SkyePharma extraordinary general meeting set for March 9

By Angela McDaniels

Seattle, March 2 - An extraordinary general meeting called for by SkyePharma plc institutional investors North Atlantic Value LLP, Insight Investment and Morley Fund Management will take place on March 9.

The syndicate of investors, which together hold 15¼% of the company, called for the meeting on Jan. 20 in order to remove director Ian Gowrie-Smith, to appoint Robert Thian as his replacement and to remove any person other than Thian who may be appointed by the company between then and the meeting.

Gowrie-Smith has since retired, as was his intention to do so since early 2005, according to SkyePharma.

In an effort "to represent the wishes of all shareholders," the company's nominations committee then met with Thian and raised the possibility of offering him a non-executive director position. Thian said he had no interest in non-executive posts, according to a company news release.

In a Thursday news release, the North Atlantic Value syndicate detailed its reasons for calling the meeting, saying it has been "forced" to call the meeting in order to appoint a board member who will address and reverse the "inexorable decline in shareholder value" at SkyePharma and rectify "a number of corporate governance issues at the company."

According to the syndicate, SkyePharma has wasted money on prestige properties in London and New York for company executives and lost million of pounds "not on developing new drugs, but in acquiring companies which appear to have added little or no value, or investing in other companies where the directors either have personal interests or serve on the board."

The syndicate went on to say that Argeris "Jerry" Karabelas, whom the company appointed as chairman after Gowrie-Smith's departure, has been a member of the board since 2000 and has failed to resolve the company's continuing "under-performance."

Since 1996, SkyePharma's share price has dropped to 40.5p from 75p, according to the release.

"Despite management promises over many years that it would do so, SkyePharma has never achieved sustainable profitability and the company has undertaken frequent equity fundings, often non-preemptively, which have caused further dilution and diminution in shareholder value," the syndicate said in the release.

SkyePharma responded in a Thursday news release, saying "the allegations made in [the syndicate's] statement are without substance" and that the company "abides by the highest corporate governance standards and strongly resents any claims to the contrary."

Shareholders will vote on the appointment of Thian at the meeting. Shareholders may instead vote by proxy no later than March 7.

SkyePharma develops pharmaceutical products that use drug delivery technologies to provide easier-to-use and more effective drug formulations.

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