Pharmaceutical gurus argue that the respiratory industry - long dominated by a small number of drugs with well-known brands - is in need of a shake-up. Inhaler maker Vectura (VEC), following its recent £476m merger with drugmaker SkyePharma, is now in a position to be a big contributor to that. The group has arms in both the branded and generic markets and, through a recent partnership with UCB, could make a splash in the highly innovative respiratory biologics sector.
Interim results reveal rapid revenue growth powered by the merger which brought in an extra 13 royalty-earning marketed products. That said, on a pro forma basis (assuming the merged group had existed in the comparative period), revenue was still up 31 per cent, although that was after the receipt of a $10m (£8.1m) milestone payment from Hikma and $8m from Pacira as their respective drugs made important steps.
But the merger also dampened the numbers, contributing to a £33m charge for amortisation of intangible assets and £9.6m of exceptional costs. Strip out these figures and adjusted cash profits rose from £4.7m to £21.5m.
Broker N+1 Singer expects adjusted pre-tax losses of £6.8m, giving earnings per share of 0.6p in the nine months to December 2016, which is to be the new year-end, and profits of £27.2m and 4.6p in 2017.
VECTURA (VEC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 150.9p | MARKET VALUE: | £1.03bn | |
| TOUCH: | 150.7-150.9p | 12-MONTH HIGH: | 200p | LOW: 123p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 102p* | NET CASH: | £92m | |
| Half-yearto 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 26.1 | -5.0 | -0.7 | nil |
| 2016 | 73.9 | -22.4 | -3.2 | nil |
| % change | +183 | - | - | - |
Ex-div: na Payment: na *Includes intangible assets of £658m, or 96p a share | ||||
