TIDMVEC
RNS Number : 7560F
Vectura Group plc
17 July 2019
This announcement contains inside information
Vectura confirms R&D investment priorities, announces a
proposed GBP50 million capital return and a pre-close trading
update
Chippenham, UK - 17 July 2019: Vectura Group plc (LSE: VEC)
("Vectura" or "the Group") today confirms its R&D investment
priorities, announces a proposed GBP50 million capital return and
provides an unaudited pre-close trading update.
Paul Fry, Interim Chief Executive Officer of Vectura,
commented:
"Vectura has a rich heritage in developing innovative inhaled
drug delivery solutions and we believe we provide a differentiated
offering to partners. We see an attractive, growing market
opportunity for these services, and this is where our focus is set
for the future. Today we are confirming that our R&D investment
priorities will be clearly aligned to this partnering focus.
"Given the Group's focus is now primarily on organic growth,
with lower risk R&D spend supported by partners, it is our
intention to return GBP50 million to shareholders this year, with
the Board continuing to review our capital allocation strategy on a
regular basis.
"Vectura made a positive start to trading during H1 2019, with
flutiform(R) product supply revenues making an important
contribution to growth. We are pleased to be able to re-confirm our
financial guidance and outlook expectations for 2019."
R&D investment priorities
Vectura is a provider of innovative inhaled drug delivery
solutions that enable partners to bring their medicines to
patients. With differentiated proprietary technology and
pharmaceutical development expertise, Vectura is one of the few
companies globally with the device, formulation and development
capabilities to deliver a broad range of complex inhaled
therapies.
Following the successful build out of its generics portfolio,
Vectura will continue to focus on securing new partner contracts
for the development of inhaled therapies, including novel
molecules. For these contracts the Group will move towards offering
development services where a smaller proportion of the overall
contract value is delivered through contingent milestones.
The Group will continue to invest in new proprietary platform
technologies, creating intellectual property to drive future
licensing and royalty income. In 2018, the Group invested
approximately 55% (c. GBP30 million) of its total R&D spend in
platform technologies and existing partnered programmes.
The R&D investment that has historically been focused
outside these priorities will be progressively re-deployed towards
new partner contracts.
Return of capital
In light of the Group's reducing R&D risk profile, future
cash generation expectations and strong cash balance, the Board has
approved, in principle, a capital return of approximately GBP50
million, commencing in 2019. The proposed return of capital is
currently expected to be structured as a tender offer, although the
Board continues to review other options. Further details regarding
the specific mechanism for, and the timing of, the return of
capital will be provided at the time of the Group's interim results
in September.
The Board recognises that considerable financial upsides remain
in the outlook for the Group, and, in the absence of future
inorganic growth opportunities, it intends to make additional
future 'special' returns of excess capital arising from operations
or from material one-off events, by the most appropriate
mechanism.
Current trading and outlook
Vectura made a positive start to trading in 2019, with
flutiform(R) in-market demand and partner supply chain management
resulting in product supply revenues being ahead of the Board's
expectations for H1 2019. Given the Group's visibility of
flutiform(R) product supply volumes for the rest of 2019, the Group
expects this strong performance to continue into the second half of
the year.
Following a constructive end of Phase II meeting with the FDA in
May, Vectura continues to seek a partner for VR647 Phase III
development and commercialisation. Irrespective of the outcome of
these discussions the Group maintains its financial guidance and
outlook expectations for 2019.
Vectura will report its interim results for the six-months ended
30 June 2019 on Tuesday 10 September 2019.
- Ends -
For more information, please
contact:
Vectura Group plc
David Ginivan - VP Corporate
Communications +44 (0)7471 352 720
Elizabeth Knowles - VP Investor
Relations +44 (0)7767 160 565
Consilium Strategic Communications +44 (0)20 3709 5700
Mary-Jane Elliott / Susan Stuart
/ David Daley +44 (0)7739 788 014
About Vectura
Vectura is a provider of innovative inhaled drug delivery
solutions that enable partners to bring their medicines to
patients.
Vectura has ten key inhaled and eleven non-inhaled products
marketed by partners with global royalty streams, and a diverse
partnered portfolio of drugs in clinical development. Our partners
include Hikma, Novartis, Sandoz (a division of Novartis AG),
Mundipharma, Kyorin, Baxter, GSK, UCB, Bayer, Chiesi, Almirall,
Dynavax and Tianjin KingYork.
For further information, please visit Vectura's website at
www.vectura.com
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END
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