SOURCE: SkyePharma PLC

May 19, 2008 02:07 ET

Skyepharma PLC - Interim Management Statement

London, UK--(Marketwire - May 19, 2008) -


FOR IMMEDIATE RELEASE


SKYEPHARMA PLC -  Q1 2008 INTERIM MANAGEMENT STATEMENT


LONDON, UK, 19 May 2008 - SkyePharma PLC (LSE: SKP) today makes its
first Interim Management Statement ("IMS").


Highlights of the first quarter

  - Revenues in the first quarter have shown an encouraging start to
    the year. There has been growth in revenues compared with the run
    rate for the whole of 2007. Contract research and development
    income is up due to charges to Kos Life Sciences LLC (a subsidiary
    of Abbott) for work on the additional studies for FlutiformTM
    required by the FDA, royalty income has strengthened due to the
    launch of Pulmicort® HFA-MDI in a number of markets, and initial
    sales of the new formulation of Sular® have boosted manufacturing
    revenues.

  - The overhead cost base of the business has
    remained broadly constant.

  - 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 if the exchange rates were to
    revert to 31 December 2007 levels.


Update on matters since 27 March 2008


Progress with convertible bond refinancing

As stated in the 2007 annual results' announcement, the Directors have
carried out a detailed appraisal of a number of potential approaches to
renegotiate or refinance the convertible bonds well before their
earliest put date in May 2009. The announcement also stated that, in
selecting the approach to be implemented, the Directors will have
regard to the Group's working capital requirements and the likelihood
of success of the potential approaches. The Board continues to have a
reasonable expectation that the convertible bonds can be renegotiated
or refinanced in a timely manner. Detailed work is now being carried
out with a view to making a proposal to key bondholders and announcing
definitive plans for refinancing or renegotiating the 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 FlutiformTM,
the Company's lead product for the treatment of asthma. This is
expected to take place in the summer.


Progress with FlutiformTM  development

Since the announcement on 27 March, further progress has been made with
the development of FlutiformTM with a number of announcements in April
2008, which are summarised and updated as follows:

  - Mundipharma, the Group's partner for the development and marketing
    of FlutiformTM in Europe and other territories outside
    the Americas and Japan, has successfully completed an efficacy
    study in 211 paediatric patients, with preliminary analysis showing
    that it had met its primary endpoint of statistical non-inferiority
    to the combination product Seretide.  Under EU regulations, there
    is a requirement to have an agreed Paediatric Investigation Plan
    ("PIP"). There are ongoing discussions with the Paediatric
    Committee of the European Medicines Agency to agree the PIP.

  - The Group entered into an exclusive Development, Distribution and
    License Agreement with Kyorin Pharmaceutical Co. Ltd. for Japan.
     Under this agreement the Group is entitled to receive signing,
    development and approval milestones worth several million pounds,
    along with a high mid-single digit royalties on sales.  The
    development costs associated with obtaining approval for the
    Japanese market will largely be met by Kyorin, which is responsible
    for clinical trials and regulatory submissions.

  - The Phase III efficacy study SKY2028-3-002 has met its primary
    endpoints.  In a top line analysis of key results, the levels of
    improvement in FEV1 (forced expiratory volume in the first second),
    the primary endpoints measured, showed statistically significant
    differences in favour of FlutiformTM compared with both fluticasone
    and formoterol taken alone. The results of this trial, together
    with the long-term Phase III safety trial reported last year, will
    form part of the New Drug Application (NDA) for USA approval
    for FlutiformTM.  Further details of the results of the safety trial
    are included in a scientific poster being presented at the American
    Thoracic Society meeting in Toronto, Canada, and an announcement
    will be made on 20 May 2008 summarising these more detailed
    results.

  - The last patient visits for two further Phase III efficacy studies,
    SKY2028-3-004 and SKY2028-3-001, took place in April 2008.  As
    stated above, the top line results of these studies are expected to
    be available in the summer.

  - The additional efficacy study, SKY2028-3-005, required for the NDA,
    has commenced recruitment and the overall development program
    remains on schedule for the NDA to be filed in Q1, 2009.


Other updates on products and pipeline


Foradil® CertihalerTM

Work continues on seeking a marketing and distribution partner for the
approved Foradil® CertihalerTM in the USA. Other avenues for potential
applications for the SkyeHalerTM device are also continuing to be
explored.


LodotraTM

Nitec Pharma AG ("Nitec") has informed us that they expect first
national European approvals and launches towards the end of 2008, with
LodotraTM being launched in Germany by Merck KGaA.  An end of Phase
II meeting with the FDA has taken place, and Nitec has started
recruitment for a Phase III trial required for the NDA in the USA.


Paxil CR®

In its announcement of 23 April 2008 GlaxoSmithKline ("GSK") reported
sales in Q1 2008 of Paxil CR® of GBP33 million (down 20% at constant
exchange rates compared with Q1 2007).  On 14 May
2008, Mylan Laboratories ("Mylan") announced that it has launched a
generic version of Paxil CR®. Mylan has stated that, as the first
company to successfully file an abbreviated new drug application (ANDA)
containing a paragraph IV certification for the 12.5mg and 25mg
tablets, it has earned 180 days of marketing exclusivity for these two
strengths. Reflecting a supply and distribution agreement with GSK,
Mylan also has the right to market the 37.5mg strength.


