Drug delivery solutions company Vectura (VEC) reported strong first half growth in revenues, up 14.8% to £91.7m along with an increase in the proposed return of capital from £50m to £60m. The shares puffed up 1.9% to 81p.
Product supply revenues saw a 42.9% increase to £54.3m while the expiry of the company’s pain management drug Exparel in 2018, impacted royalty revenues, which fell 16.5% to £30.3m. The drug development division saw a 26.8% uplift in revenues to £7.1m.
The company’s asthma drug Flutiform continued to overall drive sales, with revenues up 12.2% in constant currencies to €123.6m, against a market backdrop which saw a decline of 3.5%. The company receives a mixture of royalty income (£3m) and product delivery income (£48.4m) from these end market revenues.
Interim chief executive Paul Fry said ‘Vectura has had a strong first half in 2019, with the year as a whole tracking to guidance. Following the shift in focus we announced in July, we are now executing on our strategy to build a leading inhaled contract development and manufacturing business’.
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Given the good visibility of Flutiform revenues, the company expects strong performance to continue into the second half of the year.
Vectura intends to focus on organic growth which has a lower risk profile and lower research and development needs.
Therefore, given the £104m of net cash on the balance sheet management have proposed to pay a special dividend of approximately £40m, accompanied by a share consolidation.
The board intends to undertake a further £10m share buyback, to be announced in due course, if approved by shareholders.
The total capital payment represents around 10% of the current market capitalisation.