Verona Pharma plc (VRNA) Earnings Call Transcript & Summary

Hello, ladies and gentlemen, and welcome to Verona Pharma's Phase IIb Results Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the call over to Kimberly Minarovich, Managing Director of Argot Partners.

Thank you, operator. Hello, ladies and gentlemen, and welcome to Verona Pharma's Phase II Results Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to review Verona Pharma's 4-week Phase II clinical trial data of nebulized ensifentrine on top line -- on top of tiotropium therapy for COPD. With me today are Jan-Anders Karlsson, Chief Executive Officer; and Piers Morgan, Chief Financial Officer. Earlier today, we issued a press release detailing these top line clinical trial results. A copy of the release can be found in the Investor Relations section of our corporate website at www.veronapharma.com. On today's call, Jan-Anders will provide an overview of the new clinical data highlighted in today's press release and presented in the slides that were posted to the Events and Presentations page of the IR section of the Verona Pharma website. We will then open the call -- open up to your questions. As a reminder, the call is being recorded and will also be available on Verona Pharma's IR page on our website shortly after the conclusion of today's call. This recording can be accessed for the next 30 days. During the call, the team will be making forward-looking statements, and we remind you of the corporate's safe harbor language. All statements that do not relate to matters of historical fact should be considered forward-looking statements, including but not limited to statements regarding the significance of the top line dataset from the 4-week Phase IIb add-on clinical trial, ensifentrine as a first-in-class product candidate; the timing of ensifentrine's clinical trials, trial results and end of Phase II meeting with the FDA; the treatment potential of ensifentrine; the value of ensifentrine for COPD patients, who remain symptomatic and uncontrolled despite treatment with currently available products; the potential for certain formulations of ensifentrine to address larger markets and expand the commercial opportunity of ensifentrine; partnering ensifentrine for further development and commercialization of such formulations; and the company's plan to explore ensifentrine in cystic fibrosis and asthma. These forward-looking statements are based on management's current expectations. Such statements are neither promises nor guarantees but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from our expectations expressed or implied by the forward-looking statements. Any such forward-looking statements represent management's estimates as of the date of this conference call. While the company may elect to update such forward-looking statements at some point in the future, it disclaims any obligation to do so even if subsequent events cause its views to change. With that, I will now turn the call over to Jan-Anders.

