Vectura hikes guidance after approval of a generic Advair and CDMO wins

Vectura Group PLC (LON:VEC) said sales and profits for 2020 will be better than the market expects, after the approval of a generic version of asthma drug Advair in December.

This US regulatory approval led to an US$11mln milestone payment from partner Hikma.

Moreover, the drug formulation specialist said it has won 18 contracts under its inhalation contract development and manufacturing organization (CDMO) strategy, with roughly £3mln of revenue from this new business being recognised in the second half of the year.

Management said they expect CDMO revenue to more than treble in 2021, while also anticipating £5-7mln of operating expenditure savings from a planned site closure in Switzerland, offset by some “low single-digit millions” of exceptional cash costs from the transition towards a development services model.

Vectura said it closed the year with cash and equivalents of roughly £79mln, versus £81.9mln at the half year.

A previously announced US$200m patent litigation win against GlaxoSmithKline is expected to be mostly paid by the end of this month and subject to 10% tax.