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NASDAQ:SKYE LSE:SKP www.skyepharma.comUK tel: +44 (0)207 491 1777US tel: +1 (212) 753 5780
Business Review Day 2006
Introduction and Injectables DivestmentFrank CondellaChief Executive
21 June 2006
21 Jun 06 2
Legal statementThis 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 being made only to and is directed at (a) persons who have professional experience in matters relating to
investments who fall within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (b) high
net worth entities and other persons to whom it may otherwise lawfully be communicated, falling within Article 49(1) of the Order (all such persons
together being referred to as “relevant persons”). Any person who is not a relevant person should not rely on this presentation or any of its
contents.
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 any revenue and profit guidance. 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 IFRS. Where US dollar equivalents of SkyePharma’s reported figures have been provided for convenience in this
presentation, a fixed exchange rate of $1.88 = £1 has been used throughout. These dollar equivalent numbers do not imply restatement from IFRS
to US GAAP.
This presentation was updated on 20 June 2006
21 Jun 06 3
Strategy evolution
Develop drugs under contract
Develop drugs toPh II/III and partner
Develop drugs and market
3 – 5%royalty
10 – 15%royalty
25 – 30%product operating
margin
~2000 ~2008
21 Jun 06 4
Strategic plan 2006
• new leadership
• divest injectables unit
• continue Phase III for Flutiform™ and outlicense this year
• focus on core oral/inhalation unit and expand pipeline
• improve operational efficiency
• longer term aim to market own products in selected therapeutic area
21 Jun 06 5
London (HQ)
Basel
Lyon
San Diego
Two main business units
INJECTABLE
ORAL & INHALATION
21 Jun 06 6
Divest injectables unit• two complementary injectable delivery technologies
• DepoFoam™
• Biospheres™
• two approved products• DepoCyt (cancer)
• DepoDur (post-operative pain)
• strong pipeline• DepoBupivacaine™ (post-operative pain; Ph II completed)
• Biologics (SR injectable formulations of therapeutic proteins; pre-clinical)
• stand-alone operation with R&D and manufacture in San Diego
• unit requires significant investment in R&D and capex
21 Jun 06 7
DepoBupivacaine™
DepoBupivacaine™ has
blockbuster potential
21 Jun 06 8
DepoBupivacaine™ - issues with bupivacaine
• bupivacaine is the “gold standard” local anaesthetic - but has the drawback of a short duration of action
• all patients require post-operative analgesia after surgery
• local anaesthetics are used for:• pre-operative anaesthesia
• post-operative analgesia
• bupivacaine most commonly used local anaesthetic for significant surgical procedures - considered the “gold standard”
• longest-lasting bupivacaine duration of effect currently 6-10 hours
*Source: 2004 Verispan Data
21 Jun 06 9
DepoBupivacaine™ - extended pain relief
• DepoBupivacaine™ offers prolonged pain relief through a variety of routes of administration
• innovation in local/regional analgesia provides sustained duration of analgesia (target: >48 hours)
• sustained-release bupivacaine via a single-dose administration
• favored analgesic matched with sustained-release DepoFoam™ delivery technology
• previously approved in both US and EU (DepoDur and DepoCyt)
• 3 potential routes of administration• wound infiltration - soft tissue incisional procedures (eg hernia repair, hysterectomies,
etc)
• nerve blocks - thoracic, upper and lower limb surgeries
• epidural - significant orthopedic procedures (eg hip and knee replacement, etc)
21 Jun 06 10
DepoBupivacaine™ - major product benefits• simplified post-operative pain management after various surgical
procedures• helps address patient pain for 2-4 days after surgery
• significant reduction in need for supplemental opioid pain medications
• fewer narcotic side effects
• ease of use• no need for catheters, pumps, or devices
• potential pharmacoeconomic benefits• easier patient management
• earlier discharge
• faster rehabilitation
21 Jun 06 16
DepoBupivacaine™ - $1 bn market potential
• potential $1 billion opportunity exists for DepoBupivacaine™
• >40 mn annual US in- & out-patient surgical procedures (hospitals and out-patient surgical centers) - all patients require post-operative analgesia
• significant established market, expressed clinical and commercial needs
• safety and potential duration of action out to 96 hours currently established by PK levels
• safety comparable to bupivacaine solution has been shown at 2-6x free bupivacaine dose
• production scale-up approach already cleared by regulatory agencies
• one possible competitor• Durect – now in Ph II
• Ph III trials due to start 2H ‘06
21 Jun 06 17
Biologics
Substantial potential for Biologics
21 Jun 06 18
Biologics - >$100 bn market opportunity
0
100
200
300
400
500
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Glo
bal
sal
es (
$ b
illio
n)
Biologics sales
All other ethical pharma sales
*DataMonitor 56 top pharma and biotech companies
Biologics to make up 23% of the $455 billion global pharma market by 2010
21 Jun 06 19
Biologics - most patents will expire by 2013
Biologic product Brand name CompanyLaunch
year
2004 sales ($mm)
EU patent expiry
US patent expiry
Epoetin alfa Epogen / Procrit / Eprex
Amgen / J&J 1988 6,735 Expired Aug 2013 Sep 2016
Insulin Novolin, Humulin, Insuman
Novo Nordisk, Lilly, Sanofi-Aventis
1982 3,774 Expired Expired
Interferon beta 1a Avonex, Rebif Biogen Idec, Serono 1996 2,554 Jul 2012 May 2008 May 2013
Human growth hormone
Genotropin, Humatrope etc.
