Vectura hopes that liquidity swiftly follows strong full-year results
This article was originally published in Scrip
Vectura's revenues jumped by 24% to £31 million in the year ended March 31st, further securing the company's immediate future with a cash position of £74 million.
The UK-based company was again ahead of analysts' expectations across the board, beating Piper Jaffray's revenue forecast by £4.5 million and Nomura Code's by £3.8 million.
Vectura's gross profit was up by 31% to £27 million while loss after tax fell by 13% to £17 million.
Vectura expects a large amount of data to be released on many of its pipeline products within the next year, with those products licensed to Novartis offering particular up-side. It expects Novartis to begin Phase III trials of the chronic obstructive pulmonary disease (COPD) products NVA237 and QVA149 this year and could receive $7.5 million for each of the products if this occurs. NVA237 is a dry powder formulation for oral inhalation of glycopyrronium bromide, while QVA149 is a combination of NVA237 and the long-acting beta-agonist indacaterol.
R&D costs increased by 9% to £32 million, while total administrative expenses fell by 4% to £15 million. Vectura expects its cash burn to increase gradually as more of its pipeline products near late-stage development. However, it also foresees major milestone payments in the future that will cancel out this increase and hopefully take it to cash generation soon, the company added.
Novartis today assumed exclusive development and commercialisation rights to QMF149, a fixed-dose combination of indacaterol and Schering-Plough's inhaled corticosteroid mometasone. The deal is further evidence of Novartis's interests in the respiratory space, Piper Jaffray analysts said, which is surely good news for Vectura.
Vectura's reputation was further strengthened this year when it was included in the FTSE 250 index for the first time in March. This helped to make it more visible to licensing deals and investments and will ultimately improve its liquidity, the company's chief executive Dr Chris Blackwell told Scrip.
Vectura's focus has primarily been on respiratory treatments but it is also developing VR040 for the treatment of Parkinson's disease. Despite plans to out-license the product, it has begun a Phase IIb "at-home" study, the results of which are expected early next year. The company is in talks with several parties but cannot afford to stop or slow the momentum of the product's development, Dr Blackwell said.