Respiratory specialist Vectura (VEC) has reported a maiden net profit of £3.7m after a year of bumper royalty and milestone payments from its big pharma partners boosted revenues by nearly two-thirds. Lower-than-expected capital expenditure costs propelled cash profits 212 per cent to £16.2m, marking a significant improvement from inaugural cash profits of just £5.2m this time last year.
Vectura's partnership with Novartis (NOVN) triggered a $12.5m milestone payment last year when the Swiss giant filed an application with the US Food and Drug Administration (FDA) for QVA149 and NVA237; two new treatments for chronic obstructive pulmonary disease (COPD). If approved by the end of 2015, the new products could generate further royalties for Vectura.
The group's own product pipeline is progressing well, too. Chief executive Chris Blackwell confirmed plans to initiate Vectura's first in-house Phase III trial of a wholly-owned asset Favolir later this year.
Peel Hunt upgraded profit forecasts for the current year by 15 per cent. The broker now expects adjusted pre-tax profits of £19.5m for the current financial year, giving EPS of 4.7p, up from £14.2m and 4.1p respectively.
| VECTURA (VEC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 165p | MARKET VALUE: | £665m | |
| TOUCH: | 164-165p | 12-MONTH HIGH: | 165p | LOW: 114p |
| DIVIDEND YIELD: | nil | PE RATIO: | 41 | |
| NET ASSET VALUE: | 55p* | NET CASH: | £90m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 42.9 | -13.3 | -2.7 | nil |
| 2012 | 33.0 | -13.2 | -1.3 | nil |
| 2013 | 30.5 | -10.4 | -1.8 | nil |
| 2014 | 36.5 | -4.8 | 1.5 | nil |
| 2015 | 58.0 | -6.2 | 4.0 | nil |
| % change | +59 | - | +167 | - |
Ex-div: na Payment: na *Includes intangible assets of £161m, or 40p a share | ||||