Pfizer, Lilly etc. 1988 2,324 Expired Expired / Invalidated
Epoetin beta NeoRecormon Roche 1990 1,678 Expired (2013)
Filgrastim (G-CSF) Neupogen Amgen 1991 1,428 Aug 2006 Dec 2013
Interferon beta 1b Betaseron Schering AG 1993 973 Expired Sep 2007
Imiglucerase Cerezyme Genzyme 1991 839 Jan 2012 Aug 2013
Interferon alfa 2b Intron A Schering-Plough 1987 318 Expired Nov 2019*
Sources: Datamonitor; company-reported information; DOLPHIN patent database, Thomson Scientific, September 2005; Biogen Idec annual reports; etc
* Bacterially produced
21 Jun 06 20
Biologics - limited ways to exploit patent expiry
• biogeneric / biosimilar• mimic originator product
• adulterate or enhance protein• modify protein to increase circulation half-life (eg PEGylation)
• enhance delivery of protein• maintain originator product but extend duration of action via
sustained-release delivery system (eg DepoFoam™ or Biosphere™)
21 Jun 06 21
Biologics – not like small molecule generics
High up-front investment
Biotechnology expertise
Legal / patent expertise
Pharmacovigilance studies
Specialist marketing
Regulatory experience
Controlling manufacturing cost
Clinical trial requirements New challenges representing
increasing barriers to biogeneric entry
Skills required in a traditional
generic business model
• the biosimilars market presents higher barriers to entry than for small molecule generics - including cost, risk and time needed for clinical development
21 Jun 06 22
Biologics - portfolio of enhanced biosimilars
• Phase I• hGH-Biosphere
• feasibility studies complete:• Depo-IFN-α
• Depo-EPO
• feasibility studies in progress:• Depo-G-CSF
• Depo-hGH
• Depo-IFN-β
• a number of proprietary proteins and peptides for third parties
21 Jun 06 23
Benefits of divesting injectable unit
• improve SkyePharma P&L
• reduce cash requirements of ongoing business
• strengthen balance sheet• permits SkyePharma to explore strategic options
• focus management on oral/inhalation unit
21 Jun 06 24
SkyePharma segment P&L split
• in 2005 Injectable unit represented 17% of 2005 SkyePharma revenue
• Oral & Inhalation unit was profitable
• split included allocation of corporate costs to each segment
• excludes exceptionals
£m 2004 2005
Revenue
Injectable 25.6 10.5
Oral & Inhalation 49.6 50.8
Total 75.2 61.3
Operating profit/loss (excluding exceptional items)
Injectable (1.4) (18.6)
Oral & Inhalation 1.0 2.5
Total (0.4) (16.1)
21 Jun 06 25
Sale of injectables unit - status
• due diligence materials prepared
• UBS selected as investment bank
• several expressions of interest already received
• management presentations and due diligence ongoing
21 Jun 06 2621 Jun 06 26
10 approved products
TOPICAL
Foradil CertihalerPulmicort HFAFlutiformformoterol HFAQAB 149
NovartisAstraZenecaKosSkyePharma Novartis
Paxil CRXatral OD/Uroxatral Madopar DR CorunoCordicant-UnodiclofenacTriglideRequip Once-a-dayzileuton CRLodotranisoldipine CR
GlaxoSmithKlineSanofi-Aventis RocheTherabelMundipharmaRatiopharmScieleGlaxoSmithKlineCritical TherapeuticsNitecSciele
ORALlaunchedapprovedfiledPh.IIIPh.IIPh.IfeasibilityproductLicensee / partner
SkyePharma-funded Client-funded
INHALATION
SolarazeMultiple
Bradley/ShireDr Reddy’s Status is most advanced project
Product to be presented today
21 Jun 06 27
NASDAQ:SKYE LSE:SKP www.skyepharma.comUK tel: +44 (0)207 491 1777US tel: +1 (212) 753 5780
Business Review Day 2006
Marketed products
Dr Werner EnzVP Commercial
Patrick FourteauCEO, Sciele
21 June 2006
21 Jun 06 2821 Jun 06 28
Key marketed products
Paxil CR® (GlaxoSmithKline)
Xatral® OD / Uroxatral® (Sanofi-Aventis)
Solaraze® (Bradley; Shire)
Triglide™ & nisoldipine CRwill be covered by
Patrick Fourteau, CEO
21 Jun 06 2921 Jun 06 29
Paxil CR™ GlaxoSmithKline
• Geomatrix™ version of GSK’s SSRI Paxil® (paroxetine)
