NASDAQ:SKYE LSE:SKP
www.skyepharma.com
UK tel: +44 (0)207 491 1777
US tel: +1 (212) 753 5780
2004 Full Year Results
28 Apr...
2
Legal statement
This presentation does not constitute or form part of any offer for sale or subscription or solicitation...
3
Michael Ashton
Chief Executive Officer
4
Headline news
 new agreement with GlaxoSmithKline on Paxil CR™
 partner for pulmonary package
 subject to contract
 ...
5
Paxil CR™
– new GSK agreement
 GSK has now agreed to increase the royalty rate on Paxil
CR™
from 3% to 4%
 $10 mn cash...
6
Global asthma market 2003-2010e
Source: ING “Asthma & COPD” July 2004
0
5
10
15
20
25
2003 2010e
$bn
Others
Leukotriene ...
7
Pulmonary package
 Heads of Terms with major global pharma company for
Flutiform™
HFA-MDI
 up to $160 mn in milestone ...
8
2004 results summary
 revenues £62m (2003: £53m) up by 17%
 milestone income affected by timing of key deals & product...
9
A transforming business
Integrated pharmaceutical
developer
Drug delivery
service provider
Developing own
products for o...
10
Major marketed products
Paxil CR™
(GlaxoSmithKline)
Xatral®
OD / Uroxatral®
(Sanofi-Aventis)
DepoDur™
(Endo; Zeneus)
So...
11
Paxil CR™
 generic competition for Paxil®
began Sep ‘03
 a prescription for Paxil CR™
cannot be
substituted with gene...
12
Xatral®
OD/Uroxatral®
Sanofi-Aventis
Once-daily Geomatrix™
formulation of alfusozin
for BPH, with two USPs:
•highly uro...
13
DepoDur™
Endo / Zeneus
 sustained–release injectable formulation of morphine for relief of post-
operative pain
 USA ...
14
DepoDur™
- licence terms endorse potential
Licence terms for DepoDur™
 SkyePharma bears development and manufacture co...
15
Solaraze®
Bradley / Shire
 topical gel treatment for actinic keratosis
 active ingredient diclofenac in proprietary H...
16
DepoCyt®
Enzon / Mundipharma
 intrathecal injectable treatment for lymphomatous
meningitis
 marketed by Enzon in US, ...
17
Key near-term
pipeline products
Foradil®
Certihaler®
PropofolIDD-D™
18
Foradil®
Certihaler®
Novartis / Schering-Plough
 formoterol (fast-onset, long-acting bronchodilator)
 uses SkyePharma...
19
Propofol IDD-D™
 proprietary improved version of propofol
 SkyePharma IDD-D™
technology stabilises emulsion
 formula...
20
Near-term pipeline status
 Requip®
24hr (GlaxoSmithKline)
 once-daily oral formulation of ropinirole (dopamine agonis...
21
2004 - new corporate developments
 Zeneus Pharma - DepoDur™
for Europe
 First Horizon – fenofibrate
 improved formul...
22
2004 - new corporate developments 2
 Trigenesis – dermatology portfolio
 $20+ mn in milestones and 10% royalty (35% o...
23
Well-stocked pipeline
fenofibrate
Propofol IDD-D
Multiple
First Horizon
Endo / SkyePharma
Baxter
SOLUBILISATION
Solaraz...
24
Donald Nicholson
Finance Director
25
Turnover
Turnover
up 17%
Contract developmentdown 11%
Royaltiesup 39%
Manuf. & distributionup 106%
Deferred income:
- c...
26
Turnover
Compound annual growth rate 1996-2004: 27%
2.1
6.5 5.0
8.4
10.5
14.8
27.7
22.6
28.5
6.9
7.3
5.9
9.3
13.8
31.3
...
27
R&D
2.5
4.7 2.9
0.9
1.1 2.81.9
3.5 3.8
3.8
3.9
7.7
6.5
7.0 3.3
2.8
2.8
5.3
3.4
7.5
9.7
0
10
20
30
40
2002 2003 2004
£m
...
28
Operating result
 Gross profit up 33%
 R&D down 8%
 Selling and Marketing down 60%
 Other Admin costs down 32%
 Op...
29
Net Cash
23.2
29.9
15.3
-1.2 -0.9
22.0
29.0
15.3
-5
0
5
10
15
20
25
30
35
Cash Overdraft Net Cash
£m
December 2003 June...
30
Cash flow
-1.7
-5.1
-2.2
-5.7
2.7
16.6
-10.7
-0.6
Total: - £6.7m
£m
Cash outflow
CAPEX
Investment purchases
Other
Inter...
