Vectura Share Discussion Threads

[justiceforthemany] 29/5/2019 22:29

Special Dividend is imperative here NOT another buy back. Did nothing for the share price

[justiceforthemany] 29/5/2019 18:53

If GSK were going to appeal I think they would have announced it by now.

[polaris] 29/5/2019 13:39

I've much better things to do with my time than go to an AGM. ;-)

Not a lot ever happens at these things, they are mostly procedural in nature. If it was an EGM then that might be different.

I note a few of the re-appointments had some resistance but everything passed easily.

Now it's back to seeing what progress can be made up to the release of the H1 figures in September.

[justiceforthemany] 29/5/2019 12:58

Which of you went to the AGM today?
Polaris I assume you did.
Any feedback?

[jimboyce] 29/5/2019 11:30

Don't wish to be cynical, but would this help the performance result for the directors long term incentive a boost in that the income per share would increase.

[polaris] 29/5/2019 11:17

Perception is a powerful thing. It can be positive or negative. The perception of VEC is that there have only been set-backs since the merger with SKP. Generic Advair is the main one people will come up with, followed by the failure of the Ph III trials of VR475 and the litigation with GSK.

HBM are selling out and this provides a strong distortion to the share price movement. A market is, by its very definition, a balance of the buyers and sellers. If there are a surfeit of sellers then the share price will fall as the buyers are exhausted. This will continue until the buyers return or a new buyer comes into the market. This may be from news or just that valuations are right for their investment case.

The news on the US IP case against GSK should have led to a larger movement, IMO. The $89.7m is currently worth about £71M and the share price has risen 7-8p since the announcement, a little over £50M. The judgement also has the 'willful' (US spelling) nature and is likely to lead to an enforcement of the same terms until patent expiry in the US. This is worth about $100M with sales projections. Then VEC can also go for punative damages for the impact of the disagreement on the Sp over several years. This, in itself, is a dangerous game but the US system is pretty damning in these things and the value is difficult to assess. All of this is discounted in the share price right now to £50M. If GSK appeal then they had better have some very good new information as they are only likely to get hammered further. The US and UK IP battles are separate entities but we know that VEC have appealed the UK judgement.

We also have the exparel final milestone looking more and more nailed on for 2021, possibly even before depending on the approvals outside the US, for $32m cf. the analyst consensus of mid 2023.

QVM149 submission and the recent presentation of results suggest that it will be approved and become a success in the triple therapy arena in the EU and RoW. The assumption will be that US submission will follow at some point. Novartis have this on their list of potential blockbuster pipeline drugs, though analyst consensus here is for about $250M in sales by 2024. VEC have the formulation rights and should be of the order of 2-3% of net sales in royalties, plus the approvals and launch milestones (another $5M).

These are near-term assets with considerable market value, at least IMO.

There are a raft of longer term developments: VR2081 (US generic symbicort), VR647, the nebulised therapy possibilities and the generic Ellipta series. Many companies would kill for a pipeline of possibilites that we have, yet the perception says it isn't enough.

VEC do lean heavily on the revenues from Flutiform. However, the majority of that is from manufacturing revenue and this will not go away, unless Flutiform is taken off the market...that isn't going to happen. Even if some generic was to appear in the future, VEC would still get the manufacturing revenues. Any generic would need to make sure that the delivery mechanism (inhaler) did not contravene any VEC patents. This is not something that can be done overnight - just look at the battles VEC have had with generics that have been off patent as far as the API is concerned for years! New products will come along in time and possibly eat into sales. However, there are growth possibiliteis in Japan, China and MENA regions, which will far outweigh any fall off in the EU market.

The business model chosen by VEC means that R&D spend is going to fall, mostly reimbursed by partnering of the technologies. Some of the legacy products will fall away but the profitability will continue to increase. Soon enough, the goodwill and intangibles write-offs will end and the underlying profitability of VEC will shine through...even in the headline numbers.

The number of stale holders here is incredible. As soon as the share price starts to rise they will sell, causing the share price to stall. However, once they are all out then the true value will come through, as new investors read into the numbers behind the story and see the truly undervalued nature of this company.

But, hey, i'm biased as i hold over 250k of these. That being said, I am yet to see any kind of bear case that holds even an ounce of water, given where we are now.

regards,

Paul

[ps0u3165] 29/5/2019 10:24

Can somebody remind me what the last share buyback did for the SP?

[base7] 29/5/2019 09:51

I would have thought most likely to start another buy back of up to 66mill shares rather than return cash to shareholders & the repurchase of 66mill shares equates to about 8p per share.If all bought @ around our current share price we would still have over £60 mill in the bank + funds due from GSK & additional royalties from GSK until 2021.

[diesel] 29/5/2019 09:47

The talk of a return to shareholders, and this is the second time, hasnt done anything for the sp, looks like we still might have a overhang, with no sign of an inst mopping them up.

[chrisdgb] 29/5/2019 09:41

How much cash per share do we think will come back...20p..???

[chrisdgb] 29/5/2019 09:41

How much cash per share do we think will come back...20p..???