• FDA approved for the treatment of depression, social anxiety disorder, premenstrual dysphoric disorder, and panic disorder
• all SSRI antidepressants take about a month to take effect – but side-effects (notably nausea) start immediately
• nausea major reason for therapy switching and non-compliance
• Paxil CR™ designed to reduce nausea
• active passes through stomach unchanged and is released in lower intestine
• clinically proven benefits of Paxil CR™ over Paxil® IR:
• reduced nausea
• improved compliance
• improved efficacy
21 Jun 06 3121 Jun 06 31
Paxil CR™ GlaxoSmithKline
• FDA approval Feb ‘99 - but GSK did not launch until Apr ’02
• first generic competition for Paxil® (old IR version) Sep ’03
• Paxil CR™ clinically differentiated and not substitutable, so generic paroxetine had minimal impact on Paxil CR™ Rx share
21 Jun 06 3221 Jun 06 32
Paxil CR™ GlaxoSmithKline
• manufacture problems at GSK’s Cidra plant led to product being taken off US market Mar ‘05
• FDA Consent Decree allowed re-introduction end Jun ‘05 - but ongoing supply restrictions from new documentary controls
• 2005 Paxil CR™ sales $231m
• US $209m + RoW $22m
• Q1 ‘06: $89 mn (+15% CER)
• US $82 mn + RoW $7 mn
• SkyePharma royalty: 4%
• was 3% until April ’05
Paxil CR - share of all SSRI Trxfrom return to market Jun 2005
0%
1%
2%
3%
4%
3-Jun-05 3-Aug-05 3-Oct-05 3-Dec-05 3-Feb-06 3-Apr-06
TRx s
hare
21 Jun 06 3321 Jun 06 33
Paxil CR™ GlaxoSmithKline
• Mylan filed Para IV certification for “paroxetine hydrochloride controlled release” in late 2005
• Mylan is not challenging GSK’s paroxetine hydrochloride hemihydrate crystalline form patent (expires Jun ’07)
• GSK has decided not to invoke 30 month stay of approval
• earliest possible generic entry: July ’07
• no certainty that Mylan will be able to match PK profile of Paxil CR™
• SkyePharma not aware of any other generic versions pending
• SkyePharma has other patents on technologies used in Paxil CR™
21 Jun 06 3521 Jun 06 35
Paxil CR™ GlaxoSmithKline
Conclusions
• sales >$700 mn before withdrawal
• sales slowly recuperating - but unlikely to reach previous level
• sales still growing Q over Q
• generic paroxetine has had minimal impact
• earliest generic CR entry could be Q3 ‘07
21 Jun 06 3621 Jun 06 36
Xatral® OD/Uroxatral® Sanofi-Aventis
• once-daily Geomatrix™ formulation of alfuzosin
• alpha-blocker for treating the urinary symptoms of benign prostatic hypertrophy (BPH)
• in BPH slow growth in size of prostate gradually constricts the urethra
• patient unable to empty bladder despite frequent urination
• urination problems normal reason for patient to consult doctor BPH diagnosis
• BPH is a very common condition in males from middle age onwards
• 20% of males aged 50-60, >40% of males aged >70
• pharmaceutical treatments for BPH:
• 5-alpha reductase inhibitors
• slowly shrink prostate
• little or no short-term benefit on urination
• alpha-blockers for symptomatic relief
• relax smooth muscle, open urethra and allow the bladder to empty
21 Jun 06 3721 Jun 06 37
Xatral® OD/Uroxatral® Sanofi-Aventis
• alfuzosin has two USPs:
• highly uroselective
• avoids postural hypotension seen with older alpha-blockers
• low cardiovascular risk
• can be used safely by patients taking PDE5 inhibitors
• minimal impact on sexual function
• contrast with tamsulosin (retrograde ejaculation affects ~20% of patients)
• late-stage BPH results in total blockage of urethra - Acute Urinary Retention (AUR)
• severe complication requiring immediate surgery for insertion of catheter
• Xatral® OD now approved in Europe and over 40 other markets for AUR
• adjuvant (after surgery) and prophylaxis
• indication no longer being pursued in USA
21 Jun 06 4221 Jun 06 42
Xatral® OD/Uroxatral® Sanofi-Aventis
• marketed in Europe & RoW since 2000
• replaced older versions taken twice or three times a day
• launched in US 2003
• main competitor tamsulosin (Flomax®)
