Verona Pharma and Nuance Pharma Announce $219 Million Strategic Collaboration to Develop and Commercialize Ensifentrine in Greater China

LONDON and RALEIGH,N.C.,and SHANGHAI,June 10,2021 -- Verona Pharma plc (Nasdaq: VRNA) ("Verona Pharma") and Nuance Pharma Limited ("Nuance Pharma"),today announce that the companies have entered into an agreement granting Nuance Pharma,a Shanghai-based specialty pharmaceutical company,the rights to develop and commercialize ensifentrine in Greater China (mainland China,Taiwan,Hong Kong and Macau). Ensifentrine is an investigational,first-in-class,inhaled,dual inhibitor of the enzymes phosphodiesterase 3 and 4 ("PDE3" and "PDE4"). This dual inhibition enables it to combine both bronchodilator and anti-inflammatory effects in one compound. Verona Pharma is currently conducting a global Phase 3 program evaluating ensifentrine for the maintenance treatment of chronic obstructive pulmonary disease ("COPD"),with sites in the US,Europe and South Korea.

"We are extremely excited about the formation of this strategic partnership with Nuance Pharma to further the development and future commercialization of ensifentrine in Greater China," said David Zaccardelli,Pharm. D.,President and CEO of Verona Pharma. "Nuance Pharma's highly talented leadership team has deep experience developing and commercializing respiratory products across China and we look forward to working with them to bring ensifentrine to this important market."

"Ensifentrine is an ideal fit for Nuance Pharma's portfolio,given our focus on developing and commercializing innovative products for the Chinese market," commented Mark G. Lotter,CEO and Co-Founder of Nuance Biotech. "With proven expertise in developing and commercializing global brands,including many leading respiratory products,I have confidence in the Nuance Pharma team's ability to develop and commercialize ensifentrine in Greater China."

Under the terms of the agreement,Verona Pharma has granted Nuance Pharma the exclusive rights to develop and commercialize ensifentrine in Greater China. In return,Verona Pharma will receive an upfront payment of $25 million in cash and an equity interest currently valued at $15 million in Nuance Biotech,the parent company of Nuance Pharma. Verona Pharma is eligible to receive future milestone payments of up to $179 million that are triggered upon achievement of certain clinical,regulatory,and commercial milestones. Verona Pharma is also entitled to tiered double-digit royalties as a percentage of net sales in Greater China.

Nuance Pharma will be responsible for all costs related to clinical development and commercialization in Greater China. A joint steering committee will be established to ensure ensifentrine's clinical development in the region aligns with Verona Pharma's overall global development and commercialization strategy. Nuance Pharma intends to file a Clinical Trial Application with the China Food and Drug Administration later this year and begin clinical studies for the treatment of COPD in Greater China thereafter.

About Ensifentrine

Ensifentrine (RPL554) is an investigational,dual inhibitor of the enzymes phosphodiesterase 3 and 4 ("PDE3" and "PDE4"). This dual inhibition enables it to combine both bronchodilator and anti-inflammatory effects in one compound. Ensifentrine also activates the Cystic Fibrosis Transmembrane Conductance Regulator ("CFTR"),which is beneficial in reducing mucous viscosity and improving mucociliary clearance. Ensifentrine's mechanism of action has the potential to alleviate respiratory symptoms such as breathlessness and cough and work against inflammation associated with COPD or inflammation triggered by viruses.

Ensifentrine has demonstrated significant and clinically meaningful improvements in both lung function and symptoms,including breathlessness,in Verona Pharma's Phase 2 clinical studies in patients with moderate to severe Chronic Obstructive Pulmonary Disease ("COPD"). In addition,nebulized ensifentrine showed further improved lung function and reduced lung volumes in COPD patients taking standard short- and long-acting bronchodilator therapy,including maximum bronchodilator treatment with dual/triple therapy. Ensifentrine has been well tolerated in clinical trials involving more than 1,300 subjects to date.

