Circassia is focused fully on inhalers for asthma [NIOX] and COPD after the failure of its allergy programme and reported good progress over the past year in both areas.
Asthma/NIOX inhaler sales rose 18% to £27.3mln in 2017, out of total sales of £46.3mln.
Ongoing losses for the group were £36.9mln but hefty impairment charges (£82mln) meant a deficit of £114mln.
Some £45mln of the impairments related to R&D costs already incurred by Astra on Tudorza and Dualkir, the two drugs the companies are working on together.
Astra will now take Circassia shares in lieu of most of this R&D cost, which would take its stake up to 19.9% from 14.2% currently.
Drugs making progress
Both drugs have made substantial strides forward since the collaboration was announced in March 2017.
Dualkir is set for a new product application in the US after a successful Phase III trial in people suffering moderate to severe COPD.
Tudorza, meanwhile, will likely have its medical application or marketing label widened after a post-launch study showed a beneficial effect on heart disease in COPD sufferers.
Steve Harris, Circassia’s chief executive, expects strong revenue growth in 2018 as there will be a full year from the Tudorza collaboration and rapid growth in NIOX sales.
“During the second half of the year, we anticipate the opportunity to acquire the full US commercial rights to Tudorza which we intend to fund through third-party financing," he said in a statement.
The regulatory submission for Dualkir will also be made, he added.
Acquisition of Tudorza's full US commercial rights will trigger a payment of between US$5mln and US$80mln and a further US$100mln will be payable on Duaklir approval or at the end of the first half of 2019 if earlier.
“We will continue our focus on growing Tudorza revenues, leveraging our new marketing campaign and established field force, while also exploiting our commercial capabilities to promote NIOX to a larger potential customer base,” said Harris.
Circassia had cash of £59.5mln at end December.
Shares rose 2% to 90p.