• Boehringer-Ingelheim / Astellas
• in Europe, roughly equal market shares
• in US, Uroxatral® now holds >11% of combined NRx for Flomax and Uroxatral®
Uroxatral vs Flomax - all prescriptions
0%
2%
4%
6%
8%
10%
12%
14%
Oct-03 Jan-04 Mar-04 Jun-04 Sep-04 Dec-04 Feb-05 May-05 Aug-05 Nov-05 Jan-06 Apr-06
Uroxtr
al %
of co
mbine
d TRx
Uroxatral TRx share
21 Jun 06 4321 Jun 06 43
Xatral® OD/Uroxatral® Sanofi-Aventis
• 2005 sales of Xatral® €328m +18% CER
• US sales €53m ($66m) +121% CER
• Xatral® OD/Uroxatral® now >90% of Xatral® sales reported by Sanofi-Aventis
• Q1 ’06 sales €94 mn +15% CER
• US sales €19 mn ($23 mn) +19% CER
• Sanofi-Aventis Q1 ’06 report:
• UroXatral® share among US urologists reached all-time high of 20.7% in March
• fastest-growing agent for the treatment of BPH among urologists
• Ph III for OD version in Japan to start in 2006
• Uroxatral® has long patent life in US
• Flomax loses patent protection in Oct ‘09
• SkyePharma return on sales: mid-single digits
Xatral/Uroxatral sales trend 1996-2005
0
100
200
300
400
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005Sal
es € m
n
Non-US US
Xatral OD
launch
21 Jun 06 45
Xatral® OD/Uroxatral® Sanofi-Aventis
Conclusions
• ongoing successful sales effort through Sanofi-Aventis
• excellent sales development - particularly in the USA through covering urologists and high potential GPs
• continued growth in Europe
21 Jun 06 4621 Jun 06 46
Solaraze® Bradley / Shire
• topical gel formulation of diclofenac for actinic keratosis (AK)
• AK is early form of squamous cell carcinoma• caused by over-exposure to sunlight
• especially common in fair-skinned individuals
• typically presents in middle age
• increasingly common
• AK lesions usually found in clusters on scalp, forehead or backs of hands
• lesions gradually progress to metastatic stage so need to be treated
• alternative treatments for AK are effective… • cryosurgery (liquid nitrogen)
• topical 5-FU
• photodynamic therapy
• …but painful and disfiguring• scarring and reddening very visible and cosmetically unacceptable
21 Jun 06 4721 Jun 06 47
The presentation of AK
A few superficial “thin” AKs
Many small but visible AKs, which may be palpated
Multiple “thicker” AKs, many of which are quite hyperkeratotic
Topical treatment
Surgical treatment
Images not to scale
21 Jun 06 4821 Jun 06 48
Solaraze® Bradley / Shire
• Solaraze® is a topical formulation of 3% diclofenac in a proprietary hyaluronic acid (HA) gel formulation
• mode of action unclear but HA formulation retains high concentration of diclofenac in upper skin layers
• other gel formulations of diclofenac ineffective in AK
• applied topically twice a day for 60-90 days
• particularly suitable for treating clusters of lesions
• generally well-tolerated and invisible
21 Jun 06 5121 Jun 06 51
Solaraze® Bradley / Shire
• 2005 global in-market sales $27.5 mn (+78%)
• Bradley (North America)• Doak Dermatologics unit has ~135 reps
• 2005 sales $10m in 9M ‘05 (latest data reported by Bradley)
• FY ‘05 est $15m
• vs $6m in 2004 (for 4 months)
• Bradley estimate Solaraze has 15% of the US market for topical AK treatments
• Shire (Europe / Australasia)• 2005 sales $12.5m (+32%)
• Q1 ’06 $3.3 mn (+38%)
• Australian regulatory review ongoing
• SkyePharma royalty: double digit
21 Jun 06 52
Solaraze® - raising awarenessJoint Doak / Skin Cancer Foundation campaign (Mar-Sep ’06):
“We’re Going On The Road”
To raise US public awareness about skin cancer and the importance of early detection and treatment
The Goal: Encourage people to see their local dermatologists for testing and treatment
Campaign expected to contact 20 mn people in 2006
Guidelines for the Management of
ACTINIC KERATOSES
Developed by the Guideline Subcommittee
May 2006
http://www.skincancerscreeningtour.com/
