Transcript Slide 1

Michael Ashton
Chief Executive
Banc of America Securities
Specialty Pharmaceuticals Conference
29 July 2004
NASDAQ:SKYE LSE:SKP
www.skyepharma.com
UK tel: +44 (0)207 491 1777
US tel: +1 (212) 753 5780
Legal statement
This presentation does not constitute or form part of any offer for sale or subscription or solicitation of any offer to buy or
subscribe for any securities in SkyePharma PLC nor shall it or any part of it form the basis of or be relied on in connection
with any contract or commitment whatsoever. This presentation is only being distributed to persons who fall within Article 8
of the Financial Services Act 1986 (Investment Advertisements) (Exemptions) (No 2) Order 1997 or Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996, as amended.
This presentation includes certain forward-looking statements with respect to certain development projects, potential
collaborative partnerships, results of operations and certain plans and objectives of SkyePharma including, in particular,
the statements regarding potential sales revenues from Paxil CR, targeted sales revenues from other products both
currently marketed and under development, possible launch dates for new products, and our revenue and profit guidance
for the 2004 financial year. By their very nature forward-looking statements involve risk and uncertainty that could cause
actual results and developments to differ materially from those expressed or implied. The significant risks related to
SkyePharma’s business which could cause our actual results and developments to differ materially from those forwardlooking statements are discussed in SkyePharma’s SEC filings under the caption “Risk Factors”.
SkyePharma reports under UK GAAP. Where US dollar equivalents have been provided for convenience in this
presentation, a fixed exchange rate of $1.85 = £1 has been used throughout. These dollar equivalent numbers do not
imply restatement from UK GAAP to US GAAP.
This presentation was updated on 19th July 2004
2
What is drug delivery?
Not “truck” delivery!
Drug delivery – making good drugs better
We normally work on drugs already proven safe and
effective
 low risk of clinical failure
 short development times
 low development cost
 contrast with biotech!
We rely on partners for sales and marketing
4
Pharma pipelines are drying up
M a jo r n e w c h e m ic a l e n tity a n d b io lo g ic
s u b m is s io n s to F D A
80
70
60
50
40
30
20
10
0
1993
S ourc e: F DA
1994
1995
1996
1997
NCE s
1998
1999
2000
2001
2002
2003
O riginal biologic s
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Drug delivery deals still getting done…
Number of Drug Delivery Deals 1993-2003
140
120
Delas in year
100
80
60
40
20
0
1993
Source: Windhover
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
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…but deal values lower than biotech
Value of Drug Delivery vs Biotech deals
Average deal value $ mn
90
80
70
60
50
40
30
20
10
0
Drug delivery - all Drug delivery Biotech - all
phases
clinicals
phases
NB excludes deals for products that have been approved
Source: Windhover
Biotech - clinicals
7
SkyePharma in brief
 UK-domiciled speciality pharmaceutical company
 originally founded 1983, IPO 1996
 listed London (SKP), New York (ADR, SKYE)
 market capitalisation £380/$710 mn
 (19 Jul: 61p/share, $11.43/ADR)
 small equity stakes held by GlaxoSmithKline,
Novartis and Kowa
8
Two business models
Contract drug delivery project
Self-funded project
Example: Paxil CR
Example: DepoDur
Medium
Risk
Low
Return
Low
High
Out-licence stage
Start of project
Late-stage clinical trials
Partner (reimburses SkyePharma)
SkyePharma
$5-10 mn
Modest
$25-50 mn
High
<$10 mn
Low
$50-100 mn
High
3-7%
20-50%
R&D costs
Milestone
payments
Royalty rate
NB much lower than for a NCE
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A transforming business
Drug delivery
service provider
Developing own
products for outlicence
Integrated pharmaceutical
developer
Nine Ten approved products
FDA approvals validate three of our five delivery technologies
Foradil Certihaler “approvable” letter (Oct ‘03) validates fourth (pulmonary)
Strong clinical pipeline
1 Filed, 4 x Phase III, 3 x Phase II
Changing quality of earnings:
Strategic emphasis on royalty income over upfront milestone payments
Royalty income to replace milestones as main revenue source, driven by
Now: Paxil CR, Xatral® OD/Uroxatral®, Solaraze®, DepoCyt®
Future: Foradil® Certihaler ®, DepoDur, HFA-formoterol, Propofol IDD-D
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Global infrastructure
London (HQ)
Basel
Lyon
Montreal
San Diego
FDA/EMA approved
manufacturing
facilities
Osaka
New York
>400 staff worldwide of
which 50% scientists /
clinical staff
Global business
development coverage
11
Key marketed products
Paxil CR (GlaxoSmithKline)
Xatral OD / Uroxatral (Sanofi-Synthélabo)
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Paxil CR


