Last year is fading from memory for pharma group Vectura (VEC). Revenues from top-selling drug Flutiform have returned to growth, partner Hikma (HIK) has restarted third-phase clinical trials after a new unbranded asthma medicine was rejected by the US Food and Drug Administration (FDA), and the integration of SkyePharma has reached its final stage.
The only ongoing concern from the group’s 'anus horribilis' is a patent dispute with GlaxoSmithKline (GSK), which added £2.3m in legal costs during the first half. Vectura is currently entitled to £9m in royalty revenues for manufacturing the device, which dispenses one of its peer's leading asthma medicines, but the pharma giant withdrew extension of the contract in late 2016. A resolution is expected in early 2019.
Still, there's plenty to be optimistic about. Two of Vectura’s new respiratory drugs are reaching the end of their development phase and could be launched – with help from partners – in 2019. Generic drug development is also progressing well, supported by a strong balance sheet. Meanwhile, tight cost control, including lower research and development (R&D) costs, and better margins helped send adjusted cash profits up 52 per cent to £24.6m in the first half. Broker Panmure Gordon expects full-year Ebitda of £30.1m and EPS of 2.9p (from £25.9m and 2.4p in 2017).
| VECTURA (VEC) | ||||
| ORD PRICE: | 75p | MARKET VALUE: | £499m | |
| TOUCH: | 74.9-75p | 12-MONTH HIGH: | 127p | LOW: 68p |
| DIVIDEND YIELD: | na | PE RATIO: | na | |
| NET ASSET VALUE: | 81.8p* | NET CASH: | £83.9m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 (restated) | 78.8 | -44.5 | -5.6 | nil |
| 2018 | 79.9 | -29.9 | -3.5 | nil |
| % change | +1 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £453m, 68.1p a share | ||||