Thank you, Kimberly, and thank you to all participants for joining us today. It's a pleasure to have the opportunity to update you on our new data. This morning, we announced positive top line results from our 4-week Phase IIb clinical trial, evaluating the effect of nebulized ensifentrine, or formerly RPL554, when used on top of inhaled [indiscernible] or Spiriva Respimat in patients with moderate to severe COPD. We are very pleased that the study clearly demonstrated statistically significant and clinically meaningful improvements in both lung function and quality of life when ensifentrine was added on to tiotropium in symptomatic COPD patients, who required additional treatment. Let me first remind you that COPD is a progressive and life-threatening respiratory disease without the cure. The most common symptom is shortness of breath, impacting a person's ability to perform daily activities. Of those diagnosed with COPD in the United States, some 3 million suffered from more severe disease and are treated with bronchodilators and inhaled steroids. We call that the dual and triple therapy. We believe there's an urgent medical need for new treatment for COPD to improve lung function, to reduce the number and burden of symptoms, reduce exacerbations and establish a consistent and durable treatment response. The World Health Organization estimates that it will become the third leading cause of death worldwide by 2030. In the U.S., the costs related to COPD are projected to rise to $49 billion this year. Ensifentrine is a unique first-in-class, dual PDE3 and PDE4 inhibitor. It has the potential to be the first therapy for the treatment of respiratory diseases that combines bronchodilator and anti-inflammatory activities in one compound. We believe it is truly differentiated from existing COPD medications, as it is able to further improve breathing and reduce symptoms in patients already on maximum standard-of-care treatment [Audio Gap] options. These first patients urgently need better treatments. The data we report today with ensifentrine further support this view. We are pleased to share the exciting initial results of our Phase IIb trial with nebulized ensifentrine announced earlier today. As our slides will show, the study met its primary endpoint of improved lung function at all doses. The results of this study will support planning the design of our Phase III program. We plan to discuss this along with previous positive clinical data in an end of Phase II meeting with the FDA, which is planned for the second quarter this year. Now turning to the slide set that is available on our website and specifically to Page 3. This large 4-week, randomized, double-blind, placebo-controlled, dose, ranging trial [indiscernible] to evaluate the safety and efficacy of nebulized ensifentrine in symptomatic patients with moderate, severe COPD, already treated with inhaled tiotropium. The trial enrolled a total of 416 patients at 46 U.S. sites. Patients were run in over 2 weeks on once-daily tiotropium to ensure they all have stable background treatment and continued to show impaired lung function and symptoms prior to dosing with ensifentrine or placebo. Patients received nebulized ensifentrine at 4 dose levels: 0.375, 0.75, 1.5 and 3 milligram or placebo twice daily for 4 weeks added on to once-daily tiotropium. The primary endpoint of the trial was improvement in lung function with ensifentrine at 4 weeks. And it was [indiscernible] by peak forced expiratory volume in 1 second, or FEV1, which is a standard measurement of lung function. Key additional endpoints include symptoms, quality of life measures by different patient-reported outcome tools. If we turn to Slide 4. The bar chart here shows that ensifentrine provide a significant clinically meaningful and dose-ordered improvement in lung function when added on top of tiotropium after 4 weeks of treatment. The addition of bronchodilator response was substantial, as you see from the slide, and already after the first dose and maintained throughout the 4-week period. The primary endpoint was met at all doses, and we note the clear dose-dependent effect. The data are highly significant. Improvements range from 78 milliliters for a 0.375 milligram dose with a p-value of 0.0368 to 124 milliliter for a 3 milligram dose with a p-value of 0.0008. These improvements were consistent over the 4 weeks on top of tiotropium. Importantly, dose-dependent improvements in lung function were observed both on peak FEV1 and also on FEV1 area under the curve of 0 to 12 hours. Also note, as we mentioned in the press release, that the statistical significant improvement in average FEV1 over 12 hours of 87 milliliter for the 3 milligram dose with a p-value of 0.0111 is supportive of twice-daily dosage. Now if you turn to Slide 5. This shows very important data, perhaps the most important finding in this study. As I mentioned earlier, COPD patients are symptomatic and suffer poor quality of life, which deteriorates as the disease becomes more severe. In the U.S., there's over 1 million patients remaining symptomatic despite treatment with dual and triple therapy. And these patients really need another types of treatment. Slide 5 shows that ensifentrine demonstrated a progressive and clinically meaningful improvement in health-related quality of life. We measured it as the mean SGRQ-C on top of tiotropium treatment for 4 weeks. These progressive improvements exceeded a minimum clinically important difference, or MCID, in the chart of 4 units compared to placebo after a short treatment of only 4 weeks with the 2 highest doses achieving statistical significance. These are remarkable data, especially as the patients already treated with an effective bronchodilator tiotropium, and we believe this data support the view that ensifentrine is able to improve both symptoms and quality of life in a clinically meaningful way in COPD patients that remain symptomatic despite using standard COPD medications. Slide 6 summarizes the positive top line data from this Phase IIb trial with nebulized ensifentrine. Importantly, ensifentrine was well tolerated at all doses with an adverse event profile similar to placebo, including the gastrointestinal and cardiovascular profile. This is consistent with the data from all previous studies with a compound. We believe the data we report here today support the dose selection for Phase III. Moving to the next slide. We are focused on preparing for Phase III trials. Preparations are already underway of an end of Phase II meeting with the FDA as we planned follow-up in the second quarter of this year, ahead of our plans to initiate pivotal trials with nebulized ensifentrine as a maintenance therapy for patients with COPD in the third quarter of this year. The data we report here together with the positive results from our previous Phase II studies, bring clarity to the planning of the design, including the dose selection, the endpoints, the background therapy in the patients, to be used in our Phase III program. We are undertaking a number of additional activities to expand the potential of ensifentrine. These include exploring the development of nebulized ensifentrine in China, a country with an estimated 100 million patients with COPD, and the rapidly changing market and advancing the inhaler formulations of ensifentrine in the clinic. In August, we reported positive data from a Phase II trial with a dry powder inhaler formulation of ensifentrine, where all primary and secondary lung function endpoints were met. Our pressurized metered dose inhaler formulation is currently being evaluated in our Phase II study with single-dose data expected later this quarter and final one-week data around the middle of the year. In addition, further data from the Phase IIb study that we're now talking about will be released at subsequent scientific and medical conferences. In summary, ensifentrine is indeed first-in-class. It's a unique compound. The large and sustained increase in lung function and considerable and progressive improvements in quality of life in patients already on an effective bronchodilator treatment are impressive and may be particularly important for symptomatic COPD patients on maximum therapy and with few, if any, additional treatment options. I will now open the line for questions. Operator?

