Vectura Share Discussion Threads

[alexchry] 23/7/2019 16:09

jimboyce-cash windfall from GSK, if it ever comes, will be very welcome but investors, quite rightly, are looking at future prospects. It is likely to be around five years after the merger before VEC come up with a potential big money-earner and that has largely missed the boat due to price reductions and competition. Polaris has an exciting vision for the future but that is too far away to have too much influence on the share price at the moment. The company just seems to have marked time since the merger, FD gone and now MD going. At the moment I can see little reason to buy, we need some really unexpected good news from somewhere.

[pooroldboy55] 23/7/2019 15:32

Gift coming our way shortly ???? could be years.

[jimboyce] 23/7/2019 15:17

Cannot see any logic for the present selling. Why would you sell now with the prospect of a ten percent gift coming your way shortly. I just do not understand.

[justiceforthemany] 23/7/2019 15:10

AT trades working over time today. Nearly all sells.

[base7] 22/7/2019 17:34

Dame Louise Makin fancying would last challenge would be a great choice for CEO but at the age of 58 & about to cash in even more many millions from BTG ,she really does not need the money & our best bet would be for her to become Non Exec Chairman ,the chances of which are also slim.

[justiceforthemany] 22/7/2019 16:46

A debt free company - particularly in the pharmaceutical sector - with £100M-£200M in cash will always be highly likely to be taken over and surprising that no offer has as yet been disclosed by the board.

[diesel] 22/7/2019 16:40

We really need to see a dynamic leader here, for too long they have disappointed, they need some ambition, some plans to use some of the cash to grow the business.

[pooroldboy55] 22/7/2019 16:09

Going to hold off buying for now as i said a few weeks ago can see this back in low 70s no info just gut feeling.but as you all know i've been wrong many times !!!!
cheers POB

[polaris] 22/7/2019 14:01

Agreed that if you joined as an SKP shareholder then the 'returns' have been slightly worse than awful. Most of the current share price value comes from SKP IP and products. The notable recent development failures are from VEC IP, same with the origin of the litigation (SKP IP still being paid but expires in Q4 2019). A lot of development projects have also fallen by the wayside in the last 2 years from the VEC early stage programme. The only positive is that almost all of that is now behind us and there are some decent wins on the horizon: QVM149 (submitted), generic Symbicort, generic Advair, the final Exparel sales milestone and GSK litigation in the US. Longer term there are the Ellipta generics and the nebulised platform possibilities.

Yes, everything is underpinned by Flutiform, supported by the royalties from Ultibro/Utibron/Seebri/Breelib/Airflusal and Rayos. I discount everything else on the royalty front to zero. The plans for Flutiform with Kyorin are the key for me - expansion in Japan and China seems to be the way forward and their targets for sales and market penetration are aggressive. I would also not discount the MENA region, with its growing population and markets. This can support a great deal of R&D and IP commercialisation.

I said some time ago that my valuation was in the 88-105p region without the impact of the US litigation. With the information in the public domain then i rate VEC in the 100-120p region, based on the uncertainties in the US litigation timeline and a possible appeal. That's an upside of 25-50% from here, which is good enough for me with my trading style. A bid would add another 20-25% on those numbers, although it is unrealistic to expect a bid without the litigation result being known in both US and EU, IMO.

H1 results season is upon us and things will be much clearer going forward for FY revenues by the end of August, even though VEC will not report actual numbers until mid-September. I tend to pick up the majority of my information from partner results.

regards,

Paul

[alexchry] 22/7/2019 13:08

best1467-agree that so far the merger seems a bad deal for SKP shareholders. The merger may eventually prove successful for both partners but the journey has been too long for the FD and now for the MD. I presume they have got fed up of playing golf four days a week as surely the achievements of the past three years only required one day a week working.

[best1467] 22/7/2019 12:44

My comment REf Fluitform is as a SKP shareholder I’m frustrated that we merged with Vectura as that side of the business as produced very little in the years since the merger.
I’m certain all SKP holders would be a lot better off than we are at the moment while we have some long term drivers it always seems long term IMO.

[aceuk] 22/7/2019 09:33

Said at the time Vectura got SkyePharma on the cheap and that has been borne out in my opinion.

My original investment is destroyed but it is worth so little as to not even be worth selling, at some point may be useful as a rather large capital loss :-)

[pooroldboy55] 22/7/2019 09:19

Almost added more late Friday .

[polaris] 22/7/2019 09:16

Alexchry - put it this way, i think VEC needed the merger much more than SKP if you look at the product split and what has happened to those and the IP since the merger. The ex-SKP assets remain the main revenue and EBITDA driver for the combined entity.