About Verona Pharma

Verona Pharma is a clinical-stage biopharmaceutical company focused on developing and commercializing innovative therapies for the treatment of respiratory diseases with significant unmet medical needs. If successfully developed and approved,Verona Pharma's product candidate,ensifentrine,has the potential to be the first therapy for the treatment of respiratory diseases that combines bronchodilator and anti-inflammatory activities in one compound. The Company is evaluating nebulized ensifentrine in its Phase 3 clinical program ENHANCE ("Ensifentrine as a Novel inHAled Nebulized COPD thErapy") for COPD maintenance treatment. Two additional formulations of ensifentrine are in Phase 2 development for the treatment of COPD: dry powder inhaler ("DPI") and pressurized metered-dose inhaler ("pMDI"). Ensifentrine has potential applications in cystic fibrosis,asthma and other respiratory diseases. For more information,please visit www.veronapharma.com.

About Nuance Pharma

Nuance Pharma is aShanghai-based late clinical-stage biopharmaceutical company focused on licensing,developing and commercializing globally innovative therapies with the mission of addressing critical unmet medical needs inChinaand other emergingAsia Pacificmarkets. Its world-class clinical and regulatory teams,visionary approach to business development and integrated commercial platforms enable Nuance Pharma to continuously accelerate the access of innovative treatments to patients. Since its inception in 2014,Nuance Pharma has assembled a portfolio of promising clinical-stage drug candidates for respiratory,pain and iron deficiency anemia. The company has targeted these therapeutic areas based on the severity of the unmet medical needs,the size of the at-risk patient population,and the emergence of innovative products worldwide.

Forward-Looking Statements

This press release contains forward-looking statements. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements,including,but not limited to,statements regarding milestone payments,royalties and other financial terms of the collaboration agreement with Nuance Pharma,our and Nuance Pharma's ability to bring ensifentrine to market in China,the timing of Nuance Pharma filing a Clinical Trial Application with the China Food and Drug Administration and beginning clinical studies for the treatment of COPD in China,and the potential of ensifentrine in the treatment of COPD,cystic fibrosis,asthma and other respiratory diseases.

These forward-looking statements are based on management's current expectations. These 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,the following: our limited operating history; our need for additional funding to complete development and commercialization of ensifentrine,which may not be available and which may force us to delay,reduce or eliminate our development or commercialization efforts; the reliance of our business on the success of ensifentrine,our only product candidate under development; economic,political,regulatory and other risks involved with international operations; the lengthy and expensive process of clinical drug development,which has an uncertain outcome; serious adverse,undesirable or unacceptable side effects associated with ensifentrine,which could adversely affect our ability to develop or commercialize ensifentrine; potential delays in enrolling patients,which could adversely affect our research and development efforts and the completion of our clinical trials; we may not be successful in developing ensifentrine for multiple indications; our ability to obtain approval for and commercialize ensifentrine in multiple major pharmaceutical markets; misconduct or other improper activities by our employees,consultants,principal investigators,and third-party service providers; our future growth and ability to compete depends on retaining our key personnel and recruiting additional qualified personnel; material differences between our "top-line" data and final data; our reliance on third parties,including clinical research organizations,clinical investigators,manufacturers and suppliers,and the risks related to these parties' ability to successfully develop and commercialize ensifentrine; and lawsuits related to patents covering ensifentrine and the potential for our patents to be found invalid or unenforceable; changes in our tax rates,unavailability of certain tax credits or reliefs or exposure to additional tax liabilities or assessments could affect our profitability,and audits by tax authorities could result in additional tax payments for prior periods; and our vulnerability to natural disasters,global economic factors and other unexpected events,including health epidemics or pandemics like the COVID-19 pandemic,whichhas and may continue to adversely impact our business. These and other important factors under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31,2020,and our other reports filed with the SEC,could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management's estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future,we disclaim any obligation to do so,even if subsequent events cause our views to change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

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