The business was £4.8 million in the red last year, after reducing its losses by 54% on the back of a 25% (£3.3 million) rise in royalties. This was the result of the £509 million cap launching three new products during the period.
Vectura’s products target bronchial conditions such as Asthma and smoking-related chronic obstructive pulmonary disease (COPD).
The company has £81.7 million cash to bring new treatments out of its pipeline, where it has receive positive data from a combination therapy study involving its Ultibro Breezhaler, which treats chronic lung disease.
Vectura has already made a positive start to its current fiscal year collecting a £2 million royalty payment from drugs giant GlaxoSmithKline (GSK). Two of its products are expected to be filed in the US in the fourth quarter.
Analyst Nicholas Keher at Investec sees Vectura's progress as encouraging, believing the company will generate sustainable profits in the long term. ‘Whilst a positive first step, we think the investment case still resides upon management’s (and partners’) ability to successfully launch key pipeline assets. For us, the long term investment case is still unclear with significant risks, hence a retained Hold recommendation although we see potential near term upside given upcoming events.’
Analysts at Oriel Securities are bullish, expecting that strong royalty payments will Vectura drive profitable growth from 2015 and beyond.