• Diclofenac in hyaluronic acid gel… Adverse effects were skin related and mild to moderate in severity
21 Jun 06 5321 Jun 06 53
Solaraze® Bradley / Shire
Conclusions
• good sales growth in a market driven by epidemiology, awareness and prevention
• both partners actively promote product and invest in campaigns to raise profile of disease and treatment options
• activities ongoing to expand territories
21 Jun 06 5454
Triglide™ Sciele (formerly First Horizon)
• SkyePharma oral formulation of fenofibrate
• fenofibrate used to treat lipid disorders
• lowers LDL and TG but raises HDL
• potential synergy with statins
• uses Insoluble Drug Delivery – Microparticle (IDD-P™) technology
• can be taken with or without food
• launched in US July ’05 by Sciele (formerly First Horizon)
• SkyePharma receives up to $50m in milestones and 25% share of sales
• SkyePharma manufactures in Lyon (and bears COGS)
21 Jun 06 56
nisoldipine CR®
• Geomatrix™ technology applied to nisoldipine (Sular®)
• calcium channel blocker for treating hypertension
• 3 goals: • improve bioavailability
• reduce therapeutic dose
• optimize side-effect profile
• target filing: mid-07
• target US launch: 2008
• partnered with Sciele Pharma (formerly First Horizon)
• mid-single digit royalty + option to manufacture for Sciele
21 Jun 06 57
Introducing
Patrick Fourteau
CEO
Sciele Pharma(the new name for First Horizon Pharmaceuticals)
Alpharetta, GA, USA
21 Jun 06 58
21 Jun 06 59
SCIELE PHARMA – WHO WE ARE
• Revenue of $216 million for full-year 2005
• Specialty pharmaceuticals with 70% of sales derived from cardiovascular/ metabolic
• Sales force of 525 representatives
• Unique business model – pay for performance
Importance
• Fast growing market
• Large market – over $1 billion
• One dominant player
• Synergy within our cardiovascular/ metabolic portfolio
21 Jun 06 61
PRODUCT PORTFOLIO SYNERGY
• Hypertension
• Hypercholesterolemia
• High triglycerides
• Type 2 Diabetes
Products address multiple risk factors in cardiovascular and metabolic diseases
Strategy
• Managed care – cost savings
• 450 sales representatives/11 calls per day
• Calling on primary care physicians
• Savings card
Sales PerformanceJune 2005 –March 2006Sales PerformanceJune 2005 –March 2006
Monthly Triglide TRx June 2005 – Mar 2006
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06
Source: IMS Americas NPA
Formulation development project
• Sular is Sciele's flagship product
• New CR formulation is a priority for the company
• Sular has achieved excellent growth• New Rx’s increased 32% in 1Q 06 versus 1Q 05• Total Rx’s increased 17% in 1Q 06 versus 1Q 05
Development timeline
• Initiate pivotal clinical trial in second half 2006
• FDA filing in first half of 2007
• FDA approval expected in 2008
TRx by quarter
Source: IMS Americas NPA
Sular TRx by Quarter
200,000
225,000
250,000
275,000
300,000
325,000
350,000
Qtr 22004
Qtr 32004
Qtr 42004
Qtr 12005
Qtr 22005
Qtr 32005
Qtr 42005
Qtr 12006
21 Jun 06 67
NASDAQ Symbol: SCRX
NASDAQ:SKYE LSE:SKP www.skyepharma.comUK tel: +44 (0)207 491 1777US tel: +1 (212) 753 5780
Business Review Day 2006
Near-term pipeline and pre-approval products
Dr Francesco PatalanoManaging Director Europe
Dr Geraldine VenthoyeHead of Inhalation Business Unit
21 June 2006
21 Jun 06 69
Oral / inhalation:
Pulmicort® HFA
Requip Once-a-day
zileuton CR
Lodotra™
Foradil® Certihaler™
+
nisoldipine CR – already presented
Flutiform™ – to be presented by Ken Cunningham
Key near-term pipeline products
21 Jun 06 70
Pulmicort® HFA-MDI AstraZeneca (for Europe)
• Pulmicort® (budesonide) in CFC-free MDI• inhaled steroid for asthma
• will allow AZN to withdraw CFC-MDI version (Montreal protocol requirement)
• SkyePharma developed formulation and conducted clinical development for AZN
• development started Jan ′02
• filed on country-by-country basis in Europe mid ′05
• first European approval (Finland) Feb ′06
