Results for inhaled medicine specialist Vectura (VEC) showed the company in a solid position as products were approved last year and, rather like the endgame in chess, moved in stages towards commercial launch by its major licensing partners. However, the end-result is that a pause in newsflow looks probable this year before royalty revenues from the company's stable of inhaled asthma medicine begin to ramp towards the end of 2014.
Vectura's major chronic obstructive pulmonary disorder products - NVA237, also known as Seebri Breezehaler, and QVA149 - are at late stages of approval and launch in Europe and Japan, with a US filing for NVA237 pencilled in by Novartis for early next year. As a result, this meant lower development fees for Vectura - the major work has been completed - and accounts for the fall in overall revenues. However, Vectura should start to see a regular flow of royalties from Novartis once the regulatory formalities are completed and the products are launched commercially. In the meantime, GlaxoSmithKline plans to launch Breo Ellipta, which uses some of Vectura's dry powder formulations, in the US during the third quarter of this year. This could generate a maximum annual royalty for Vectura of £13m if sales targets are reached.
Broker Canaccord Genuity forecasts current year pre-tax losses of £12.3m and a loss per share of 2.8p, moving to profits of £3.2m and EPS of 1.2p the following year.
VECTURA (VEC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 90p | MARKET VALUE: | £300m | |
| TOUCH: | 88-90p | 12-MONTH HIGH: | 98p | LOW: 61p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 40p* | NET CASH: | £70m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 31.2 | -19.6 | -5.2 | nil |
| 2010 | 40.1 | -13.8 | -3.2 | nil |
| 2011 | 42.9 | -13.3 | -2.7 | nil |
| 2012 | 33.0 | -13.2 | -1.3 | nil |
| 2013 | 30.5 | -10.4 | -1.8 | nil |
| % change | -8 | - | - | - |
*Includes intangible assets of £66.7m, or 20p a share | ||||
