Vectura Limited has signed an agreement with GlaxoSmithKline plc (GSK) to collaborate on evaluating Vectura's Aerocine and associated powder formulation technologies in dry powder inhaler devices for the treatment of inflammatory and constrictive diseases of the airways.

Vectura will earn option and development fees during the initial programme of work and pre-agreed licence fees, milestone payments and royalties if GSK exercises its option to licence Vectura's formulation technology for its respiratory product pipeline. The financial terms of the agreement are not being disclosed.

Vectura's Aerocine technology is part of the family of PowderHale powder formulation systems, which utilise specially selected components termed 'Force Control Agents' that modify the interactive forces between the active drug substance and the carrier particles, thus achieving optimal flow properties as well as superior de-aggregation and aerosolisation characteristics. These formulation systems have been successfully applied to a wide variety of therapeutic drugs and inhaler devices.

In another significant development for the company, Vectura successfully completed a further round of equity financing of 6.9 million pounds sterling. The Merlin Biosciences Fund LP together with ISIS Capital/ISIS Asset Management business units led the round, each investing 2 million pounds. West Euro Beteiligungsgesellschaft mbH, a 100 per cent subsidiary of West LB AG, contributed 1.5 million pounds, Sitka Health Fund VCT and eTechnology VCT contributed 0.5 million pounds each, with Northern Ventures, Vectura management, non-executive directors and the scientific founders providing the balance. Vectura has also entered into a 2 million pounds loan facility with GATX European Technology Ventures, bringing the total additional cash resources available to the company to 8.9 million pounds.

"We are delighted to be working with GSK, one of the world's leading developers of innovative respiratory medicines", said Peter Virley, CEO of Vectura. "Furthermore, the equity refinancing will enable us to progress five exciting pipeline products into the clinic over the next eighteen months. We have both the drug formulation and device technologies to become a leading supplier of enhanced-performance products."