Transcript Slide 1

C E Unterberg, Towbin
Specialty Pharmaceutical Conference
Michael Ashton
Chief Executive
27 October 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 $1.805 = £1 has been used throughout. These dollar equivalent numbers do not
imply restatement from UK GAAP to US GAAP.
This presentation was updated on 22 October 2004
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SkyePharma in brief
 UK-domiciled speciality pharmaceutical company
 originally founded 1983, IPO 1996
 listed London (SKP), New York (ADR, SKYE)
 market capitalisation $605 mn
 (18 Oct: 54p/share, $9.75/ADR, 622 mn shares in issue)
 small equity stakes held by GlaxoSmithKline,
Novartis and Kowa
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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
Ten approved products
Three launches anticipated 2005
Two products to be filed 2005
Four Products in Phase III / Five Products in Phase II
Strategic emphasis on royalty income over upfront milestone
payments
Royalty income replacing 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
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Marketed products
Paxil CR (GlaxoSmithKline)
Xatral OD / Uroxatral (Sanofi-Aventis)
Solaraze (Bradley; Shire)
DepoCyt (Enzon; Mundipharma)
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Paxil CR

– defending the Paxil® franchise
Paxil CR holds ~7.5% of the US SSRI
antidepressant new prescription market
 generic competition for Paxil® from 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
 despite May ‘04 Appeals Court decision, GSK still
aggressively defending last patent for Paxil® (expires
end-2006) – should limit number of generic versions
Paxil CR US sales:
 2003: $635m
 2004: ~$750m (est – likely peak)
 H1’04: $351m +26% CER
+ $5 mn of non-US sales
 royalty rate: low single digits
 potential increase from start of US generic competition
 dispute with GSK still proceeding
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®
Xatral OD/Uroxatral
®
Sanofi-Aventis
Once-daily Geomatrix formulation of alfusozin
for BPH
Xatral/UroXatral sale s tre nd 1996-2004
US launch
Nov '03
250
 two USPs:
• highly uroselective (avoids postural hypotension)
• no ejaculatory side-effects (cf. Flomax)
 marketed in Europe & ROW since 2000
Sales € mn
200
EU launch
Apr '00
150
100
50

 USA: Uroxatral launched Nov 2003
0
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 primary care launch Mar ’04
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2003
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 2006 forecast: €500m (Sanofi-Aventis)
ct
-0
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 H1’04 world sales (all versions) €138 mn +35% CER
2002
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
10
-O
 AUR indication: approved Europe; Ph III US
Uroxatral share of new
prescriptions
 Uroxatral now holds 10% of combined

2001
FY RoW
FY US
UROXATRAL vs FLOMAX

 SkyePharma return on sales:
1999
H1 RoW
H1 US
 main competitor Flomax (tamsulosin)
NRx for Flomax and Uroxatral
1998
Week ending
mid-single digits
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Solaraze

Bradley/Shire
 topical gel treatment for actinic keratosis
 active ingredient diclofenac in proprietary HA gel formulation
 alternative therapies for AK painful and/or disfiguring
 now marketed by Bradley in North America, Shire in Europe / Australasia
 H1’04 global in-market sales $12.5m
 US $8.7m (some wholesaler inventory build); Europe $3.8 m
 positive longer-term results from phase 3 Australian study
 data will be used for Australian filing
 will support marketing elsewhere
 SkyePharma return on sales: mid-teens
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DepoCyt

