Holding(s) in Company

TR-1: NOTIFICATION OF MAJOR INTEREST IN SHARES

1. Identity of the issuer or the underlying issuer of existing shares to which voting rights are attached:

SkyePharma PLC

2 Reason for the notification (please tick the appropriate box or boxes):

An acquisition or disposal of voting rights

X

An acquisition or disposal of qualifying financial instruments which may result in the acquisition of shares already issued to which voting rights are attached

An acquisition or disposal of instruments with similar economic effect to qualifying financial instruments

X

An event changing the breakdown of voting rights

Other (please specify):

3. Full name of person(s) subject to the notification obligation:

Zazove Associates, LLC

4. Full name of shareholder(s) (if different from 3.):

National Railroad Retirement Investment Trust

Virginia Retirement System

5. Date of the transaction and date on which the threshold is crossed or reached:

24 September 2012

6. Date on which issuer notified:

25 September 2012

7. Threshold(s) that is/are crossed or reached:

18%

8. Notified details:

A: Voting rights attached to shares

Class/type ofshares

if possible usingthe ISIN CODE

Situation previousto the triggeringtransaction

Resulting situation after the triggering transaction

NumberofShares

NumberofVotingRights

Numberof shares

Number of votingrights

% of voting rights

Direct

Direct

Indirect

Direct

Indirect

Ordinary Shares GBP1

GB00B3BFNB64

 Nil

 Nil

8,605,041

 8,605,041

 18.65%

B: Qualifying Financial Instruments

Resulting situation after the triggering transaction

Type of financialinstrument

Expirationdate

Exercise/ConversionPeriod

Number of votingrights that may beacquired if theinstrument isexercised/ converted.

% of votingrights

C: Financial Instruments with similar economic effect to Qualifying Financial Instruments

Resulting situation after the triggering transaction

Type of financialinstrument

Exerciseprice

Expirationdate

Exercise/Conversionperiod

Number of votingrights instrumentrefers to

% of voting rights

Convertible Bond

Each £1,000 of the principal amount convert into 269.5418

Shares (but see 13 below)

4 May 2012

N/A

Nil

Nominal

Delta

Nil

N/A

Total (A+B+C)

Number of voting rights

Percentage of voting rights

18,605,041

18.65%

9. Chain of controlled undertakings through which the voting rights and/or thefinancial instruments are effectively held, if applicable:

The Reporting Person is an investment advisor with discretionary authority over portfolios that, in the aggregate, held £31,989,000 principal amount of SkyePharma PLC's 6% convertible bonds that mature 4 May 2012 (the "Convertible Bonds"). The convertible Bonds were exchanged as of 24 September 2012 for ordinary shares and additional consideration. The ordinary shares are held by the following undertakings that hold in excess of 3% based on current shares outstanding:

National Railroad Retirement Investment Trust (1,546,750 shares; 3.35% of current shares outstanding)

Virginia Retirement System (1,570,960; 3.41% of current shares outstanding)

Proxy Voting:

10. Name of the proxy holder:

None

11. Number of voting rights proxy holder will cease to hold:

N/A

12. Date on which proxy holder will cease to hold voting rights:

N/A

13. Additional information:

Zazove Associates, LLC acquired these shares on behalf of its portfolio clients following the issue of ordinary shares on 24 September 2012 on conversion of convertible bonds at 269 shares per £1,000 of convertible bonds held and the remaining 2024 bonds no longer have any rights to convert into ordinary shares

14. Contact name:

 John Murphy

15. Contact telephone number:

 020 7881 1174