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Vectura strikes Hikma deal

The respiratory specialist has struck a new development deal with a generics giant
November 13, 2018

Finally, a piece of good news for Vectura (VEC) investors. Despite a year plagued by legal proceedings with pharma behemoth GlaxoSmithKline (GSK) and challenges in integrating its acquisition of respiratory business Skyepharma, a new deal with generics giant Hikma (HIK) has the potential to get the market back on side.  

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The new deal lays the ground to develop cheaper, more readily available versions of GSK’s Ellipta portfolio, which could include up to five different inhalers, by licensing Vectura’s dry powder inhaler technology. Ongoing disputes over royalty payments with GSK would only effect this deal on the commercial launch of a future generic product which, given that current product patents only run until 2023, isn’t likely to pose much of an issue. 

Initially, Vectura will receive an upfront payment of US$15m (£11.4m), with around $6.5m of this to be recognised as revenue in 2018. Similar cash payments are expected in 2019 and 2020, although Vectura will fund the initial device and formulation development costs. Once the first product is transferred to Hikma's manufacturing facility, Vectura will receive a $5m payment and thereafter receive milestone payments of up to $75m depending on successful clinical trials and regulatory approvals. In fact, approval from the US Food and Drug Administration (FDA) is understood to account for as much as a third of that $75m figure, although Vectura could receive sales-related payments of up to $100m thereafter.