That said, i continue to believe that the market has it wrong with VEC valuation. I've been adding in the last few days at this level, but only because i am changing the mix of my holdings from daily-funded to Qly-funded so that i have a well-defined exposure on the 3-9 month timescale. Thankfully, gold and tobacco have been taking up the slack of my VEC position in recent weeks.

[alexchry] 22/7/2019 09:08

With the Flutiform revenues would SKP shareholders have done better if the company had remained independent of VEC or would this have been a dead end for SKP?

[polaris] 22/7/2019 08:46

Haven't we been through this before. Why would you strip out Flutiform from VEC numbers? It's like stripping out the operational mines from a mining company and then saying there isn't much left by only looking at the exploration. Well, yes, that is true but the main value is in the marketed (operating) products. Flutiform is the revenue driver that provides the bulk of profitability at the operating level. This in turn allows the other products to be developed. It does not matter what their carrying value is at this point in the development cycle. The revenues are also mostly generated from product manufacturing now. Why hypothesise about a situation that will not occur?

[frazboy] 21/7/2019 20:59

best1467 - but why would you strip flutiform out of the numbers? Take the market cap, knock off the cash, take of your guesstimate for GSK legal action, and the value attributed to Flutiform, and you would not expect there to be a huge amount left, surely? They are the company - I realise there are plenty of other revenue streams e.g. Ulitbro, Seebro etc but the key NPV contributors, for now, are those mentioned.

By the way, on the topic of a bid, there was some pretty good FT Alphaville Markets Live chat on VEC about 12 to 18 months ago - all worth reading. A bid can't be discounted, but I doubt it'll be coming from, say, GSK.

[best1467] 21/7/2019 20:12

But as I’ve said before strip Fluitform out of the numbers and it doesn’t look great.
While we have a cash pile and The Potential GSK money but who knows how long that will take with appeal likely.
Not sure what the time frame is on the first ellipta product news but 12/18 months at least I would imagine so not slot to get excited about in the short term

[insideryou] 20/7/2019 08:37

And there she goes, back under 80p. Comical really how money is literally printed by syndicated attacks on hundreds of stocks that have nothing to do with value.

[justiceforthemany] 19/7/2019 17:42

Quite incredible how the share price has been dragged down to sub-80p yet again despite the wider news. The chart was pointing to a return to 100p+. No doubt messrs Connor, Clark and Lunn are still shorting this lurking at 0.49% just below the FCA reporting threshold.

What Vectura need is an activist like Elliott to buy in and finally drive a sale of this company to the highest bidder. Saga rose almost 20% this week on them buying in.

[best1467] 19/7/2019 16:42

As discussed previously ifthe GSK hearing is in favour of vec and theHikima Elipta range looks promising then a bidfrom both is very likely

[frazboy] 19/7/2019 14:05

There's chat on this board about a bid from time to time but I doubt many companies suggested would be genuine contenders due to conflicting interests. However, if there is genuine value in the company then perhaps a PE offer is a possibility - the cash pile is certainly a sweetener for them. Just a thought...

[diesel] 19/7/2019 12:36

Alex... Totally agree, maybe a new CEO will bring some fresh ideas. For a company in this sector to be sitting with £100m in the bank with no initiatives in how that could be invested in the business is somewhat disappointing. It's almost a total reversal in how SKP started out, plenty of plans for growth but no funds, hence the numerous bond offerings and equity dilution, but Fluti and Exparel were the rewards.

[frazboy] 19/7/2019 12:32

Agreed. I would expect the final judgement to be sooner rather than later (within a few months). Then, IIRC, a poster in here said they had one month to appeal...? Is that true, I'm not sure, but doesn't seem to be unreasonable. For the appeal to be held could take a significant amount of time (presumably a good indicator would be the amount of time it took the original case to get to court). Now, assuming GSK do appeal I would hope that any final, final, settlement would include an allowance for the decaying time value of the award - say equivalent to the current discount rate, thus meaning you don't need to take that into account in a spreadsheet. And then of course there is Vectura's claim on the remaining patent infringement. Kind of difficult to put a risked value on all of this but I would plump for £100m.All a bit speculative, time will tell.

[polaris] 19/7/2019 11:59

Remember, the final judgement is not yet known. We must await that before getting haead of ourselves. VEC do seem to be in a strong position but it it entirely the remit of the judge to weigh all the information from the different parties. The judgement could be today, next week, next month or several months from now, depending on the information that the judge requests to make the final decision.