Vectura Share Discussion Threads

[volvo] 18/12/2020 16:49

justice, takeaway the cash due and in the bank, and you have company worth £475m.

That is the pharma world, generating this income and whats in pipeline is nothing.

Could easily trade at 170p plus today.

FWIW the markets were bidding up Hikma all day and again a strong auction. They like the news.

Hikma are going to flood the US with cheap Advair, I recon people have under estimated how strong Hikma are going to push this.

[volvo] 18/12/2020 16:37

Going for the hat trick.

Nice strong auction.

More news next week for certain

[volvo] 18/12/2020 16:26

Wonder how the company will play the GSK fine situation.

Today being last for appeal, none registered.

Surely some form of news should be forth coming on Monday, if only to confirm the above facts?

[volvo] 18/12/2020 16:14

Hikma's generic business is based in the US, and its very established and ready to go with all the contacts necessary to flood the market.

Probably going to price aggressively and target market share.

They are very confident of a large success with Advair.

[best1467] 18/12/2020 15:48

Yes I've added 20k just solely for a quick 10p trade margin on the basis of no GSK appeal

[justiceforthemany] 18/12/2020 14:38

Volume already twice normal.
People buying on today.

[justiceforthemany] 18/12/2020 14:37

Deadline today yes.

[richtea2517] 18/12/2020 14:20

Reckon the GSK litigation team are balls deep in their Prosecco and Brussel sprouts via their virtual Christmas party and lost track of time.

[bobo18] 18/12/2020 13:42

When and how will we know if GSK are appealing? Is the deadline today?

[justiceforthemany] 18/12/2020 12:46

127-128p resistance. Underperformed relative to news again and the soon to be confirmed cash balance close to $300M.

[polaris] 18/12/2020 11:52

@Popper Joe - back in the day, FDA stated that it was pretty much a closed door. I am sure that VEC must have approached FDA again over the years, since Flutiform was approved elsewhere, on their standpoint. I'd say that it probably isn't worth it now. The market has moved on and combi therapies are now the norm. The market potential is too small. Remember, had VEC succeeded, it would have been either the first or second combi therapy of that type to market...a potential blockbuster. For me, the ship sailed a long time ago wrt US.

However, I still follow developments in Japan and Far East. Don't rule out China approval and that market is unknown size...there are a lot of smokers in China and a lot of industrial pollution. The plans that Kyorin have for Flutiform in Japan also need watching. If they actually meet their forward planning, it would be quite an uplift in royalty and manufacturing revenues for VEC.

[popper joe] 18/12/2020 11:45

Question for Polaris. Paul, given the lessons that VEC will have learned from their interactions with the FDA for Advair, is there any possibility of them revisiting a submission for Flutiform in the USA? Or do you think that ship has well and truly sailed? Thanks.

[polaris] 18/12/2020 11:37

Flutiform patents extended in Japan and it is not just the product IP that you need to take into account, it's the delivery device, which will have a number of individual patents associated with it.

Unless all patents expire then any new entrant would need to have an approved delivery mechanism that does not infringe. Look at the trouble VEC/Hikma are going to in Ellipta device generic. The APIs lost patent protection a long time ago. However, if you cannot deliver in a clinically identical manner, no generic!

No-one is going to make a generic Flutiform. It's overall market value is too small. Look at some of the legacy respiratory products in GSK's own portfolio. Some of them have been around for 25+ years (e.g. Ventolin and Flixotide), yet no generics. Companies are only going to target the blockbusters.

[elsa7878] 18/12/2020 11:19

Flutiform starts losing it's patent protection from 2019 - 2030 depending on territory from recollection.
Need to factor that in.

[volvo] 18/12/2020 11:18

Thanks polaris.

Agree on the $200m, but I know Hikma will want more and personally see nearer $300m, maybe more in year 2.

Time will tell, but even at $200m thats still $30m royalties per year to VEC standing around and watching.

Yes 150p is base line when the GSK monies arrive.

All good, lets see where we end up.

