SKP.L Regulatory News (SKP)

27 Dec 2006 07:01

Skyepharma PLC27 December 2006 For immediate release 27 December, 2006 SkyePharma raises £35m finance facility. Updates on Flutiform(TM) and potential sale of the Injectable Business London, England, 27 December, 2006 - SkyePharma PLC (LSE: SKP; NASDAQ: SKYE)today announces that it has finalised a £35 million financing agreement andprovides an update on the continuing progress with the Flutiform(TM) developmentand the potential sale of the Injectable Business. £35m financing facility The Group has entered into an agreement with a specialist lending entitydomiciled in Ireland and advised by Christofferson, Robb & Company ("CRC") for a10-year secured amortising loan facility of approximately £35 million. The facility comprises initial commitments of US$35 million and €26.5millionrepayable over 10 years based on a minimum amortisation schedule. This scheduleis based on expected receipts from milestone and royalties in respect of certainproducts ("CRC Products"). Interest is generally charged on a quarterly basis atthe respective US and Euro three month LIBOR rates plus a 5.85% margin. Theloan facility is secured by assignments of certain assets including, onceimplemented, the receipts in respect of the CRC Products. There is also acovenant (negative pledge) not to grant further securities over the Group'sassets and the requirement for prior consent from CRC for certain transactionsthat could affect CRC's security and risk. There are provisions for thefacility to be increased by a further US$15 million (£7.6 million) subject todue diligence and progress with a specific product development. None of theaforementioned products include Flutiform(TM). The funds available from this new finance facility will be used to strengthenthe Group's balance sheet and provide funds for general working capital purposesand the further development of Flutiform(TM). Progress with Flutiform(TM) development The Flutiform(TM) project continues to operate to the original timescales with atarget approval in the first half of 2009. The overall costs of the programme have increased since the time of the rightsissue, which was announced in September 2005, when the estimated costs for PhaseIII development of Flutiform(TM) were based on the design of the programmeanticipated at that time and excluded manufacturing implementation, whichdepended on the structure of future licensing and distribution deals. Sincethat time, the programme has been agreed with the FDA and now includes threeefficacy studies and an increased level of respiratory monitoring, resulting inthe programme presented earlier this year. Further costs have also arisen dueto a couple of supply issues, both of which have been dealt with withoutdelaying the project. We are also planning to take additional steps to secure the delivery of theprogramme, scale up of commercial manufacturing, and invest in the necessarycapital expenditure, as required under the licence agreements with Kos andMundipharma. The estimated costs to the Group to complete the programme from now through tolaunch (excluding saleable launch stock) total approximately US$47 million(£23.9 million) of development expenditure and US$13 million (£6.6 million) ofcapital expenditure. Allowing for costs incurred but not yet paid, the Group'sestimated cash outflows on Flutiform(TM) development from now through to launch(including capital expenditure) total US$70.0 million (£35.6 million). Update on the potential sale of the Injectable Business The Company is currently in exclusive negotiations with a potential buyer tosell the Injectable Business. Subject to agreement on certain terms,negotiations are expected to conclude shortly and any disposal will be subjectto shareholder approval. Frank Condella, CEO, SkyePharma said: "We are very pleased to have the support of CRC, who have a strong globalpresence in structured credit, a deep knowledge of our business and a commitmentto the long term. CRC's responsiveness provides a flexible financing alternativeand allows us to secure the completion of the development and launch ofFlutiform, as well as maintaining progress with the early product pipeline inoral and inhalation products." SkyePharma: SkyePharma PLC +44 207 491 1777Frank Condella, Chief Executive OfficerKen Cunningham, Chief Operating OfficerPeter Grant, Chief Financial Officer Buchanan Communications +44 207 466 5000Tim Anderson / Mark Court / Rebecca Skye Dietrich Christofferson Robb & Company:Media contact:Michael Rummel, Merlin +44 207 653 6620Angus Urquhart, Merlin Notes for editors About SkyePharma SkyePharma PLC develops pharmaceutical products benefiting from world-leadingdrug delivery technologies that provide easier-to-use and more effective drugformulations. There are now eleven approved products incorporating SkyePharma'stechnologies in the areas of oral, injectable, inhaled and topical delivery,supported by advanced solubilisation capabilities. For more information, visitwww.skyepharma.com. About CRC Christofferson, Robb & Company is a private money management firm that investsin global structured credit and asset backed securities markets.Christofferson, Robb and Company LLC is registered as an Investment Advisor withthe U.S. Securities and Exchange Commission and Christofferson, Robb and Company(UK) LLP is authorised and regulated by the Financial Services Authority. Certain statements in this news release are forward-looking statements and aremade in reliance on the safe harbour provisions of the U.S. Private SecuritiesLitigation Act of 1995. Although SkyePharma believes that the expectationsreflected in these forward-looking statements are reasonable, it can give noassurance that these expectations will materialize. Because the expectations aresubject to risks and uncertainties, actual results may vary significantly fromthose expressed or implied by the forward-looking statements based upon a numberof factors, which are described in SkyePharma's 20-F and other documents on filewith the SEC. Factors that could cause differences between actual results andthose implied by the forward-looking statements contained in this news releaseinclude, without limitation, risks related to the development of new products,risks related to obtaining and maintaining regulatory approval for existing, newor expanded indications of existing and new products, risks related toSkyePharma's ability to manufacture products on a large scale or at all, risksrelated to SkyePharma's and its marketing partners' ability to market productson a large scale to maintain or expand market share in the face of changes incustomer requirements, competition and technological change, risks related toregulatory compliance, the risk of product liability claims, risks related tothe ownership and use of intellectual property, and risks related toSkyePharma's ability to manage growth. SkyePharma undertakes no obligation torevise or update any such forward-looking statement to reflect events orcircumstances after the date of this release. This information is provided by RNS The company news service from the London Stock Exchange