VR876 - Progress in Europe confirmed

Vectura Group plc

VR876 - Progress in Europe confirmed

Chippenham, UK - 2 October 2015: Vectura Group plc (LSE: VEC; "Vectura" or "the Company"), which specialises in the development of products for the treatment of airways-related diseases, announces that our undisclosed partner on the VR876 programme has achieved an important development milestone in Europe.

This development triggers a cash milestone payment of €5m (circa. £3.6m) to Vectura. The agreement comprises further commercial milestones and tiered royalties on any net sales in the EU/RoW in the event of successful launches. Financial terms of the agreement have not been disclosed.

VR876 - Europe/RoW

VR876 is being developed by our partner for the treatment of serious lung disease. It uses one of Vectura's smart nebuliser delivery systems to improve the patient acceptance of the product.

Smart nebuliser delivery system

The smart nebuliser delivery system is a hand-held, self-contained, battery powered device that delivers nebulised liquid drugs with high performance using a vibrating mesh technology. The mesh-based aerosolisation engine is proprietary to Vectura. As with all of Vectura's smart nebuliser delivery systems, this smart nebuliser delivery system provides targeted inhalation therapy for applications where precise and targeted delivery of the drug to the lungs in needed. To achieve this the device creates a liquid aerosol and co-ordinates delivery after the patient has inhaled using the FAVORITE (Flow And Volume Regulated Inhalation TEchnology) principle for precise delivery of drugs to the lungs. The inhalation system also makes use of a flow sensing/controlling value system, is rechargeable and can be Bluetooth®-enabled.

Trevor Phillips, COO, commented:

"This development is a very positive step and we look forward to receiving regulatory action in 2016 and subsequent commercialisation, if approved. The announcement demonstrates the value generation starting to be derived following the acquisition of Activaero. This achievement is underpinned by the excellent relationship, combining the device and development strengths of Vectura and the commercialisation expertise of our partner. Vectura continues to be viewed as a partner of choice by companies seeking to address the unmet medical needs of patients with airway diseases."

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About Vectura

Vectura is a product development company that focuses on the development of pharmaceutical therapies for the treatment of airways-related diseases (airways diseases). This growing market includes asthma and chronic obstructive pulmonary disease (COPD) and is estimated to be worth $44 billion worldwide.1

Vectura now has eight products marketed by partners with growing global royalty streams and a portfolio of drugs in clinical development, a number of which have been licensed to major pharmaceutical companies. Vectura currently has disclosed development collaborations and licence agreements with several global pharmaceutical and biotechnology companies, including Novartis, Sandoz, Baxter, GlaxoSmithKline, UCB, Ablynx, Grifols, Janssen Biotech and Tianjin KingYork Group Company.

Vectura develops products for airways diseases and owns formulation and inhalation technologies that are available to other pharmaceutical companies on an out-licensing basis where this complements Vectura's business strategy.

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.