Positive Phase II data for VR496

VR496 demonstrates anti-inflammatory and mucolytic activity in cystic fibrosis patients

Chippenham, UK - 25 March 2011: Vectura Group plc ("Vectura"; LSE: VEC) today announces positive data from a Phase II clinical study for its orally inhaled product, VR496, a potentially multi-modal treatment for respiratory symptoms associated with airway disorders such as cystic fibrosis (CF).

Seventy-seven CF patients with a median age of 23 years were randomised, double-blind, to placebo or one of three active dose groups. Study treatment was administered twice-daily at home for a period of four weeks. Subjects with established lung inflammation and impaired sputum clearance were eligible for enrolment. Patients with a history of significant haemoptysis (coughing up blood) or unstable disease were excluded.

VR496 was found to be safe and well tolerated with over 90% of patients successfully completing the study. Dosing compliance was high, with 91% of prescribed study treatment administered. Anti-inflammatory activity was demonstrated via reductions, from Baseline to Week 4, in induced sputum neutrophil elastase and total cell counts when compared to placebo. Active treatment also resulted in clearer and thinner sputum that was easier to clear from the airways compared with placebo.

VR496 is Vectura's proprietary formulation of dry powder heparin sodium and has been designated orphan drug status by the European Medicines Agency (EMA) and Food and Drug Administration (FDA).

Dennis Shale MD, FRCP. Clinical Professor, Department of Medicine, Cardiff University, United Kingdom commented:

"This study was the first opportunity to evaluate inhaled dry powder heparin sodium in CF patients. The resultant data illustrated excellent systemic and local safety and evidence of anti-inflammatory and mucolytic activity. This multi-modal profile differentiates VR496 from current treatment options and confirms its potential to address unmet treatment requirements in CF and other inflammatory airway disorders."

Dr Chris Blackwell, Chief Executive of Vectura, added:

"This study confirms the potential therapeutic benefit of VR496 in a variety of airway disorders and justifies further clinical evaluation. These data will be of value in our on-going discussions with prospective licensing partners."

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About cystic fibrosis

CF is a genetic disease with recessive inheritance, caused by mutations in a gene coding for an ion transporting cell membrane protein, namely the cystic fibrosis transmembrane conductance regulator (CFTR). Normally the CFTR gene is responsible for directing the production of a protein that covers both the internal and external epithelial cell surfaces of the pancreas, sweat glands, salivary glands, intestine and reproductive organs. In CF the protein is defective due to one of over 300 mutations of the CFTR gene. This defect results in abnormal water and salt transport and thick secretions in several organs (e.g. lungs and pancreas). Secretions in airways show a decrease in water content, increased viscosity and decreased clearability from the lung on the mucociliary escalator.

This chronic, life-threatening disease is characterised primarily by progressive lung disease, pancreatic insufficiency, gastrointestinal obstruction and an excess of sodium and chloride in the sweat. The respiratory based symptoms of CF, which include persistent cough and repeated chest infections usually become more severe with age and lead to chronic, recurrent infection and inflammation of the lungs resulting from the persistence of respiratory pathogens. This combination is the major cause of morbidity and overall disease burden for CF patients.

Despite CF lung disease having a complex pathology current inhaled therapies typically target only one disease element e.g. infection, viscid mucus. Conversely, heparin sodium exhibits a multi-modal and complementary pharmacology via anti-inflammatory, mucolytic, anti-bronchoconstrictor and anti-infective activity that is relevant to the treatment of various airway disorders.

About Vectura

Vectura Group plc develops inhaled therapies principally for the treatment of respiratory diseases. Vectura's main products target diseases such as asthma and chronic obstructive pulmonary disease (COPD), a growing market that is currently estimated to be worth in excess of $25 billion. Vectura also develops products for other lung pathologies and non-respiratory diseases.

Vectura has six products marketed by its partners and a portfolio of drugs in clinical and pre-clinical development, some of which have been licensed to major pharmaceutical companies. Vectura seeks to develop certain programmes itself where this will optimise value. Vectura's formulation and inhalation technologies are available to other pharmaceutical companies on an out-licensing basis where this complements Vectura's business strategy.

Vectura has development collaborations and licence agreements with several pharmaceutical companies, including Novartis, Sandoz (the generics arm of Novartis), Baxter, GlaxoSmithKline (GSK) and Otsuka. For further information, please visit Vectura's website at www.vectura.com.

Forward-looking statements

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 programmes; failure to obtain patent protection for inventions; 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 statements. 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.