Favourable Resolution with FDA Relating to EXPAREL

Pacira Received Favourable Resolution with U.S. FDA Relating to EXPAREL®

LONDON, UK, 15 December, 2015 - Skyepharma PLC (LSE SKP), the expert oral and inhalation drug delivery company, today reports that Pacira Pharmaceuticals, Inc., ("Pacira") has announced that it has achieved an amicable resolution with the United States Food and Drug Administration ("FDA") of its lawsuit filed in September 2015. The resolution confirms that EXPAREL® (bupivacaine liposome injectable suspension) is, and has been since 2011, broadly indicated for administration into the surgical site to provide postsurgical analgesia.

The key features of the resolution are as follows:

· The FDA confirms that EXPAREL® has, since its approval on 28 October 2011, been approved for "administration into the surgical site to produce postsurgical analgesia" in a variety of surgeries not limited to those studied in its pivotal trials.

· The FDA also approved a labelling supplement which amends the EXPAREL® Package Insert to clarify and reinforce that:

o the use, efficacy and safety of EXPAREL® is not limited to any specific surgery type or site;

o the proper dosage and administration of EXPAREL® is based on various patient and procedure-specific factors, with the two surgical models utilised in the pivotal trials provided as examples for the purpose of providing general guidance;

o there was a significant treatment effect for EXPAREL® compared to placebo over the first 72 hours in the pivotal haemorrhoidectomy study; and

o EXPAREL® may be admixed with bupivacaine - including co-administered in the same syringe - provided certain medication ratios are observed.

· The FDA's September 2014 Warning Letter has been formally withdrawn via a "Rescission Letter". At the request of Pacira, the Rescission Letter includes FDA guidance related to two key procedures:

o infiltration into the transversus abdominis plane, which is a field block technique covered by the approved indication for EXPAREL®; and

o infiltration to produce postsurgical analgesia at the site of oral surgery procedures including tooth extractions, which is also covered by the approved indication for EXPAREL®.

Now that approval is confirmed, Pacira is planning to launch EXPAREL® for use for postsurgical analgesia in oral surgery in Q4, 2016.

Skyepharma receives 3 percent of net sales (on a cash received basis) of EXPAREL®. In addition, Skyepharma is eligible to receive certain sales milestones. The Board expects that the next sales milestone of U.S. $8.0 million (£5.3 million1), which is due when annual net sales (on a cash received basis) reach U.S. $250 million, will be achieved in 2016. A U.S. $32.0 million (£21.1 million1) milestone is due when annual net sales (on a cash received basis) reach U.S. $500 million.

Peter Grant, Chief Executive Officer of Skyepharma, commented:

"We are pleased that Pacira has been able to reach this amicable resolution with the FDA, and we look forward to seeing the resumption of the growth trajectory for EXPAREL sales, which has significant cash-generating potential for Skyepharma."

1 Using exchange rate at December 14, 2015

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About Skyepharma

Skyepharma combines proven scientific expertise with validated proprietary drug delivery technologies to develop innovative oral and inhalation pharmaceutical products. The Group is eligible for revenues from 16 approved products in the areas of inhalation, oral, topical and injectable drug delivery as well as generating income from the development of further products and technology licenses. The products developed by the Group are marketed throughout the world by big pharma as well as speciality pharmaceutical companies. For more information, visit www.skyepharma.com