[Operator Instructions] Our first question comes from Joon Lee with Suntrust.

And congrats on the positive data. Given the impressive improvement in FEV1 and symptoms as an add-on to LAMA, how do you see some physicians forgoing -- do you see some physicians forgoing LABA, the beta-agonist component, given some safety risk associated, especially in the elderly due to drug-drug interaction? And if so, what percentage of the patients do you think should benefit from dropping LABA and adding ensifentrine instead? And maybe as an associated question. You have previously stated that, in addition to the duplicate Phase IIIs, you would do yet another Phase III study to help guide the commercial strategy with a head-to-head LAMA/ensifentrine versus LAMA/LABA the possible option. Any color on your vision for ensifentrine's commercial strategy would be very helpful.

Thank you very much, Joon. Thanks for your questions. So indeed, we have shown that, with this study and previous studies, that ensifentrine indeed is a very good bronchodilator on its own, but also when you add it on to a LAMA or a LABA, or as we earlier had done, through the combination of the 2. So we know that the compound is active when you add it on to beta2-agonist as much as it is on an antimuscarinic. I appreciate your suggestion that the LABA combination with our compound could be interesting. That might be more interesting in other indications and perhaps also in COPD. We believe that the effect we have seen with the LAMA together with ensifentrine in this study today is very important. And you know, of course, that tiotropium must be revised, the most commonly used drug as a starting COPD patient, though, we think it makes a lot of sense for patients on Spiriva to -- and their physicians to perhaps add ensifentrine as an alternative to a LABA going forward. But of course, we will do more studies to look into this. For the Phase III program, as we have said, and we can go into that in more detail later, we plan two 6 months Phase III studies today. We also consider a safety extension up to 12 months. So one of the studies will last for 12 months of treatments. The effect of the compound in these patients, we believe, based on the data we have here and the data we have released about a year ago from a previous Phase IIb study following the patients for 4 weeks, but then no background treatment, makes it a very attractive combination. I think we very much look forward to conducting Phase III trials that have a mixture of patients that are on no treatment and maybe now on tiotropium. And we have 2 very positive studies that supports that notion. The commercial strategy, thank you. We certainly believe that there is a lot of patients, I mentioned many times, that are on maximum therapy but are not well controlled and continue to deteriorate and, above all, are very symptomatic. They need a new treatment that help them with symptoms and quality of life. The data we have shown in our two 4-week studies, we believe, really supports the notion that ensifentrine, perhaps in a different way to be determined from other COPD treatments, have an ability or will have an ability to help patients to have a better quality of life. We think that's a very, very meaningful finding. We also think it's important to, for this group of patients, look into perhaps performing a study later on as an add-on to single and dual therapy. But right now, we focus very much on actually performing or planning to perform these 2 pivotal trials. That is our focus. So thanks for the question.

And our next question comes from Lucy Codrington with Jefferies.