31
IFRS guidance
 guidance on IFRS transition (with 2004 restatement) to be
announced during H1 ’05
 IFRS transition bas...
32
Financial summary 2004
Turnover up 17%
Royalties up 39%
Gross profit up 33%
Exceptionals and amortisation of £9.3m
R&D ...
33
Michael Ashton
Chief Executive Officer
34
Newsflow targets 2005
Product approvals/launches:
DepoDur™
UK/EU √ (with conditions)
Foradil®
Certihaler®
US FDA “appro...
35
Investment highlights
Strategic focus on royalties rather than upfront payments
Changing quality of earnings driven by ...
NASDAQ:SKYE LSE:SKP
www.skyepharma.com
Investor relations contacts:
London
Peter Laing, Director of Corporate Communicatio...
of 36

NASDAQ:SKYE LSE:SKP www.skyepharma.com

Published on: Mar 3, 2016
Published in: Business      Economy & Finance      
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Transcripts - NASDAQ:SKYE LSE:SKP www.skyepharma.com

  • 1. NASDAQ:SKYE LSE:SKP www.skyepharma.com UK tel: +44 (0)207 491 1777 US tel: +1 (212) 753 5780 2004 Full Year Results 28 April 2005
  • 2. 2 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 2005 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 forward- looking 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 $1.90 = £1 has been used throughout. These dollar equivalent numbers do not imply restatement from UK GAAP to US GAAP. This presentation was updated on 27 April 2005
  • 3. 3 Michael Ashton Chief Executive Officer
  • 4. 4 Headline news  new agreement with GlaxoSmithKline on Paxil CR™  partner for pulmonary package  subject to contract  UK marketing authorisation for DepoDur™  subject to conditions  DepoBupivacaine™ licensed to Mundipharma  all territories outside North America and Japan
  • 5. 5 Paxil CR™ – new GSK agreement  GSK has now agreed to increase the royalty rate on Paxil CR™ from 3% to 4%  $10 mn cash payment upfront  GSK to pay SkyePharma 4% of budgeted US sales of Paxil CR™ from 4 March ‘05 until Paxil CR™ returns to the market  GSK to pay SkyePharma 4% of actual sales thereafter  subject to other conditions of the agreement  SkyePharma to drop all legal/arbitration action
  • 6. 6 Global asthma market 2003-2010e Source: ING “Asthma & COPD” July 2004 0 5 10 15 20 25 2003 2010e $bn Others Leukotriene antagonists Long-acting beta-agonists Short-acting beta-agonists Inhaled steroids LABA/steroid combinations $11.5 bn $20.9 bn
  • 7. 7 Pulmonary package  Heads of Terms with major global pharma company for Flutiform™ HFA-MDI  up to $160 mn in milestone payments and development cost reimbursement from 2005  double digit royalties – escalating rate on sales thresholds  SkyePharma to execute clinical development  at this stage still non-binding and subject to contract finalization
  • 8. 8 2004 results summary  revenues £62m (2003: £53m) up by 17%  milestone income affected by timing of key deals & product approvals  royalty income £26m up by 39% - now over 40% of total revenues  net loss £24m (2003: £43m) down by 44%  net loss per share 4.9 p (2003: 7.1 p)  end-2004 cash £15.3m (end-2003 £22.0 m)  £70m raised / refinanced through convertible issues
  • 9. 9 A transforming business Integrated pharmaceutical developer Drug delivery service provider Developing own products for out- licence 10 approved products Now: Paxil CR™ , Xatral® OD/Uroxatral® , Solaraze® , DepoCyt® , DepoDur™ Future: Foradil® Certihaler® , fenofibrate, HFA-formoterol, zileuton CR, Requip 24hr, Propofol IDD-D™ , Flutiform™ ….… Royalty income replacing milestone payments as main revenue source, driven by royalties from: 2 launches anticipated 2005 4 products to be filed 2005 5 products now in Phase III - 5 products in Phase II
  • 10. 10 Major marketed products Paxil CR™ (GlaxoSmithKline) Xatral® OD / Uroxatral® (Sanofi-Aventis) DepoDur™ (Endo; Zeneus) Solaraze® (Bradley; Shire) DepoCyt® (Enzon; Mundipharma)
