LONDON, UK, 12 January, 2015 – Skyepharma PLC (LSE: SKP), the expert oral and inhalation drug development company, today publishes a pre-close update together with a summary of key events since the interim management statement published on 8 October 2014.
Trading
Full-year results for 2014 are expected to be in line with the Board’s expectations. As anticipated, revenue in Q4 2014 benefited from the €2.0 million (£1.6 million) milestone following the launch of flutiform® in Spain in December as well as growing royalties and supply income from flutiform® and a share of higher EXPAREL® net sales.
As at 31 December 2014, the Group’s cash was c. £32.4 million (up c. £6.1 million since 30 June 2014). Gross debt amounted to c. £17.3 million and the Group had net cash of c. £15.1 million (30 June 2014: net debt £2.9 million). The Paul Capital facility has now been terminated, following the final amortisation payment in June 2014.
Update on flutiform®
Following the launch of flutiform® in Spain by Mundipharma on 1 December 2014, flutiform® is now available in all five of the largest European markets. The launch by Kyorin of the 120-puff (30-day) version of the product in Japan on 1 December 2014 has added further growth potential in the world’s second largest pharmaceutical market. Kyorin’s management has reported that initial prescribing of the 120-puff version has been encouraging in the five weeks since launch.
Other products
Pacira announced sales of EXPAREL® of $50.2 million for Q3 2014, an increase of 12 per cent. from the prior quarter and Skyepharma’s 3 per cent. share of sales (on a cash received basis) has continued to grow accordingly. Pacira has also reported that its unaudited revenue estimates for Q4 2014 for EXPAREL® were $59.0 million, an increase of 18 per cent. over the sales for Q3 2014.
GSK’s Q3 2014 sales of Relvar®/Breo® Ellipta® and Anoro® Ellipta®, both of which use technology licensed by Skyepharma, were below market expectations. Based on subsequent analysts’ forecasts, Skyepharma’s royalties should still reach the cap of £9.0 million per annum, but this may be one year later than the Skyepharma Board previously expected.
Research and Development
The Group is continuing the development of SKP-2075 for chronic obstructive pulmonary disease (COPD) using a novel inhaled therapy platform acquired from Pulmagen Therapeutics (Synergy) Limited (“Pulmagen”) in August 2014. Work is also continuing on a number of internally developed concepts for novel oral drug delivery platform technologies. These include Soctec™, a concept for a novel, proprietary gastro-retentive drug delivery platform technology comprising a buoyant self-orienting capsule.
As the Group’s income grows, the Board’s strategy is to selectively invest in attractive future growth projects which use Skyepharma’s proven technologies and skills. Self-funded net research and development (R&D) investment has increased, as planned, from £0.5 million in 2013 to around the middle of the previous guidance range of between £3 million to £6 million for 2014. For 2015, as well as continuing to ramp up investment in SKP-2075 and novel oral drug delivery platform technologies, a number of opportunities have been identified for increasing net investment in R&D, which could be around £10 million for the year as a whole.
Lyon Restructuring
Aenova France SAS (“Aenova”) continues to lease the Group’s manufacturing business and premises in Lyon (together “the Facility”) at a rental of €2.0 million (£1.6 million at current rates) per annum until the lease arrangements expire in mid-2016. Aenova continues to manage and be responsible for the operational and financial performance of the Facility on a day-to-day basis, and during 2014 concluded consultations with the Works Council in respect of a site restructuring plan, which is in the course of being implemented. Under the arrangements with Aenova, some of the costs of the restructuring will be reimbursed by Skyepharma, and will be shown as an exceptional cost in the 2014 results.
Peter Grant, Chief Executive Officer of Skyepharma, commented:
“The overall momentum from the eight new products launched in the last three years has continued into the final quarter and Skyepharma looks forward to this trend continuing. With a strong balance sheet, we continue to seek opportunities for investment in further product and technology development to help deliver additional long-term growth. We look forward to 2015 with confidence.”
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For further information please contact:
Skyepharma PLC
Peter Grant, Chief Executive Officer
Andrew Derodra, Chief Financial Officer
+44 207 881 0524
Jonathan Birt, Investor and Media Relations
+44 7860 361746
FTI Consulting
Julia Phillips/Rob Winder/Natalie Garland-Collins
+44 203 727 1000
N+1 Singer
Shaun Dobson/Gillian Martin/Jen Boorer
+44 207 496 3000
About Skyepharma
Skyepharma combines proven scientific expertise with validated proprietary technologies to develop innovative oral and inhalation pharmaceutical products. The Group’s licenses cover 16 approved inhalation, oral, topical and injectable products, which generate milestones, recurring royalties, and in some cases, product supply revenues. The Group also earns milestones and contract development revenues from new product developments. Products developed by Skyepharma are marketed by some of the world’s most respected pharmaceutical companies. For more information, visit www.skyepharma.com
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