Vectura Wins US GSK Patent Litigation and Awarded $89.7Million in Damages by Trial Jury

Vectura Group plc (LSE:VEC) ("Vectura" or "the Group") confirms that on 3rd May 2019 following a jury trial in the United States District Court for the District of Delaware, the relevant asserted claim of Vectura’s US patent 8303991 was found valid and infringed by US sales of three of GlaxoSmithKline’s (GSK) Ellipta products. The jury awarded Vectura $89.7m in damages for the period from August 2016 through December 2018, based on a calculation of 3% of US sales of these products. Vectura expects to seek application of the 3% royalty to the sales of the infringing products through the end of the patent term in mid-2021. The jury also found that GSK’s infringement was willful. The willfulness finding gives Vectura the right to seek enhanced damages. GSK has the option to appeal the decision.

James Ward-Lilley, Chief Executive Officer of Vectura, commented:

"Although we regret the need to take a longstanding partner to court, we are pleased with the jury’s verdict which confirms the validity of our intellectual property and the decision to progress this action with GSK. We will provide updates on this matter in due course.”

Background to litigation:

In July 2016, Vectura filed a patent infringement lawsuit against GSK in the United States District Court for the District of Delaware claiming that sales of certain GSK Ellipta products infringed Vectura patents.

Vectura and GSK had entered into an agreement in 2010 under which GSK had taken a license to formulation technology covered by a Vectura patent family. These licensed patents expired in July 2016. At this time GSK had the option to license additional patent families under the original agreement but declined to do so, resulting in the filing of the lawsuit by Vectura.

From the outset Vectura has been open to finding a mutually acceptable solution to avoid prolonging the dispute. Those efforts were not fruitful and led to the litigation progressing to a jury trial in April 2019.

Expected news flow for 2019

In the meantime, we continue to focus on executing our strategy and to build on our recently reported strong financial and operational progress. Further expected news flow for 2019 includes:

• VR315 (US) repeat clinical study read-out and resubmission
• VR647 (US) partnering post FDA end of Phase II meeting
• Updated disclosure on new nebulised niche portfolio assets, including potential orphan drug designation
• QVM149 Phase III study completion and submission

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.

About Vectura

Vectura is an industry-leading inhaled product formulation, device design and development business offering a uniquely integrated inhaled drug delivery platform. We develop inhalation products to help patients suffering from airways diseases.

Vectura has ten key inhaled and eleven non-inhaled products marketed by partners with global royalty streams, and a diverse partnered portfolio of drugs in clinical development. Our partners include Hikma, Novartis, Sandoz, Mundipharma, Kyorin, Baxter, GSK, UCB, Bayer, Chiesi, Almirall, Dynavax and Tianjin KingYork.

Vectura's strategy is to fully leverage its differentiated technology and skills, maximising value by enhancing the delivery and performance of inhaled products, and through the development of high-quality generic alternatives to branded therapies.

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

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