Vectura Group plc: 2019 Preliminary Results

2019 Preliminary Results     

- Vectura reports 2019 financial performance ahead of expectations, with strong operational delivery -

- Executing the strategy to become an industry-leading specialist inhalation CDMO -

Chippenham, UK – 17 March 2020: Vectura Group plc (LSE: VEC) ("Vectura" or "the Group") today announces its preliminary results for the year ended 31 December 2019.

Financial highlights

Commenting on the results, Will Downie, Chief Executive Officer of Vectura, said:

"I am pleased to report a solid set of results for 2019 which were ahead of expectations, underpinned by continued flutiform® revenue growth. We have begun to execute on our new strategy to become an industry-leading specialist inhalation services company, as well as adding two very experienced CDMO executives to our leadership team and driving extensive activities to diversify our customer base.  

“We enter 2020 with a strong, cash generative business with several near-term catalysts expected, including VR315 (US) and QVM149 approvals, and the framework in place to deliver on our service focused business strategy, which fits well within an attractive inhaled market opportunity.”

Business highlights

• Executing on new strategy to become an industry-leading specialist inhalation CDMO
• Total revenue of £178.3m, up 11.1% (FY18: £160.5m)

• Product supply revenue of £115.0m, up 34.3% (FY18: £85.6m), driven by growth in flutiform® product supply revenues of £101.4m, up 36.7% (FY18: £74.2m)
• As expected, royalty and other marketed revenue of £51.9m, down 11.1% (FY18: £58.4m), following Q3 2018 expiry of EXPAREL® patents and a one-off milestone in prior year
• Following receipt of generic Ellipta® upfront licence fee from Hikma in 2018, Development revenues fell back to £11.4m, down 30.9% (FY18: £16.5m)
• Gross profit of £95.3m down 3.6% (FY18: £98.9m), impacted by normalisation of flutiform® supply chain margins and reduction in royalty and development services revenues
• R&D costs of £50.2m down 9.5% (FY18: £55.5m) in line with guidance, with approximately 50% of R&D spend focused on partnered programmes (FY18: 37.1%)
• Significant reduction in operating loss to £27.0m (FY18: £105.4m) as a result of a lower charge for amortisation and impairment of intangible assets, despite VR647 impairment of £8.2m
• Adjusted EBITDA¹ of £43.4m, up 11.3% (FY18: £39.0m), with revenue mix effects more than offset by a reduction in expenditure
• Strong liquidity maintained with closing cash and cash equivalents of £74.1m (FY18: £108.2m), following a capital return of approximately £43.4m in 2H 2019
• Submission of FDA response by partner Hikma in respect of generic Advair® (VR315 (US)) in Q4 2019 following completion of Clinical Endpoint study
• Vectura awarded damages and on-going royalties amounting to an estimated $200m in total, following US Jury verdict in patent litigation against GSK in the US, subject to appeal

Leadership changes

• Will Downie joined Vectura as Chief Executive Officer and Executive Director in November 2019 from Catalent, a world-leading CDMO
• Post period, Vectura appointed two key leadership roles to support the Group’s transition to a specialist CDMO organisation.  Sharon Johnson joined Vectura as EVP – Delivery Management, and Mark Bridgewater joined as Chief Commercial Officer 

Analyst webcast and conference call today

Vectura will present its Preliminary Results via live webcast today from 9.30am to 10.30am GMT. There will be a simultaneous live conference call.

 The live webcast and the presentation slides can be accessed on Vectura's website: https://www.vectura.com/investors/presentations-and-webcasts

Dial-in details are:

Participant local dial-in: +44 (0)207 192 8000

Participant free phone dial-in: +44 (0)800 376 7922

Participant code: 6690667