Vectura achieves £9 million royalty cap from GSK Ellipta products

Company achieves the £9 million calendar year royalty cap on net sales of Ellipta products a year earlier than previously guided.

Vectura Group has announced that, based on the continued strong performance of GSK's Ellipta products reported by GSK in its Q4 2016 results announced on 8 February 2017 and the Group's subsequent receipt of its royalty statement from GSK, it has achieved the £9 million calendar year royalty cap on net sales of these products in 2016, a year earlier than previously guided.

Vectura receives a low single-digit percentage royalty on net sales of GSK's Ellipta products (Breo/Relvar Ellipta, Anoro Ellipta and Incruse Ellipta) under a legacy Skyepharma agreement with GSK, subject to a cap of £9 million per calendar year. The Group will record £5.4 million of this capped amount in its 2016 revenues, representing income since 10 June 2016, the effective date of the merger with Skyepharma.

This is additional to the royalties earned in respect of a separate Vectura legacy agreement with GSK which was subject to a £13 million calendar year cap. This cap was materially achieved before GSK decided not to extend the term of this latter agreement. Accordingly, for the financial year 1 April to 31 December 2016, the Group will record £7.3 million royalties under this legacy agreement.

James Ward-Lilley, CEO, commented: "We are pleased to see continued momentum in Vectura's recurring revenues driven by the strong performance of our partnered marketed respiratory products. The merger with Skyepharma has added to the Group's growing revenue streams and combined with anticipated pipeline and partnered programme developments, Vectura is well positioned to capture a growing share of the evolving respiratory market."