LONDON, April 19 /PRNewswire-FirstCall/ -- SkyePharma PLC (LSE:SKP)
( NASDAQ: SKYE) announces the Company's preliminary results for the
year ended December 31, 2005. Operating highlights - Paxil CR(TM)
back on US market - Triglide(TM) launched in USA - Pulmicort(R)
HFA-MDI filed - Foradil(R) Certihaler(TM) now approved in more than
20 markets - Flutiform(TM) starts Phase III clinical trials -
DepoBupivacaine(TM) completes Phase II clinical trials -
Flutiform(TM) licence negotiations ongoing with several parties -
DepoBupivacaine(TM) licensed to Mundipharma and Maruho - Rights
issue raised 35 million pounds Sterling (net of expenses) -
Strategic decision to divest injectables business unit Financial
highlights (under IFRS) - Turnover down by 18% to 61.3 m pounds
(2004: 75.2 m pounds) -- Absence of Flutiform(TM) licensing
revenues -- Strategic shift from up fronts to royalties - Royalty
income decreased by 16% to 21.7 m pounds (2004: 25.9 m pounds) --
Paxil CR(TM) supply problems -- Royalties excluding Paxil CR(TM) up
38% - Gross profit down 32% to 32.1 m pounds (2004: 47.0 m pounds)
- Exceptional items of 21.4 m pounds (2004: 8.9 m pounds) -- Non
cash investment impairments 19.4m pounds -- Abortive transaction
costs 2.0m pounds - Operating loss before exceptionals 16.1 m
pounds (2004: 0.4 m pounds) - Operating loss after exceptionals
37.5 m pounds (2004: 3.1 m pounds) - Net loss 50.9 m pounds (2004:
18.6 m pounds) - Loss per share 8.1p (2004: 3.0p) - End 2004 net
cash 34.3 m pounds (2004: 15.3 m pounds) Dr Jerry Karabelas,
Non-executive Chairman, said: "2005 was a difficult year for
SkyePharma but the Company now has a new management team and has
adopted a new strategy. We are focused in the short term on the
licensing of Flutiform(TM) and the divestment of our injectables
business. While there is obviously uncertainty as to the timing of
these two transactions, they will not only greatly reduce the
Company's current and future cash requirements but also provide us
with the funds to consider new opportunities related to oral and
inhalation products. We remain convinced that Flutiform(TM) will
become a major product. We believe that the strategic initiatives
we have adopted will enable the Company to maximise the potential
of Flutiform(TM) and other pipeline products, to become profitable
in the near term and to deliver long- term value for shareholders."
For further information please contact: SkyePharma PLC Jerry
Karabelas, Non-executive Chairman Frank Condella, Chief Executive
Officer Peter Laing, Director of Corporate Communications Today +44
207 466 5000 Thereafter +44 207 491 1777 Sandra Haughton, US
Investor Relations +1 212 753 5780 Buchanan Communications +44 207
466 5000 Tim Anderson / Mark Court / Rebecca Skye Dietrich
CHAIRMAN'S STATEMENT There is no disguising that 2005 was a
difficult year for SkyePharma. Despite a number of significant
achievements, outlined in the Review of Operations below, we did
not complete a development agreement for Flutiform(TM), our major
pipeline product. We believe that Flutiform(TM) has substantial
commercial value. Faced with the prospect of a delay to the
development of this important product, which might have impaired
its commercial potential, we took the decision in September to
raise �35 million (net of expenses) by means of a rights issue to
keep Flutiform(TM) on its planned development timeline through
Phase III. As such, our target launch date in the USA remains 2009.
We are convinced that the decisions to proceed with the clinical
development of Flutiform(TM) ourselves and to fund this development
through a rights issue were in shareholders' best interests. We
continue to have negotiations with potential strategic marketing
partners for Flutiform(TM) who could also fund development of
additional indications following initial approval for asthma. We
hope to finalise an agreement with one or more marketing partners
for Flutiform(TM) as soon as reasonably possible. The Board remains
confident that an agreement will be reached in 2006. Prior to
reaching the decision to ask shareholders for funding, we explored
a number of financing alternatives to fund the development of
Flutiform(TM) and also a variety of strategic options for the
Company. These included discussions concerning a transaction that,
had it been successful, would have created a combined company that
could have marketed Flutiform(TM) itself in some markets. The
discussions were called off by SkyePharma due to uncertainties over
the other party's prospects. SkyePharma was unable to disclose this
at the time due to reasons of confidentiality and the possibility
that these discussions could resume at some time in the future. In
November, we also received an opportunistic takeover approach from
Innovata PLC. As a result, the Board felt that it was in
shareholders' interests to explore all options and consequently
appointed Lehman Brothers to conduct a full strategic review of all
the options open to the Company. The conclusion of this review in
early 2006 did not lead to an offer for the entire Company on terms
that the Board felt able to recommend to shareholders. However,
there were expressions of interest in individual parts of the
business. The Board then took a strategic decision to divest the
US- based injectables business in order to reduce the Company's
projected cash outflow over the next few years and to raise funds
to concentrate on the oral and inhalation businesses. The
investment bank UBS has been retained recently to manage this sale
and the process is ongoing. The injectables business includes
DepoCyt(TM) and DepoDur(TM), both marketed products, and the lead
injectable pipeline product DepoBupivacaine(TM). In January 2006
certain shareholders requisitioned an Extraordinary General Meeting
("EGM") seeking to remove the Company's then Chairman and to
appoint a nominated director to SkyePharma's Board with the
ultimate aim of having him appointed as Executive Chairman.
