SkyePharma plans rights offering for £35 million to fund asthma drug phase III trials

By Ronda Fears

Nashville, Sept. 28 - SkyePharma plc announced Wednesday a 1-for-5 rights offering of 125.6 million new ordinary shares at 30p to qualifying shareholders for about £35 million to fund phase III trials for its new asthma drug Flutiform instead of seeking an out-licensing partner.

The London-based biotech also reported earnings Wednesday. For the six months ended June 30, SkyePharma posted a 3% gain in revenue to £36 million. Royalties, which accounted for 33% of total revenue, rose 17% to £12 million. The loss for the period widened by 7%, the company said, to £9.3 million, or 1.5p per share.

At June 30, SkyePharma recorded net cash of £19 million.

Credit Suisse First Boston is managing the rights offering.

"The proceeds of the rights issue will allow the company the flexibility to proceed by itself with the clinical development of Flutiform, thereby helping to ensure its time to market," said SkyePharma chief executive Michael Ashton in a news release. "This will help to secure its competitive position and should in turn enhance its licensing terms."

Ashton said the SkyePharma board of directors "firmly believes it is in shareholders' interests to proceed with the clinical development of Flutiform ourselves."

Flutiform is a fixed-dose combination of formoterol and the inhaled steroid fluticasone. It has completed a phase II trial review by the U.S. Food and Drug Administration, and SkyePharma has submitted an application to begin phase III trials in early 2006 with a target filing date of mid-2007.

The market for combination products for asthma alone is already worth in excess of $5 billion and growing rapidly and is projected to be worth $10 billion by 2010, according to SkyePharma. The company said it believes Flutiform will have significant advantages over a limited number of potentially competitive products expected to reach the market over the next few years.

By proceeding with phase III development at its own expense, SkyePharma believes it can appoint a marketing partner or partners at a later stage on substantially better terms than previously anticipated.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.