Vectura earnings surge as Skyepharma merger creates step-change

Inhaler maker Vectura's interim revenue have soared following the merger with rival Skyepharma and a launch of new products.

For the six months ended 30 September, revenue increased 183% to £73.9m, compared to the same period last year, primarily due to the completion of the £441m merger with Skyepharma in June.

Recurring revenue rose by four percentage points to 76% and even excluding the effect of the merger, pro-forma revenues were up 31% to £89.5m.

Earnings before interest, tax, depreciation and amortisation (EBITDA) climbed 3575 to £21.5m, and pro forma EBITDA surged 63% higher to £30.8m.

Loss before tax widened to £18.6m from £2.7m after amortisation of £33m and exceptional costs of £9.6m.

Basic earnings per share increased to 3.2p from 0.7p.

At the end of September the company, which as a result of the merger has market capitalisation of just over £1bn, had £92m in cash, up from 8% compared the end of March, while net assets were near tripled to £696m.

The company launched several inhaled products including Flutiform, Ultibro and Breezhaler during the period and has started to recruit for a phase three study for drug device to treat severe asthma in adults.

Vectura is currently partnered with seven assets that are in phase three development or under regulatory review, and has several projects in the pipeline.

Chief executive James Ward-Lilley said: "We are making excellent progress with the merger integration process including completing the portfolio review, adding new programmes and implementing the new organisation structure. We remain on course to at least deliver the identified synergy savings and look forward to strong financial performance and continued progress across our pipeline in the remainder of the year and beyond.”

He said the company is well placed to deliver “significant further shareholder value” by capitalising upon changes in market dynamics, as a potential partner for both generic and novel drug development programmes and through the future commercialisation of its wholly-owned niche products.

Shares in Vectura were up almost 2% to 149.2p by 0920 GMT on Wednesday.