Vectura & Sandoz Revise VR315 Agreement
18 March 2010
Vectura to receive $9.5m payment and up to $25m loan facility
Chippenham, UK - 18 March 2010: Vectura Group plc (LSE: VEC) ("Vectura"), the specialty pharmaceutical company, announces today that it has agreed with Sandoz AG to take full control of the US development and commercialisation of VR315, its combination product for asthma/COPD. Good progress continues to be made with the development of VR315. In Europe, there is no change to the agreement signed in April 2006, and Sandoz will continue to be fully responsible for the development, manufacture and commercialisation of the product.
Under the revised agreement, Vectura regains full rights and responsibilities for the development and commercialisation of VR315 in the US and is released from its profit share obligations. The reacquisition of full control of this important product in the US is part of Vectura's strategy to become a cash-generative specialty pharmaceutical company, and VR315 will form the cornerstone of Vectura's nascent US operations.
Vectura will receive an additional payment of $9.5m from Sandoz in Q2 2010. This follows a $6m milestone received in August 2009 and $2m received in 2006. Potential further payments to Vectura may be generated under the revised agreement. Additionally, Sandoz will put in place a loan facility of up to $25m to facilitate Vectura's development and commercialisation of VR315 in the US.
Branded combination dry powder inhaler (DPI) therapy is the biggest sector of the respiratory market, with annual sales in excess of $10bn, and these products have the potential to provide a large value opportunity as generics or branded generics. There is increasing pressure to provide innovative medicines that are effective and affordable to more patients. Developing DPI products requires the integrated development of both formulation and device, which is Vectura's area of expertise.
Dr Chris Blackwell, Chief Executive of Vectura, commented:
"Vectura's strategy is to develop and commercialise products in the US. Together with Sandoz's partnership in Europe, VR315 has the potential to be a significant new product in the DPI market. Regaining complete ownership of the VR315 US programme is in line with this strategy and offers Vectura significant financial advantages. We are confident that we have the high level of expertise required to develop and successfully commercialise inhaled products, and with a robust balance sheet, we believe we have the ability to gain an enlarged share of a major market opportunity."
Chris Blackwell and Chief Financial Officer, Anne Hyland, will host an analyst/investor conference call today at 7.45 a.m. GMT. For further details please contact Juliet Edwards at Financial Dynamics on +44(0)20 7269 7125 or via email on [email protected]