• development experience underwrites Flutiform™ development
• double digit royalty
21 Jun 06 71
Requip Once-a-day GlaxoSmithKline
• once-daily oral dosage formulation of Requip® (ropinirole)• dopamine agonist for Parkinson’s disease
• dopamine agonists are used as as first-line therapy for Parkinson’s disease
• Requip® is dosed three times a day
• once-daily version provides patient convenience in dosage titration
• filed by GSK Dec ′05• filed in Europe and New Zealand
• US filing to be resubmitted Q4 ′06
• GSK’s 2005 sales of Requip® $284m (+34%)• approx two-thirds of sales currently for RLS indication
21 Jun 06 72
zileuton CR Critical Therapeutics
• highly potent oral anti-inflammatory• 5-lipoxygenase inhibitor
• blocks both branches of inflammatory cascade
• primary indication: severe asthma• reduce or eliminate need for oral steroids
• current version (Zyflo) has to be taken four times a day
• zileuton CR is twice daily
• Ph III trial of zileuton CR completed - filing expected Q3’06
• high single digit royalty rate + option to manufacture
• peak sales estimates in region of $150 mn
21 Jun 06 74
zileuton - unique mechanism of action
EOSINOPHILS
5-LOArachidonic acid
LTC4
LTB4LTA4
5-HPETE5-HETE
FLAP
zileuton
5-oxo-ETE
ProstaglandinsThromboxanes
cysLT2RLTD4
cysLT1R
NEUTROPHILS
EOSINOPHILS
EOSINOPHILS
Singulair/LTRAs
zileuton
21 Jun 06 75
zileuton – greatest benefit in most severe asthma
All patients Severe disease(FEV1 <50%)
Placebo Zyflo Placebo Zyflo
N=257 N=257 N=56 N=52
Improvement in morning trough FEV1
+5.8% +15.1%** +11.9% +36.5%**
Decrease in ß-agonist use
-7.5% -26.3%** +3.4% -19.7%*
% requiring steroid rescue
17.1% 6.6%** 38.0% 6.0%**
Source: Critical Therapeutics pivotal trials for Zyflo (zileuton 600 mg)
* p < 0.05 ** p < 0.001
21 Jun 06 77
Lodotra™ Nitec
• controlled release formulation of oral anti-inflammatory• active not yet disclosed
• indication: rheumatoid arthritis
• Ph III recently completed• data not yet available
• Nitec has licensed rights for Germany and Austria to Merck KGaA
• negotiations for other territories ongoing
• mid-single digit royalty and manufacture for Nitec
21 Jun 06 78
Lodotra™ - limitations of current RA treatments• despite several innovative developments and use of combination therapies, RA
patients still experience considerable morning stiffness and pain
Sources: 1Townsend HG et al., Clinical Experimental Rheumatology, 2004; Buttgereit F et al, Arthritis and Rheumatism, 2004; NDC prescription data; WHO, CDC ² Decision Resources
>80%
11Oral Oral corticosteroidscorticosteroidsBiologics
NSAIDs (analgesics,
COX2)
DMARDs
(methotrexate,
others)
10-30% 70-100% 40-60%
Limitations: stomach ulcers cardiovascular
risk
side effects at higher doses
current formulations suboptimal
non-responders toxicity slow onset of
action
serious side effects
inconvenient (IV) expensive
Treated RA patientsTreated RA patients²²
> 4.5 mn (US/EU)> 4.5 mn (US/EU)
RA prevalence ~1% 80 % diagnosed/ treated
21 Jun 06 79
Circadian rhythms in rheumatoid arthritis• elevated night time pro-inflammatory cytokines result in more
severe early morning symptoms
• “… the timing of low-dose glucocorticoid administration should be adapted to the biological rhythms of the inflammatory process in RA.” – Cutulo et al. 2003
Source: Cutulo M et al,. Annals of Rheumatic Diseases, 2003.
Circadian Rhythms in Rheumatoid Arthritis
0
50
100
150
200
300
5 pm 9 pm 1 am 5 am 9 am 1 pm 5 pm
IFN
IL6
IL10
sTNFR75
TNF
Ser
um
le
vels
(p
g/m
l)
Clinical symptoms
21 Jun 06 80
6 p.m. 10 p.m. 2 a.m. 6 a.m. 10 a.m.
LODOTRA™ - design rationale• morning administration is too late to
mediate the nocturnal cytokine peak
Stiffness andpain
High
Inflammatory cytokine
levels
Pain and stiffness scores
Cytokinerelease
Current therapy dose time
21 Jun 06 81
Release
6 p.m. 10 p.m. 2 a.m. 6 a.m. 10 a.m.
