SOURCE: SkyePharma PLC

July 08, 2008 02:00 ET

Skyepharma PLC announces Trading Update

LONDON--(Marketwire - July 8, 2008) -



SkyePharma - Update on Convertible Bonds and Current Trading

LONDON, UK, 8 July, 2008 - SkyePharma PLC (LSE: SKP) today provides an
update on progress with the convertible bonds and current trading.


Progress with convertible bond refinancing/renegotiation

In its Q1 Interim Management Statement of 19 May 2008, the Company
announced that detailed work was being carried out with a view to
making a proposal to key bondholders and announcing definitive plans
for refinancing or renegotiating the convertible bonds shortly after
the announcement of the results of the further two pivotal Phase III
efficacy trials (SKY2028-3-004 and SKY2028-3-001) of Flutiform™. As
announced on 17 June and 3 July 2008 the positive top line results of
both of these trials have now been reported.

In anticipation of these positive results, meetings were held with a
number of existing and potential investors and with certain key
bondholders regarding a specific proposal to refinance the convertible
bonds. Although there was significant support, in the light of current
capital market conditions the discussions on the specific proposal are
not being pursued at the present time. Discussions are now taking place
with a small number of stakeholders to consider an alternative plan. A
further update will be given with the half-year results announcement,
which is scheduled for 28 August 2008.


Progress with Flutiform™

Excellent progress has been made with the development for the United
States of Flutiform™, the Company's lead product for the treatment of
asthma. As previously announced the primary end points have been met
in all of the studies in the core clinical programme, comprising a
long-term safety study and three efficacy studies, covering over 1,850
patients.  The additional clinical efficacy study required for the New
Drug Application ("NDA") will be fully recruited this month and is on
track for the last patient last visit during October.  Work on the
Chemistry, Manufacturing and Control package is well advanced. In the
light of this significant progress and the nature of the outstanding
steps to be completed, the Directors have increasing confidence in the
likelihood of the NDA being filed in the United States in Q1 2009.

In Europe, good progress also continues to be made with the development
of Flutiform™, with positive results reported from a paediatric trial.
Mundipharma, which is responsible for the clinical trial
programme for regulatory approval in Europe, has been reviewing its
plans for filing and marketing the product in light of discussions with
regulatory authorities and advisers.  Existing plans are to file for
approval of the lower and middle strengths in adults around the end of
2008 and to follow on with a later filing for the higher strength once
additional clinical trials had been concluded.  Mundipharma has
informed the Company that it is considering whether to file for all
three strengths in one application, and launch them together, rather
than having a phased approach.  This would have the effect of bringing
forward the likely launch timing for the higher dose strength by six to
nine months whilst holding back the launch of the low and middle
strengths by a similar amount of time.  In addition to commercial
considerations, the Marketing Authorisation Application ("MAA") would
also be supplemented by including the additional data from the high
dose study.  If Mundipharma decides on this alternative
approach, the expected date for filing of the MAA for European approval
for all three strengths will be in the third quarter of 2009.  The
Directors believe that the medium term financial effect of an earlier
launch of the higher dose, which is forecast to represent a substantial
part of sales, is likely to largely compensate for the effect
of holding back the launch of the lower strengths.

The target remains for Flutiform™ to be launched in the United
States and Europe in 2010.


Current trading and prospects

Revenues in the first half of 2008 have shown an encouraging start to
the year and will be significantly higher than in the first half of
2007. The first half results will include most of the costs of
completing the core Phase III clinical programme on Flutiform™ and
these will be included in research and development expenses in the
profit and loss account. The underlying level of administrative
expenses of the business in local currencies has remained broadly
constant.

In the first half of 2008, net finance costs have benefited from
unrealised gains in translating certain foreign currency denominated
finance liabilities into the functional currency of a Swiss subsidiary.
Such gains would largely reverse in the full year results if the
exchange rates were to revert to 31 December 2007 levels by 31 December
2008.

The Directors remain optimistic about prospects for growth of the
business once the bond refinancing has been resolved. Over the next
eighteen months, notwithstanding the effect of generic competition on
the sales of Paxil CR™, the Directors expect to see further growth in
revenues from sales of recently approved products, such as Requip®
Once-a-day and Pulmicort® HFA-MDI in Europe and ZYFLO CR™, the new
formulation of Sular®, and Requip® XL™ in the United States,
and, once approved, from Lodotra™ in Europe. The ongoing rate of
expenditure on research and development is expected to reduce
significantly now that the core clinical programme for the NDA for
regulatory filing of Flutiform™ in the United States has been
largely completed and the Board expects costs to be further offset, in
the medium term, through contributions from partners on collaborative
development projects.

Once Flutiform™ is approved and launched in the United
States and Europe, the Board believes that there will be exciting
prospects for growth in both revenues and cashflow.

Frank Condella, CEO, said: "We are pleased with the progress being made
with the approved products and the development of Flutiform™, which
continues to meet all its development milestones, and believe that this
provides a good platform for refinancing or renegotiating the
convertible bonds."

-- ends --


For further information please contact:

SkyePharma PLC                    Frank Condella    +44 20 7491 1777
During office hours               Ken Cunningham
                                  Peter Grant


Financial Dynamics (UK Enquiries) David Yates       +44 20 7831 3113
Outside office hours              Deborah Scott


Trout Group (US Enquiries)        Christine Labaree +1 617 583 1308
                                  Seth Lewis


About SkyePharma PLC

Using its proprietary drug delivery technologies, SkyePharma develops
new formulations of existing products to provide a clinical advantage
and life-cycle extension. The Company has twelve approved products in
the areas of oral, inhalation and topical delivery. The Group's
products are marketed throughout the world by leading pharmaceutical
companies. For more information, visit www.skyepharma.com.


About Flutiform™

Flutiform™ HFA-MDI is a fixed-dose combination of formoterol and
fluticasone in a metered dose inhaler ("MDI"). The product incorporates
a fast onset long-acting beta-agonist (formoterol fumarate) with the
most commonly prescribed inhaled anti-inflammatory corticosteroid
(fluticasone propionate) in combination with an
environmentally-friendly aerosol propellant hydrofluoroalkane ("HFA")
and is being developed for asthma.  Flutiform™ is aimed at the market
for combination steroid and long-acting beta-agonist inhalers which is
forecast to be approximately USUSD10 billion worldwide by 2010.
 Flutiform™ is licensed in the U.S. to Kos Life Sciences, a wholly
owned subsidiary of Abbott.
                    This information is provided by RNS
          The company news service from the London Stock Exchange

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