26 May 2021 07:03
Vectura Group plc
AGM Trading Update
Chippenham, UK - 26 May 2021: Vectura Group plc (LSE: VEC) ("Vectura", "the Group", "the Company"), an industry-leading specialist inhalation CDMO, today provides a trading update ahead of its Annual General Meeting ("AGM"), to be held tomorrow, 27 May 2021.
CDMO progress
Vectura continues to make progress with its CDMO strategy, with deal momentum building in 2021 and a good funnel of potential deals created through strong traction in the market for Vectura's offering. Revenues for the CDMO business in 2021 are expected to remain in line with previous guidance of more than tripling versus 2020.
Product supply revenue
As a result of the ongoing impact of COVID-19, market weakness seen in the ICS/LABA market in the second half of 2020 has continued into this year, with Q1 2021 market volumes similar to Q3 and Q4 2020. Whilst flutiform® continues to broadly maintain its market share, the overall market weakness is likely to result in revenues being marginally below our guided range of £75m - £80m, as our partners adjust their in-market stock levels accordingly. Gross profit remains in line with our previous guidance, driven by an improved margin expectation.
Vectura anticipates the market to normalise in 2022 and over the medium term, with flutiform® volumes following a similar trend.
Royalties and marketed revenues
In the first quarter of 2021 Vectura has received further payments of £13m with respect to GSK's Ellipta® products, of which £6.9m relates to payments under the legacy Skyepharma licence, and £6.1m relates to the US litigation award. Vectura also expects to recognise further royalty payments with respect to Ellipta® in Q2 2021, alongside royalties arising from the resumed launch of generic Advair® in April 2021.
Site footprint rationalisation
As part of the previously communicated decision to significantly reduce R&D operations at the Group's Muttenz site by 2022, the site continues to be transitioned to the UK as planned.
In Q1 2021, Vectura signed a put option for the sale of its oral manufacturing facility in Lyon. This process remains ongoing, and is expected to complete later this year. If the option is exercised, the Group would offer financial support to the site until the end of 2022 of approximately £10m, equivalent to three years of net negative cash flows for the site. Given the uncertainty over the ability of the site to become cash flow positive over the next five years, and the Group's focus on inhalation, this transaction is expected to deliver improved financial returns versus retaining the site, as well as simplifying further the Group's operations.
AGM details
The AGM will be held tomorrow at 10.30am at the offices of Vectura Group plc, Manning House, 22 Carlisle Place, followed by the General Meeting. As previously communicated, in light of COVID-19 restrictions, shareholders are not permitted to attend in person. Further information for shareholders, including the details of the AGM webcast, is available at www.vectura.com/investors.
- Ends -
For more information, please contact:
Vectura Group plc
John Murphy - Company Secretary +44 (0)207 881 1206
David Ginivan - VP Corporate Communications +44 (0)7471 352 720
Olivia Manser - Director, Investor Relations +44 (0)7947 758 259
Consilium Strategic Communications +44 (0)20 3709 5700
Mary-Jane Elliott / Jessica Hodgson / David Daley
About Vectura
Vectura is a leading specialist inhalation CDMO that provides innovative inhaled drug delivery solutions that enable customers to bring their medicines to patients. With differentiated proprietary technology and pharmaceutical development expertise, Vectura is one of the few companies globally with the device, formulation and development capabilities to deliver a broad range of complex inhaled therapies.
Vectura has thirteen key inhaled and eleven non-inhaled products marketed by partners with global royalty streams, and a diverse partnered portfolio of drugs in clinical development. Our partners include Hikma, Novartis, Sandoz (a division of Novartis AG), Mundipharma, Kyorin, GSK, Bayer, Chiesi, Almirall, and Tianjin KingYork.
For further information, please visit Vectura's website at www.vectura.com
Forward-looking statements
This press release contains forward-looking statements, including statements about the commercialisation of products and the successful execution of the Group's strategy to win new customer contracts for development services. Various risks may cause Vectura's actual results to differ materially from those expressed or implied by the forward looking statements, including: failure to develop a strong pipeline of new CDMO opportunities and to successfully convert these opportunities into new revenues with an acceptable margin profile; the requirement for substantial funding to conduct research and development to maintain a competitive service offering; commercial limitations imposed by patents owned or controlled by third parties; dependence upon strategic alliance partners to develop and commercialise products and services; difficulties or delays in obtaining regulatory approvals to market products and services resulting from development efforts; and product initiatives by competitors. As a result of these factors, prospective investors are cautioned not to rely on any forward-looking statements. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.