Although this motion was defeated at the EGM in early March, the
Board has since made a number of changes and introduced a process
whereby major investors are now involved in the selection of new
Non-Executive Directors. Board Changes In January 2006, Ian
Gowrie-Smith stepped down from his role as Non- Executive Chairman
when I was appointed in his place. Ian subsequently resigned as a
Director in February. As shareholders will be aware, Ian founded
SkyePharma in 1996 and has seen it grow to become a substantial
business. He remains a shareholder but will now be focusing his
energies on a number of early-stage non-pharmaceutical companies. I
have been a Non-Executive Director of SkyePharma since 2000 and I
have also had extensive experience at senior management levels of
the international pharmaceutical industry. Michael Ashton, who has
now reached the age of 60, indicated to the Board last year that it
was his intention to retire as Chief Executive in 2006. Michael
will continue to serve as a Director until the 2006 Annual General
Meeting in June but will not be seeking re-election. I am sure that
shareholders will join me in thanking both Ian and Michael for
their contribution to the development of SkyePharma since its
formation. The Board has appointed Frank Condella as Chief
Executive, who joined the Company on 1 March 2006, having
previously run the European operations of the leading generic
company IVAX. Before joining IVAX, Frank was Chief Executive of
Faulding Pharmaceuticals and before that built up the speciality
pharmaceuticals business of Roche. Frank joined the Board on 4
April 2006. The Board has also appointed Dr Ken Cunningham in the
new role of Chief Operating Officer. Ken was formerly Chief
Executive of the private UK company Arakis and has a wealth of
experience in pharmaceutical development, especially in the areas
of oral and inhalation products. Two other Non-Executive Directors,
Sir Michael Beavis and Dr Keith Mansford, will not be standing for
re-election at the Annual General meeting. The Board will miss
their wise counsel and wishes them well in retirement. In their
place, we will be appointing two new Non-Executive Directors. The
Future The EGM process was costly and also diverted significant
management time away from running the business. However, now that
this is behind us we can focus on execution of the new strategy
referred to above and outlined in more detail in the following
pages. We are focused in the short term on the licensing of
Flutiform(TM) and the divestment of our injectables business. While
there is obviously uncertainty as to the timing of these
transactions, they will not only greatly reduce the Company's
current and future cash requirements but also provide us with the
funds to consider new opportunities related to oral and inhalation
products. We are also devoting a significant amount of resource to
ensure that Flutiform(TM) continues on its planned development
timeline. We remain convinced that Flutiform(TM) will become a
major product, as is evident from the number of companies that have
expressed an interest in obtaining licensing rights. We believe
that the strategic initiatives we have adopted will enable the
Company to maximise the potential of Flutiform(TM) and other
pipeline products, to become profitable in the near term and to
deliver long-term value for shareholders. Dr Jerry Karabelas
Non-Executive Chairman STRATEGY SkyePharma's mission is to become
one of the world's leading speciality pharmaceutical companies,
powered through excellence in drug delivery. On 2 February 2006,
the Company announced the outcome of its Strategic Review. The
Board concluded that in the interests of achieving sustainable
profitability in the shortest reasonable time, SkyePharma should
concentrate on oral and inhalation products and divest its
injectable business interests. The proposed divestment, which the
Board expects to be subject to approval by shareholders, would not
only release cash but also relieve the Company of a significant
cash burn and future capital expenditure. The Board believes that
the residual core business would be able to achieve profitability
in the near term. Furthermore, with greater focused resources the
Company would be in a better position to further develop its
pipeline of oral and inhalation products. Ultimately, it is the
Company's strategy to add a niche sales and marketing capability in
one or more markets that would improve profit growth and give it
greater control over revenue generation. The injectables business,
located in San Diego, consists of two marketed products: DepoCyt(R)
for a complication of cancer and DepoDur(R) for the treatment of
post-surgical pain. This business also has a pipeline of projects
in various stages of development. These include controlled-release
injectable formulations of a number of biological products and
DepoBupivacaine(TM), a long-acting injectable formulation of the
local anaesthetic bupivacaine for the control of post-operative
pain. The Company remains convinced that DepoBupivacaine(TM)
addresses an important area of unmet medical need and has major
commercial potential. However, further development of this business
would require significant cash resources and would also impact the
Company's ability to become profitable in the near term. The
Company has retained UBS to act as its investment bank to manage
the divestment process. This process is ongoing and several third
parties, both trade and financial, have already shown significant
interest in the injectables business. Funds raised by the
divestment of the injectables business will be available to enhance
the core oral and inhalation business. We expect to be able to
accelerate the development of certain pipeline products whose
development has had to be delayed in recent years. Several of these
products are at an early stage of development but would address
important therapeutic areas such as gastrointestinal, diabetes and
hypertension. Development activities will continue to be based in
Muttenz, Switzerland and manufacturing in Muttenz and Lyon, France.
Our oral and inhalation pipeline includes SkyePharma's most
important project Flutiform(TM), a combination asthma product. The
Company is convinced that Flutiform(TM) has substantial value as it
is poised to enter a large and rapidly growing market with
currently limited competition. We are currently negotiating with
several companies for the rights to market Flutiform(TM) in the US,
Canada, Japan and the countries of the European Union. The core
oral and inhalation business has seven products marketed by
licensees, including Paxil CR(TM), Xatral(R) OD and Triglide(TM).
These products will continue to generate revenues and cash for the
Company. There are also a number of late-stage products that are
close to the market. The Company will focus its efforts on working
with partners to maximise revenues from existing and future
marketed products. We will also be able to devote more resources in
this area to the development of additional products and to increase
the size of our pipeline. OPERATIONAL REVIEW INHALATION PRODUCTS
Flutiform(TM) HFA-MDI Flutiform(TM) HFA-MDI is a fixed-dose
combination of the long-acting bronchodilator formoterol and the
inhaled steroid fluticasone in a metered- dose aerosol inhaler
(MDI) using a hydrofluoroalkane (HFA) propellant. The world market
for asthma drugs is expected to exceed $20 billion by 2010, with
use in chronic obstructive pulmonary disease (COPD) expected to add
a further $10 billion. The fastest-growing part of this market is
combination treatments, which combine a long-acting bronchodilator
with an inhaled steroid in a single delivery device. Combinations
are not only convenient for patients but also optimise the efficacy
of the individual agents. Sales of GlaxoSmithKline's combination
Advair (Seretide in Europe) already exceed $6 billion and
AstraZeneca's Symbicort (which is not yet on the US market) add
another $1 billion. By 2010 the combination category is expected to
account for over half of the asthma/COPD market by value.
Formoterol provides 12 hours of bronchodilation and has a rapid
onset of action (1-3 minutes). By contrast salmeterol, the
bronchodilator used in GlaxoSmithKline's Advair/Seretide, is also a
twice-daily product but has the drawback of needing 30-45 minutes
after inhalation to take effect. The inhaled steroid fluticasone (a
component of Advair/Seretide) is perceived to have a better safety
and efficacy profile than budesonide, the steroid used in
AstraZeneca's Symbicort, and is the physician-preferred inhaled
steroid in the US. The SkyePharma formulation technology employed
in Flutiform(TM) provides patent protection to 2019. In 2005 the
Company completed phase II trials and a review of development
activities with the FDA and European regulatory agencies.
