Vectura Share Discussion Threads

[base7] 23/1/2020 23:13

I look forward to re assessing my position once our share price hits 162p,& hopefully ,by then,the momentum taking us to 162 will continue propelling us to higher levels.I am also interested to see how our new CEO will differentiate himself from his predecessor & what growth strategies he will pursue .

[jimboyce] 23/1/2020 21:47

So that's an exit price of at least 1.62, based on present issued capital.

[frazboy] 23/1/2020 20:49

Talking of litigation... an update tomorrow perhaps?https://dockets.justia.com/docket/circuit-courts/cafc/20-1054

[polaris] 23/1/2020 19:45

@insideryou - the cynical scientist part of me laughed at your post. My colleagues may not agree with you that i am open to my critics. ;-)

For the second short question, the short answer is yes but...

I have a set of scenarios that can play out and each would cause me to sell part of the whole of my holding if they come to pass. Even simple valuation metrics change as a function of time so it is not just a case of hit price X and i will sell no matter what.

2020 will see movement on the litigation with GSK (a big short term price driver) and the decisions on VR315 and QVM149. There will also be first sales indications for analogue Symbicort (Airbufo Forspiro) and hopefully further progress on generic Symbicort in the US (VR2081). I'd also expect updates on the CDMO realignment, Ellipta generic development progress and the nebulised therapy candidates. There is the outside chance of Exparel sales reaching $500 M releasing the final $32 M milestone. That's a lot of potential value to unlock.

VECs day to day business goes from strength to strength and is well primed for further growth, especially if Kyorin can get the extra indications approved and make moves on approval in China. That product is £100 M in sales and around £35 M in earnings on manufacturing revenue, probably closer to £40 M if you include the royalties.

VEC will still report a headline loss for FY2019, due to the accounting for intangibles and write-offs from the VEC/SKP merger. Some people will not look past that and sell into any strength.

What price would i like? That is maybe a better question. The aim is a £1 Bn+ valuation and see where things stand?

[insideryou] 23/1/2020 10:44

Polaris.Do you have an exit price?

[insideryou] 23/1/2020 08:57

Looked to have played that well... Vec does appear to be predictable with its trading patterns? Falls around 10% from its highs before setting off again... May be able to buy again in high 80s...By the way as a side note. Polaris is a very classy individual. As a psychologist, I specialise in human emotions and how they convey and discuss... Paul is a talented conversationalist, open to his critics, and never allows his ego to control his own belief biases.Its refreshing to observe.

[qackers] 18/1/2020 19:43

Polaris - Thank you for your reply and Popper Joe for your further comments. Much appreciated

[polaris] 15/1/2020 23:58

Thanks for the clarification popper joe. I wonder how long it'll be before Justia updates post briefing...and whether there will be anything of interest in it.

[popper joe] 15/1/2020 21:55

Paul, regarding the difference between the UK and US litigation. There are fundamental differences in the two cases; it is not simply a case of different legal systems interpreting the same argument differently.

In the UK, GSK instigated proceedings and requested the Arrow declaration. The request for the Arrow declaration sought to prevent VEC from targeting GSK products with a pending patent that, at the time of the court case, had not been granted, but which had been worded specifically around the active ingredients that GSK had been using. GSK were able to point to a history of VEC submitting incrementally different patents for many different ingredients, but all based around a single concept. Hence they were successful with their "obvious and prior art" argument.

In the US, it is VEC who have instigated proceedings and it seems a more straightforward argument. VEC were able to convince the Jury that GSK had used a VEC patented process in the Ellipta range. GSK argued that they hadn't. It will be interesting to hear what their appeal is based on.

[polaris] 15/1/2020 18:50

@best1467. Never stop asking questions. If someone can't back up their point of view then they are likely not what they seem. I have no problem with your post, after all it's not the first time I have been associated with a company by another poster. ;-)

edit
A colleague told me a long time ago: knowledge is power...his bringing together and touching of index fingers in front of him while saying this will stay with me forever. :-D

[polaris] 15/1/2020 18:43

@Rogerrail - they have to get to the run rate and then hold it for 4Qs though. It is on reported sales not run rate. So best case scenario from here are 3 subsequent Qs above $125 M that give a total above $500 M. That would lead to milestone end of Q4 2020. I find that unlikely, but there is a pediatric indication and some phase IV studies that could lead to expanded indications. There is also the EU submission. We will know more when Pacira report sales forecasts for 2020, probably around the Q1 results.

