Vectura Share Discussion Threads

[polaris] 04/1/2018 16:35

Dear All,

VEC have finally decided what kind of company they want to be going forward. While many will be disappointed with this apparent change in focus, i am very happy that they have taken this decision. VEC can now concentrate on leveraging technology in inhalation technologies to many partners. That also means that they will look to add other delivery technologies to their portfolio (several here know i follow this area with a keen interest).

VEC will now be a generics company specialising in delivery technologies for inhalation drugs, concentrating on the respiratory area. They can now beef up the team to negotiate better deals with tier I pharma - they have been royally screwed on several recent deals due to their lack of focus and taking the eye off the ball. High quality delivery devices will command 3-5% royalties on sales, without the need to be involved in the marketing chain, meaning high volume, high margin products going straight to bottom line.

With Flutiform, VEC have also shown that they can be a larger part of the chain, adding lower margin manufacturing capability to the overall chain. As the devices are proprietary and increasingly complex, this is not such a bad thing for tier I pharma to outsource.

One possibility now is that the Flutiform assets are sold to Mundipharma for a capital injection, but retaining the device royalties - that will depend on how the VEC management want to play it. That means sales may fall but margin will be higher and the company will become focussed. As a result of this decision, i think it more likely in the medium term that VEC will become a target for acquisition by a larger generics company.

I now expect to see VEC announce various generics programmes with a turnaround of 2-4 years on submitting ANDAs to the FDA. There are a lot of products out there that will come off patent and the device technology is one area that will hold its value. As such, the generic Advair resolution becomes more important as a test case for the technology.

It will be an interesting tightrope to walk while they realign and i think most analysts will not see the value of this decision. This will lead to strong swings in the share price as that information is passed on the larger holders, causing some to head for the door in the short term.

regards,

Paul

[eastbourne1982] 04/1/2018 16:23

I wonder if the change of focus is because a takeover is expected, i.e. keep things ticking over, be prudent, keep costs down and wait for offers to come in.

[richtea2517] 04/1/2018 15:24

Jimboyce good spot

[blueflex2] 04/1/2018 15:17

Strong rebound from lowest point today.

[jimboyce] 04/1/2018 12:23

Buys exceeding sales. I think this will move higher shortly from £1.13.Hopefully the brokers are filling their boots as we speak.

[zho] 04/1/2018 11:53

Broker views from Cazenove and Panmure being discussed on FTAlphaville

[alexchry] 04/1/2018 11:32

Webcast didn't add too much to the trading statement but what did come across was the strong focus on generics and the importance of the Advair generic, not just for itself but for future generics. I think there will be a significant share price rise if and when they get FDA approval.

[bill hunt] 04/1/2018 11:27

According to the slides the Hikma results should be in the first quarter re Advair generic. GSK litigation hearing is December but there is plenty of time here for out of court progress (or not as the case maybe).

[stevenlondon3] 04/1/2018 10:21

For what it is worth my reading of today's statement is that Vectura does not want to depress short to medium term profits, which would lead to a depressed share price that would attract an unwanted bid. Their cash flow models probably value the company markedly higher than the current share price...hence the successful share buy backs. The bears would argue that the models have rubbish put in,so rubbish out. I remain a holder (still below my average purchase price but did pick up a few at 93p.)

[boadicea] 04/1/2018 09:50

alex - No reason why the share price shouldn't hold steady as there is no material downside in the announcement and the recent lower price had heavily discounted that possibility. The objective seems to be one of safeguarding and enhancing the cash pile by avoiding longer term, go-it-alone high risk projects.
One notable missing factor was absence of any report of movement in the GSK litigation situation which presumably remains in the legal gluepot.

[alexchry] 04/1/2018 09:35

My thoughts, too, diesel, but hard to explain the sharp rise in share price on very large volumes unless it was someone sniffing around. Clearly, it wasn't advance notice of these results. Perhaps something to do with Advair generic but Hikma's share price didn't suggest that. share price held up well so far despite nothing exciting in the update, hope we'll hear something bullish this morning to give us and the share price a bit of a lift.

[diesel] 04/1/2018 09:15

Never thought this was an attractive t/o proposition.

[a0148009] 04/1/2018 08:51

A bid for the Company looks out of the question with so many partnerships and intention to increase them in future, seems set for product quality,innovation, good housekeeping and increasing markets.

[pooroldboy55] 04/1/2018 08:39

Well the markets don't like it ,so who and why did the price get pushed up over he last few weeks?

[richtea2517] 04/1/2018 08:37

Bit like getting a bike for Christmas but not the expensive shiny red one. Depends on how spoilt brattish the market is

[diesel] 04/1/2018 08:35

Can't call it bullish, but safe and realistic might find some favour. I like the fact that they have dropped the idea of buying a marketing co., expensive and risky, and not enough of their own products to viable. Looks like Fluti may reached peak sales or thereabouts, and I believe revenues from injectibles end this year. Sp could go either way, maybe the conf call will be enlightening.

[fhmktg] 04/1/2018 08:27

Let's hear what is said re Advair in the presentation at 10.00.Could be that it is sidelined again by referring it to a Hikma ( who surely have a time frame for resubmission if they are serious.)Competitor(s) making the running on this one and new developments coming along as well.Could be a dead duck if it isn't ready for 2019.

[jimboyce] 04/1/2018 08:21

Lack of news re advair. Perhaps allowing more purchases by broker whilst price lower.

[richtea2517] 04/1/2018 07:33

Dip then rise Or rise then dipOr just dipTake your pick

[alexchry] 04/1/2018 07:30

Read the trading statement a couple of times but can't make up my mind as to whether it's good or bad. One view of it is that hard times are here and time to batten down the hatches. Another view is that management has taken a very realistic view of the company and its pipeline and is now properly focused on maximising its assets and increasing profits. No doubt the market will make my mind up for me.

[nw99] 04/1/2018 07:08

Results in line and management on the ball identifying cost savings and profit opportunities . Bodes well for 2018

[a0148009] 02/1/2018 21:55

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[a0148009] 02/1/2018 21:46

boadicea - they look like accumulation of delayed trades carried over from 29th Dec.

[nw99] 02/1/2018 16:16

Stake building looks like stock will go much higher