Subsequent to these meetings, the Company initiated Phase III
trials for Flutiform(TM) in February 2006. The product is on track
for its target filing date with the US Food and Drug Administration
("FDA") in the second half of 2007, with US market entry expected
in early 2009. SkyePharma expects Flutiform(TM) to be the third
combination product to enter the US market, following
GlaxoSmithKline's Advair and AstraZeneca's Symbicort. Despite the
eventual likelihood of additional entrants, the Company believes
that no competing product is likely to enter the US market before
2012. We believe that Flutiform(TM) will be at worst the third
combination on the US market and differentiated from both Advair
and Symbicort. There is potential to position Flutiform(TM) as
"Best in Class." Furthermore there is limited risk of generic
competition in the combination asthma market because there is no
recognised test for bioequivalence after inhalation dosing and
therefore no basis for approval of an "AB rated" generic inhaled
drug in the US market. A generic company would therefore have to
conduct clinical trials, which is much more expensive and risky
than development of a conventional oral generic drug - so typical
generic deep- discount pricing would not be possible. We therefore
anticipate a peak sales potential for Flutiform(TM) well in excess
of $1 billion with an appropriate marketing partner. SkyePharma had
previously sought a partner to pay for the clinical development of
Flutiform(TM) but negotiations have taken longer than expected. In
September 2005 we therefore decided to raise funds to proceed with
Phase III development at our own expense. The Phase III trials will
cost in excess of $50 million. This decision kept development under
our control and reduced the risk of delays to market entry that
could jeopardise the sales potential of Flutiform(TM). It is still
our intention to appoint a licensee or licensees as soon as
possible. However, SkyePharma's flexibility on the terms and
structure of any licensing deal has been significantly increased by
removal of the partner funding obligation, elimination of the
majority of the development risk and proximity to launch.
SkyePharma remains in discussions with various potential marketing
partners. Foradil(R) Certihaler(TM) Foradil(R) Certihaler(TM) is
our version of Novartis' long-acting bronchodilator Foradil(R)
(formoterol). Global sales of Foradil(R) were $332 million in 2005,
of which the Certihaler(TM) version made up a very small
proportion, the product having only been on the market for a short
time. We developed not only the multi-dose dry-powder inhaler
device but also the formulation technology that had been shown to
ensure dose consistency. Foradil(R) Certihaler(TM) has now been
approved in 22 countries in Europe, the Middle East and Latin
America. The product was launched in Germany and Switzerland in
September 2005 but a recall from these markets was initiated in
January 2006 because of concerns that accidental mishandling of the
device had resulted in inaccurate dosing in a small number of
cases. SkyePharma is collaborating with Novartis and the relevant
health authorities to investigate the reasons and the actions
necessary before the product can be returned to the market. These
are likely to include modification of the patient use instructions
and the device. In the US, the FDA issued an "approvable" letter
for Foradil(R) Certihaler(TM) in April 2006. However, the FDA is
requiring device modification as a prerequisite for approval.
Novartis is currently working with the FDA on the most effective
way to address its concerns. The Certihaler(TM) and related
formulation technology are also involved in a second collaboration
with Novartis to jointly develop QAB149 (indacaterol), a novel
inhaled long-acting beta-2-agonist that provides sustained 24-hour
bronchodilation with rapid onset of action, which has completed
Phase II development in both asthma and COPD. Novartis is currently
revising the indacaterol development plan in Certihaler(TM) to
accommodate the device modifications mentioned above. Formoterol
HFA-MDI This is a formulation of the long-acting bronchodilator
formoterol in an HFA-powered MDI. Because of the growing use of
combination products for asthma and COPD, there is now a
correspondingly diminishing market opportunity for single agent
bronchodilators. While this product has completed Phase II
development, pending the divestment of the injectables business,
the Company will conclude its strategic review of this product.
Pulmicort(R) HFA-MDI This new HFA-powered MDI containing
AstraZeneca's inhaled corticosteroid Pulmicort(R) (budesonide) was
filed for marketing authorization in June 2005 on a
country-by-country basis in Europe for the treatment of asthma in
adults and children. In February 2006, the product received
approval in Finland, its first European market. Other European
approvals are expected this year. The currently available MDI
formulation of Pulmicort(R) has been on the market since 1981 and
uses chlorofluorocarbons (CFCs) as the propellant. In accordance
with the Montreal Protocol, this version will now be replaced by
the non-ozone depleting device using HFAs as propellant. SkyePharma
developed this new HFA-MDI formulation, which employs its
proprietary formulation technology, and also conducted the clinical
development programme for AstraZeneca. SkyePharma will earn a
double digit royalty on AstraZeneca's sales of this formulation of
Pulmicort(R). ORAL PRODUCTS Paxil CR(TM) Our improved formulation
of GlaxoSmithKline's antidepressant Paxil(R) (paroxetine) remains a
major source of royalty income. In March 2005 GlaxoSmithKline
temporarily suspended production of Paxil CR(TM) and certain other
products made at its Cidra plant in Puerto Rico. GlaxoSmithKline
announced in April 2005 that it had entered into a consent decree
with the FDA regarding manufacturing processes at the plant and
recommenced supply of product to the market shortly thereafter. As
previously reported, we concluded a new agreement with
GlaxoSmithKline last year that not only provided us with a $10
million lump-sum payment and increased the royalty rate on this
product from 3% to 4% but also maintained our royalty income even
while the product was temporarily off the market. Despite the
product's return to the market, new documentary procedures
introduced as part of the consent decree have hindered the Cidra
plant's ability to meet demand and GlaxoSmithKline alerted
customers to supply constraints in January 2006. Paxil CR(TM)
currently holds about 3% of new prescriptions in this market, well
below the 7% share held before the March 2005 withdrawal. World
sales of Paxil CR(TM) were $231 million in 2005, of which US sales
were $209 million, 70% below the 2004 level in constant exchange
rate terms. In late 2005 we and our partner GlaxoSmithKline
received notification from Mylan Pharmaceuticals Inc. that it had
filed an Abbreviated New Drug Application ("ANDA") with the FDA for
a version of paroxetine hydrochloride extended release tablets. The
ANDA contains a "Paragraph IV certification" that certain of the
patents listed in the FDA's "Orange Book" by GlaxoSmithKline for
Paxil CR(TM) (paroxetine hydrochloride Controlled Release tablets)
are not infringed. These patents include SkyePharma's US patent
5,422,123. The certification does not challenge GlaxoSmithKline's
basic active ingredient patent covering paroxetine hydrochloride
hemihydrate, which protects the product until June 2007.
GlaxoSmithKline has decided not to exercise its right to file suit
for patent infringement within the 45-day period permitted by the
Hatch-Waxman Act ("the Act") and therefore there will be no
30-month stay of approval for this product pursuant to the Act.
