LONDON (Alliance News) - Vectura Group PLC Wednesday reported higher profits for its last financial year as revenue was buoyed by increased royalties and milestone payments.
The developer of treatments for airways-related diseases reported earnings before investment income, finance gains or losses, tax, depreciation, amortisation and one-off items of GBP16.2 million for the year to end-March, up from 5.2 million a year earlier, as a rise in revenue to GBP58.0 million from GBP36.5 million more than offset an increase in research and development costs to GBP36.1 million from GBP28.0 million.
Its pretax loss widened to GBP6.2 million from GBP4.8 million as amortisation increased to GBP20.9 million, from GBP6.9 million, but it posted a maiden net profit of GBP3.7 million as it booked a tax gain of GBP9.9 million, compared with a net loss of GBP2.3 million after a tax gain of GBP2.5 million in the previous year.
Increased royalty income was driven by higher sales of the Ultibro Breezhaler and Seebri Breezhaler chronic obstructive pulmonary disease treatments by Novartis, while the launch of Anoro Ellipta for the same disease by GlaxoSmithKline PLC triggered a GBP2 million milestone payment to Vectura. It also got EUR3.0 million in milestone payments after Sandoz got marketing approval for asthma treatment AirFluSal Forspiro in the Czech Republic and Portugal, while the filing acceptances for QVA149 and NVA237 from the US Food and Drug Administration triggered combined milestone payments of USD20 milllion.
In total, royalty revenue rose 55% on the year to GBP25.2 million, product licensing revenue rose 49% to GBP19.8 million, and technology licensing rose to GBP6.6 million from GBP4.3 million. It also booked development services revenue of GBP3.9 million and device sales of GBP2.5 million.
"Our partnered assets have started to generate meaningful royalties that, together with important development and regulatory milestones, helped Vectura achieve a maiden profit," Chief Executive Chris Blackwell said. "We have other value opportunities in development with partners and in our own portfolio".
The company did caution that R&D spending in the last financial year was below its guidance due to the timing of some spending commitments, and it expects R&D spending in the current year to be at the higher end of its expected range. It also expects to book one-off costs related to the closure of its Gemunden site in Germany and transfer of the operations to other sites in the UK and Germany, although this will also result in cost savings from the next financial year.
Vectura acquired the Gemunden site when it bought Activaero GmbH in March 2014 for about GBP108 million.
"Our ability to attract additional business development and partnership interest has been enhanced by the range of exciting technologies acquired with Activaero," CEO Blackwell said Wednesday.
Vectura said it had cash and cash equivalents of GBP90.0 million at the end of March, up from GBP81.7 million a year earlier, while net cash inflow from operating activities rose to 8.0 million compared with a GBP0.7 million outflow a year earlier.
Vectura shares were up 0.5% at 164.00 pence Wednesday morning. It had hit a new 15 month high of 165.00 pence on Tuesday and earlier in the session on Wednesday.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
Copyright 2015 Alliance News Limited. All Rights Reserved.
