Chippenham, UK - -- Vectura Group plc (LSE: VEC) ("Vectura"), an industry-leading inhalation CDMO, announces that the United States Court of Appeals for the Federal Circuit has denied GlaxoSmithKline's (GSK) motions for judgment as a matter of law, a new trial on infringement and for a new trial on damages in litigation concerning Vectura's US patent 8303991. The United States Court of Appeals for the Federal Circuit has therefore upheld the District Court of Delaware ruling on post-trial motions.

In September 2019, the District Court of Delaware issued the following ruling on the parties' post-trial motions:

Award of US$89.7m in damages to Vectura on May 3, 2019 upheld

Ongoing royalties of 3% on US sales of certain infringing GSK Ellipta® products

Supplemental damages based on GSK's infringing sales of approximately US$10.5m

Pre-judgment interest at the prime rate of approximately US$6.7m

GSK has 30 days to file a petition for rehearing.

Will Downie, Chief Executive Officer of Vectura, commented: "We are very pleased with the result of this appeal, which confirms the validity of our intellectual property and the decision to progress this litigation with GSK. Once we have further clarity regarding final settlement and potential timing of receipts, we will provide a further market update."

Background to litigation

In July 2016, Vectura filed a patent infringement lawsuit against GSK in the United States District Court of Delaware claiming that sales of three of GSK's Ellipta products, Breo® Ellipta®, Anoro® Ellipta® and Incruse® Ellipta®, infringed certain Vectura formulation 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. However, the litigation progressed to a jury trial in April 2019 with a subsequent appeal hearing in October 2020.

As reported in March 2020, Vectura has estimated that damages, accumulated interest and ongoing royalties could amount to approximately $200m in total. The precise amounts to be received are dependent on the future US sales of the infringing products as well as sales for historical periods yet to be reported by GSK.

Amounts received will be subject to taxation in the UK. Vectura expects to pay tax a rate of approximately 10% on these proceeds.

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Vectura Group plc

David Ginivan, VP Corporate Communications +44 (0) 7471 352 720

Elizabeth Knowles, VP Investor Relations +44 (0) 7767 150 565

Consilium Strategic Communications

+44 (0)20 3709 5700

Mary-Jane Elliott/ Sue Stuart/ David Daley

About Vectura

Vectura is a provider of innovative inhaled drug delivery services that enable partners to bring their medicines to patients. With differentiated proprietary technology and pharmaceutical development expertise, Vectura is one of the few companies globally with the device, formulation and development capabilities to deliver a broad range of complex inhaled therapies.

Vectura has eleven 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 (a division of Novartis AG), Mundipharma, Kyorin, GSK, Bayer, Chiesi, Almirall, and Tianjin KingYork.

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

Forward-looking statements

This press release contains forward-looking statements, including statements about the 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: 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.

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