SkyePharma has a number of issued patents covering technology
incorporated in Paxil CR(TM) and our policy is to enforce our
intellectual property wherever possible. Requip Once-a-day In
December 2005, SkyePharma's collaborator GlaxoSmithKline submitted
Requip Once-a-day, a once-daily dosage formulation of Requip(R)
(ropinirole), for approval by US and European regulatory
authorities for the treatment of Parkinson's disease. The FDA has
raised some administrative issues that were identified in the
preliminary initial review and which led GlaxoSmithKline to
withdraw the US filing. SkyePharma has been informed that it is the
intention of GlaxoSmithKline to resubmit as soon as possible. It is
not expected that the European regulatory review process will be
affected by these issues. This new once-daily oral formulation of
Requip(R) incorporates SkyePharma's Geomatrix(TM) oral
controlled-release delivery technology. SkyePharma will receive
royalties on the product sales. Triglide(TM) Following FDA approval
in May 2005, First Horizon Pharmaceutical Corporation launched
Triglide(TM) (fenofibrate) on the US market in July. First Horizon,
which licensed Triglide(TM) in 2004, has a 400-strong
representative force focused on cardiovascular physicians and
high-prescribing primary care practitioners and has a proven
ability to capture market share in the cardiovascular therapeutic
area. We and First Horizon see a substantial opportunity for
Triglide(TM), a once-daily oral treatment for lipid disorders such
as elevated cholesterol and triglycerides. Fenofibrate not only
lowers levels of total triglycerides and LDL cholesterol ("bad
cholesterol") in the bloodstream but also has the valuable property
of raising abnormally low levels of HDL cholesterol ("good
cholesterol"), increasingly recognized as a major cardiovascular
risk factor. In Triglide(TM), the problem of variable uptake
arising from the low solubility of fenofibrate has been overcome by
our proprietary IDD-P(TM) solubilization technology. Triglide(TM)
has comparable absorption under both fed and fasting conditions and
therefore allows patients to take the drug at any time, improving
compliance and simplicity for both patients and prescribers. First
Horizon's 2005 sales of Triglide(TM) in the 5 months since launch
were just under $5 million but we and First Horizon expect a
significant increase in the current year. SkyePharma has now
received $20 million in milestone payments from First Horizon ($15
million of which was due on FDA approval, obtained in May 2005) and
could receive up to $30 million more in sales-based milestone
payments. In addition we receive 25% of First Horizon's net sales,
out of which we pay for manufacturing and supply. In 2005 we also
agreed to contribute towards the marketing costs incurred by First
Horizon to establish the product in its first two years after
launch, the aim being to enhance market penetration and thereby
optimize revenues. Originally we agreed to contribute up to $5
million towards First Horizon's marketing costs through 2007 and to
provide samples. In January 2006 this arrangement was modified in
order to emphasise its intent as a marketing contribution.
SkyePharma will now make a contribution of up to $11.3 million
towards First Horizon's marketing costs (of which $3.1 million was
paid in 2005) and First Horizon will pay SkyePharma for the supply
of product samples. There is no change in the net cost to
SkyePharma. Xatral(R) OD Xatral(R) OD (Uroxatral(R) in the USA) is
our once-daily version of Sanofi-Aventis's Xatral(R) (alfuzosin), a
treatment for the urinary symptoms of benign prostatic hypertrophy.
Xatral(R) OD has been on the market outside the USA since April
2000 and the older multidose versions of Xatral(R) have now largely
been withdrawn. Uroxatral(R), launched in the US in November 2003,
currently holds over 11% of the combined prescriptions written for
it and for its principal competitor Flomax (tamsulosin, jointly
marketed in the US by Boehringer Ingelheim and Astellas). Xatral(R)
OD has now been approved in more than 50 countries, including 24 in
Europe, for a second indication, acute urinary retention. However
Sanofi-Aventis is no longer pursuing US approval for this
indication. In 2005, global sales of all forms of Xatral(R)
reported by Sanofi-Aventis were 328 million euro ($410 million), up
by 18% in constant exchange rate terms. Included in this total were
US sales of Uroxatral(R) of ?53 million ($66 million), up by 121%
in constant exchange rate terms. We estimate that Xatral(R) OD now
accounts for more than 90% of the sales of Xatral(R) reported by
Sanofi-Aventis. Zyflo(R) CR SkyePharma's partner Critical
Therapeutics, Inc. announced in January 2006 that it had initiated
two studies designed to support a New Drug Application for a
twice-daily version of Zyflo(R) (zileuton), an oral leukotriene
synthesis inhibitor for the treatment of asthma. The current
version of Zyflo(R) has to be taken four times a day and the CR
version is expected to improve convenience for patients and
therefore compliance. The controlled release formulation employed
in the CR version was developed by SkyePharma. Critical
Therapeutics expects to file the CR version with the FDA in the
third quarter of 2006. OTHER PRODUCTS Solaraze(R) Solaraze(R) is
our topical gel treatment for actinic keratosis and our proprietary
hyaluronic acid formulation ensures that a high concentration of
the active ingredient is maintained in the upper layers of the
skin. Solaraze(R) is now marketed in the US by the Doak
Dermatologics unit of Bradley Pharmaceuticals. Bradley has recently
reported that sales in the first nine months of 2005 were just
under $10 million and SkyePharma estimates that full year sales
were approximately $15 million. Sales in 2004 were only $6 million,
reflecting the fact that product rights were not acquired by
Bradley until August 2004. Solaraze(R) is marketed in Europe and
certain other territories by Shire Pharmaceuticals. In 2005 Shire's
total non-US sales of Solaraze were $12.5 million, up by 32%.
INJECTABLE PRODUCTS (TO BE DIVESTED) Biologicals portfolio There
has been encouraging progress with the Company's portfolio of
versions of protein drugs with enhanced delivery profiles, based on
its two complementary sustained-release injectable technologies
DepoFoam(TM) and Biosphere(TM). The objective of the work has been
to develop different protein formulations to provide a range of
durations from 7 up to 28 days of activity. The DepoFoam(TM) system
has the benefit of neither altering the native protein during the
formulation process nor the way in which it acts upon release into
the body. SkyePharma has now successfully formulated seven
different protein drugs, including major commercial products such
as G-CSF, EPO, HGH, IFN-alpha and IFN-beta. In the second half of
2005 the Company entered into three new feasibility study
agreements with third parties for enhanced biologics. It is
anticipated that several of these products will enter Phase I
clinical trials in 2007. DepoBupivacaine(TM) We are pleased to
report that we have now completed the Phase II trial programme for
DepoBupivacaine(TM), a long-acting local anaesthetic for use in the
treatment of post-operative pain. DepoBupivacaine(TM) is
SkyePharma's novel sustained-release injectable formulation of the
local anaesthetic bupivacaine, currently widely used as a local or
regional anaesthetic during surgery, either in a hospital
in-patient setting or in ambulatory (or "day") surgery in which the
patient is discharged from the hospital or clinic shortly after
surgery to recover at home. DepoBupivacaine(TM) employs
SkyePharma's proprietary DepoFoam(TM) technology and was shown in
Phase I and Phase II studies to provide local relief of pain for
more than 48 hours after a single injection instead of 8-12 hours
for conventional immediate-release bupivacaine. Superior control of
pain after discharge is expected to reduce the need for other
analgesics and to improve patient recovery and rehabilitation. The
Phase III trial programme is expected to commence in the first half
of 2006. We have extended our relationship with Mundipharma, our
European marketing partner for DepoCyte(R), by granting rights
outside North America and Japan for DepoBupivacaine(TM). Under the
terms of the agreement we could receive up to $80 million in
milestone payments and a 35% share of sales (30% in markets outside
Europe). The milestone payments include a contribution of up to $20
million towards the cost of the Phase III trial once Mundipharma
agrees to the design of the trial. DepoBupivacaine(TM) has also
been licensed to the Japanese pharmaceutical company Maruho for the
Japanese market. Maruho will pay SkyePharma up to $18 million in
milestone payments and conduct at its own cost the clinical
development of DepoBupivacaine(TM) required for regulatory approval
in Japan. Additionally, SkyePharma will receive a share of Maruho's
sales in Japan, out of which SkyePharma will bear the cost of
manufacture. Endo Pharmaceuticals, our North American partner for
DepoDur(TM), which had a right of first negotiation for commercial
rights to DepoBupivacaine(TM) for North America, has now
relinquished this right, thereby providing a buyer of the
injectables business with unencumbered US rights to this product.