  • 11. 11 Paxil CR™  generic competition for Paxil® began Sep ‘03  a prescription for Paxil CR™ cannot be substituted with generic paroxetine…  …but generics exert indirect price pressure Paxil CR™ sales:  2003: $635 mn (all in USA)  2004: $725 mn  USA £388 mn ($710 mn) +13% CER + £8 mn ($15 mn) of non-US sales Up to 4 March 2005, Paxil CR™ held ~7% of the US SSRI antidepressant new prescription market Paxil and Paxil CR - share of US SSRI prescription market (NB generic paroxetine from 8 Sep 2003) Paxil CR suppliesdisrupted by FDA seizure 4 Mar 2005 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% Week ending NRxshare Paxil CR Paxil
  • 12. 12 Xatral® OD/Uroxatral® Sanofi-Aventis Once-daily Geomatrix™ formulation of alfusozin for BPH, with two USPs: •highly uroselective (avoids postural hypotension) •no ejaculatory side-effects (cf. Flomax)  marketed in Europe & ROW since 2000  USA: Uroxatral® launched Nov ’03 primary care launch Mar ’04 main competitor Flomax (tamsulosin) Uroxatral® now holds ~10% of combined TRx for Flomax and Uroxatral®  AUR indication: approved Europe; Ph III US  adjuvant (after surgery) and prophylaxis  2004 world sales (all versions) €281 mn +28% CER  SkyePharma return on sales: mid-single digits Xatral/UroXatral sales trend 1996-2004 0 50 100 150 200 250 300 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Sales€mn H1 RoW FY RoW H1 US FY US EU launch Apr '00 US launch Nov '03 Uroxatral vs Flomax - TRx 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 Weeklyprescriptions 0% 2% 4% 6% 8% 10% 12% Uroxatral%ofcombinedTRx Flomax TRx Uroxatral TRx Uroxatral TRx share
  • 13. 13 DepoDur™ Endo / Zeneus  sustained–release injectable formulation of morphine for relief of post- operative pain  USA (Endo Pharmaceuticals)  approved by FDA May ’04  launched Dec ‘04 – hospital sales force 70  priced at premium to conventional analgesia  Q1 ’05 sales $1.9 mn  Europe (Zeneus Pharma)  filed Nov ’03  EU mutual recognition procedure (UK as reference country)  UK marketing authorisation Apr ’05 – subject to conditions  approvals in other EU countries to follow over next 6-12 months  Zeneus has pan-European hospital sales force of 150
  • 14. 14 DepoDur™ - licence terms endorse potential Licence terms for DepoDur™  SkyePharma bears development and manufacture costs  partner bears sales and marketing costs  Skyepharma receives increasing share of sales as partner’s revenues increase  most of milestone payments also related to revenue targets Territory Partner Products Milestones (maximum if all targets met) SkyePharma’s share of sales Min Max North America Endo Pharmaceuticals Dec ’02 DepoDur™ Propofol IDD-D™ + right of first negotiation for DepoBupivacaine™ $120 mn 20% 60% of combined sales of DepoDur™ and Propofol IDD-D™ Europe Zeneus Pharma Mar ’04 DepoDur™ €100 mn 35% 50%  rights for other territories not yet assigned
  • 15. 15 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  2004 global in-market sales $18 mn  US $12 mn; Europe $6 mn  positive longer-term results from Ph III Australian study  filed in Australia Dec ‘04  data will support marketing elsewhere  SkyePharma return on sales: mid-teens
  • 16. 16 DepoCyt® Enzon / Mundipharma  intrathecal injectable treatment for lymphomatous meningitis  marketed by Enzon in US, Mundipharma in Europe  2004 global in-market sales doubled to $8 mn  US sales $6.5 mn (+60%)  Europe sales $1.5 mn (first year)  Ph IV trial in solid tumour patients now completed  expect to file data with FDA Q2’05  SkyePharma return on sales: 35%
  • 17. 17 Key near-term pipeline products Foradil® Certihaler® PropofolIDD-D™
  • 18. 18 Foradil® Certihaler® Novartis / Schering-Plough  formoterol (fast-onset, long-acting bronchodilator)  uses SkyePharma’s multi-dose dry-powder inhaler  SkyePharma developed both 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  global sales of Foradil® in inconvenient single-dose DPI: ~$360 mn  filed US & Europe Dec ‘02  FDA “approvable” letters issued Oct ’03, Dec ’04  approvals began H1 ’04 (now 5 in Europe, 5 in Latin America…)  SkyePharma return on sales: ~10% (royalty + manufacturing return)
