Vectura achieves £9m royalty cap

Vectura Group says it has achieved the £9m calendar year royalty cap on net sales of GSK's Ellipta products in 2016.

This was a year earlier than previously guided, and was based on the continued strong performance of Ellipta products and the group's subsequent receipt of its royalty statement from GSK.

Vectura receives a low single-digit percentage royalty on net sales of Ellipta products under a legacy Skyepharma agreement with GSK, subject to a cap of £9m per calendar year.

The group said it would record £5.4m of this capped amount in its 2016 revenues, representing income since 10 June 2016, the effective date of the merger with Skyepharma.

"This is additional to the royalties earned in respect of a separate Vectura legacy agreement with GSK which was subject to a £13m calendar year cap," said Vectura.

As announced in July 2016, this cap was materially achieved before GSK decided not to extend the term of this latter agreement. Accordingly, for the financial year 1 April to 31 December 2016, the Group will record £7.3m royalties under this legacy agreement.