Re GSK Agreement

Vectura and GlaxoSmithKline sign agreement to license some of Vectura's dry powder drug formulation patents

Chippenham, UK - 6 August 2010: Vectura Group plc (LSE: VEC) ("Vectura") announces that Glaxo Group Limited and GlaxoSmithKline Research & Development Limited ("GSK") have signed a worldwide non-exclusive agreement to license some of Vectura's dry powder drug formulation patents in relation to two late stage development compounds in GSK's respiratory product pipeline.

Under the terms of the agreement, Vectura will receive up to £20 million in up-front and milestone payments. An initial up-front payment of £10 million will be received in September 2010 with the remaining £10 million expected to be received by the time both compounds are launched. In addition, Vectura will earn royalties capped at certain levels of sales of these products. The maximum annual royalties payable to Vectura under this license agreement will be £13 million.

The majority of treatments for asthma and COPD are delivered by inhalation. Global markets for these treatments are valued in excess of $25 billion today and are expected to grow by 30% over the next 10 years. Vectura remains focused on the respiratory market. With the benefit of Vectura's range of enabling technologies, including both inhalation devices and formulation technologies, the Company is well placed to capture value from this large market in a number of ways. Today's deal with GSK, one of the world's leading companies developing therapies for the treatment of asthma and COPD, is one such example.

Dr Chris Blackwell, Chief Executive of Vectura, commented:

"GSK is one of the world's leading developers of innovative respiratory medicines and I believe this deal reflects the importance of Vectura's respiratory technology IP. The non-exclusive nature of this agreement also allows us to continue our efforts to deliver further value for shareholders from our inhaled therapy technologies in the future"

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About Vectura

Vectura Group plc is a company that 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 eight 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 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.