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Vectura initiates legal proceedings against GlaxoSmithKline

Vectura Group has received formal notification from GlaxoSmithKline ('GSK') that GSK does not wish to exercise the option to take a license to any additional patents under the patent licence and option agreement with Vectura dated 5th August 2010 for GSK's Breo Ellipta/Relvar Ellipta, Anoro Ellipta and Incruse Ellipta products (the Ellipta products).

In response to this, Vectura has filed a patent infringement lawsuit against GSK claiming infringement of Vectura's U.S. Patent No. 8,303,991 in the United States District Court for the District of Delaware. 

Whilst the lawsuit has been filed, Vectura continues to remain open to finding a mutually acceptable solution in order to avoid costs and potential uncertainty over royalties that have, up to now, been subject to a cap of £13 million per calendar year.

The separate licence agreement with GSK relating to the legacy Skyepharma dry powder formulation technology used in the Ellipta products is unaffected with the potential for royalty income of up to £9 million per annum.

Patent licence and option-to-licence agreement

In August 2010, GSK and Vectura entered a license and option-to-licence agreement encompassing a number of Vectura patent families relating to various formulation technologies relevant to GSK's Ellipta products.

A number of these patents expire in 2016. GSK had the option to extend the term of the agreement by licensing additional patent families on or before 31 July 2016, but has formally notified Vectura that it does not wish to do so.

Despite the notification from GSK, the Directors believe that revenues for the current financial year ending December 2016 remain in line with current expectations.

James Ward-Lilley, Vectura's CEO commented: "As a UK-based R&D collaborator and formulation specialist, the Group undertakes to build strong collaborative partnerships respecting important and valued IP and know how. Vectura has now issued proceedings in the US to enforce its patents relating to these products.

"Vectura has a robust, diversified business with a series of growing revenue streams from products at relatively early stages of their respective sales trajectories. The focus of the organisation is the progression of the portfolio and leveraging the benefits of the recent merger with Skyepharma including the additional revenues of new product opportunities and delivery of committed cost synergies."