– defending the Paxil® franchise
Paxil CR has captured ~8% of the US SSRI
antidepressant prescription market
 first US generic competition for Paxil® started
8 September ‘03
 a prescription for Paxil CR cannot be
substituted with generic paroxetine…
 …but some indirect price pressure
 GSK still actively promoting Paxil CR
It is very important to keep the sales effort behind Paxil CR
John Coombe (GSK’s CFO) Feb 2004
 despite May ‘04 Appeals Court decision,
GSK still aggressively defending last patent for
Paxil® (expires end-2006)
 Paxil CR US sales:
 2003: ~$650 mn
 2004: ~$800 mn (est – likely peak)
 Q1’04: $180 mn (+37%)
 SkyePharma royalty rate: low single digits
expect increase from start of US generic competition
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Xatral OD/Uroxatral
Once-daily Geomatrix formulation of
alfusozin
 uroselective alpha-blocker
 indication: urinary symptoms of BPH
On market in Europe & ROW since 2000
 replacing multidose versions
USA: Uroxatral
 new product on US market
 launched to urologists Nov ’03
 launched to primary care Mar ‘04
 two USPs:
• uroselection (no postural hypotension)
• no ejaculatory side-effects
®
Sanofi-Synthélabo
Xatral/UroXatral sale s tre nd 1996-2003
250
US launch
Nov '03
200
EU launch
Apr '00
Sales € mn
®
150
100
50
0
1996
1997
1998
1999
H1 RoW
H1 US
2000
2001
2002
2003
FY RoW
FY US
AUR indication: approved Europe; Ph III US
2003 world sales €222 / $250 mn (+25% CER)
Q1’04 world sales €72 / $90 mn (+50% CER)
2006 forecast: €500 mn (Sanofi-Synthélabo)
SkyePharma royalty rate: mid-single digits
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Three key near-term
pipeline products
DepoDur (previously DepoMorphine)
Foradil Certihaler
Propofol IDD-D
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
DepoDur
US:
Europe:
Endo, Medeus
approved by FDA 18 May ‘04
filed Nov ‘03 (EU mutual recognition, UK as reference country)
Clinical trials (~1000 patients) highly statistically significant
 hip/knee surgery, lower abdominal surgery, caesarean section
Sustained-release morphine for relief of pain after surgery
 given as a single epidural injection before/during operation
 morphine released evenly over 48 hours (period of peak post-op. pain)
 minimizes breakthrough pain
 with conventional PCA, patient must react to pain
 no need for catheters and infusion pumps (= savings for hospital)
Disadvantages of conventional morphine
 effective analgesic – but short-acting
 repeat doses need a catheter and an infusion pump
 catheter problems main barrier to wider use of epidural analgesia
 epidural route desirable (delivers direct to CSF, needs less morphine than IV)
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
DepoDur - potential market
knee replacements &
revisions
 ~12 million key target surgeries a
year across the US and major Europe
hip replacements &
revisions
 surgeries associated with an ageing
population are growing at 6-7% per
annum
major abdominal surgery
 market research indicates potential
for 25% - 40% patient share in major
territories. Assumes pricing equivalent
to IV PCA or epidural infusion ($125 per
surgical procedure)
caesarean sections
thoracic
vascular
 sales potential: $250+m
 exploring scope for premium pricing
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
DepoDur - potential endorsed
USA/Canada
 $120m milestone deal with Endo Pharmaceuticals (Dec ‘02)
 rights for DepoDur and Propofol IDD-D
option on related pipeline products including DepoBupivacaine
 SkyePharma bears development, manufacture costs
 Endo bears marketing costs
 SkyePharma’s share of sales 20-60%
 based on combined sales of DepoDur and Propofol IDD-D
>50% share if combined sales >$250 mn
Europe
 €100+m milestone deal with Medeus Pharma (Mar ’04)
 rights for DepoDur only throughout Europe
 SkyePharma bears development, manufacture costs
 Medeus bears marketing costs
 SkyePharma share of sales 35-50%
 50% share reached at sales well below €100 mn
Rights for rest of world still available for licence
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Foradil Certihaler Novartis/Schering-Plough
Active ingredient formoterol
 fast-onset, long-acting bronchodilator for asthma
 recent major study on maintenance use of formoterol raises value
 SkyePharma developed both Certihaler device and formulation
 formulation keeps powder dry, ensures accurate consistent dose
 now also being used in second collaboration with Novartis (QAB149)
Schering-Plough to market in key US market, Novartis elsewhere
Filed US & Europe Dec ‘02 (launches expected in H2 ‘04)
 FDA “approvable” letter issued Oct ’03
 European approvals 2004 (Switzerland, Austria, Finland….)
SkyePharma return on sales: ~10% (royalty + manufacturing return)
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Propofol IDD-D