  • 19. 19 Propofol IDD-D™  proprietary improved version of propofol  SkyePharma IDD-D™ technology stabilises emulsion  formulation unique  inherently antimicrobial  no need for a preservative  2% emulsion (= lower injection volume, reduced lipid load)  not a generic  designed for continuous uninterrupted 24-hour sedation  in discussion with FDA on design of Ph III trial
  • 20. 20 Near-term pipeline status  Requip® 24hr (GlaxoSmithKline)  once-daily oral formulation of ropinirole (dopamine agonist for Parkinson’s disease)  therapeutic benefits + improved compliance  SkyePharma has managed clinical studies for GSK  Ph III trial complete - filing mid ‘05  Pulmicort® HFA-MDI (AstraZeneca for Europe)  Pulmicort® (budesonide) inhaled steroid for asthma in CFC-free MDI  Ph III trial complete - filing mid ‘05  DepoBupivacaine™ (SkyePharma)  long-acting injectable formulation of local anaesthetic  designed to provide 48-72 hours of local pain relief after out-patient surgery  complementary with DepoDur™  Ph II trial started late ’04  licensed to Mundipharma outside North America/Japan Apr ’05  $80 mn in milestones + 35% share of sales (30% outside Europe)  Endo has right of first negotiation for North America
  • 21. 21 2004 - new corporate developments  Zeneus Pharma - DepoDur™ for Europe  First Horizon – fenofibrate  improved formulation of important cholesterol-lowering therapy (marketed by Abbott as Tricor)  second “approvable” letter issued Dec’04  approval condition in agreement with First Horizon extended to 30 Jun ‘05  up to $50 mn in milestones + 25% royalty  Critical Therapeutics – zileuton  potent oral leukotriene synthesis inhibitor (previously marketed by Abbott as Zyflo)  CR formulation (originally developed for Abbott) now in Ph III for asthma – Critical expects to file late ‘05  other indications in development (COPD, nasal polyps, acne, atherosclerosis)
  • 22. 22 2004 - new corporate developments 2  Trigenesis – dermatology portfolio  $20+ mn in milestones and 10% royalty (35% of sub-licence income)  Trigenesis now part of Dr Reddy’s – reinforces marketing ability  Vectura – pulmonary alliance  technology sharing – Vectura’s DPI device more suited to delivery of macromolecules  equity stake  King – Altace project cancelled  Astralis – Psoraxine™  US Ph II trial started Apr ’04 - preliminary results very disappointing  unclear why outcome so different to results of previous large-scale studies in Venezuela  protein inactivation? adjuvant? dose? strain?  SkyePharma and Astralis exploring reasons  SkyePharma acquired shares from 2 former directors Dec’04  raised stake to just under 50%  total equity investment to date $25 mn
  • 23. 23 Well-stocked pipeline fenofibrate Propofol IDD-D Multiple First Horizon Endo / SkyePharma Baxter SOLUBILISATION Solaraze Multiple Bradley/Shire Dr Reddy’s (Trigenesis) TOPICAL DepoCyt DepoDur Psoraxine * DepoBupivacaine HGH Interferon alpha-2b Enzon/MundiPharma/Nippon S’yaku Endo / Zeneus Astralis * SkyePharma SkyePharma GeneMedix INJECTABLE Foradil Certihaler Pulmicort HFA formoterol HFA QAB 149 Flutiform Novartis AstraZeneca SkyePharma Novartis SkyePharma Paxil CR Xatral OD Madopar DR Coruno Cordicant-Uno Diclofenac Requip 24hr zileuton Undisclosed Undisclosed GlaxoSmithKline Sanofi-Aventis Roche Therabel Mundipharma Ratiopharm GlaxoSmithKline Critical Therapeutics Nitec Undisclosed ORAL marketedapprovedfiledPh.IIIPh.IIPh.Ifeasibilityproductlicensee or partner SkyePharma Client products * SkyePharma has a right of first negotiation to acquire world rights for PsoraxineTM PULMONARY Status is most advanced project
  • 24. 24 Donald Nicholson Finance Director
  • 25. 25 Turnover Turnover up 17% Contract developmentdown 11% Royaltiesup 39% Manuf. & distributionup 106% Deferred income: - contract development£7.4m - other operating income£7.1m £14.5m 7.4 4.8 9.9 6.8 18.7 26.0 55.4 29.7 26.3 0 10 20 30 40 50 60 70 2002 2003 2004 £m 69.6 53.2 62.2
