Vectura's Asthma Med Flutiform Flunks Final Late-Stage Study

Update On Mundipharma’s European Phase III Trial Of Flutiform® In COPD And Latest Flutiform® In-Market Sales

Vectura Group plc

This announcement includes inside information

Update on Mundipharma’s European Phase III trial of flutiform^® in COPD and latest flutiform^® in-market sales

Chippenham, UK – 30 August 2016: Vectura Group plc (LSE: VEC) ("Vectura", “the Group”), an industry-leading inhaled airways disease focused business, has been informed by its partner Mundipharma that its Phase III trial of flutiform^® did not meet the primary endpoint of demonstrating statistically significant superiority in the reduction of annualised rates of moderate and severe COPD exacerbations when compared to mono-component LABA treatment alone. Mundipharma carried out this Phase III study to support a filing to expand the approved indication for the regular treatment of asthma of flutiform^® in Europe to include chronic obstructive pulmonary disease (COPD). Mundipharma is currently undertaking an analysis of the trial’s other endpoints but has indicated that the primary endpoint result will not allow it to make a regulatory filing for the COPD indication in Europe.

The Phase III trial was an international double blind study with 1,767 randomised patients in 16 countries. Patients either received flutiform^® 250/10µg (2 puffs twice per day), flutiform^® 125/5µg (2 puffs twice per day) or formoterol fumarate dihydrate 12µg (1 puff twice per day) for 52 weeks. The primary endpoint compared the annualised rate of moderate and severe COPD exacerbations of patients treated with flutiform^® 250/10µg (2 puffs twice per day) against those treated with formoterol fumarate dihydrate 12µg (1 puff twice per day).

Although the results are disappointing, there have been several previous studies with other inhaled ICS/LABA combinations in COPD that have also not shown a sufficient decrease in exacerbation rate versus mono-bronchodilatory treatments in one study while demonstrating efficacy in other studies -[1], [2], [3] .

With its existing approved asthma indication, flutiform^® provides benefits to patients and health systems and in-market net sales[4] have continued to grow strongly, having doubled to €144.4 million in calendar year 2015 following the launch of the 120-puff version in Japan in December 2014. In the most recent six month period to 30 June 2016, in-market net sales totalled €92.4 million, up 42% year-on-year.

James Ward-Lilley, Vectura’s CEO commented:

“COPD is a complex and highly variable disease and these trial results highlight the challenge in demonstrating reductions of exacerbations with ICS/LABA combinations in today’s treatment environment.

Whilst this result is disappointing, flutiform continues to grow strongly based on the approved asthma indication, which continues to underpin our expectations for future growth of the product. Vectura already benefits from sizeable and growing revenues from other partnered products on the market in Europe and elsewhere for the treatment of COPD, including Ultibro and Seebri.”

As previously announced, the Group will publish an AGM Trading Update on 7 September 2016 to coincide with its Annual General Meeting where it will also provide an update on the progress of the integration with Skyepharma.

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Enquiries

Vectura Group plc	+44 (0)1249 667700
Fleur Wood, Director – Investor Relations and Corporate Communications
Citigate Dewe Rogerson	+44 (0)20 7638 9571
David Dible / Mark Swallow

About Vectura

Vectura, a FTSE250 company listed on the London Stock Exchange (LSE: VEC), is an industry-leading inhaled airways disease focused business with proprietary formulation and devices across DPI, pMDI and smart nebulisation platforms. With our extensive range of technologies, capabilities and collaborations, we believe we can become a leader in the development of inhalation products, increasing our ability to help patients suffering from respiratory diseases. In June 2016 Vectura completed a merger with Skyepharma PLC.

Vectura has seven inhaled, four non-inhaled and ten oral products marketed by partners with growing global royalty streams, and a portfolio of drugs in clinical development, a number of which have licence agreements with several global pharmaceutical and biotechnology companies including Hikma, Novartis, Sandoz, Mundipharma, Kyorin, Baxter, GSK, UCB, Ablynx, Grifols, Chiesi, Almirall, Janssen, and Tianjin KingYork.

For further information, please visit Vectura's website at www.vectura.com.

About flutiform^®

A novel combination, flutiform^® combines fluticasone propionate (fluticasone), an inhaled corticosteroid (ICS), and formoterol fumarate (formoterol), a long-acting ß₂-agonist (LABA), in a single aerosol inhaler incorporating Vectura's proprietary SkyeDry™ technology.

In Europe, flutiform^® is indicated for the regular treatment of asthma in patients aged 12 years and over (50/5µg and 125/5µg strengths) and in adults (250/10µg strength) whose symptoms are not adequately controlled on an ICS and an as-required inhaled short-acting ß₂-agonist (SABA), and in those patients who are already receiving treatment with both an ICS and LABA.[5]

In Japan, flutiform^® is indicated for the regular treatment of bronchial asthma in patients aged 16 years and over (50/5µg and 125/5µg strengths) whose symptoms are not adequately controlled on an ICS and an as-required inhaled short-acting ß₂-agonist (SABA), and in those patients who are already receiving treatment with both an ICS and LABA.

Mundipharma has marketing rights to flutiform^® for most of the world outside North America and Japan and Kyorin has marketing rights in Japan.

flutiform^® is available in 21 countries across Europe for the treatment of asthma in adults as well as in adolescents aged 12 and above.

In-market net sales trends for flutiform^® are summarised below:

€’m	2013	2014	2015	H1’ 16
E.U./ROW (Excluding America and Japan)	17.9	57.0	101.1	61.8
Japan	1.5	15.2	43.3	30.6
Total	19.4	72.2	144.4	92.4

About Mundipharma

The Mundipharma network of independent associated companies consists of privately owned companies and joint ventures covering the world's pharmaceutical markets. These companies are committed to bringing to patients the benefits of pioneering treatment options in the core therapy areas of oncology, pain, respiratory and inflammatory conditions. They are also committed to independent thinking and ground breaking solutions. Through innovation, design and acquisition, the Mundipharma network of independent associated companies delivers cutting-edge treatments to meet the most pressing needs of healthcare professionals and patients. For further information see: www.mundipharma.com.

About Kyorin

Kyorin Pharmaceutical Co., Ltd, a subsidiary of Kyorin Holdings, Inc. is headquartered in Japan focuses on respiratory medicine, otolaryngology, and urology. Key products include Kipres^®, for treating bronchial asthma and allergic rhinitis; Mucodyne^®, a mucoregulant; Pentasa^®, for treating ulcerative colitis and Crohn's disease; and Uritos^®, for treating overactive bladder. For further information see www.kyorin-pharm.co.jp

Forward-looking statements

This press release contains forward-looking statements, including statements about the discovery, development and commercialisation of products. Various risks may cause Vectura's actual results to differ materially from those expressed or implied by the forward-looking statements, including: adverse results in clinical development programmes; failure to obtain patent protection for inventions; commercial limitations imposed by patents owned or controlled by third parties; dependence upon strategic alliance partners to develop and commercialise products and services; difficulties or delays in obtaining regulatory approvals to market products and services resulting from development efforts; the requirement for substantial funding to conduct research and development and to expand commercialisation activities; and product initiatives by competitors. As a result of these factors, prospective investors are cautioned not to rely on any forward-looking statements. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.