Interim results for six months ended 30 September 2005

16 Nov 2005

Interim results for six months ended 30 September 2005

Chippenham, UK, 16 November 2005 Vectura Group plc (LSE: VEC), the drug development company, today announces its results for the six months ended 30 September 2005, reporting under International Financial Reporting Standards (IFRS).

Highlights Year to Date

VR776 for premature ejaculation (PE)
Commencement of VR776 first clinical trial in man

NVA237 (formerly AD 237) for Chronic Obstructive Pulmonary Disease (COPD)
$375m global licensing agreement with Novartis for NVA237
Commencement of NVA237 Phase IIb clinical trial

VR004 for erectile dysfunction (ED)
Continuation of VR004 Phase IIb clinical trial programme

VR496 for cystic fibrosis (CF)
Receipt of EU Orphan Medicinal Product designation and US Orphan Drug designation.

Progression of licensing discussions
Progression of discussions on the Company's respiratory technologies, particularly the dry powder inhaler (DPI) GyroHaler® and the formulation technology PowderHale® providing potential for high-value upside

Financial Highlights

Total revenues increased by 35% to £3.6m (2004/05 £2.6m)
Gross profit increased by 48% to £2.7m (2004/05 £1.8m)
Loss before tax reduced to £2.4m (2004/05 £4.1m)
62% reduction in loss per share to 1.4p (2004/05 3.7p)
Net cash inflow from operating activities of £4.3m (2004/05 cash outflow £2.6m)
Cash and cash equivalents of £23.1m at 30 September 2005 (£18.4m at 31 March 2005)

Commenting on these results, Dr. Chris Blackwell, Chief Executive of Vectura, said: "The first half of the year has seen Vectura progress well with a number of significant achievements, in particular our $375m licensing deal with Novartis, which provides strong validation for our product development strategy. Today's announcement of the start of clinical trials with VR776, our product for premature ejaculation, marks another important milestone for Vectura and provides a further regulatory endorsement for the investigational use of our Aspirair inhaler in the clinic.
" With the advancement of our product pipeline, continued interest in our technologies from licensing partners and our improved cash position, we are well placed to generate further value for our shareholders."

Download the full review (PDF 1.24MB)

- Ends -

A presentation for analysts is taking place today 16 November 2005 at 9:30 a.m. UK time (10:30 European time) at Financial Dynamics, Holborn Gate, 26 Southampton Buildings, London WC2A. Please contact Claire Rowell at Financial Dynamics on +44 (0)20 7269 7285 for details. Slides for the presentation will also be made available through our website at www.vectura.com from 14.00 today.

Enquiries

Vectura Group plc
Chris Blackwell, Chief Executive On 16/11/05
+44 (0) 207 831 3113

Anne Hyland, Chief Financial Officer thereafter
+44 (0) 1249 667 700

Financial Dynamics
David Yates/Sarah MacLeod/John Gilbert +44 (0) 207 831 3113

Notes for Editors

Vectura's principal focus is the development of a range of inhaled drugs for the treatment of both lung diseases and other conditions where optimised delivery via the lungs can provide significant benefits, such as a rapid onset of action, improved efficacy and improved tolerability compared with current therapies.

Vectura's strategy is to combine its proprietary, innovative, pulmonary formulation and device technologies (PowderHale®, Aspirair® and GyroHaler®) with existing, off-patent drugs either for use in new indications or to provide inhalation as an improved route of administration. The Company seeks to license its lead products to pharmaceutical companies with established sales and marketing infrastructures for the later stages of development and for commercialisation, typically prior to Phase III clinical development. In addition to its own pharmaceutical products, Vectura operates a well established Pharmaceutical Development Services business that undertakes contract development work for other pharmaceutical companies. Vectura has also licensed some of its technologies in certain fields to other pharmaceutical companies. These activities generate positive cash flows that are available for investment in Vectura's own development projects. These activities also demonstrate Vectura's acknowledged expertise in applying pulmonary technologies to the creation of innovative pharmaceutical products. The Company has development collaborations with a number of companies, including Novartis, GSK, SkyePharma and Chiesi.

This press release contains "forward-looking statements," including statements about the discovery, development and commercialisation of products. Various risks may cause Vectura's actual results to differ materially from those expressed or implied by the forward-looking statements, including adverse results in clinical development programs; failure to obtain patent protection for discoveries; commercial limitations imposed by patents owned or controlled by third parties; dependence upon strategic alliance partners to develop and commercialise products and services; difficulties or delays in obtaining regulatory approvals to market products and services resulting from development efforts; the requirement for substantial funding to conduct research and development and to expand commercialisation activities; and product initiatives by competitors. As a result of these factors, prospective investors are cautioned not to rely on any forward-looking statement. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.