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Skyepharma PLC (SKYEF) – Interim Management Statement


5/16/2014 11:46:07 AM

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LONDON, UK, 16 May, 2014 – Skyepharma PLC (LSE: SKP), the expert oral and inhalation drug delivery company, today publishes its Interim Management Statement for the period 1 January 2014 to 15 May 2014 and provides an update on key events since the 2013 results were announced on 31 March 2014.

Trading
Trading performance to date is broadly in line with the Board’s expectations. As anticipated, revenue in the first quarter of 2014 has benefitted from a milestone of €3.0 million (£2.5 million at the then prevailing exchange rate) following the launch of flutiform® in France. A further milestone of €2.0 million (£1.7 million at current rates) is payable when flutiform® is launched in Spain, which will follow completion of local pricing and reimbursement procedures, which could be as early as the second half of 2014.

Capital Raise and Bond Repayment
The Capital Raise and Bond Repayment transactions announced on 31 March 2014 have been successfully concluded. The Group has repaid its bond debt in full at a cost of £95.6 million, representing a discount of £25.2 million compared with the total amount which would have been payable at the earliest normal redemption date of November 2017. After costs, the balance of the proceeds of the Capital Raise was approximately £8.4 million, and the Group’s net debt as at 30 April 2014 was £4.8 million. The repayment of the bonds has reduced the Group’s full year net finance cost in the consolidated income statement by £8.1 million in 2014 and by £13.3 million in 2015 compared with the costs forecast prior to the repayment.

Product updates

Update on flutiform®
flutiform®, the novel combination of the fast acting LABA (Long-Acting Beta Agonist), formoterol, and the most widely prescribed ICS (Inhaled Corticosteroid), fluticasone, has now been approved in 29 countries and launched in 22. Affiliates of Mundipharma International Corporation Limited (“Mundipharma”), have launched the product in Australia, Israel, Hong Kong, South Korea and 17 European countries: Germany, the UK, Italy, Belgium, Cyprus, the Czech Republic, Denmark, Finland, France, Iceland, Ireland, Luxembourg, the Netherlands, Norway, Slovakia, Sweden and Switzerland. Kyorin Pharmaceutical Co, Ltd. (“Kyorin”) launched the 56-puff version of the product in Japan in November 2013 and is planning the launch of the 120-puff version in December 2014.

Sanofi, the Group’s licensee in Latin America, has received marketing approval for flutiform® in Argentina. This is the first approval for the product in the region. A new drug application has been filed in Colombia and further applications are being prepared.

Licences to GlaxoSmithKline (“GSK”)
During 2014, GSK has made further progress with its new inhalation products which use the Group’s technology. Relvar® Ellipta® was launched in the UK and Germany in January 2014 following the November 2013 approval in 31 European countries by the European Commission for the treatment of asthma and Chronic Obstructive Pulmonary Disease (“COPD”). Anoro™ Ellipta® was launched in the United States in April 2014 for the once-daily treatment of COPD. Marketing authorisation for Anoro™ Ellipta® was granted in Europe in May 2014 for the treatment of COPD. Another COPD treatment, Incruse®, was approved in Europe, Canada and the United States in April 2014.

Skyepharma is entitled to a low single-digit royalty on net sales of products using its licensed technology, capped at a maximum of £3.0 million per annum for each chemical entity for the life of the relevant patents. Breo® Ellipta®, Anoro™ Ellipta® and Incruse® together include three chemical entities, with total potential income to the Group of up to £9.0 million per annum.

EXPAREL®
Pacira reported that EXPAREL® net sales were U.S.$34.4 million in the first quarter of 2014, compared with U.S.$10.4 million in the first quarter of 2013 and up 13% from the fourth quarter of 2013.

On 7th May, Pacira announced the submission of a supplemental New Drug Application (sNDA) to the U.S. Food and Drug Administration (FDA) for a nerve block indication for EXPAREL®. The sNDA is based on positive data from a Phase 3 study assessing the safety and efficacy of EXPAREL® in femoral nerve block for total knee arthroplasty, and will also include additional safety data from a Phase 3 study of EXPAREL® used to perform an intercostal nerve block for thoracotomy.

Skyepharma is entitled to three per cent. of net sales of EXPAREL® (based on cash received by Pacira) in the U.S. (and if relevant, certain other major countries) related to certain patents sold with the Injectable Business in 2007. The Group is also entitled to further contingent milestones of up to U.S. $52 million, the first U.S.$8 million of which is due once applicable annual net sales in the U.S. (and if relevant, the same major countries) reach U.S.$100 million.

Sular® and Triglide®
A resolution has been reached with Shionogi Inc. (“Shionogi”) on the application of the licence agreements for Sular® and Triglide® and, going forward, the royalty payable by Shionogi on Sular® will be a low single digit percentage on net sales and it is anticipated that regular royalty payments will be resumed for Triglide®.

Peter Grant, Chief Executive Officer of Skyepharma, commented:
“Skyepharma has had a very good start to the year, building on strong momentum from 2013, and we continue to anticipate further growth in revenues as the year progresses. The key value drivers of the business, including flutiform and Pacira’s EXPAREL, are performing in line with expectations, and GSK’s new inhalation products, which use Skyepharma’s licensed technology, continue to receive approvals in key markets.

“Completion of the Capital Raise and the repayment of all of Skyepharma’s bond debt has transformed the Group’s balance sheet and will enable us to invest in new products, technologies and other corporate opportunities.”

For further information please contact:

Skyepharma PLC
Peter Grant, Chief Executive Officer
Andrew Derodra, Chief Financial Officer +44 207 881 0524

FTI Consulting
Julia Phillips/Natalie Garland-Collins +44 203 727 1000

N+1 Singer
Shaun Dobson/Gillian Martin +44 207 496 3000

About Skyepharma
Skyepharma combines proven scientific expertise with validated proprietary drug delivery technologies to develop innovative oral and inhalation pharmaceutical products. The Group is eligible for revenues from 16 approved products in the areas of inhalation, oral, topical and injectable drug delivery as well as generating income from the development of further products and technology licenses. The products developed by the Group are marketed throughout the world by big pharma as well as speciality pharmaceutical companies. For more information, visit www.skyepharma.com

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