LONDON, UK, 3 December 2010 – SkyePharma PLC (LSE: SKP) today publishes an update ahead of its financial year end on 31 December 2010.
The Board’s expectations for 2010 are unchanged from the Interim Management Statement of 20 October 2010 and the Board continues to anticipate revenues will show modest growth compared with 2009. As previously announced, the 2010 results will include substantial non-recurring manufacturing revenues. The operating cash flows have been boosted by the non-recurring manufacturing revenues and the deferral into 2011 of costs relating to preparing the Flutiform™ supply chain for launch. As a result it is anticipated that the net cash position will have been largely conserved during 2010, with strong operating cash generation covering interest costs and loan repayments.
The Board currently anticipates that revenues for 2011 will decrease compared with 2010 levels, primarily because of non-recurring revenues in 2010. Results in 2011 are likely to be impacted by the costs of preparing the Flutiform™ supply chain for launch and supplies in the launch period.
Pipeline and Product updates
Preparations for a potential launch of Flutiform™ in Europe in the second half of 2011 are continuing. The European Marketing Authorisation Application was submitted to the MHRA in March 2010, and SkyePharma’s partner Mundipharma has the rights to market the product in Europe.
As part of the preparations for a potential European launch the Group signed an amendment to the Flutiform™ Development and Marketing Agreement with Mundipharma in November 2010. The amendment increased the cap for third party development costs related to the high dose product development to €19 million (£16.1 million) from €15 million (£12.7 million), in order to cover the third party costs of validating the manufacturing line for the high dose product. These additional costs will be paid by Mundipharma which is entitled to recover them out of partial reductions in royalties and sales-related milestones for up to four years following commercial launch in one of Europe’s five major countries. The amendment also extended a cap on the total cost of goods and royalties as a percentage of net sales of Flutiform™ to also cover the follow-up inhaler for Flutiform™ being developed by Mundipharma.
SkyePharma is responsible for the manufacturing validation of the low, medium and high dose strengths of Flutiform™. In order to maximise the likelihood that inventory produced during validation can also be used for the commercial launch, the low and medium development costs payable by SkyePharma will now fall in 2011 rather than 2010 as envisaged earlier this year.
Under a Manufacturing and Supply Agreement with Mundipharma, SkyePharma is responsible for supplying Flutiform™. Start up costs, minimum commitments to suppliers and initial low volumes are expected to delay the profitability to SkyePharma of the supply of Flutiform™ until the product has been successfully launched in the major European countries.
As previously announced, the development of Flutiform™ for Japan continues to make progress, with the commencement of recruitment for two Phase III trials initiated in November 2010, ahead of expectations.
Flutiform™ United States
The Group continues to investigate whether there is a viable way forward for Flutiform™ in the United States, including identifying potential partners to finance any additional work required.
The New Drug Application (“NDA”) for EXPAREL™ (formerly DepoBupivacaine) was filed with the Food & Drug Administration (“FDA”) in September 2010 by Pacira Pharmaceuticals, Inc. EXPAREL™ is a long acting bupivacaine (anaesthetic/analgesic) for post surgical pain management.
The Group is entitled to receive a U.S.$10 million (£6.4 million) milestone on the first commercial sale of EXPAREL™ in the United States, up to U.S.$52 million (£33.4 million) in other contingent milestone payments, and a 3 per cent share of worldwide net sales of EXPAREL™.
Horizon Pharma Inc. (“Horizon”) (the Group’s licensee for the Geoclock® technology used in Lodotra®) anticipates submitting an NDA for the treatment of the signs and symptoms of rheumatoid arthritis to the FDA in the fourth quarter of 2010.
In November 2010, Horizon announced it had signed an exclusive distribution and supply agreement with Mundipharma for the commercialisation of Lodotra® in Australia, China, Hong Kong, Indonesia, Korea, Malaysia, New Zealand, Philippines, Singapore, South Africa, Taiwan, Thailand and Vietnam. SkyePharma is entitled to a small share of the signing milestone payable to Horizon.
Somnus has completed patient enrolment into its Phase II clinical program for SKP-1041. Data for this study is expected to be disclosed during the first half of 2011. Somnus has received a grant of U.S.$245,000 under the Qualifying Therapeutic Discovery Project, to help to fund this study.
Dr Axel Müller, Chief Executive Officer of SkyePharma, said, “Preparations for the potential launch of Flutiform™ in Europe continue to be on track, and we are pleased that Phase III trials have been initiated in Japan. The results for 2010 are expected to be in line with the Board’s previous expectations, and we are planning for 2011 to be the launch year for Flutiform™. Although the launch preparations will result in additional costs, the Board remains confident in the prospects for revenue growth once this important treatment is on the market.”
For further information please contact:
Axel Müller, Chief Executive Officer
Peter Grant, Chief Financial Officer
+44 207 491 1777
Jonathan Birt/Susan Quigley
+44 207 831 3113
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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