I just have a couple. And you flagged before that the dose response to curve is likely to be shallow, and we would and shall see a minimally effective dose. Perhaps -- and I guess -- I appreciate you still need to meet with the FDA, but should the FDA insist on having taking the lowest dose forward, could you consider taking more than one dose into the Phase III program? And then secondly, just with regards to the dose dependence for the quality of life, it seems less clear. Is there anything that you think could explain that?

Yes. Thanks very much. So on the shallow dose response curve, yes, I think that's exactly what we saw. And that was not a surprise, Lucy, as we've been talking about before. So we do think we have a less-effective dose, very clearly, in terms of lung function improvement, almost whichever way you measure it. From our perspective, we think this data really supports selection of a higher dose. If that is the 3 milligram or the 1.5 milligram, we need to look at all the data before we make that conclusion. But we do think, with such a great safety profile, it's well tolerated in all doses. We believe that it's a possibility to perhaps go in with a higher dose to FDA. Now FDA, of course, have their own view, and we cannot speculate on what that will be. If it was indeed the case that they were proposing a very low dose for whatever reason, then I think the opportunity would perhaps be that to add a higher dose. But our initial proposal is really to go -- will be to go with a single dose for the Phase III studies. And then you asked about the quality of life. It's quite interesting that, actually the bronchodilator response, so it's not on the slides now, and we, of course, will release more data as we get the complete dataset, we believe is almost maximum, as we saw in all other studies from the first dose. And yes, that is very effective throughout the study period. Now that's different from the previous study, where we had a progressive improvement in symptoms measured by ERS. This time, we thought it was very important to demonstrate a different patient tool to review the quality of life, which, of course, is totally related to symptoms but not only in this questionnaire. And it's interesting, even striking perhaps, that we here have, again, a progressive improvement in symptoms. And we believe that will continue after 4 weeks we stop the study, but there's no reason why this could not continue to improve with longer treatment. We think that 2, the 2 very different profiles of effects really indicates that there is an effect on the -- that there is an effect on the bronchodilator -- bronchodilatation that is quite different from the quality of life symptom effect. And therefore, this can only be explained by the symptoms being due to something else. And we think it's an anti-inflammatory effect that is gradually developing over the 4-week period. And we have shown that in 2 studies, and it fits that notion. So we believe that, indeed, there are 2 different modes of action, again, that are not necessarily completely the same and that we think this is demonstrated in the 2 studies here. So thank you.

And our next question comes from Liana Moussatos with Wedbush Securities.

Congratulations on the positive data. Is there anything in this Phase IIb data that is going to change some aspect of design in Phase III that you were talking before this data came out?

Yes. Thank you, Liana. That's a very good question. We have top line data. We are waiting for more data. So I cannot completely answer the question. But I can say that, looking at the data we report here today, together with the totality of the data that we've reported and, of course, mentioned before, it seems that the strategy that we have to select patients, to select the dose, to look at dosing interval and, clearly, the overall planning for Phase III is, if anything, strengthened with the Phase IIb data that we report today. So we're indeed very pleased that the data continue to support the further development of the compound and in a very strong and positive way.

And our next question comes from Adam Walsh with Stifel.

Congrats on the data. I have a couple. Jan, I understand, you kind of help us contextualize the data in terms of what's been seen when LAMA is -- I'm sorry, LABA is tested on top of LAMA and how the FEV1 and SGRQ compare just so we have some context to understand the data. And then in terms of the market segmentation, I understand that there are patients, when we talk to KOLs, who have said that there are patients on LAMA that, for medical reasons, would want to avoid a LABA, and that could create a market opportunity for ensifentrine. And I'm just curious as to whether or not you believe that, that segment is something that you're targeting. Is that kind of the market segment we should look at? Or is there a possibility that you think that this could compete head-on with LAMA/LABA. That's my first one. And I have a follow-up.