Subject the terms of this sale, we may seek to retain an economic
interest in the sales of DepoBupivacaine(TM), which we believe has
major commercial potential. DepoCyt(R) DepoCyt(R) is an oncology
drug for the treatment of lymphomatous meningitis. It consists of
cytarabine in our proprietary DepoFoam(TM) formulation to avoid the
need for frequent intrathecal (spinal) injections. Sales of
DepoCyt(R) in the USA in 2005 by our partner Enzon were $8 million,
up 26% on the prior year. Our European partner Mundipharma, which
launched the product as DepoCyte(R) in February 2004, had sales of
$6 million (against $1.5 million in 2004) and is forecasting a
further substantial increase in 2006. We have completed the Phase
IV trial required by the FDA when granting approval for this
product and will be submitting the results to the FDA shortly. We
have also filed in Europe for the additional indication of the most
common form of neoplastic meningitis, associated with solid
tumours. A response is expected in mid-2006. DepoDur(TM) In
December 2004 our US marketing partner Endo Pharmaceuticals
launched DepoDur(TM), our sustained-release injectable version of
the analgesic morphine for the treatment of post-operative pain.
Sales in 2005 were $4 million, which was a disappointment both to
us and to Endo. The product is still in the launch phase but has
now been accepted on more than 400 hospital formularies, the first
gateway to routine hospital use. Given the length of time typically
needed to establish hospital products, we are confident that this
initial sales level does not reflect the full potential of the
product. In the UK, we were informed last year by the UK regulatory
agency, the CSM, that it would recommend approval for DepoDur(TM),
subject to certain conditions being satisfied. We have been in
discussions with the CSM about these conditions (which did not
require further clinical trials) and final UK approval is expected
shortly. This will be used as the basis for seeking approval
throughout the European Union under the EU's Mutual Recognition
procedure. Zeneus Pharmaceuticals, SkyePharma's European licensee
for DepoDur(TM), announced on 6 December 2005 that it had reached
agreement to be acquired by the US company Cephalon Inc. SkyePharma
has regained the European rights for DepoDur(TM) and is now seeking
a new sales and distribution partner for the EU and other
territories outside North America. Propofol IDD-D(TM) Propofol
IDD-D(TM) is our novel formulation of propofol, a widely-used
injectable anaesthetic and sedative. Our formulation was designed
not to support microbial growth, a recognised problem with current
versions, and to provide uninterrupted sedation for 24 hours. This
product has satisfactorily completed Phase II trials. We are
conducting additional toxicology studies as required by the FDA to
determine the continued viability of the development programme.
Pending resolution of the Phase III trial design, and a further
evaluation of the commercial potential, this project is under
strategic review. The Future In the immediate future, we will be
concentrating on two tasks: the divestment of our injectables
business and securing a marketing and co- development partner (or
partners) for Flutiform(TM). Once these tasks have been completed,
we will be able to focus our management and financial resources on
the "new SkyePharma," consisting of our core inhalation and oral
product business. We will drive for sustainable profitability. At
the same time, however, we will invest in our inhalation and oral
product pipeline to make sure that we bring forward the growth
drivers of tomorrow. We have a longer term goal of forward
integration into marketing and sales of our own products in
selected specialty therapeutic areas. I believe that this new focus
will create exciting opportunities for SkyePharma and increase
investor confidence in our future. Frank Condella Chief Executive
Financial Review Turnover The Group's revenues continue to be
sensitive to the timing and receipt of milestone payments and
payments received on the signing of new contracts. Revenues for
2005, at 61.3 million pounds, were 18% below the 75.2 million
pounds reported in 2004. This was primarily due to the absence of a
licensing transaction on Flutiform, continuing Paxil CR supply
problems and slower overall market penetration of Triglide and
DepoDur by marketing partners, partly offset by an increase in
manufacturing and distribution revenues. In addition the Company
undertook a strategic shift away from licence terms that prioritise
upfront payments on signature towards deal structures with higher
royalty rates and increased milestone payments tied to product
revenue targets. Despite the decline in 2005, revenues have
nevertheless increased at a cumulative annual growth rate of 24%
since 1996. The absence of a licensing agreement on Flutiform had a
double negative impact on SkyePharma in 2005. First, revenues
suffered from the absence of the anticipated milestone payment and
of a partner's contribution towards continuing development costs of
Flutiform. Secondly, SkyePharma's R&D costs exceeded budget
expectations because of the need to press ahead with the
development programme without a partner in order to avoid the risk
of impairment to the commercial potential of this key product if
development was delayed. Contract development and licensing revenue
decreased 30% to 27.6 million pounds, compared with 39.4 million
pounds in 2004. This was primarily due to the absence of an
anticipated milestone from the licensing of Flutiform and the
change in the structure of our licence agreements described above.