LODOTRA™ - how Geoclock™ delivers
• convenient bedtime dosing with maximally effective nocturnal drug release
Stiffness andpain
High
Inflammatory cytokine
levels
Pain and stiffness scores
Cytokinerelease
Dosing
21 Jun 06 82
Foradil Certihaler Novartis / Schering-Plough
• formoterol (fast-onset, long-acting bronchodilator) for asthma / COPD
• uses SkyePharma’s SkyeHaler™ multi-dose dry-powder inhaler (DPI)
• SkyePharma developed both device and formulation
• formulation keeps powder dry, ensures accurate consistent dose
• Schering-Plough to market in US market, Novartis elsewhere
• 2005 sales of Foradil in single-dose DPI: $332 mn• includes Novartis sales to Schering-Plough but no US end-user sales
• mid-single digit royalty + manufacturing return
21 Jun 06 83
Foradil Certihaler™ Novartis / Schering-Plough
• Foradil Certihaler™ now approved in 24 markets (Europe, Mid-East, S America…)
• launched in Germany Sep ′05 and Switzerland Oct ′05 but batches withdrawn by Novartis from both markets Jan ′06• a few patients mishandled the device and received an incorrect dose
• SkyePharma working with Novartis to investigate cause and correct
• FDA “approvable” letter Apr ′06 – device modifications will be required for final approval
21 Jun 06 84
Dose Counter: indicator& mechanism
Valve
Powder reservoir
Dosing bar & shelter
Mouthpiece
Protective cap (closed)
Aerosolisation chamber
SkyeHaler™: key components
21 Jun 06 85
Horizontal start position
SkyeHaler™: operation
21 Jun 06 86
Opening of protective cap
SkyeHaler™: operation
21 Jun 06 87
Powder dispensed into dosing chamber
SkyeHaler™: operation
21 Jun 06 88
Powder dose slides towards mouthpiece
SkyeHaler™: operation
21 Jun 06 89
Powder dose slides towards mouthpiece
SkyeHaler™: operation
21 Jun 06 90
Protective capopened to 90o
position
SkyeHaler™: operation
21 Jun 06 91
Powder in dispense position
SkyeHaler™: operation
21 Jun 06 92
Device readyfor inhalation
SkyeHaler™: operation
21 Jun 06 93
Inhalation: powder dispersed through
mouthpiece
SkyeHaler™: operation
21 Jun 06 94
Inhalation: valve moves forward
SkyeHaler™: operation
21 Jun 06 95
Closing of protective cap
SkyeHaler™: operation
21 Jun 06 96
Closing of protective cap
SkyeHaler™: operation
21 Jun 06 97
Closing of protective cap
SkyeHaler™: operation
21 Jun 06 98
Counter advances
SkyeHaler™: operation
21 Jun 06 99
Valve moves back
SkyeHaler™: operation
21 Jun 06 100
Device ready for next actuation
SkyeHaler™: operation
21 Jun 06 101
Skyehaler™ – current status
• in collaboration with Novartis, the Skyehaler™ has now been successfully modified
• the adapted device provides equivalent performance to the previous device version
• testing of the adapted device is complete
• DMF (Drug Master File) updated by the device manufacturer Riwisa and data submitted to the FDA
NASDAQ:SKYE LSE:SKP www.skyepharma.comUK tel: +44 (0)207 491 1777US tel: +1 (212) 753 5780
Business Review Day 2006
Flutiform™
Dr Ken CunninghamChief Operating Officer
Adrian AdamsCEO, Kos Pharmaceuticals
21 June 2006
21 Jun 06 103
Flutiform™ – product features
21 Jun 06 104
Asthma therapy 1.01 • asthma is an inflammatory condition - the airways become hyper-reactive to
external stimuli• in an asthma attack, the airways narrow (“bronchoconstriction”), causing breathing difficulties
Two complementary types of treatment are needed for asthma:
• controller • an anti-inflammatory to control the underlying cause of asthma
• most commonly an inhaled corticosteroid (“ICS”)
• reliever• a beta-agonist bronchodilator to open the airways and make breathing easier
• a short-acting beta-agonist is useful for acute relief from an asthma attack
• a long-acting beta-agonist (“LABA”) provides 12 hours of relief
• very important in avoiding night-time asthma attacks
• “combination” treatments have an ICS and a LABA in the same container• convenient for patient better compliance
• synergistic – the two agents work better together than on their own
• delivery: metered-dose aerosol inhaler (“MDI”) or dry-powder inhaler (“DPI”)• each type has merits and drawbacks – no dominant advantage for either type
21 Jun 06 105
Flutiform™ product details• formoterol (LABA) and fluticasone (ICS) in a fixed-dose
combination• formoterol 5 μg with fluticasone 50 μg or 125 μg per actuation (“puff”)
• two actuations per dose
• dosed twice a day (morning and night)
• proprietary HFA-powered MDI with dose counter
• covered by SkyeDry™ patent (2019 expiration)• unique proprietary formulation technology
• uses DSCG (cromolyn sodium, Intal) at sub-therapeutic dose as excipient to stabilize formoterol
• maintains dose-to-dose consistency
• target indication: asthma in adults and adolescents ≥ 12• COPD and paediatric asthma to follow
21 Jun 06 106