Yes. Thanks Adam. Thanks very much. So that's an interesting question. We, of course, haven't made a direct comparison. So this is based on literature, and of course, we cannot really make statements about what a LAMA will do exactly in these patients in such a study. However, when we look at the magnitude of the data of 120 milliliters or so was the top dose of ensifentrine added onto tiotropium after 4 weeks, we think that is a very, very significant response. And I think that is very meaningful for patients. They certainly will feel improved even if they have a background treatment of tiotropium when they take this compound. So that's certainly for the FEV1. There is less data on quality of life that is very strong when you add a LABA onto a LAMA reported in the literature. That's the only thing we can look at. We believe that our data indeed are remarkable. And if you read a statement or the quote in the press release of our lead PI, Gary Ferguson, he also states that he think this is very strong data and really supports the notion that we don't only have a bronchodilator effect, as you have with a LABA, but there's actually an underlying additional effect that results in the strong improvement of symptoms and quality of life. We think that is excellent data. And we're very happy with that. Of course, the direct comparison for patients on a LABA and a LAMA together, we would have to conduct at a later stage. But now, we're focused completely on getting into the Phase III trials with discussions with FDA. The other question, which is very good, is, of course, what is the opportunity for patients on a LAMA that perhaps not tolerating or, for whatever reason don't want to use a LABA. We believe that's an excellent opportunity that, in the future, of course, to consider using ensifentrine in those patients as well. As we also have mentioned very briefly and as was asked earlier on the commercial aspect of the compound, we have done extensive market research, and we can discuss that more at a separate occasion. But we really believe that patients with no other treatment options, already treated with single- or dual-bronchodilators or triple therapy, they will be looking for something else to help symptomatic patients. And we believe that ensifentrine, if we can achieve a label that is broad and allows us to use it in COPD as a maintenance treatment, might want to use our compound, even based on the pivotal trials that we are planning, also in patients that need an additional treatment, and that could be ensifentrine for these patients. Obviously, that needs more studies and more market research. But we believe that is a very, very interesting opportunity for the compound with its unique profile.

That's helpful. And then just a couple quick follow-ups. Any comment on how the moderate versus the severe patients did in the trial? When will we see the full data? And just, Piers, real quick, the cost of the Phase III program, any comments there?

Thanks. So the first data we have in, we believe the patients are moderate, severe, maybe even a little bit more severe in this study than what we have -- and than the patients we had used in earlier clinical trials. And we will have a better understanding of that when we get the full dataset. We plan, of course, to release this at the earliest -- at the medical conference of the appropriate stature. With respect to the cost, Piers?

Yes. So as Jan's mentioning, we still need to analyze the full data and discuss with the FDA. But if you're looking at this kind of a study, then I think you will be expecting a cost for clinical trials required to get to the FDA filings and doing some of the other important studies in the range of $100 million to $125 million.

And our next question comes from Tom Shrader with BTIG.

Congratulations on a very clean dataset. The first question is, in the FEV1 measurement, is the difference between the lowest dose and the highest dose, is that statistically significant? It's almost 50 ml.

Yes. Thank you. The -- what we have demonstrated in the slides here is just the statistical significance for each dose versus placebo. And we think it is actually a remarkable effect. It's very similar to the effect that we saw in an earlier 3-day study. It's quite surprising, actually. But I think that helps us, of course, moving forward to really predict or assume with some degree of certainty, hopefully, what, in future studies, also an effect will be in these different statistics with ensifentrine. It really performs very consistently. We will continue to release data on the statistical significance and the comparisons about different doses and within and between. But this study, also you have to remember, is a relatively small study in the grand scheme of Phase IIb and III studies. And it is not designed to statistically evaluate differences between doses but between the doses and placebo. And that was the purpose of the study, and that's what we have done. And of course, as we go forward, we'll help you to further understand the different doses and how they are effective. But clearly, we also believe that it's a dose response statistical significance and nothing to do with it. We clearly see a dose response on both the AUC and on the FEV1. And as we move forward, we will, of course, give you further clarity on this.

