15th May 2009 07:00
SKYEPHARMA PLC - INTERIM MANAGEMENT STATEMENT
LONDON, UK, 15 May 2009 - Ahead of its Annual General Meeting later today, SkyePharma PLC (LSE: SKP) publishes its Interim Management Statement. This provides an update on key matters since the preliminary announcement of annual results issued on 26 March 2009.
Trading
The Company has made good progress in the first few months of the year, including the submission of the New Drug Application ("NDA") for Flutiform™ in the US and the approval and subsequent launch of Lodotra® in Germany. The Board's expectations for the results for 2009 as a whole remain unchanged, apart from a potential unrealised foreign exchange translation loss arising on translating net debt, due mainly to the strengthening of the US dollar against the Swiss franc since the beginning of 2009.
The Group continues to focus on controlling and reducing costs where appropriate to balance resources with demand. Headcount has been reduced by over 10% at the Group's research and development facility in Muttenz, Switzerland. At the manufacturing facility in Lyon, France, consultations with the Works Council have just been completed regarding a reduction of the workforce of over 120 employees by approximately one third. The plan will be implemented shortly and is expected to save operating costs at the rate of approximately £1.5 million per annum. It is anticipated that an exceptional charge of approximately £2.0 million will be included in the accounts for the first half of 2009.
Following the notice of termination of the Foradil® Certihaler™ contract in December 2008, separate discussions continue to be held with Novartis and a subcontractor with a view to agreeing what amounts are receivable from Novartis and payable to the subcontractor by the Group during the two-year termination and wind-down period. The Board continues to believe that any amounts receivable from Novartis will exceed any liability due to the subcontractor.
Cash
As reported in the 2008 report and accounts, at 31 December 2008, the Company had £37.5 million in cash and facilities and sufficient funds for the foreseeable future. Since the year end, cash usage has been in line with the Board's expectations.
Convertible bonds
Since 31 December 2008, a number of conversion notices have been received from holders of the 6% 2024 bonds, converting bonds with a nominal value in aggregate of £4,037,000 into ordinary shares at a conversion price of £3.71 per ordinary share, resulting in the issue of an additional 1,088,136 ordinary shares. These conversions have reduced interest costs by £242,000 per annum and strengthened the Group's balance sheet through the associated reduction in debt.
Products and pipeline products
Flutiform™
As announced previously, the NDA for Flutiform™ was submitted to the United States Food and Drug Administration in Q1, 2009. Progress continues to be made with the development of Flutiform™ for Europe and Japan and on additional dosage forms and indications. Negotiations are continuing with a view to transferring the responsibility for the Flutiform™ supply chain to a third party.
Lodotra®
In April 2009, Lodotra®, the novel night-time release formulation of low dose prednisone, utilising SkyePharma's proprietory Geoclock™ technology and developed with Nitec Pharma AG ("Nitec"), was launched in Germany by Merck KGaA (Nitec's licensee for Germany and Austria). This is the first launch in Europe following the final assessment report from the German BfArM (Bundesinstitut für Arzneimittel und Medizinprodukte). The report concluded that Lodotra® is approvable for the treatment of rheumatoid arthritis and associated morning stiffness in 15 European countries, under the European Medicines Agency's decentralised procedure. Nitec has recently concluded a distribution agreement with Mundipharma for the rest of Europe.
Nitec continues to work on its programme for U.S. registration of Lodotra® and announced on 27 February 2009 that it had finalised recruitment for the second pivotal Phase III trial.
Solaraze®
In its announcement of results for Q1, 2009, Almirall reported that Solaraze® was particularly successful with sales of €4.9 million, up 54.3% compared with Q1, 2008. Almirall acquired the marketing rights to this medicine, for the treatment of actinic keratosis, in Europe and some Asia Pacific countries in 2007. It is currently the market leader in Europe and Australia.
Sular®
In Febuary 2009 a paragraph IV certification was filed by a generic manufacturer in the U.S. in respect of the 25.5mg and 34mg strengths of the new formulation of Sular®, and in March 2009 a further certification was filed for the 8.5mg and 17mg strengths. Sciele Pharma Inc. did not file a patent infringement suit within 45 days of receiving notification of the paragraph IV certifications and, therefore, there is no automatic 30-month stay to prevent the generic manufacturer from launching a generic version once approved. The impact of any generic launch on sales of the new formulation of Sular® is dependent on a number of factors including the timing of launch, pricing strategy of the generic company and the number and timing of additional generic formulations, if any, that reach the market. If net sales of the new formulation of Sular® are significantly lower following generic entry, SkyePharma's royalty rate would be reduced from a low mid-single digit percentage to a low single digit percentage on net sales.
Interim results
The Group is scheduled to release its interim results for the six months ending 30 June 2009 on Thursday 27 August 2009.
Dr Ken Cunningham, CEO of SkyePharma, said "With the submission of the Flutiform™ NDA, SkyePharma is moving its focus to increasing its product pipeline, primarily through partnered research and development projects. The level of operating costs continues to be controlled, with appropriate action being taken where necessary. We continue to work towards our goal of achieving long-term profitability for the Group."
For further information please contact:
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SkyePharma PLC |
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Ken Cunningham, Chief Executive Officer |
+44 207 491 1777 |
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Peter Grant, Chief Financial Officer |
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Financial Dynamics |
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Jonathan Birt |
+44 207 831 3113 |
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Susan Quigley |
About SkyePharma PLC
Using its proprietary drug delivery technologies, SkyePharma develops new formulations of known molecules 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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