of the Company.
The 3 deals that we did namely with Endo, Novartis and Biogen have also strategically given us the opportunity to, in the future have the option to co-promote products in the United States. And we see that as a significant strategic option and an element within 2 of those 3 collaborations, that we felt was very, very significant.
The cash position as you'll see at the end of June was [pounds sterling]11m, as those 3 deals since the half year results have transformed that cash position now to just over [pounds sterling]37m with a further [pounds sterling]6m due in from Novartis, for their equity investment. And we announced today the conclusion of that agreement and so that [pounds sterling]6m should be in in the next week.
Our view is that that cash position based on our current earn rate gives sufficient cash to take the Company out for about a further 3 years. There is a critical milestone during that period and that is as and when we get the approval for the prophylaxis of menstrually-related migraine. Our expectation for that is at the end of 2006. And upon achievement of that label and approval by the FDA, there's a further milestone of $40m due in from Endo. …