Ward-Lilley, who has been in charge of the company since September 2015, will be replaced by Chief Financial Officer Paul Fry on an interim basis as the company starts looking for a new CEO, Vectura said.
"The Board and James have agreed that after four years as CEO it is now time for a new leader to take Vectura through its next phase of development," Vectura Chairman Bruno Angelici said.
Prior to taking on the role at Vectura, Ward-Lilley had worked for nearly three decades for pharmaceutical giant AstraZeneca.
The 54-year old led Vectura through its $621 million purchase of rival SkyePharma couple of years ago, but shares in the company have lost more than half their value under his management.
Vectura said last month that its outlook was in line with its guidance for the current year, after reporting a bigger operating loss for the last fiscal year in March partly due to costs relating to the discontinuation of a drug to treat severe asthma.
(Reporting by Muvija M in Bengaluru; Editing by Patrick Graham)