SkyePharma PLC - Preliminary Results Announcement for the Year Ended 31 December 2005 |
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.
SOURCE SkyePharma PLC
back to topRelated links:
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
