One to watch: Vectura

Regulatory approval of a new drug can set the share price of a firm on an upward course – as is happening with Vectura and its QVA149 lung drug. Vectura specialises in inhaled therapies and technologies for the treatment of respiratory diseases.

QVA149, which is being developed in conjunction with Novartis, aims to provide a more effective treatment for chronic obstructive pulmonary disease, also known as "smokers cough". The World Health Organisation estimates this affects 80 million people worldwide, indicating the "blockbuster" potential for QVA149.

The discounted future cash flows and higher probabilities of success from its projects over the next two to three years have caused Vectura's share price to rise 33 per cent this year. We have in mind a price target of 120p, but longer term there is plenty of scope to exceed this target. However, the price can reverse just as quickly if the news flow deteriorates.

Vectura

95p +5p

Scotsman says BUY

• The value of your investments may fall and you may get back less than you invested. This does not constitute investment advice and you should take professional advice regarding the suitability of this company for your portfolio.

BROKER SNAPS

FirstGroup

353p +1.8p

Broker says SELL

PEEL Hunt thinks FirstGroup's dividend "remains attractive", but carries a "sell" rating on the Aberdeen-based transport group ahead of Friday's AGM. The broker said: "We expect the company to assert its First Student recovery plan is on course. But it is a long time before the tangible results of this good work will be seen."

Britvic

382p -4.5p

Broker says BUY

AHEAD of Britvic's third-quarter trading update on 21 July, RBS Equities highlighted what it sees as "an opportunity to buy" shares in Pepsi bottler Britvic. The broker said: "We believe it has weathered a difficult storm of first-half pressures and it will deliver on what is needed in the second half of its financial year."