@qackers - just means VEC have given up overturning the arrow declaration against sales in the EU, which invalidate the patents in those markets as targeting GSK. US law and interpretation is different and the onus is on GSK to try and overturn the original decision. Brief on the 24/1 will hopefully shed light on what grounds. They may just be looking to limit the royalties rather than the current 3 % on all US relevant sales. The decision may also be related to costs and the size of the legal team available. You choose the one you are most likely to win.

[best1467] 15/1/2020 18:27

Polaris I feel slightly guilty that my comment received such an in-depth response but an interesting read and I wish you all the best with your large investment here.
As I think I’ve mentioned I arrived here by default from SKP where we had one hell of a ride but in the end haven taken some large risks paid out handsomely in the end.
I still hold a reasonable holding but have several similar holdings else where as I like to spread the risk

[polaris] 15/1/2020 16:57

best1467 - absolutely not connected to VEC (or SKP before it) in any way beyond my shareholding(s). My profile really doesn't lie. I do work at a government facility. I am a scientist. A chemist by training (degree and doctorate) with some supplementary biochemistry.

I ask a lot of questions and read a lot of information on companies that i am invested in. I retain facts and keep extensive notes, plus my history of posts is always available if i need to search back for some tidbit of information that i can't immediately remember. I've read countless US stock market submissions, which require a lot higher level of detail to be given. Old agreements between SKP and partners, old presentations from early days of development of different products, etc.

I have been accused of being an analyst, a company plant or on the pay-roll, as i seem to have information to hand that is 'impossible' to recount at such speed. Sorry, i just have a decent memory and can recall things very quickly through the combination of retained knowledge, links and context/timing to go back to old relevant posts.

I don't post on many boards. Those that i post on are where i have/or had holdings. I am positive for prospects in many cases as a result, except where i sold out for specified reasons. I don't short, except in very rare short term cases. Take a look at my multi-year posts on AVM and the prophecy of its implosion for example. I turned a 6 figure return on that share but sold out when i identified issues that ended up the downfall of the company. I quizzed the CEO on behalf of PIs, posting a report after approval from the company (so it was clear what was my opinion and what was 'from the horses mouth'), due to my detailed questioning via their IR obviously perking high level interest.

I don't tend to invest unless i've done my homework. That doesn't mean i am always right, far from it as the market does like to kick one in the balls from time to time, but i do tend to have facts to hand to back up my posts. I've mis-interpreted financials before and lost a packet as a result. (POG...look back at that now and still feel...WTF was i thinking? yuk!).

VEC is my current project, as previously stated. But i've previously been in SKP, back in the days of the flutiform and depodur development, the Paul Capital loans against future royalties and the debacle that was GSK screwing SKP over on Paxil CR. I also followed VEC for their inhaler development, but was not a holder until after the merger.

A project for me is something where i will build a position expecting a minimum 6 figure return. I've read just about as much as i can, have bookmarked links to news sources for the GSK litigation and the major partners. I follow presentations and then go and look what was said previously, both by VEC and the partner. Context...progress...changing expectations...dates...

I'll delve through partner numbers and reports for seemingly minor factoids and inconsistencies. The scientist in me then forms hypotheses that i can 'test' via examining further updates and financial results from the entities involved. I have targets and will always take on board relevant discussion points. I detest unsubstantiated claims, the staple of BB communities, and will debunk things that i know to be wrong or mis-stated.

I talk to IR wherever i can, although VEC have been singularly unhelpful with most of my questions over the last 12-18 months, hiding behind the 'we cannot comment' on many things that i know are in the public domain and are not in themselves price sensitive. Examples - the original SKP/PCRX agreements on the Exparel state that a milestone is due ( a few $ M) when Exparel (Depodur as was) is approved in a major European country, on the same page as the $32 M milestone for $500 M sales. I asked whether this still held seeing as PCRX were looking to submit (i think they now have)? If not, why does the $32 M milestone carry over? There was also a statement on royalties for other developed products based on the delivery technology passed to PCRX. Have they lapsed? What were the differences between the US and UK cases for IP infringement by GSK wrt Ellipta?