[alexchry] 29/5/2019 09:07

If only the company were as good at drug development as they are at presentations and managementspeak. In the three years since the takeover/merger we have heard very little good news and lots about failure and delay. The most important news was the Ellipta deal with Hikma but it will be quite some time before that generates significant revenue.

[fhmktg] 29/5/2019 08:40

Hint of a possible special or ongoing dividend policy!Not sure a bolt on looks likely....more chance of a takeout in the next couple of years as the Ellipta projects reach trial stages?

[base7] 29/5/2019 07:35

Solid update with prospects for more positive newsflow in the second half together with continuing discussions regarding a substantial return of capital to shareholders.
I expect they want to see whether GSK appeal or move to settle in order to assess exactly how much we have.
I would rather they identified a high quality bolt on acquisition which could be paid for in cash & therefore not dilutive -which would demonstrate an ambition to grow Vec & which would be viewed positively by The Market.

[base7] 28/5/2019 22:50

66.7 mill shares bought back would be a good start ,in the absence of any suitable acquisitions.Lets hope trade has held up & our weak £ should help our revenues,profitability & cashflow.

[polaris] 28/5/2019 14:32

Not a lot of interest in the 20 items on the AGM agenda.

Resolutions 1-14 are standard business, although might be interesting to see how many vote against the remuneration packages (item 2)
15-18 seem a bit random to me - anyone care to explain?
They seem to relate to possible acquisitions including the possibilty to include a rights issue.
19 is the authority to purchase up to 10% of the issued share capital with the usual rules for price paid and settlement.
20 is also a standard item.

Looks like VEC will start to hoover shares up again post the AGM, with a mandate of up to 66.7M shares. That is well within the current cash pile and cash generation assuming the GSK patent decision holds and royalties are imposed to 2021 patent expiry.

[base7] 28/5/2019 12:47

Our poor share price is suggesting that no excitement is expected from tomorrows AGM

[best1467] 25/5/2019 10:38

I’m not sure HBM are totally responsible for the last 3years of misery for me the lack of clear leadership as to take a portion of blame.
They just don’t seem to communicate clearly from what we know they have had a breakdown in realationship with HBM .
I would suggest they asked for a change at the top and that’s one reason they are offloading but like many of us on here they became Vectura holders by default while they took a percentage in cash they still have a considerable holding.
Does anyone have an insight to the potential time frame for GSK to appeal I presume it as to have some sort of cut off point ,and on the basis of the share performance a one off special divedend with the surplus cash should be under consideration for me.

[diesel] 25/5/2019 07:52

While I believe that this is undervalued, primarily due to the overhang, I would rather see the cash used to expand the business. Having originally invested in SKP I look back to the days when they had products and technologies in most areas of drug delivery. If this management displayed, innative, dynamic and exciting qualities then other inst investors would be hoovering up the HBM stock, to have to buy your own as a way of clearing a overhang, says something, not sure what though!

[base7] 25/5/2019 07:29

Well I added to my bloated holding yesterday morning at under 80p & I am speculating that ,after 3 miserably disappointing years ,over which time substantial paper profits almost evaporated ,that we are now at an inflexion point & more good news,continuing with the AGM update,will see the worm turn,at very long last.
Only even more time will tell

[boadicea] 24/5/2019 21:36

Sounds like a good idea but they need to do it before we get any more good news.
The last couple of days have been ideal for "burying good news".

[polaris] 24/5/2019 18:58

alexchry - they can make an open offer at a fixed price for up to a specified %age of the share capital, for which anyone can apply. The reverse of a rights issue effectively. However, i doubt too many would take it up if it were at VWAP or average price over a short period, except those really wanting out.

Another small positive today and every little helps.

[base7] 24/5/2019 13:00

I am sure you are right & Vec cannot just buy HBMs shares, but perhaps our brokers could acquire them for clients ,if they have any clients who want Vec shares.
3 years since my SKP shares became Vec shares,which are now worth less than 50% of their value at the time of the acquisition , Markets are up over 20% over that period & Vec appears to be doing well right now,with revenues & cash flow improving(mainly in valuable foreign currencies).Every dog has its day ( generallY ) & my thinking is that Vec has been a dog for too long & that may change over the coming weeks/months.Depending on whether GSK appeal we could have substantially in excess of £200mill in the bank by the year end & be nearer to the final $32mill Pacira milestone - so we certainly arent going under & could be attractive to an acquiror,despite the cross relationships with various Pharmas.

[alexchry] 24/5/2019 11:42

base7 & others-not sure VEC can make an offer to buy HBM shares without making the same offer to all shareholders. VEC can choose to spend some of their cash pile buying shares in the market via a third party as before. They have said that they have cash surplus to operational requirements so I cannot understand why they are not using some of it to buy shares while the share price is under pressure due, in part, to HBM selling. I am not sure whether my glass is half full or half empty as I have lost a lot of money since the takeover of SKP by VEC but am still showing a healthy profit overall as I bought my SKP shares a long time ago.

[dp1umb] 24/5/2019 11:06

Base7 couldn’t agree more regarding BTG, I haven’t sold my holding because knowing my Luke there will be another bid as soon as I sell , but iam very tempted to add to my holding in Vectura Any thoughts?