Pulmicort® HFA-MDI

This new HFA-MDI containing AstraZeneca's inhaled corticosteroid
Pulmicort® (budesonide) has now been approved and launched in most of
the markets in which the CFC MDI formulation of Pulmicort® has
previously been sold.  The target market
for Pulmicort® HFA-MDI represents a low single digit percentage of
AstraZeneca's global sales of Pulmicort®.  SkyePharma earns a mid
teens' royalty on AstraZeneca's net sales of Pulmicort® HFA-MDI.


Requip® Once-a-day

Requip® (ropinirole) as a once daily formulation for Parkinson's
disease was developed in partnership with GSK.  This new formulation
has now been launched in 12 European markets and a response from the
FDA in the USA is expected during June 2008.  In an announcement of 23
April 2008 GSK reported sales in Q1 2008 of all versions of Requip® of
GBP94 million (up 15% at constant exchange rates compared with the Q1
2007).  In May 2008 a number of companies are launching generic
versions of the immediate release formulation of Requip® in the USA.


Solaraze®

Responsibilities for marketing and distributing Solaraze® (diclofenac)
, a topical gel treatment of actinic keratosis, have now transferred
successfully to Nycomed in the USA and Laboratorios
Almirall, S.A. in Europe.


Sular®

The new formulation of Sular® was launched by Sciele Pharma, Inc.
("Sciele") in the second half of March 2008, and as of the week
ended 25 April 2008, approximately 10% of new prescriptions had moved
to the new Sular® formulation, according to IMS Health NPA
data.  Sciele has discontinued shipping the existing formulation of
Sular®.


Triglide

Triglide (fenofibrate), an oral treatment for elevated blood lipid
disorders, is marketed in the USA by Sciele and is now being sold by
Sciele alongside FenoglideTM, a fenofibrate product in-licensed from
LifeCycle Pharma A/S ("LifeCycle").  FenoglideTM was launched in
February 2008.  As previously announced, Sciele has agreed to purchase
and distribute minimum numbers of samples of Triglide and to share
revenues from FenoglideTM with SkyePharma. The share of revenues starts
at 8% and reduces to 4% from 31 July 2008 to 31 December 2009, or 1%
once SkyePharma manufactures FenoglideTM at its plant in Lyon, France,
which the Directors believe is unlikely to happen before 2010.


Xatral® OD

On 30 April 2008, sanofi-aventis reported Q1 2008 sales of all forms
of Xatral® of EUR83 million (GBP63 million) up 5.1% at constant
exchange rates compared with Q1 2007. As expected, European sales
continue to be affected by generic competition, with sales for Q1 2008
reported as EUR40 million (GBP30 million), down by 7.0%. This decline
was more than offset by strong growth in the USA, where sales of
Uroxatral® were EUR26 million (GBP20 million), up 18.2%. Sales in
other countries were also up 21.4% to EUR17 million (GBP13 million).


ZYFLO CRTM (zileuton) Extended-Release Tablets

As previously announced, Critical Therapeutics launched ZYFLO CRTM in
the USA together with its co-promotion partner, Dey, L.P., at the end
of September 2007.  Net product sales of ZYFLO CR were approximately
USUSD2.6 million in Q1, 2008. The combined net sales of ZYFLO CR and
ZYFLO in Q1, 2008 were up 15% compared with net sales of ZYFLO in Q1,
2007 and total prescriptions for ZYFLO CR and ZYFLO were
up 54% on ZYFLO in Q1, 2007 and up 15% on the total for both products
in Q4, 2007.


Critical Therapeutics has advised that a number of batches of ZYFLO CR
tablets cannot be released into the commercial supply chain because
they did not meet the product release specifications. The cause is
being investigated by Critical Therapeutics in conjunction with
its three manufacturing partners which supply the zileuton active
pharmaceutical ingredient, tablet cores and coating and release.  As
the manufacturer of the tablet cores in semi-finished
bulk form SkyePharma is assisting with this investigation although the
relevant batches passed pre-release tests in its Lyon factory.
Critical Therapeutics holds sufficient stocks of ZYFLO CR to meet
anticipated demand from wholesale distributors until mid-July 2008 and
additional batches are being processed with a view to extending this
coverage.  On 1 May 2008, Critical Therapeutics and Cornerstone
BioPharma Holdings, Inc., a privately-held company, announced the
signing of a definitive merger agreement.  Cornerstone is a specialty
pharmaceutical company focused on developing and commercializing
prescription medications for respiratory disorders.  According to the
announcement, the stock-for-stock transaction is targeted to close in
the fourth quarter of 2008.


Pipeline developments

Progress continues to be made with the development of the sleep
therapeutic, SKP-1041, licensed to Somnus, which is now in
Phase I development.  Satisfactory progress continues to be made with
the collaborative development with Dr Reddys for a product utilising
two of SkyePharma's proprietary technologies.


Frank Condella, Chief Executive Officer, said: "Since the announcement of
the annual results in March, we have made
encouraging progress with the USA development for FlutiformTM and are
looking forward to announcing further results from the Phase III trials
over the coming months.  Detailed work is now being carried out with a
view to approaching key bondholders with a proposal and being in a
position to announce definitive plans for refinancing or renegotiating
the convertible bonds shortly after the announcement in the summer of
the results of the further two pivotal Phase III efficacy trials
of FlutiformTM."


For further information please contact:


SkyePharma PLC

Frank Condella, Chief Executive Officer

Ken Cunningham, Chief Operating Officer +44 207 491 1777

Peter Grant, Finance Director


Financial Dynamics (London enquiries)

David Yates / Deborah Scott             +44 207 831 3113


Trout Group (USA enquiries)

Christine Labaree / Seth Lewis          +1 617 583 1308



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 Group 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.

                    This information is provided by RNS
          The company news service from the London Stock Exchange

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