Enzon / Mundipharma
 intrathecal injectable treatment for lymphomatous meningitis
 active ingredient cytarabine in DepoFoam formulation
 increases period between injections from every 2-3 days to every 2 weeks
 approved in US as orphan drug ($10,000 for course of 6 injections)
 marketed by Enzon in US, Mundipharma in Europe
 H1 ’04 global in-market sales $2.7m
 clinical trial in solid tumour patients now fully enrolled
 expect to file data with FDA Q1’05
 approval would roughly triple the number of eligible patients
 substantial milestones due on approval
 SkyePharma return on sales: 30%
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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, Zeneus
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
 10-12 million key target surgeries a
year in USA and 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:
USA
caesarean sections
Procedure share:
16-50%
Price per procedure:
$125-175
thoracic
vascular
 est’d sales potential: $300 - 400m
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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 and 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 Zeneus Pharma (Mar ’04)
 rights for DepoDur only throughout Europe
 SkyePharma bears development and manufacture costs
 Zeneus bears marketing costs
 SkyePharma share of sales: 35-50%
50% share reached at sales well below €100m
Rights for rest of world still available for licence
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Foradil Certihaler Novartis/Schering-Plough
 formoterol (fast-onset, long-acting bronchodilator) in Certihaler dry-powder inhaler
 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
 global sales of Foradil in inconvenient single-dose DPI: ~$300 mn (2003)
 filed US & Europe Dec ‘02
 FDA “approvable” letter issued Oct ’03
 Novartis has filed additional data requested
 European approvals began H1 ’04 (Switzerland, Austria, Finland, Netherlands….)
 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)
 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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Pipeline status
Requip® (GlaxoSmithKline)
once-daily oral formulation of ropinirole (for Parkinson’s disease)
therapeutic benefits + improved compliance
SkyePharma managing clinical studies for GSK
Ph III started Jun ’03 (enrolment completed Q1’04)
filing 2005
Pulmicort® HFA-MDI (AstraZeneca for Europe)
Pulmicort® (budesonide) inhaled steroid (for asthma)
Ph III trial complete
filing early 2005
DepoBupivacaine (SkyePharma)
long-acting injectable formulation of local anaesthetic
designed to provide 48-72 hours of local pain relief after out-patient surgery
Ph I trial started in Europe Sep ’03; Ph II to start late ‘04
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Well-stocked pipeline
licence or partner
ORAL
product
GlaxoSmithKline
Sanofi-Aventis
Roche
Therabel
Mundipharma
Ratiopharm
GlaxoSmithKline
Critical Therapeutics
Nitec
Kowa
Undisclosed
Paxil CR
Xatral OD
Madopar DR
Coruno
Cordicant-Uno
Diclofenac
Requip
zileuton
Undisclosed
Statin NK-104
Undisclosed
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 / Zeneus
Astralis *
SkyePharma
SkyePharma
GeneMedix
DepoCyt
DepoDur
Psoraxine *
DepoBupivacaine
HGH
Interferon alpha-2b
* SkyePharma has an option on world rights for PsoraxineTM, exercisable at the end of Phase II
TOPICAL
Bradley/Shire
Dr Reddy’s (Trigenesis)
Solaraze
Multiple
Status is most advanced project
SOLUBILISATION
SkyePharma
Endo / SkyePharma
Baxter
Fenofibrate
Propofol IDD-D
Multiple
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Turnover growth record 1996-2004
CAGR H1’96 – H1’04: 38%
£m
69.6
70
Collaboration equity
60
53.2
H1
50
46.1
41.9
H2
40
30.6
22.6
20
10
13.8
9.0
17.0
24.3
4.9
13.8
6.1
22.6
5.9
6.5
5.0
1997
1998
2.1
1996
28.5
27.7
9.3
7.3
6.9
0
28.5
31.3
30
14.8
8.4
1999
10.5
2000
2001
2002
2003
2004
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H1’04 - new corporate developments
 Zeneus Pharma - DepoDur for Europe
 €100+ mn of milestones and 35-50% share of sales
 First Horizon – oral cardiovascular product
 response to “approvable” letter filed with FDA - approval expected in Q4
 up to $50 mn in milestones + 25% net royalty
 Critical Therapeutics – zileuton
 oral leukotriene antagonist
 now in Ph III for asthma – expect to file in 2005
 Dr. Reddy’s – dermatology portfolio
 Trigenesis now acquired by Dr Reddy’s – reinforces marketing ability
 Vectura – pulmonary alliance
 technology sharing – Vectura DPI device more suited to delivery of macromolecules
 King – terminated Altace agreement after announcement of acquisition by Mylan
 project was still at pre-feasibility stage of development
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2004 full year outlook
 performance will depend on timing and structure of deals
 deliberate strategic shift away from upfront payments to longer-term revenue-related
milestone payments and higher share of profits
 short-term negative impact on revenues and cashflow
 expect further substantial increase in royalty income
 2004-05: diminishing dependence on milestones
 2004 profitability dependant on terms and timing of:
1. pulmonary package deal
2. FDA approval of cardiovascular product
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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

Cardiovascular product (First Horizon)
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 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
Ten approved products
Three launches anticipated 2005
Two products to be filed 2005
Four Products in Phase III / Five Products in Phase II
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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
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LSE:SKP
www.skyepharma.com