Reorganisation of Swiss Operations

SKYEPHARMA PLC - REORGANISATION OF SWISS OPERATIONS

LONDON, UK, 10 January, 2012 - SkyePharma PLC (LSE: SKP) today announces that the SkyePharma Group ("SkyePharma") has entered into a consultation process which could lead to a reduction of approximately 20% of its 101-strong workforce in Muttenz, Switzerland. The proposed steps are intended to improve SkyePharma's competitiveness and generate CHF2.6m (£1.8m) of operating cost savings each year.

Separately, the Group has entered into agreements with the Aenova Group to sub-let part of its laboratory space in Muttenz and sell some of its surplus laboratory equipment to Aenova. Aenova plans to use the space to expand its own non-competing oral product development activities and has agreed to consider offering positions to some of the SkyePharma employees potentially affected by the headcount reduction. 

The changes will not affect relationships with existing or potential customers and the Group will continue to provide its full existing range of innovative oral and inhalation drug delivery solutions.

In future, SkyePharma intends to make greater use of third-party sub-contracting for certain aspects of the oral product development process and Aenova has agreed to be a sub-contractor for this purpose. There will be no transfer or disposal of any business, technology or intellectual property to Aenova and Aenova's oral product development activities do not directly compete with those of SkyePharma.

In August 2011, SkyePharma leased its entire pharmaceutical manufacturing business and premises at Saint Quentin-Fallavier, Lyon, France, to the Aenova Group for an initial period of two years, extendable for a further three years. The new agreements between SkyePharma and Aenova in Switzerland have reinforced the links between the companies and could lead to collaborative development opportunities.

SkyePharma's Chief Executive Officer, Axel Müller, said:

"The alliance announced last year with Aenova, which is one of Europe's leading contract manufacturing organisations, provided an important opportunity to increase the utilisation of our Lyon facility, generate rental income and enable SkyePharma to focus on its core business of developing drug delivery solutions for the global pharmaceutical industry. The additional agreements announced today will enable SkyePharma to operate in Muttenz with lower fixed costs whilst continuing to offer clients the full range of our innovative services and solutions.

"We regret the need to reduce the workforce at our Swiss operations. However changes are essential to ensure that we have the correct staffing to meet demand and remain competitive. We are pleased to have reached an agreement with Aenova which may offer opportunities for a number of employees affected by the consultation process."

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About SkyePharma

Using its proprietary drug delivery technologies, SkyePharma develops new formulations of known molecules to provide a clinical advantage. The Group has eleven approved products in the areas of oral and topical delivery as well as important license and revenue-generating arrangements in inhalation and injectable technologies. The Group's products are marketed throughout the world by leading pharmaceutical companies. For more information, visit www.skyepharma.com.

About Aenova

Aenova Holding GmbH was formed in 2008 through the merger of two high profile mid-sized companies: Dragenopharm Apotheker Püschl GmbH and SWISS CAPS AG. As a result of this merger the Aenova Group belongs today to the leading manufacturers and suppliers of pharmaceutical and health supplements in modern oral dosage forms such as soft gelatine capsules, hard capsules, tablets, film tablets, sugar coated tablets, and effervescence tablets for the Pharma and Healthcare industries. The Aenova Group generates annual sales of approx. €260m and has 1500 employees across its sites in Germany (Tittmoning, Berlin, Bad Aibling, Warstein), Switzerland (Kirchberg and Bioggio), Romania (Cornu), France (Lyon) and in the USA (Miami). The Aenova Group, with its HQ in Paehl, thereby offers its customers a Full-Service-Portfolio covering development, purchasing raw materials, production and analysis, through to packaging and logistics.