We each approach investing in a different way. This just happens to be my approach.

regards,

Paul

[qackers] 15/1/2020 15:50

From Trading update

"In order to concentrate on the US litigation, Vectura has taken the decision not to pursue its appeal of the decision of the UK High Court in the proceedings initiated by GSK relating to the Ellipta(R) products. The US action involves different patent claims to those in the UK and interprets the patents under US law."

Any comments on this statement?

Thanks in advance

[rogerrail] 15/1/2020 12:02

Dont overlook there was nothing in TU about Pacira milestone payment (to be expected). Revenue in 4th qtr was just shy of $119m which is not far off the $125/qtr run rate required to trigger the $32m milestone payment for annual sales of $500. I cant remember, but I am fairly sure there was an FDA approval in the pipeline which would boost revenues further?

[best1467] 15/1/2020 09:39

Polaris I'm convinced you are employed in some form or other by Vectura which I have no issue with and your in depth analysis is appreciated

[polaris] 14/1/2020 20:07

Closing cash balance of £74 M at end December 2019 cf. £105.9 M at 30th June. In the interim VEC have returned £40 M to shareholders via the special dividend and £3.5 M of the buyback mandate pre-year end. Taking those into account means cash balance has effectively gone from £62.4 M to £74 M in H2 2019. Something must be causing that...could it be the on going business is nicely profitable despite the lower H2 revenues, due to H1-loaded royalties from GSK?

What are management expectations for FY2019 revenues? The statement says at least in line with management expectations but i can't remember ever seeing what the forecasts are from SKP, just numbers from the analysts.

[polaris] 14/1/2020 19:20

I suggest reading the trading update again regarding Flutiform. The statement is as follows:

Continued growth of flutiform(R) partner in-market sales is expected in 2020, with Vectura product supply revenues expected to be at a similar level to 2019

So in market sales will increase but the average price will likely fall, due to outside pressures, and the overall supply revenues will be similar to 2019, suggesting some inventory build in the last Q of 2019 that will be run off in 2020.

Praise be to SKP for the legacy that is Flutiform eh? ;-) That and the revenues from the recently elapsed Ellipta IP, the likely milestone for Exparel upcoming and the legacy non-inhaled products.

VEC would have been on its knees without the SKP merger, that's for sure. However, if they do finally get the GSK litigation over the line then the $200 M may just come in handy before mid 2021...

[pooroldboy55] 14/1/2020 15:33

Agree this does seem a one trick pony but we do have a pipe line but nothing ever seems to flow along it, tomorrow tomorrow tomorrow but as we all know tomorrow never comes well not in VECTURA case.

[best1467] 14/1/2020 14:40

Very little been achieved since the SKP merger as I’ve stated along with others without Flutiform this company would be on its Knees At best

[johnsampson] 14/1/2020 13:31

what is surprising to me is that Vectura see no growth in Flutiform sales/volumes/revenue for the coming year. For a company that is so dependent on this one drug that is a disappointing revelation for revenue and profit growth in 2020.

[boadicea] 13/1/2020 17:48

polaris - Re buyback - Agreed. In fact roughly the point I was making in #9260.

There is nothing surprising in the update but the reaction may indicate there was hope in some minds of rather more than confirmation of the existing expectation range albeit biassed towards the upper side.

[polaris] 13/1/2020 16:59

SP has reached well overbought in the short term and you would expect a correction. Trading update is solid, if unspectacular. The underlying cash position at the end of the year does imply an increase on the H1 number once you take into account the special dividend, the share consolidation and the ongoing buyback. That means the business remains cash generative on an ongoing basis, despite the costs associated with the GSK litigation and the fall in H2 revenues from the expiry of the legacy SKP IP with GSK.

I also noted the much lower buyback volumes over last few days, as share price broke 100 p. It may be that there is a cap on the buyback mandate wrt price, as any buyback should not drive the price upwards - i.e. create a false market. It will usually be some fraction of the volume weighted price over a certain number of trading days, say 105 % (i'm guessing here). As the share price rose so strongly in the last 7 trading days then the threshold has probably been broken. With the pullback in the share price you might expect a larger reported buyback in the coming days. We will know soon enough.

[best1467] 13/1/2020 14:30

Jimboyce that is a good point and could be reason for the strange wording ref Earnings because I found it Odd but if they stated ahead of previous guidance then we may have rose further.
But it could be just reading to much into it we will have to wait and see ,I thought we may of had some sort of update on the Elipta Generics

[richtea2517] 13/1/2020 13:59

Normal price reaction on update day