Endo, SkyePharma
 improved version of AstraZeneca’s injectable anaesthetic Diprivan
 SkyePharma’s formulation unique - cannot support microbial growth
 no need for a preservative
 2% emulsion (= lower injection volume and less lipid)
 not a generic
 designed for continuous uninterrupted 24-hour sedation
 ICU sedation is fastest-growing segment of Diprivan market
 Ph II completed ($5 mn milestone payment from Endo)
 Ph III to start Q2’04; target filing: 2005; target launch: 2006
 North America: Endo (same terms as DepoDur)
 Europe/Japan: licensees to be appointed
 est. sales potential for Propofol IDD-D: ~$200 mn
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Well-stocked pipeline
licence or partner
ORAL
product
GlaxoSmithKline
Sanofi-Synthelabo
Roche
Therabel
Mundipharma
Ratiopharm
GlaxoSmithKline
Critical Therapeutics
Merck KGaA
Kowa
Undisclosed
King
Paxil CR
Xatral OD/Uroxatral
Madopar DR
Coruno
Nifedipine
Diclofenac
Requip
zileuton
Undisclosed
Statin NK-104
Undisclosed
Altace
feasibility
Ph.I
Ph.II
SkyePharma
Ph.III
filed
Client products
approved
marketed
PULMONARY
Novartis
AstraZeneca
SkyePharma
Novartis
SkyePharma
Foradil Certihaler
Pulmicort HFA
Formoterol HFA
QAB 149
Formoterol Combi
INJECTABLE
Enzon/MundiPharma/Nippon S’yaku
Endo / Medeus
Astralis *
SkyePharma
SkyePharma
GeneMedix
Chugai
DepoCyt
DepoDur
Psoraxine *
DepoBupivacaine
HGH
Interferon alpha-2b
Undisclosed
* SkyePharma has an option on world rights for PsoraxineTM, exercisable at the end of Phase II
TOPICAL
Quintiles/Shire
Trigenesis
Solaraze
Multiple
Status is most advanced project
SOLUBILISATION
SkyePharma
Endo / SkyePharma
SuperGen
Baxter
Fenofibrate
Propofol IDD-D
Busulfan
Multiple
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Newsflow 2004 – further progress
Filings
Requip OD Europe (US 2005)
Licence agreements
DepoDur (Europe)
Pulmonary product package
Unnamed pipeline product
Dermatology assets
Propofol IDD-D (Europe)
DepoBupivacaine (Europe)



Clinical data publications (by partners)
DepoDur Ph III

American Pain Society, Vancouver 6-9 May
Foradil Certihaler Ph III
Uroxatral Ph III
Product approvals/launches
Paxil CR PMDD intermittent US

DepoDur US
FDA approval 18 May 
DepoDur UK
Launch of DepoCyte Europe

Foradil Certihaler US
FDA “approvable” Oct ’03
Foradil Certihaler Europe

Clinical trial progression
Pulmicort HFA-MDI
Propofol IDD-D
Formoterol HFA-MDI
Formoterol+fluticasone HFA-MDI
Zileuton (Critical Therapeutics)
Psoraxine (Astralis)
DepoBupivacaine
Ph III end 
Ph III start
Ph III start
Ph II/III start
Ph III start
(COPD)
Ph II start 
Ph II start
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Investment highlights
Strategic focus on royalties rather than upfront payments
Ten FDA-approved products validate drug delivery technologies
- DepoDur approval demonstrates successful development capability
Changing quality of earnings driven by rising royalties from
Paxil CR, Xatral® OD/Uroxatral®, Solaraze, DepoCyt®
- with Foradil® Certihaler®, DepoDur, HFA-formoterol &
Propofol IDD-D close behind
Strong near-term clinical pipeline
1 Filed, 4 x Phase III, 3 x Phase II
Two major product launches expected in H2 ’04
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Investor relations contacts:
London
Peter Laing, Director of Corporate Communications
44-(0)207-491-1777
[email protected]
New York
Sandra Haughton, US Investor Relations Manager
1-212-753-5780
[email protected]
…and please visit our website
NASDAQ:SKYE
LSE:SKP
www.skyepharma.com