Okay. I got an even pickier question. If you look at the quality of life data at 4 weeks, the tio plus the lowest dose is actually bigger than the tio plus the highest dose, but it's not statistically significant, which suggests that the lowest dose is very noisy. Is it reasonable to assume that a kind of a responder analysis, which show that the higher doses are better? Does that question makes sense? You're reporting the mean, but bigger means are not statistically significant. Does that mean it's noisy? And do you think a responder analysis was maybe more meaningful here?

No, I think it's interesting you mentioned this. I think we were touching on this dose response but especially compared to lung function on Slide 5. I believe it is the quality of life data, of course, progressive improvement is very different from how the lung function improvement works. So 2 different things. Actually, we believe that the anti-inflammatory effect, it could be other things, so we cannot prove it. But certainly, we believe that part of this is due to an anti-inflammatory effect. The dose response curve for an anti-inflammatory effect may be somewhat different from a dose response curve to the bronchodilator effect. So it may well be that also lower doses have anti-inflammatory effects, which is coming through in this study here. Now that's a hypothesis. And of course, as we will move forward, we'll have more data to discuss this. But coming back to statistical significance, it's very simple, actually. If you -- as we do in all our studies, you do a statistical hierarchical testing. You test a top dose first, the 6 milligram -- sorry, the 3 milligram dose here, followed by the 1.5, and they're both statistically significant. Then at the 0.75, the effect also in this particular study is not significant, and you stop the statistical [indiscernible]. That explains -- I assume that looking at 0.375 in isolation, that's a great dose and a great data in this study on this measure. But if you look at the totality of the data, we believe that, so far -- more data to come, so far, the top doses seem to have more rounded and stronger effect. And clearly, it is very important that we -- when we go to FDA to make a recommendation to what we dose is -- think is an effective dose. And clearly, in this study, if you look at the dotted line, this is maybe the most important measure here is the minimum clinically important dose. So this is a clinically relevant dose, and it's a clinically relevant effect. And we think that sets this drug apart from what we have seen in the literature so far. So that's very important.

And our next question comes from Ram Selvaraju with H.C. Wainwright.

Just a couple of quick ones. I just wanted to clarify whether your end of Phase II meeting has already been scheduled or if it needs to still be scheduled and if it has been scheduled or if you have some additional color on precisely when in the second quarter you expect it to take place, please?

And thank you for the question. So the answer is no. It has not been scheduled yet. We need to wait for the full dataset from this study before we can complete the briefing book that we need to provide to FDA so they can assess it at the end of Phase II meeting. So we haven't scheduled it yet. We also know that it's, as far as I understand, the 70-day period we've been scheduling and actually having the meeting. So that means we are well into the second quarter. And as we come nearer, we will, of course, let you know when this meeting will take place. But certainly, it will be -- because of the long waiting time, it'll certainly be in the second quarter. We also need to make sure that we provide a full set of data to FDA and that the interpretation of the data is realistic and consistent and we actually believe that the dataset with a strong bronchodilator effect that is very consistent with all studies and now the 2 measures of symptoms or quality of life, which is consistent between 2 large Phase IIb studies really are effects that sets it apart. And of course, we hope and expect maybe that FDA also will recognize this. But we certainly know that the physicians, the clinicians, the KOLs understand the data and the dose we are talking about and that they see this is an opportunity for a new treatment for patients that really have very few alternatives today. But we'll let you know as soon as we have more clarity on end of Phase II meetings and then, of course, eventually start the Phase III.

Okay. And then just 2 additional clarificatory points on that. Firstly, can you give us a sense of what additional information you might be able to present publicly that would be part of the briefing book that's not necessarily included in this morning's preliminary data press release? And also, if you can just provide us with some additional clarification on the lead time necessary once the end of Phase II meeting has been concluded to formally start up the Phase III program? And then I have just one quick follow-up.