Revenues recognised from milestone payments and payments received
on the signing of agreements amounted to 22.1 million pounds in
2005 compared with 33.4 million pounds in 2004. The 2005 total
included revenues from First Horizon for the US marketing and
distribution rights for Triglide triggered by FDA approval in May
2005 from Mundipharma for the licensing of DepoBupivacaine for
Europe and from Maruho for the licensing of DepoBupivacaine for
Japan. In addition, 5.7 million pounds of revenue was recognised
from GlaxoSmithKline on the phase III clinical trials of Requip
(ropinirole), from AstraZeneca on the phase III clinical trials of
Pulmicort HFA and from Novartis on the phase II clinical trials of
QAB 149. Research and development costs recharged fell by 8% to 5.5
million pounds, compared with 6.0 million pounds in 2004. This was
mainly due to a fall in the costs recharged to Micap plc in respect
of the development of their microencapsulation technology which has
now been completed. Royalty income decreased by 16% to 21.7 million
pounds, compared with 25.9 million pounds in 2004. Royalty income
in 2005 derives principally from Paxil CR, Xatral OD, DepoCyt,
Solaraze, DepoDur and Triglide. Although the Company was able to
negotiate an increase in the royalty rate it receives on
GlaxoSmithKline's sales of Paxil CR from 3% to 4% with effect from
March 2005 and also received royalties based on budgeted sales
while the product was temporarily off the US market, royalties were
still negatively impacted by the continuing supply problems
experienced by GlaxoSmithKline. Excluding Paxil CR, royalties for
the balance of SkyePharma's other products grew by 38%. In addition
royalty growth was less than anticipated due to slower overall
market penetration of Triglide and DepoDur by marketing partners
during the year. Manufacturing and distribution revenue increased
by 21% to 12.0 million pounds, compared with 9.9 million pounds,
mainly due to higher production of clinical trial material and
launch quantities for Novartis in respect of QAB 149 and Foradil
Certihaler. Deferred income During 2005, there was a net reduction
in deferred income of 3.5 million pounds under SkyePharma's revenue
recognition policy. The movement in deferred income was: 31 31
December December 2004 Received * Recognised 2005 m pounds m pounds
m pounds m pounds Contract development and licensing revenue 14.1
24.1 (27.6) 10.6 * Includes exchange adjustments Cost of sales Cost
of sales comprises research and development expenditures, including
the costs of certain clinical trials incurred on behalf of our
collaborative partners; the direct costs of contract manufacturing;
direct costs of licensing arrangements and royalties payable. Cost
of sales increased by 4% to 29.2 million pounds in 2005, compared
with 28.2 million pounds in 2004. This was mainly due to an
increase in manufacturing and distribution expenses ahead of the
approval and launch of Triglide. The resulting gross profit
decreased 32% to 32.1 million pounds, compared with 47.0 million
pounds in 2004. Expenses Selling, marketing and distribution
expenses increased significantly to 5.9 million pounds, compared
with 1.7 million pounds in 2004. This mainly reflected SkyePharma's
contribution towards the initial launch and marketing costs of
DepoDur and Triglide. No further marketing contributions are due in
respect of DepoDur and contributions on Triglide will terminate in
2007. The Company's total costs in respect of Triglide in 2005
amount to approximately 4.6 million pounds. Amortisation of
intangible assets decreased slightly to 2.1 million pounds,
compared with 2.2 million pounds in 2004. Other administration
expenses before exceptionals were 13.8 million pounds in 2005, 12%
lower than the 15.6 million pounds reported in 2004, reflecting the
first full year of cost savings following the restructuring started
in 2004. The exceptional charge of 21.4 million pounds comprises
non-cash impairment charges of 19.4 million pounds and abortive
transaction costs of 2.0 million pounds. Following the Strategic
Review and the Group's decision to focus on its core oral and
pulmonary products and to divest its injectable business, the Group
no longer views its collaborations with Astralis, Vital Living and
Micap as strategic and these investments have therefore been
impaired. In addition, as an injectable project, SkyePharma's
entitlement to negotiate for commercial rights for Psoraxine,
Astralis' key product, is being offered with the injectable
business interests. The remaining 2.0 million pounds exceptional
charge relates to legal and professional fees relating to an
aborted transaction, as outlined in the Chairman's statement. Other
administration expenses including exceptional items increased by
14.9 million pounds to 35.2 million pounds. SkyePharma's own
research and development expenses in the year decreased by 2.0
million pounds to 26.0 million pounds, mainly due to a reduction in
expenditure on Pulmicort HFA, DepoDur and other injectable
products, partly off set by an increase in expenditure on Flutiform
and DepoBupivacaine in advance of their commencement of phase III
clinical trials. The other expense of 0.4 million pounds comprises
a 0.7 million pounds loss due to the movement in the fair value of
the Group's investment in GeneMedix plc, partly off set by a 0.3
million pounds profit on disposal of part of the Group's holding of
Vectura Group plc shares. Results The operating loss before
exceptional items was 16.1 million pounds, compared with 0.4
million pounds in 2004, due principally to the reduction in revenue
and to increased marketing contributions. The operating loss after
exceptionals increased by 34.4 million pounds to 37.5 million
pounds, mainly due to the higher exceptional charges and fall in
revenue. The finance costs of 22.3 million pounds (2004: 23.9
million pounds) mainly comprise notional interest on the Paul
Capital funding liabilities as well as interest on the convertible
bonds. Finance income includes 9.0 million pounds (2004: 6.0
million pounds) in respect of a change in the estimated future
payments to Paul Capital. The Group's share of the losses of
Astralis was 0.8 million pounds for 2005, compared with 10,000
pounds in 2004. The retained loss after exceptionals increased by
32.3 million pounds to 50.9 million pounds, also due to the higher
exceptional charges and fall in revenue. Earnings before interest,
tax, depreciation amortisation and exceptionals showed a loss of
8.5 million pounds in 2005, compared with a profit of 7.8 million
pounds in 2004. The loss per share after exceptionals was 8.1
pence, which compares with 3.0 pence in 2004. Foreign currency
movements did not have a material impact on the results of
operations in 2005 compared with 2004. Segment information
Segmental information on revenue and operating loss before
exceptionals is as follows: Year ended Year ended 31 December 2005
31 December 2004 Revenue m pounds m pounds Injectable 10.5 25.6
Oral and Inhalation 50.8 49.6 61.3 75.2 Operating loss pre
exceptional items Injectable (18.6) (1.4) Oral and Inhalation 2.5
1.0 (16.1) (0.4) Business segment data includes an allocation of
