Partnerships with pharma behemoths continue to drive growth for respiratory specialist Vectura (VEC). The recent launch of new products marketed by partners Novartis and GlaxoSmithKline (GSK) led to a 56 per cent increase in royalty payments in the period. This is likely to be enhanced in the 2017 financial year thanks to the upcoming launch of two new Novartis drugs that use Vectura technology. Approval of these products earned the group $22.5m (£15.4m) of milestone payments in the period.
Vectura continues to work on its product development pipeline, and now has two drugs in the clinical trials phase of development. That said, research and development expenditure growth was modest compared with previous years at 17 per cent. Although this helped to boost earnings, the net benefit to the bottom line was partially offset by a reduction in tax credit for the year.
Towards the period end, the group announced its intention to merge with fellow respiratory drugs specialists SkyePharma (SKP) in a deal that will create a group valued at around £1bn. Analysts have withheld forecast updates prior to the completion of this deal, expected on 10 June.
VECTURA (VEC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 166.2p | MARKET VALUE: | £682m | |
| TOUCH: | 166-166.2p | 12-MONTH HIGH: | 200p | LOW: 145p |
| DIVIDEND YIELD: | nil | PE RATIO: | 139 | |
| NET ASSET VALUE: | 58p* | NET CASH: | £99.8m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 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 |
| 2016 | 72.0 | -1.9 | 1.2 | nil |
| % change | +24 | - | -70 | - |
*Includes intangible assets of £150m, or 36p a share | ||||