Yes, thank you. So there will be a large number of datasets. And clearly, we believe that the full dataset will give a very interesting picture. But what you see in these 2 simple graphs and what is stated around safety and tolerability, I think is the key data points. And there will be more granularity. But I do not think that any additional data will change the interpretation of the study or even the look of the data. But of course, we will share that with you and colleagues as soon as we have it available. And I think we're hoping to have it at one of their major conferences later this year, if not before. And then you asked about the lead time between end of Phase II meeting and start of Phase III. It's usually around 3 to 6 months. And we will, of course, as we always do, try to achieve a faster rate between the end of Phase II meeting going into start of Phase III. This, of course, also have to admit has something to do with FDA's views. And of course, if they ask us to add more measurements or perhaps look into certain aspects that they are very interested in, maybe the quality of life is such an area, that might [indiscernible] at their protocol and also then the study planning. But our expectation is within 3 to 6 months.

Okay. And then the final question is the SGRQ-C, quality-of-life measure that you used here. Should we expect to see that deployed again in the Phase III context? Or is it going to be replaced by something else? If it's going to be replaced by something else, what? And what additional quality of life measures might you include in the Phase III clinical trial protocols, specifically to assess quality of life?

Excellent. Thank you. Yes. So the SGRQ, of course, we will use. And it's a very important measure. And it's actually the only validated tool for -- that the FDA has for measuring quality of life in patients with COPD. So that's clearly an important aspect. And it's clearly very satisfying that we see such a great effect in this study on this particular measurement. So we will use that. We will also use ERS, which we actually -- so excellent data on -- in the previous study, which we reported a year ago or so. It was the 4-week Phase IIb study in patients with no background treatment. And we will use a number of other patient-reported outcome tools that we think are appropriate. And that FDA, of course, have not validated but perhaps would be interested also to view. And most importantly, we want to have tools that can demonstrate to patients and KOLs, as we believe that this compound is, not only a great bronchodilator, but it might really have an opportunity to change the life of patients with COPD.

Great. And congrats on the data, once again.

And our next question comes from Patrick Trucchio with Berenberg Capital Management.

This is Iris on for Patrick. So first congrats on the data. Can you please discuss the clinical significance of an approximate 75 to 125 milliliter improvement in FEV1 on top of a LAMA compared to a LABA? So how would this magnitude of lung function improvement position ensifentrine in the treatment paradigm for moderate to severe COPD patients?

Thank you. So we think that the magnitude of effect you should see that also in relation to what patients actually can feel. So what we understand from all discussions with KOLs, et cetera, et cetera, is that an increase in lung function of 50, 5-0, milliliter, the patients will recognize as I can breathe better. I can breathe easier. 125, I think, is a very large effect, and we are extremely pleased by it. It's very difficult to compare with other studies, other patients and other compounds. I don't think we really can comment on that, except that we are very pleased with this magnitude of effect. And to us, it looks as good as anything else out there, at least.

Okay. And just a quick one. How should we view the Phase IIb results in the context of the partnering discussion on this intel or formulation?

Yes, thank you. So that's an interesting question. I think it will increase the interest from potential partners going forward in this country, in the U.S. and also other countries, actually. We have mentioned several times that we're, of course, interested in China. It's a huge market but a very different type of market but interesting because there's a lot of patients that actually use nebulized drugs, and there's a lot of in-hospital treatment. So that's interesting. And of course, from a different perspective, United States is here and now, and we discussed with FDA, and that's where we plan the pivotal trials. I think there will be recognition from the industry and, equally important, from KOLs and opinion leaders that, actually, the magnitude of effect is impressive. The durability of the effect is very helpful. But more importantly, you here really have a compound that can improve symptoms and quality of life based on 2 studies we have done in patients that are already treated with other types of drugs. And I think this is the key problem for symptomatic COPD patients. They are symptomatic all the time, every day and, many of them, despite taking standard COPD drugs. They are looking for something different. And we believe that's an opportunity for any country in many of those patients to help them. If that is attractive to potential partners? Yes, I would think so. But it's also important to be very clear that we need to understand exactly what the path forward is. We need to plan the end of Phase II meeting and what the pivotal trials will be, and we need to understand what the commercial opportunity is in United States. And we are very confident that this is an attractive opportunity with a completely other compound with a new mechanism of action. So that's interesting.