corporate costs to each segment. Balance sheet The Group balance
sheet at 31 December 2005 shows shareholders' equity of 31.9
million pounds (2004: 36.5 million pounds). In September 2005 the
Group raised 34.8 million pounds net of expenses by means of a
rights issue of 125,627,357 new Ordinary Shares on the basis of one
new share for every five held. In July 2004 the Group exchanged
49.6 million pounds of its convertible bonds due June 2005 for
convertible bonds due May 2024, leaving 9.8 million pounds of the
2005 bonds outstanding. The 49.6 million pounds 2024 convertible
bonds were consolidated to form a single series with the 20 million
pounds 2024 bonds issued in May 2004. In 2005 the Group issued 20
million pounds 8% convertible bonds due June 2025. In June 2005 the
company repaid the 9.8 pounds million balance on the convertible
bonds due June 2005. As a result of these transactions the Group
has 69.6 million pounds convertible bonds due May 2024 and 20
million pounds convertible bonds due June 2025 outstanding as at 31
December 2005. On the balance sheet these are reflected as 63.6
million pounds in liabilities and 28.4 million pounds in equity. In
addition the Group has Other Borrowings at 31 December 2005 of 44.6
million pounds due to Paul Capital Royalty Acquisition Fund. Whilst
the contractual arrangements contemplate the payment of royalties
to Paul Capital as outlined in note 8, IAS 39 requires the Company
to record a liability equal to the net present value of the
royalties the Company expects to pay Paul Capital over the term of
the agreement. Financial assets held at fair value comprise a 3.25
million pounds 5% convertible loan note from GeneMedix plc. This
has been recorded at 0.4 million pounds at 31 December 2005, being
the lower of cost and net realisable value assuming conversion of
the note into GeneMedix ordinary shares. Liquidity and capital
resources At 31 December 2005 SkyePharma had cash and short term
deposits of 34.3 million pounds and no bank overdraft, compared
with 15.3 million pounds net cash at 31 December 2004. Bank and
other non convertible debt amounted to 9.9 million pounds at 31
December 2005 (2004: 11.1 million pounds), consisting principally
of a 6.9 million pounds property mortgage secured on the assets of
Jago (2004: 7.4 million pounds). In addition the Company has 6%
convertible bonds due May 2024 of 69.6 million pounds (2004: 69.6
million pounds) and 8% convertible bonds due June 2025 of 20.0
million pounds (2004: Nil pounds). Net debt (excluding the Paul
Capital funding liabilities) amounted to 39.2 million pounds (2004:
55.6 million pounds). In 2005 there was a net cash outflow from
operating activities of 7.6 million pounds, compared with 3.7
million pounds in 2004. During the year the Group spent 2.6 million
pounds on property, plant and equipment and expenditure on
intangible assets of 2.3 million pounds mainly relates to the
purchase of licenses to intellectual property in the area of
pulmonary delivery. The proceeds on disposal of the Group's non
strategic holding of Vectura shares were 1.6 million pounds. Cash
inflows from financing in were 30.6 million pounds (2004: 2.9
million pounds). The Group raised 34.8 million pounds net of
expenses by means of a rights issue of 125,627,357 new Ordinary
Shares. During the year the Group issued 20 million pounds 8%
convertible bonds raising 18.8 million pounds net of expenses. In
addition the company repaid the 9.8 million pounds balance on the
convertible bonds due June 2005. Borrowings of 7.4 million pounds
were repaid in the period (2004: 8.6 million pounds). This
primarily comprises Paul Capital's share of the Company's royalty
income. The Group paid 2.0 million pounds of costs relating to an
aborted strategic transaction during the year. International
Financial Reporting Standards The financial information for the
year ended 31 December 2005 has been prepared for the first time in
accordance with IFRS. In preparing the financial information
certain first-time adoption provisions have been applied. The
Group's accounting policies and adjustments made on the
implementation of IFRS were disclosed in the interim results
announcement issued on 28 September 2005 and the IFRS restatement
announcement issued on 3 August 2005 and can be found on the
Group's corporate web site (http://www.skyepharma.com/). Since the
publication of these results the Group has changed its
interpretation of the application of IAS 39 to the Paul Capital
funding liabilities. The restatement resulted in a decrease in the
2004 net interest expense of 5.2 million pounds and in the
liability at 31 December 2004 of 4.3 million pounds. Forward
looking statements The foregoing discussions contain certain
forward looking statements and are made in reliance on the safe
harbour provisions of the US Private Securities Litigation Act of
1995. Although SkyePharma believes that the expectations reflected
in these forward looking statements are reasonable, it can give no
assurance that these expectations will materialise. Because the
expectations are subject to risks and uncertainties, actual results
may vary significantly from those expressed or implied by the
forward looking statements based upon a number of factors, which
are described in SkyePharma's 20-F and other documents on file with
the SEC. Factors that could cause differences between actual
results and those implied by the forward looking statements
contained in this Preliminary Announcement include, without
limitation, risks related to the development of new products, risks
related to obtaining and maintaining regulatory approval for
existing, new or expanded indications of existing and new products,
risks related to SkyePharma's ability to manufacture products on a
large scale or at all, risks related to SkyePharma's and its
marketing partners' ability to market products on a large scale to
maintain or expand market share in the face of changes in customer
requirements, competition and technological change, risks related
to regulatory compliance, the risk of product liability claims,
risks related to the ownership and use of intellectual property,
and risks related to SkyePharma's ability to manage growth.
SkyePharma undertakes no obligation to revise or update any such
forward looking statement to reflect events or circumstances after
the date of this Preliminary Announcement. Donald Nicholson Finance
Director CONSOLIDATED INCOME STATEMENT for the year ended 31
December 2005 Year to 31 December 2005 Year to 31 December 2004 Pre
- Exceptional Pre - Exceptional Notes Exceptional (note 3) Total
Exceptional (note 3) Total m pounds m pounds m pounds m pounds m
pounds m pounds Revenue 2 61.3 - 61.3 75.2 - 75.2 Cost of sales
(29.2) - (29.2) (28.2) - (28.2) Gross profit 32.1 - 32.1 47.0 -
47.0 Selling, marketing and distribution expenses (5.9) - (5.9)
(1.7) - (1.7) Administration expenses Amortisation of other
intangibles (2.1) - (2.1) (2.2) - (2.2) Other administration
expenses (13.8) (21.4) (35.2) (15.6) (4.7) (20.3) (15.9) (21.4)
(37.3) (17.8) (4.7) (22.5) Research and development expenses (26.0)
- (26.0) (28.0) - (28.0) Other expense (0.4) - (0.4) 0.1 2.0 2.1
