Mergers and Acquisitions

* On March 13, 2014, Vectura Group has announced the acquisition of Activaero for a total consideration of €130 million (£108 million) to be funded through a combination of existing cash and equity. The acquisition provides new product development opportunities, including products in late-stage development. It extends Vectura's technology platform into smart nebuliser-based technology, broadening Vectura's therapeutic offering by opening up possibilities for new drug-device products and partnerships. The smart, nebuliser-based technology is well suited to patients with severely compromised respiratory function and to those at both ends of the age spectrum, i.e. children and the elderly. The lead asset, FAVOLIR®, provides Vectura an un-partnered late-stage product with peak sales potential which exceeds the total deal consideration. A marketing authorisation application will be filed following the successful completion of an additional clinical trial in Europe, which will also support a US filing.

The consideration of the transaction, to be funded through a mix of existing cash and equity, will be €130 million (£108 million), consisting of: -€95 million (£79 million) payable at completion, comprising €45 million (£38 million) in cash and €50 million (£42 million) in new Vectura ordinary shares;

- €35 million (£29 million) deferred (non-contingent) cash consideration payable on 1st August 2015 (or the next business day thereafter)

In addition, the existing shareholders of Activaero may receive additional payments (up to a cap of €6 million (£5 million) (in aggregate)) in relation to future transactions involving Activaero's technology.

Both the upfront and deferred cash consideration will be met by existing cash resources. The 25,641,398 new Vectura ordinary shares are being issued to the vendors of Activaero at completion at a price of 160.9 pence per share. Pursuant to the acquisition, major shareholders of Activaero will be subject to lock-up agreements of 12 months. Any trading in respect of the shares held by Activaero's shareholders during the 6 months following the lock-up period shall be through Vectura's brokers. Application will be made to the London Stock Exchange for these shares to be listed on the premium segment of the Official List and admitted to trading on the main market and it is expected that dealings will commence on 18 March 2014. These shares will rank pari passu in all respects with the existing issued ordinary shares in Vectura.

 

Activaero is a private German pharmaceutical company focused on the development of products for the treatment of respiratory diseases. Its proprietary smart nebuliser-based technology (FAVORITE) allows drug deposition into targeted areas of the lung and is currently utilised in seven clinical and several preclinical stage programmes.

FAVORITE (Flow And VOlume Regulated Inhalation TEchnology) is a smart nebuliser-based inhalation technology that provides for more efficient drug utilisation and targeting through pre-selection of drug into the desired deposition area. Three device families, AKITA® JET, APIXNEB and FOX, cover both desktop and portable inhaler segments and provide patient benefits such as improved delivery efficiency, consistent and reproducible dosing and treatment tailored to each patient's breathing capacity. The lead asset, FAVOLIR®, provides Vectura an un-partnered late-stage product with peak sales potential which exceeds the total deal consideration.