Vectura Share Discussion Threads

[rogerrail] 05/2/2018 20:56

Kyorin Q3 results at end Dec 2017 can be found herehTTp://www.kyorin-gr.co.jp/en/news/2018/001202.shtml

[rogerrail] 05/2/2018 20:53

Flutiform sales in Japan continuing to perform well and on target to hit Y12 billion for full yr, a growth rate of just under 20% on last yearSales to end of Qtr3 were Y8.9b v Y7.6b last time .VEC get revenue from supply as well as royalties

[cumnor] 05/2/2018 19:53

Less to do with advair than with the perception of a CEO shown up to be uninspiring and lacking in the talent needed to develop a potential billion pound pharma-little has changed in the figures and income which is guaranteed. The market quickly cottons onto a weak CEO unlikely or incapable of surprising. A more entrepreneurial CEO could play VEC's assets, which are quite substantial, and position, very differently. The advair thing, in terms of anticipated revenue and profit is, as polaris pointed out, not significant. imo

[pooroldboy55] 05/2/2018 16:41

Well end of day ut trade well under bid price again, not looking good for tomorrow.
Now almost at a five year low.

[pooroldboy55] 05/2/2018 08:12

Ok let's start the week on cheerful note what the chance of it going into the 70s this week?

[pooroldboy55] 02/2/2018 12:34

Well still hanging onto blue just

[cumnor] 02/2/2018 11:32

They tend to go for companies with weak and predictable CEOs.

[diesel] 02/2/2018 09:18

What no posts!
So there you have it 500k buyback, over 12 mill shares traded.
Are we seeing a sell off, well not reported yet, but it does look like this has been targeted for the traders to make small margin on volume robot trading, with 90p being the limit.

[polaris] 01/2/2018 21:53

The Airflusal Forspiro is not quite generic seretide as it cannot be used interchangeably, due to the different inhaler type. The same is true for Sirdupla (Mylan), which was launched in 2015. They have clinical equivalence but it is the job of the assessor to educate the patient on the differences before it can be freely prescribed. It's a bit of a grey area TBH.

They are responsible for the falling sales for GSK in Europe, but the US market accounts for around 50% of global sales. That's the one where the entrants want to be first. Peak sales for Advair/seretide was in 2013/14 at around 9bn US. It has also been falling since as the next generation of inhalers and combi therapies appeared. Once switched then there are no generic alternatives to Ellipta series or the Ultibro series. Big pharma are canny. The window is closing for real returns from generic Advair in the US.

[0815exitstrategy] 01/2/2018 21:38

@polaris: In Europe the Vec generic advair product is already on the market with Sandoz (Airflusal Forspiro).

[polaris] 01/2/2018 21:19

Popper joe - interesting. The other info is spot on what i know and so i would say this has some credence. The problem, as rightly pointed out, is that the FDA have issues with the primary clinical endpoint from the trials and the resolution there may require another trial so no approval before 2019. If Sandoz get their generic approved (my guess there is that the GDUFA date will be no more than 13 months post their submission - i took this from the VEC/Hikma filing for the same thing). That means they could be to market in H2 2018, which would impact any market share for the VEC/Hikma variant.

It also gives some info on the litigation with GSK on the Ellipta series that i was unaware of. VEC IP is capped at 13M GBP p.a. on the Ellipta series, but if the resolution goes the way of VEC at the Dec 18 hearing then it can be awarded more than this in damages. It also states that the IP rights last to 2021 according to VEC. With sales expected to be well over 1bn GBP then it could be a reasonable price driver for VEC. If both SKP and VEC IP are upheld then the Ellipta series can bring 22M GBP p.a. to VEC, all straight to bottom line!

Thanks for digging out the post, it was one i missed somehow.

regards,

Paul

[popper joe] 01/2/2018 20:57

See message 6461, in which I copied and pasted the section from FTalphaville that in turn claimed to be quoting a note from Citibank.

[polaris] 01/2/2018 20:46

Nothing obvious i can find on the exact royalty levels. There was a comment in one of the early VR315 announcements (pre-disclosing it was with Hikma for generic Advair) that the agreement with partner was for development, manufacturing and commercialisation. That could lead to 15% total royalties on sales. The agreements do also clearly state that the development is for the US market only. Now, approval by the FDA may lead to quicker approval in Europe and RoW, but it is not a given. That impacts the potential market size.

[polaris] 01/2/2018 19:50

Not a fan of registering for something i am not going to use, even if it is "free". They just sell your details on to others - got to make a profit somehow. If it was just a comment by someone without any back-up then i would ignore it. I'll check back through the various filings and see what i can come up with.

regards,

Paul

[a1ord53] 01/2/2018 17:25

P J , what was in the Citi note ?