And our next question comes from Derek Johnson with Guggenheim.

Congratulations. Thanks for taking the questions. Just had a couple. On the SGRQ-C measure, I know it takes into impact dyspnea questions, but -- and since that's probably one of the main symptoms we've heard from KOLs that's -- that are particularly debilitating to these COPD patients, I was wondering if you looked at any stratification of the sort of breathlessness, shortness of breath, wheezing type elements of the questions and the questionnaire to see if they follow a similar curve to the overall questionnaire, or if it -- maybe that one is more dose responsive? And then I just had one quick follow-up.

Yes. Thanks very much. So we don't have that data yet. We -- you are correct, our subdomains, in this question. But we don't have that data yet. So I can't answer the question. We do know from the data from the previous study that we actually have reductions in all the subdomains that were quite similar. But of course, we cannot [indiscernible] that will be exactly the same in this study.

Okay. That is helpful. And then the second question is on the anti-inflammatory potential of ensifentrine. I -- you've alluded a couple times that you think you may be seeing an anti-inflammatory impact at week 4. So I guess the question is, when do you think you're going to see this effect really come to fruition? And what kind of a curve would it follow? I guess, in our head, what we've been kind of thinking is maybe almost a bilobal type distribution, kind of a first improvement you would see as you tamp down the neutrophil activity and the infiltrate. And then a kind of second longer -- it would take longer to improve improvement as the lungs can slowly repair themselves some after the neutrophils have been neutralized, so to speak. I want to know if you were thinking something along the same lines. And/or if not, what the general time line for an anti-inflammatory improvement is in your eyes?

Yes. Thank you. It's a great question. As I said, of course, we have done a sputum study earlier on with the compound in healthy subjects, which was challenged to actually produce a neutrophil COPD-like inflammation. And we had great effects, dose-dependent reductions in all different cell types. And it also is including neutrophils, of course. So we believe, as there are other PDE4 inhibitors that have shown exactly the same thing, they're not bronchodilators, and they have other problems, but they have shown anti-inflammatory effects. And therefore, we believe, of course, with all our preclinical and clinical data that we have the same. Now exactly how this will play out for these patients? It's difficult to assess. I would believe that you are correct. The neutrophils or mediators from neutrophils but also other cells may be reduced or shut down in an early phase of the start of the anti-inflammatory onset of action and that it then becomes a more profound effect on the lung and maybe the structure even at a later stage. I think in the 4-week study, we probably only look at a more acute anti-inflammatory effect, and with longer treatment, you may see even more profound effects. And that's why we're so excited that we have a progressive improvement because that also points to the fact longer treatment might give you a better response. And you know what, we have a great response after 4 weeks. And if we can continue to improve that to some extent, I think that will be fantastic for these patients, exactly what they need.

Great. That is very helpful. Congratulations, again

Thank you.

And I'm showing no further questions in the queue at this time. I'd like to turn the call back to Jan-Anders Karlsson, Chief Executive Officer, for any closing remarks.

Thank you. So we expect 2020 to be an important year for the company. And we really look forward to keeping you updated on our progress with key milestones, such as the initiation of Phase III program, as we talked about, and the end of Phase II meeting but also the data readouts from what we didn't talk so much about, which are other formulations, which might also be very important for maintenance treatment of patients. So that's the metered-dose inhaler, a clinical trial is ongoing, where we expect, first of all, the data readout in a single-dose study here in the first quarter and then a one-week study that we expect to read out around middle of the year. And of course, with the excellent data we have for the dry powder inhaler, we expect that this will also be a positive outcome. We will, of course, announce the full data from this Phase IIb study in due course. And as I mentioned, we look forward to do that in various points, but of course, scientific or medical conferences will be most appropriate. And we look forward to an exciting year. So we thank you for joining the call today and for your interest in Verona Pharma. Thank you very much, and thank you, operator. This concludes today's call.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude your program. You may now disconnect.