Vectura signs US development deal for asthma therapy

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vectura groupLONDON (AFX) - Vectura Group PLC has struck a US collaboration and development deal with a 'leading international pharmaceutical company' for its generic combination asthma therapy, VR315.

In a statement, the British drug developer said it will share the profits from any eventual sales of the product, and could receive up to 63 mln usd in milestone payments.

The therapy is thought to be a copycat version of GlaxoSmithKline PLC's top-selling asthma drug Advair, which generated sales of 3 bln stg last year and will lose patent protection in around 2010.

The small-cap British company struck a similar deal in Europe last April, with another unnamed partner. At the time analysts speculated the partner was Novartis AG's generic drugs arm Sandoz, raising the prospect that today's deal could be with the same company.

Vectura allocated a large portion of the 43 mln stg it raised through a share sale in June to the remaining development programme for VR315. By offering to co-fund the research, the company could negotiate with partners for a larger slice of eventual profits.

'The fact that they've managed to sign this deal nine months after the European one is a good indication that the development of VR315 is progressing nicely,' analyst Lucinda Seagrove from Jeffries Securities said.

'This is a good piece of news, and what we were hoping to hear.'

Jeffries has a 'buy' recommendation and a 150 pence price target on the stock.

At 8.45 am shares in the company were trading 3.75 pence, or 4.3 pct, higher at 92, valuing the company at 150 mln stg.

Sandoz and Vectura are eyeing the large and growing market for combination respiratory drugs, currently dominated by Advair and AstraZeneca PLC's Symbicort, which generate more than 8 bln usd in sales a year.

The therapies -- a steroid plus a long-acting beta agonist -- are widely prescribed for asthma and, increasingly, chronic obstructive pulmonary disease, a condition caused mostly by smoking.

Combined products are the fastest growing sector in the respiratory market, Vectura claimed today.

The product is being developed to be used with its GyroHaler dry powder inhaler. Under the terms of the US deal, Vectura will oversee the therapy's development for the US market and set up commercial manufacture and supply of the GyroHaler device.

The partner, meanwhile, will be responsible for the clinical development, manufacture and marketing.

source - AFX News