Vectura PLC (LON:VEC) saw its shares drop nearly 10% in morning trading after the inhaled medical products firm posted a bigger first half loss reflecting increased research and development costs, higher levels of amortisation, and tighter margins.
In early morning trading, Vectura shares were down 9%, or 10.05p to 99.05p
READ: Vectura reports wider loss but revenue jumps after Skyepharma merger
The FTSE 250-listed group, which specialises in developing lung drugs, reported a pretax loss of £44.5mln for the six months to the end of June, a near doubling from the £22.4mln loss a year earlier, as amortisation expenses continued to rise following its merger with Skyepharma which completed in June.
Meanwhile, the firm’s R&D costs increased to £31.4mln, up from £26.1mln last year, the company said in a statement.
The loss came despite Vectura seeing its revenue rise by 6% to £78.8mln, up from £73.9mln a year earlier, boosted by rising sales of its recently launched inhaled products and the continued weakness of sterling against a basket of its main trading currencies.
Looking ahead, Vectura said: “Within total recurring revenue, product supply and device sales are likely to be in line with the 2016 full year proforma, due to an element of customer destocking in the flutiform supply chain.”
The group added: "A detailed review of priorities for R&D programmes in 2017 has been undertaken and expenditure for the full year is now expected to be lower, at £60mln to £70mln, compared to the previous guidance range of £65mln to £75mln. The impact of these changes is expected to be broadly neutral at an earnings level.”
In a separate announcement, Vectura revealed it is progressing the development of a branded generic tiotropium bromide programme, VR410 for the US market, which will be accelerated through an exclusive licence agreement with Pulmatrix Inc. (NASDAQ:PULM).