[popper joe] 01/2/2018 17:06

Paul, this was the thread. Discussion on Vectura began at 11:29am. Supposedly quoting a Citibank note.



requires free registration.

[pooroldboy55] 01/2/2018 16:44

Not looking good for tomorrow ut price under bid and 1 million shares not good

[polaris] 01/2/2018 16:19

popper joe,

If 15% then it suggests that VEC are also involved in the supply chain and manufacturing. The margin on that 15% would be significantly lower, of the order of 5.5-6.5% (3-4% royalty and 2-3% from manufacturing chain). 15% based solely on IP rights would be huge if true. However, i don't rule it out as the overall price of the generic will be much lower than the patent protected drug+device.

Do you have a link to the article? i'd like to see the context but a quick seach on Alphaville didn't give me any relevant hits.

regards,

Paul

[cityfarmer] 01/2/2018 15:46

Well we have taken a real good shafting each day this week and I am really feeling sore! All seems to be robot trades as has been the case for weeks. A relentless tsunami of selling and no sign of that stopping. Never entirely convinced by share buy backs and VEC’s does seem a little pointless and if anything is rewarding the seller by providing liquidity. Really didn’t expect this volatility after the merger - Just hope 90p support holds ………;.

[a1ord53] 01/2/2018 15:25

HBM Health had chance after merger been announced - to sell all their positions , cause arbitrage was very liquid.And they neither sold nor reduced their holdings in both companies.
After merger they had chance to sell at 150-170 p level and they didnt.
They had huge profit and mismanaged it for their investors.
They are just criminals imo .
If they were not started to sell at 120p level, share price would be now around 140-145 p
Looks like they found buyer at 90 p for now - Woodford ? or other majors ?

[jimboyce] 01/2/2018 15:18

Except dividends are now taxable.

[diesel] 01/2/2018 14:43

Not sure that the buyback has much to do with this, 9mill shares traded today, and typically they are buying back 700-800k, not even 10% of the volume. This is being traded by the robots, thousands of trades a day, the market makers sense a share that has some weakness. My take on buy backs is a sign of Managerial weakness, they can think of no better return on investment, no acquisition, no funding of new products...they would be better off embarking on a divvi policy.

[popper joe] 01/2/2018 13:47

Paul, on FTalphaville on the FT site on 12th Jan, it was stated that VEC were entitled to 15% royalties from Hikma. That would imply a much greater loss than you suggest, but I cannot vouch for the accuracy.

[pooroldboy55] 01/2/2018 13:38

Thanks for that Paul
Cheers POB

[polaris] 01/2/2018 13:22

Hi,

looks like i logged on at exactly the right time!

I don't have the details of the agreement between VEC and Hikma on the royalty %age. If we take similar agreements with other products then you are looking at low to mid single digit royalties on sales and, potentially, a manufacturing chain contribution. That would be a higher overall %age of sales but with a low margin, due to manufacturing and distribution costs.

Taking the former then i would say 3-4% of sales. Advair/Seretide current sales around 3Bn GBP. Taking into account pricing pressure i would expect a 50% drop in the price of Advair so the total market to be of the order of 1.5Bn GBP. First generic to market can expect up to 50% market share, so 750M GBP. That works out around 22.5-30M GBP to VEC.

However, the generic is submitted to the FDA and so, as far as i can tell, only covers Advair sales in the US. I don't have region by region sales, but this is likely to reduce royalties by another 50%...Not sure what is happening re approvals for generics in Europe and RoW.

The situation becomes much more complicated with several generic entrants in a short period of time (here we have GSK itself, Hikma, Sandoz and Mylan as possibilities). Price pressure will drive sales value down by as much as 70% (a 1Bn GBP or so global market size) and the %age cuts for each entrant will be ever smaller. Largest player will likely get 30% of net sales, coming in at 9-12M GBP to VEC, assuming it is Hikma. That also assumes global generic penetration.

The supply chain side could add revenues of up to 10% of total sales but the margin is likely to be 1-2%. I have no idea who will perform manufacturing side. VEC do it for Flutiform but not any others AFAIK.

All these numbers are based on my previous experience of agreements. They could be very wide of the mark in this case, as i don't have the filing information for the agreement and we have no sales information to make a guestimate of royalty level. So please, take everything i have written with the correct sized pinch of salt. ;-)

Honestly, it is not a game changer for VEC, unless they are the only generic entrant to market. It's all bottom line though, which is a plus.

regards,

Paul