Amendment to CRC Finance Facility

Amendment to CRC Finance Facility to enhance Short-term Liquidity

LONDON, UK, 28 September, 2012 - SkyePharma PLC (LSE: SKP) today announces that the SkyePharma group (the "Group") has entered into a further amendment agreement with respect to its existing Finance Facility ("Facility") with a specialised lending entity ("CRC"), advised by Christofferson, Robb & Company LLC, to enhance the Group's short-term liquidity position.

Under the amendment agreement, the obligation for the Group to pay the next six quarterly principal repayments (starting 30 September 2012) on each of the U.S.$ and Euro components of the Facility will be deferred until 31 December 2016 when they will be paid in a bullet payment. The deferred principal payments amount to approximately U.S.$7.0 million and €5.4 million respectively, equivalent to approximately £8.6 million in total for the six quarters.

The interest rates applicable to the U.S.$ and Euro components of the Facility, which are variable based on LIBOR and Euribor, have been increased by 2.08 per cent. and 2.01 per cent. respectively, effective from 1 July 2012.

To enhance short-term liquidity further, the interest payments due at the end of the first three quarters of 2013 will also be deferred and paid on 31 December 2013. The three delayed interest payments will not bear additional rolled interest.

SkyePharma Holding, Inc., a wholly owned subsidiary in the United States, has become a guarantor of the Facility and the receivables due to it from Pacira Pharmaceuticals, Inc, principally in respect of EXPAREL®, have been pledged as additional security for the Facility.

The amendment agreement also includes an option, exercisable up to 30 June 2013, for the Group to choose not to defer the two principal payments due on 30 September 2013 and 31 December 2013. If this option is exercised the increase in margin described above will reduce to 1.50 per cent. for the U.S.$ loan and 1.45 per cent. for the Euro loan, effective from 1 July 2013.

Peter Grant, Chief Executive Officer of SkyePharma, commented:

"The implementation of the Bond Proposals announced on 24 September 2012 has alleviated short-term liquidity demands and better aligned longer-term repayment obligations with the Group's cash generative potential. The amended terms of the CRC Finance Facility provide further short-term liquidity to enable the Group to meet additional working capital requirements which may arise during the critical launch phase of flutiform®, our lead product for the treatment of asthma, in Europe."

-Ends-

For further information please contact:

About SkyePharma

Using its multiple drug delivery technologies and expertise, SkyePharma creates enhanced versions of pharmaceutical products. The Group receives revenues from thirteen approved products in the areas of inhalation, oral, topical and injectable delivery as well as generating income from the development of further products and technology licenses. The Group's products are marketed throughout the world by leading pharmaceutical companies. For more information, visit www.skyepharma.com.

About the CRC Finance Facility

The CRC Finance Facility was taken out in December 2006 and is a ten year secured amortising loan facility which at inception totalled approximately £35.0 million at the exchange rates prevailing at that time. The Facility comprised initial commitments of U.S.$35.0 million and €26.5 million repayable over ten years based on a minimum amortisation schedule. The principal outstanding at 30 June 2012 was U.S.$19.6 million (£12.6 million) and €15.2 million (£12.2 million). The CRC agreement specifies make whole percentages, which decline over time to the end of the loan, for optional pre-payments of the loan, and which are designed to compensate CRC for lost future interest margin.

In August 2011, the Group entered into an amended agreement in respect of the Facility. Effective from 1 July 2011, the interest rate applicable to the Facility, which is variable based on LIBOR and Euribor, increased by two percentage points and the obligation to pay 50 per cent. of further milestone payments or signing fees in respect of flutiform® licenses, up to approximately U.S.$9.0 million, was deferred until 4 September 2013 and waived altogether if, by 4 September 2013, the Group's Convertible Bonds were converted to equity or rescheduled or refinanced on certain terms. Following the implementation of the Bond Proposals on 24 September 2012, the requirement to make such payments has been waived. 

Following the amendment agreement announced above on 28 September 2012, interest rates applicable to the Facility effective from 1 July 2012 are as follows:

- On the U.S.$ component - three month U.S.$ LIBOR plus 9.93 per cent.

- On the first €7.5 million of the Euro component - three month Euribor plus 14.86 per cent.

- On the balance of the Euro component - three month Euribor plus 9.86 per cent.

The Financial Times of 28 June 2012 quoted the following annual rates: U.S.$ LIBOR: 0.4606 per cent.; Euribor: 0.653 per cent and are the rates applicable to 30 September 2012 interest payments due under the Facility.

The Group has an option, exercisable up to 30 June 2013, to choose not to defer the two principal payments due on 30 September 2013 and 31 December 2013. If this option is exercised the margins described above will reduce by 0.58 per cent. for the U.S.$ loan and 0.56 per cent. for the Euro loan, effective from 1 July 2013.