Preliminary results for the year ended 31 March 2005

Chippenham, UK, 22 June 2005 – Vectura Group plc (LSE: VEC), the drug development company, today announces its results for the year ended 31 March 2005.

Operating Highlights

NVA237 (formerly NVA237) for Chronic Obstructive Pulmonary Disease (COPD)

• $375m global licensing agreement with Novartis for NVA237. Successful completion of Phase IIa clinical trial
  
• Initial pharmacokinetic evaluations of NVA237 demonstrated low systemic exposure which could facilitate a beneficial side effect profile

VR004 for erectile dysfunction (ED)

• Commencement of VR004 Phase IIb clinical trial and receipt of CTA and IND approvals
  
• Initial pharmacokinetic evaluations correlate with rapid onset of activity seen in previous Phase IIa study

Other

• Successful CTA and IND review of Aspirair® inhalation device, permitting use of device in Phase II clinical studies
  
• Strategic alliance signed with SkyePharma for Aspirair®
  
• Progression of formulation and device technology licensing discussions with third parties
  

Financial Highlights

• AIM listing raised £20.1m before expenses
  
• Total revenues increased by 57% to £4.5m (2003/04 £2.9m)
  
• Gross profit more than doubled to £3m (2003/04 £1.4m)
  
• Loss before tax reduced to £8.8m (2003/04 £9m)
  
• 33% reduction in loss per share to 8.6p (12.8p 2003/04)
  
• Cash and liquid resources of £18.4m at 31 March 2005, with additional £7.9m received from Novartis in April 2005
  

Dr. Chris Blackwell, Chief Executive of Vectura, said: "We approach our first anniversary as a listed company having strengthened our product pipeline, significantly improved our financial situation and advanced all areas of our business. In particular, the global licensing deal with Novartis signed in April has demonstrated the value that our business can generate. With considerable ongoing licensing interest in our technologies, we shall continue to explore ways of generating value for our shareholders."

A presentation for analysts will take place today, 22 June 2004, at 09:00 BST (10:00 CET) at Financial Dynamics, Holborn Gate, 26 Southampton Buildings, London WC2A. Please contact Claire Rowell at Financial Dynamics on +44 (0)20 7269 7285 for details. Slides for the presentation will also be made available through our website at www.vectura.com from 14.00 today.

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Notes for Editors

Vectura

Vectura's principal focus is the development of a range of inhaled drugs for the treatment of both lung diseases and other conditions where optimised delivery via the lungs can provide significant benefits, such as a rapid onset of action, improved efficacy and improved tolerability compared with current therapies.

Vectura's strategy is to combine its proprietary, innovative, pulmonary formulation and device technologies (PowderHale®, Aspirair® and GyroHaler®) with existing, off-patent drugs either for use in new indications or to provide inhalation as an improved route of administration.

The Company seeks to license its lead products to pharmaceutical companies with established sales and marketing infrastructures for the later stages of development and for commercialisation, typically prior to Phase III clinical development. The Company has development collaborations with a number of companies, including Novartis, GSK, SkyePharma and Chiesi.

This press release contains "forward-looking statements," including statements about the discovery, development and commercialization 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 programs; failure to obtain patent protection for discoveries; 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 statement. 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.