19th May 2008 07:00
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 Flutiform™ 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 Flutiform™, the Company's lead product for the treatment of asthma. This is expected to take place in the summer.
Progress with Flutiform™ development
Since the announcement on 27 March, further progress has been made with the development of Flutiform™ 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 Flutiform™ 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 Flutiform™ 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 Flutiform™. 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® Certihaler™
Work continues on seeking a marketing and distribution partner for the approved Foradil® Certihaler™ in the USA. Other avenues for potential applications for the SkyeHaler™ device are also continuing to be explored.
Lodotra™
Nitec Pharma AG ("Nitec") has informed us that they expect first national European approvals and launches towards the end of 2008, with Lodotra™ 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 £33 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 £94 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 Fenoglide™, a fenofibrate product in-licensed from LifeCycle Pharma A/S ("LifeCycle"). Fenoglide™ 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 Fenoglide™ 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 Fenoglide™ 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 €83 million (£63 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 €40 million (£30 million), down by 7.0%. This decline was more than offset by strong growth in the USA, where sales of Uroxatral® were €26 million (£20 million), up 18.2%. Sales in other countries were also up 21.4% to €17 million (£13 million).
ZYFLO CR™ (zileuton) Extended-Release Tablets
As previously announced, Critical Therapeutics launched ZYFLO CR™ 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 US$2.6 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 Flutiform™ 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 Flutiform™."
For further information please contact:
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SkyePharma PLC |
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Frank Condella, Chief Executive Officer |
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Ken Cunningham, Chief Operating Officer |
+44 207 491 1777 |
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Peter Grant, Finance Director |
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Financial Dynamics (London enquiries) |
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David Yates / Deborah Scott |
+44 207 831 3113 |
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Trout Group (USA enquiries) |
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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.
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