Vectura (VEC) – which specialises in the development of inhaled medicines – has signed 12 manufacturing deals since January. Four of those were recorded during the first half, while the latter were agreed post-period-end – with one such deal announced a day prior to the group’s financial results. The tie-up in question is with Monash University, to develop inhaled oxytocin delivered via an inhaler – preventing post-partum haemorrhage in childbirth. The drug is currently only available via injection, but – according to Vectura – an inhaled alternative could improve ease of use and rapid onset of action.
For the six months to June, revenues were underpinned by growth in product supply sales of the ‘flutiform’ inhaler – edging up by 2.7 per cent to £49.7m. But this was tempered by a 29.6 per cent decline in development services to £5m, reflecting the phasing of development milestones, and a 3.3 per cent contraction in royalties to £29.3m. The latter fall was attributed to “market conditions”.
Cash profits benefited from a 29.3 per cent reduction in research and development (R&D) costs, in keeping with Vectura’s plans to lower expenditure here as it focuses on co-development programmes and tech platform investment.
Numis forecasts adjusted pre-tax profits of £29.3m and EPS of 5.5p for 2020, from £30.7m and 5.2p in 2019.
| VECTURA (VEC) | ||||
| ORD PRICE: | 115p | MARKET VALUE: | £685m | |
| TOUCH: | 114.6-115p | 12-MONTH HIGH: | 118p | LOW: 60p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 73p* | NET CASH: | £73.3m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 91.7 | -13.4 | -2.0 | 6** |
| 2020 | 89.7 | 3.2 | 0.3 | nil |
| % change | -2 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
*Includes intangible assets of £333m, or 56p a share ** Special dividend | ||||
