Two UK companies are to pool their resources to create a leading player in the market for pulmonary delivery systems.

Vectura will buy Innovata in an all-share transaction that values the latter at £131 million ($247m), the companies said in a joint statement. The combined company will have revenues from eight marketed products and boast a broad development pipeline with a range of formulation, device and delivery technologies for drugs inhaled as dry powders.

The transaction will create one of the largest UK quoted biotech companies as measured by market capitalisation, according to Innovata chairman Ian Kent.

The announcement was made alongside the disclosure of both companies financial results. Vectura said it had revenues of £6.1 million in the six months ended September 30, up 71% year-on-year, and posted an operating loss of £3.8 million.

Meanwhile, Innovata had revenues of £34 million in the year ended September 30, with an operating profit of £14.5 million. Revenues were up 72%, thanks largely to Innovata’s acquisition of Quadrant in July 2005 which brought in a royalty stream from Baxter.