Financial Decision Making - Sample Assignment

Vectura Pharmaceutical Company 1
Financial Decision Making: Vectura Pharmaceutical Company
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Vectura Pharmaceutical Company 2
Financial Decision Making: Vectura Pharmaceutical Company
Introduction
About Vectura location
The Vectura is a leading company in Britain pharmaceutical industry and it is based in
Chippenham, UK. The company was founded by David Anthony. Besides the UK market, the
company also operates in France, Germany and United States of America. It is also listed as a
stock exchange company in the London Stock Exchange market (Apte, 2014, p. 45). The Vectura
begun in 1997 as a pharmaceutical company. 1n 1999 after acquiring a coordinated drug
development Vectura became a drug formulation study Centre. In 2007, Vectura was listed as an
investment market. To increase its market share and profitability, Vectura merged with
Skyepharma in 2016 under the name Vectura (The merged company was not renamed). The
company engages in commercialization, development, and research of therapeutic products.
Besides, development of pharmaceutical products, the company is also a founder of inhaled
therapies aimed at treating respiratory ailments also known as airways diseases. Vectura is
among the leading companies globally that has expertise in developing, designing and delivering
a wide range of products.
With vast capabilities and expertise, the company has the ability to utilize resources, dry powder,
solutions, and suspension. Moreover, Vectura has approximately 140 device engineers, and
biotechnological and pharmaceutical scientists who engage in the development of a wide range
of products. With a deep experience and vertical integrated capability (VIC), Vectura will
provide differentiated and unique medicines which meet specific need of both its partners and
clients. Vectura will be a strong company in the UK market. Besides over 2000 partners in the

Vectura Pharmaceutical Company 3
supply chain, Vectura has at least 478 workers working on a permanent basis (Inamdar, 2014, p.
567)
A. Company Strategy
The Vectura’s strategy is based on maximizing value, leverage its skills and unique technology.
The company aims at changing the lives of patients with airways diseases through enhancing
performance and delivery of inhaled products. The objective will be fulfilled by offering quality
generic products as an alternative to branded therapies. Airways diseases comprise of illnesses
such as COPD, cystic fibrosis, and asthma (Jackhotiya, 2018, p. 154). According to a study by
Jackhotiya (2018, p. 154), the number of patients suffering from airways diseases is expected to
increase in One hundred million in the next six years. At the moment the market is valued at
$40bn and is expected to increase to $56bn by the year 2025.
In 2018, the company aims at maintaining its strong cash flow and profitability from in-market
sales. This will help to reinvest in new opportunities in the market as a way of wealth
maximization and offering solutions to a larger market. Generic drugs and enhanced therapies
are new products in the market and Vectura will use this as a competitive advantage to attract
more consumers. The company also considers Merger and acquisitions as a strategy to increase
their market growth and expansion.
Vectura is operating within a large airways market and the company’s growth directly depends
on the performance of its products in the market. Likewise, Vectura has a potential of increasing
its revenue from business research and development. In 2018, the cost of a Research
&Development sector of the company is expected to reduce from $ 65 million to $ 55 million.

Vectura Pharmaceutical Company 4
The Expenditure on R&D activities is expected to reduce further from $55 million to $45 million
in 2019.
With a focusing on increasing their sales. The company’s sales were $103.7 million and is
projected to grow by 10% in 2018. Moreover, reducing the total expenditures is another option
of increasing profitability. However, the Capital expenditure is expected to increase from $10
million to $15 million due to the proposed expansions and innovative activities in 2018 (Kohok,
2015, p. 234).
B. Products and services
Vectura being a revenue-generating company has a variety of product. The products are
categorized into three segments namely oral, inhaled and non-inhaled i.e. ten oral products, two
non-inhaled products, and eight inhaled products. The products are marketed and sold by
partners of global relationship and diverse portfolio in clinical development. Our key partners are
Novartis, Hikma, Mundipharma, Baxter, Sandoz, UCB, GSK, Bayer, Ablynx, Kyorin, Almirall,
Chiesi, Janssen, Tianjin, and Dynavax. The company acquires royalties from the selling seven
products while revenue is realized from selling Flutiform to Kyorin and Mundipharma
companies (Kulkarni, 2017, p. 345).
I. Inhaled products
a) Flutiform
Flutiform is a combination of ICS (inhaled anti-inflammatory and LABA (a bronchodilator) in a
pMDI device. The revenue earned from selling the products to Kyorin and Mundipharma
companies it is expected to increase to $30m in future. Currently, the product is sold in the UK,
but the market is expected to expand into the European countries and the US. At the end of 2017,