Vectura and Skyepharma agree to merge

Respiratory drug delivery specialists will become an industry-leading airways-related speciality business

UK respiratory drug delivery firms Vectura and Skyepharma have agreed an all-share merger.

Under the terms of the agreement, Skyepharma shareholders will receive 2.7977 new Vectura shares for every Skyepharma shares they hold. Based on Vectura's closing price of 146.60p on 15 March, this would value Skyepharma at 410.15p per share, or a total of £441.3m.

A partial cash alternative will be made available, by which Skyepharma shareholders can receive up to £70m in cash instead of new Vectura shares.

Vectura Chief Executive James Ward-Lilley will be CEO of the combined group. The other executive directors will be Skyepharma's Chief Financial Officer Andrew Derodra and Vectura's Chief Operating Officer Trevor Phillips.

The Boards of Directors at both firms believe the deal will create an 'industry-leading airways-related speciality business'.

This is a key milestone in the execution of our strategy to become a leading speciality pharmaceutical company, focusing on airways-related disease

Bringing together complementary inhaled formulation, development regulatory and device expertise (dry powder inhalers (DPI), pressurised metered dose inhalers (pMDI) and smart nebulisers) will enable the firms to accelerate growth in the inhaled respiratory market, as well offer a broader product range, they said.

The merged group will have a number of partners who are already selling products to large segments of the inhaled respiratory market. These include flutiform, Seebri Breezhaler, Ultibro Breezhaler, Breo/Relvar-Ellipta, Anoro-Ellipta, Incruse-Ellipta and AirFluSal Forspiro.

These will be further enhanced by the introduction of Seebri Neohaler and Utibron Neohaler in the US through Novartis and, once approved, the launch of VR315 in the US by Hikma (through its wholly-owned subsidiary, West-Ward Pharmaceuticals).

With these partners and broad capabilities, the enlarged group will have the 'financial capacity and technical capabilities to generate further value by accelerating the progression of new generic programmes (DPI and pMDI), novel product developments, such as SKP-2075, and by signing additional deals with companies developing novel molecules targeting the airways markets'.

Vectura Chairman Bruno Angelici said the merger 'is a key milestone in the execution of our strategy to become a leading speciality pharmaceutical company, focusing on airways-related disease'.

Skyepharma Chairman Frank Condella, added that the merger 'combines Skyepharma’s proven capabilities to develop both pMDI and DPI products with Vectura’s proven capabilities to develop DPI and smart nebulisation products addressing the US$35bn global inhaled respiratory market'.

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