Operating loss (16.1) (21.4) (37.5) (0.4) (2.7) (3.1) Finance costs
4 (22.3) - (22.3) (17.7) (6.2) (23.9) Finance income 4 10.0 - 10.0
8.6 - 8.6 Share of loss in associate 6 (0.8) - (0.8) - - - Loss
before income tax (29.2) (21.4) (50.6) (9.5) (8.9) (18.4) Income
tax expense (0.3) - (0.3) (0.2) - (0.2) Loss for the year (29.5)
(21.4) (50.9) (9.7) (8.9) (18.6) Basic and diluted earnings per
share 5 (4.7p) (3.4p) (8.1p) (1.6p) (1.4p) (3.0p) All results
represent continuing activities. See Notes to the Preliminary
Announcement. CONSOLIDATED BALANCE SHEET as at 31 December 2005
Notes 31 December 31 December 2005 2004 m pounds m pounds ASSETS
Non-current assets Goodwill 68.7 68.7 Other intangible assets 26.8
26.7 Property, plant and equipment 37.1 40.9 Investments in
associates 6 0.2 14.3 Available for sale financial assets 7 1.6 5.2
134.4 155.8 Current assets Inventories 3.6 1.5 Trade and other
receivables 14.2 18.2 Financial assets at fair value through profit
or loss 0.4 1.1 Cash and cash equivalents 34.3 15.3 52.5 36.1 Total
Assets 186.9 191.9 LIABILITIES Current liabilities Trade and other
payables (21.0) (20.6) Convertible bonds 8, 9 - (9.4) Other
borrowings 8 (14.3) (10.7) Derivative financial instruments - (0.2)
Deferred income (7.7) (11.8) Provisions - (0.3) (43.0) (53.0) Non
current liabilities Convertible bonds 8, 9 (63.6) (50.4) Other
borrowings 8 (40.2) (45.1) Deferred income (2.9) (2.3) Other non
current liabilities (3.4) (2.9) Provisions (1.9) (1.7) (112.0)
(102.4) Total Liabilities (155.0) (155.4) Net Assets 31.9 36.5
SHAREHOLDERS' EQUITY Share capital 10 76.6 63.4 Share premium 345.6
321.0 Translation reserve (1.2) (3.3) Fair value reserve 0.2 (0.5)
Retained losses (427.1) (376.5) Other reserves 37.8 32.4 Total
Shareholders' Equity 31.9 36.5 See Notes to the Preliminary
Announcement. CONSOLIDATED CASH FLOW STATEMENT for the year ended
31 December 2005 Year to Year to 31 December 31 December Notes 2005
2004 m pounds m pounds Cash flow from operating activities Cash
used in operations (a) (7.6) (3.7) Income tax paid (0.3) (0.2) Net
cash used in operating activities (7.9) (3.9) Cash flows from
investing activities Purchases of property, plant and equipment
(2.6) (4.4) Purchases of intangible assets (2.3) (1.4) Purchase of
shares in associates (0.2) - Purchase of available for sale
investments - (2.2) Purchase of own shares (0.4) - Proceeds from
disposal of available for sale investments 1.6 2.7 Net cash used in
investing activities (3.9) (5.3) Cash flows from financing
activities Gross proceeds from rights issue 37.7 - Expenses of
rights issue (2.9) - Proceeds from issue of ordinary share capital
0.1 0.3 Proceeds from issue of convertible bonds due June 2025 20.0
- Proceeds from issue of convertible bonds due May 2024 - 20.0
Expenses of issue of convertible bonds due June 2025 (1.2) -
Expenses of issue and exchange of convertible bonds due May 2024 -
(3.4) Repayment of convertible bonds due June 2005 (9.8) -
Repayments of borrowings (7.4) (8.6) Repayment of finance lease
principal - (0.2) Interest paid (6.7) (5.9) Interest received 0.8
0.7 Net cash generated from financing activities 30.6 2.9 Effect of
exchange rate changes 0.2 (0.4) Net increase/(decrease) in cash and
cash equivalents 19.0 (6.7) Cash and cash equivalents at beginning
of the year 15.3 22.0 Cash and cash equivalents at end of the year
34.3 15.3 See Notes to the Preliminary Announcement. NOTES TO THE
CONSOLIDATED CASH FLOW STATEMENT (a) Cash flow from operating
activities Year to Year to 31 December 31 December 2005 2004 m
pounds m pounds Loss for the year (50.9) (18.6) Adjustments for:
Tax 0.3 0.2 Depreciation 6.2 6.0 Amortisation 2.1 2.2 Impairments
19.4 3.5 Fair value (gain)/ loss on derivative financial
instruments (0.3) 0.5 Finance costs 22.3 23.9 Finance income (10.0)
(6.8) Share of loss in associate 0.8 - Profit on disposal of
available for sale financial assets (0.3) (2.0) Other non-cash
changes 3.2 4.0 Operating cash flows before movements in working
capital (7.2) 12.9 Changes in working capital Increase in
inventories (2.1) (0.2) Decrease/(increase) in trade and other
receivables 4.2 (5.9) Increase in trade and other payables 1.2 4.0
Decrease in deferred income (3.4) (13.0) Decrease in provisions
(0.3) (1.5) Cash used in operations (7.6) (3.7) Note: A full
version of this press release including notes to the financial
statements can be found on the Company website at
http://www.skyepharma.com/. Alternatively, please contact the
Company directly in the U.S. at (212) 753 5780 or in the U.K. at +
44 207 491 1777. About SkyePharma SkyePharma PLC develops
pharmaceutical products benefiting from world- leading drug
delivery technologies that provide easier-to-use and more effective
drug formulations. There are now twelve approved products
incorporating SkyePharma's technologies in the areas of oral,
injectable, inhaled and topical delivery, supported by advanced
solubilisation capabilities. For more information, visit
http://www.skyepharma.com/. Certain statements in this news release
are forward-looking statements and are made in reliance on the safe
harbour provisions of the U.S. Private Securities Litigation Act of
1995. Although SkyePharma believes that the expectations reflected
in these forward-looking statements are reasonable, it can give no
assurance that these expectations will materialize. Because the
expectations are subject to risks and uncertainties, actual results
may vary significantly from those expressed or implied by the
forward-looking statements based upon a number of factors, which
are described in SkyePharma's 20-F and other documents on file with
the SEC. Factors that could cause differences between actual
results and those implied by the forward-looking statements
contained in this news release include, without limitation, risks
related to the development of new products, risks related to
obtaining and maintaining regulatory approval for existing, new or
expanded indications of existing and new products, risks related to
SkyePharma's ability to manufacture products on a large scale or at
all, risks related to SkyePharma's and its marketing partners'
ability to market products on a large scale to maintain or expand
market share in the face of changes in customer requirements,
competition and technological change, risks related to regulatory
compliance, the risk of product liability claims, risks related to
the ownership and use of intellectual property, and risks related
to SkyePharma's ability to manage growth. SkyePharma undertakes no
obligation to revise or update any such forward-looking statement
to reflect events or circumstances after the date of this release.
DATASOURCE: SkyePharma PLC CONTACT: Jerry Karabelas, Non-executive
Chairman, or Frank Condella, Chief Executive Officer, or Peter
Laing, Director of Corporate Communications, all of SkyePharma PLC,
Today, +44-207-466-5000, Thereafter, +44-207-491-1777; or Sandra
Haughton, US Investor Relations, +1-212-753-5780; or Tim Anderson,
or Mark Court, or Rebecca Skye Dietrich, all of Buchanan
Communications for SkyePharma PLC, +44-207-466-5000 Web site:
http://www.skyepharma.com/
Copyright