[polaris] 18/12/2020 11:15

I've also got the EV around £470 M, Volvo, based on what we know. That is very low, given the product mix and developments. As soon as there is clarity on the GSk position on the payment of the litigation damages, then i also see a good chance of VEC moving higher.

My numbers show adjusted EBITDA will be something in the region of 8 p for 2020, rising now for 2021 on the QVM149 and generic Advair launches. A reasonable sector P/E is 15, suggesting an EV value of 120 p, or about £700 M cf. current EV of £470 M (at yesterday's close).

This 'should' see VEC approach 150 p in 3 month timescale, as a base target. I'd then revisit post-FY2020 figures, which will contain some forward projections and updates on other products / developments

[polaris] 18/12/2020 11:10

I think that Hikma may have overstated the 'current' market size. The value has been falling in 2020 as the price cuts from Mylan hit home. Mylan have significantly cannibalised the original market in the US. GSK have reported £361 M in sales for the 9 months to September 2020. I'd expect around the same for Mylan as first generic entrant. In a multi-horse race the total market value will fall again and then it's down to marketing muscle in the territories in question. A reasonable mix would be a 40:30:20 with the other 10 up for grabs/fluid.

Assuming it is 50:50 now then the market size in the US is around $1.3-1.5 Bn and likely falling in overall value, if not size (pricing pressure). If Hikma can get up to 20 % by aggressive marketing in 2021, then it does seem like $200 M+ is possible.

I think GSK and Mylan would have been caught slightly on the hop with the announcement. Hikma have been producing and stockpiling ready for the final approval and launched straight away. Normally, there would have been a few months grace period, allowing established players to sign forward deals for suppliers. I like Hikma's style! ;-)

VEC take the upfront milestones and will take home the nice royalties from here on in. Sales growth will be interesting to see in the Hikma figures...royalties will arrive to VEC in the following period to sales.

[volvo] 18/12/2020 11:10

Market cap today 730m.

Cash on the books £86m

Fine from recent case from GSK £133m after tax

Milestone payments paid and due near term £36m

Total £255m - value of VEC minus cash £475m, thats peanuts in these circles.

[diesel] 18/12/2020 11:08

All this talk of GSK buying Vec, would this not have to be ok’d by the competitions authority?

[volvo] 18/12/2020 11:00

base what could tempt them of course is the £250m in cash that VEC will have after the GSK fine and other milestone payments paid and due.

[base7] 18/12/2020 10:49

GSK could be more tempted to buy HIK,if it were possible,which it isnt due to the dominant stake still held by the founding family.The only disclosed common shareholder is Capital Group, who have 10% of HIK & 5% of GSK , but despite their size, they are unlikely to be able to influence any outcomes.
A bid for Vec would be difficult due to our longstanding relations with several substantial global companies & while HIK may be the most likely candidate & have most to gain I am not sure whether they would be keen to make an acquisition for over $1.5bill-although they know how much they hope to gain from Asvair & Ellipta & would , of course, save future milestone payments + mid teen % royalties.They could always dispose of any conflicting parts of our business to increase their cash pile further .

[jimboyce] 18/12/2020 10:21

Whichever bid comes along, the new management may object to it, but they will be swept aside and there will be nothing they can do about it.

[best1467] 18/12/2020 09:25

You do have to favour a GSK bid its all depends on if Hikma have anything safeguarding the Elipta generic program

[boadicea] 18/12/2020 09:17

Potential contenders for Vectura are not necessarily confined to GSK and Hikma. Sosei has been suggested in the past and although officially repudiated at the time the door was left open in the case of a "material change of circumstances" which would clearly be the case in the event of an offer for VEC from another party. Longstanding partnerings with other parties also complicate the issue.

[volvo] 18/12/2020 08:46

You obviously will have stale sellers looking at a profit.

I thought this initial news was worth 20p minimum, so from 110p, average over the week or so, to 130p.

Also I see the confirmation of the GSK fine as a further 15p.

So my target over the next few weeks is 145p.

My take out price is 200p by GSK or Hikma, either could decide to have a go for various reasons previously dicussed.