  • 26. 26 Turnover Compound annual growth rate 1996-2004: 27% 2.1 6.5 5.0 8.4 10.5 14.8 27.7 22.6 28.5 6.9 7.3 5.9 9.3 13.8 31.3 41.9 30.6 33.7 6.1 4.9 0 10 20 30 40 50 60 70 1996 1997 1998 1999 2000 2001 2002 2003 2004 Collaboration equity H1 H2 £m 9.0 13.8 17.0 22.6 24.3 46.1 69.6 53.2 62.2
  • 27. 27 R&D 2.5 4.7 2.9 0.9 1.1 2.81.9 3.5 3.8 3.8 3.9 7.7 6.5 7.0 3.3 2.8 2.8 5.3 3.4 7.5 9.7 0 10 20 30 40 2002 2003 2004 £m R&D decreased by 8% £3.3m on DepoDur £6.5m on Other Injectable £3.4m on Budesonide HFA £5.3m on Pulmonary Package £3.8m on Enhanced Solubilisation £2.8m on DepoBupivacaine R&D target 2005: £30m Injectable £12m Inhalation £14m* * NB subject to partner reimbursement Other 29.3 30.5 28.0
  • 28. 28 Operating result  Gross profit up 33%  R&D down 8%  Selling and Marketing down 60%  Other Admin costs down 32%  Operating loss before exceptionals down 59%  Operating loss after exceptionals down 48%  Amortisation of intangibles of £6.3m  EBITDA: 76% improvement £m 2003 2004 turnover 53.2 62.2 +17% gross profit 23.4 31.0 +33% R&D (30.5) (28.0) -8% operating loss (39.5) (20.7) -48% net loss (43.2) (24.3) -44% EPS (pence) (7.1p) (3.9p) -45% EBITDA (26.6) (6.4) -76%
  • 29. 29 Net Cash 23.2 29.9 15.3 -1.2 -0.9 22.0 29.0 15.3 -5 0 5 10 15 20 25 30 35 Cash Overdraft Net Cash £m December 2003 June 2004 December 2004
  • 30. 30 Cash flow -1.7 -5.1 -2.2 -5.7 2.7 16.6 -10.7 -0.6 Total: - £6.7m £m Cash outflow CAPEX Investment purchases Other Interest Issue of conv bond (net of expenses) Investment disposals (Transition) Debt repaid
  • 31. 31 IFRS guidance  guidance on IFRS transition (with 2004 restatement) to be announced during H1 ’05  IFRS transition base date 1 Jan ’04  key differences from UK GAAP:  revenue recognition - similar to US GAAP  Paul Capital funding - treated as debt - similar to US GAAP  employee options - fair value charged to P&L – similar to US GAAP  goodwill amortization - will cease from 1 Jan ‘04  convertible bonds - separate equity and debt components, resulting in higher interest charge
  • 32. 32 Financial summary 2004 Turnover up 17% Royalties up 39% Gross profit up 33% Exceptionals and amortisation of £9.3m R&D down 8% Operating loss down 48% EBITDA loss down 76%
  • 33. 33 Michael Ashton Chief Executive Officer
  • 34. 34 Newsflow targets 2005 Product approvals/launches: DepoDur™ UK/EU √ (with conditions) Foradil® Certihaler® US FDA “approvable” Dec ’04 Foradil® Certihaler® Europe approved in 5 EU markets fenofibrate (First Horizon) FDA “approvable” Dec ’04 Licence agreements: Pulmonary product package √ (subject to contract) Propofol IDD-D™ (Europe) DepoBupivacaine™ (Europe) √ Pipeline progress: Pulmicort HFA-MDI File EU Requip CR File EU/US DepoCyt (expanded indication) File EU/US zileuton CR (asthma) File US formoterol HFA-MDI Ph III start zileuton CR (COPD) Ph III start Flutiform HFA-MDI Ph III start QAB 149 Ph III start Psoraxine™ (Astralis) Ph II end DepoBupivacaine Ph II end
  • 35. 35 Investment highlights Strategic focus on royalties rather than upfront payments Changing quality of earnings driven by rising royalties from Paxil CR™ , Xatral® OD/Uroxatral® , Solaraze™ , DepoCyt® , DepoDur™ 10 FDA-approved products validate drug delivery technologies - DepoDur™ first-cycle FDA approval demonstrates successful development capability Foradil® Certihaler® , fenofibrate, HFA-formoterol, zileuton CR, Requip 24hr, Propofol IDD-D™ , Flutiform™ .….. close behind 2 launches anticipated 2005 4 products to be filed 2005 5 products now in Phase III - 5 products in Phase II
  • 36. NASDAQ:SKYE LSE:SKP www.skyepharma.com Investor relations contacts: London Peter Laing, Director of Corporate Communications 44-(0)207-491-1777 plaing@skyepharma.co.uk New York Sandra Haughton, US Investor Relations Manager 1-212-753-5780 shaughton@skyepharma.com …and please visit our website

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