SkyePharma’s proprietary MDI• active dispersion of drug to the airways
• dose is independent of patient’s inspiration flow-rate
• largely avoids common DPI problem of deposition of steroid in the throat and consequent hoarseness
• “steroid-induced laryngeal candidiasis”
• requires patient to have a drink of water after each DPI dose
• HFA propellant (non-CFC)
• dose counter indicates number of doses remaining
• new FDA requirement for MDIs
• perceived faster onset of effect with an MDI than with a DPI
• SkyePharma’s MDI is small, portable, discrete and easy to use
• no need to train patients in a new device
21 Jun 06 107
Flutiform - product profile• formoterol LABA (long-acting beta-2 agonist)
• 12 hours bronchodilation = twice-daily dosing
• faster onset of action (1-3 mins) than salmeterol (30-45 mins)
• gives rapid relief from common symptom of wheeziness on waking
• patient confidence that medication is working
• enhances compliance
• less risk of over-dosage
• fluticasone ICS (inhaled corticosteroid)
• low level of systemic uptake
• physician-preferred ICS in the US
• US physicians in particular are concerned by the risk of systemic uptake of inhaled steroids Source: TVG market research 2004 (commissioned by SkyePharma)
21 Jun 06 108
21 Jun 06 109
Flutiform™ – clinical trials
21 Jun 06 110
FlutiForm™ - Phase II trial design
• double-blind randomised 6-way crossover study • FlutiForm™ HFA pMDI 100/10g
• FlutiForm™ HFA pMDI 250/10g
• fluticasone (Flixotide) HFA pMDI 250g + formoterol (Foradil) DPI 12g
• fluticasone (Flixotide) HFA pMDI 250g
• formoterol (Foradil) DPI 12g
• placebo
• each patient received four of six treatments
• N=64 (7 treatment centres in UK)
21 Jun 06 111
FlutiForm™ - Phase II efficacy results
• at both doses, Flutiform™ behaves exactly the same as the two component actives given separately
• rapid onset (<5 min) of bronchodilation with both doses of FlutiForm™
• 100/10g and 250/10g
• bronchodilator effect maintained for ~12 hours • supports proposed twice-daily dosing
• no interference or other drug/drug interactions
• no safety concerns
21 Jun 06 112
Flutiform™ - positive Ph II results
21 Jun 06 113
FlutiForm™ - Phase III trials• design approved by FDA
• 3 double-blind pivotal trials
• primary end-point : FEV1
• patient population: mild-moderate / moderate-severe asthmatics age >12
• duration: 12 weeks
• one open-label 12-month safety study • conducted in parallel with pivotal trials
• total number of patients N = 1700• ~300 treatment centres in Europe and North America
• started as planned in Feb ’06
• target filing H2 ‘07
21 Jun 06 114
Flutiform™ – commercial potential
21 Jun 06 115
Flutiform - market opportunity
GLOBAL ASTHMA/COPD MARKET
0
5
10
15
20
25
2004 2009E
$ b
n
Others
Leukotriene antagonists
Long-acting beta-agonists
Short-acting beta-agonists
Inhaled steroids
LABA/ICS combinations
$15.4 bn
$22.6 bn
Source: Lehman Brothers Sep '05
21 Jun 06 116
Flutiform™ - competitive landscapeCompany Product Current
phase Estimated
FDA approval date
Likelihood of
FDA approval
GlaxoSmithKline Advair
fluticasone + salmeterol
Marketed as DPI in US and EU
MDI recently approved in
USA
n/a n/a
AstraZeneca Symbicort
budesonide + formoterol
Marketed EU as DPI
MDI filed with FDA Sep 05
2008
High
“likely to require at least two review cycles”
AstraZeneca Jun 06
SkyePharma Flutiform
fluticasone + formoterol MDI
Ph III
Feb 06
2009 High
Altana with
Sanofi-Aventis
ciclesonide + formoterol DPI
Ph II 2012 Moderate
ciclesonide once-daily formoterol twice-daily
Novartis (with/without Schering-Plough?)
once-daily ICS + QAB149 DPI
mometasone + formoterol DPI
Preclinical
“Ph III to start in ‘06”
2012
?
Moderate
NCE development
Unknown
mometasone once-daily formoterol twice-daily
GlaxoSmithKline once-daily ICS + once-daily LABA DPI
both are NCEs
Early Ph II 2011/12 Moderate
NCE development
Source: SkyePharma
21 Jun 06 118
Flutiform™ - commercial potential
US Top 5 EU
Projected total ICS/LABA market 2011/12
$6.7 bn €2.3 bn
Flutiform™ peak share estimate
15%
assumes Symbicort is launched before Flutiform™
15%
Flutiform™ peak sales potential
up to $1 bn up to €350 mn top 5 EU
(€400-500 mn all Europe)
Source: SkyePharma
21 Jun 06 119
Flutiform™ – US marketing partner
21 Jun 06 120
Flutiform™ US licence – Kos (May 2006)• Kos has exclusive marketing rights for Flutiform™ in US
• right of first negotiation for Canada
• SkyePharma receives up to $165 mn in milestone payments on regulatory & sales targets
• includes $25 mn upfront
• SkyePharma royalty rate starts in mid-teens • rate escalates on sales targets
• SkyePharma and Kos share development of Flutiform™ for asthma and COPD
• SkyePharma funds trials needed for approval in adult asthma
• Kos funds trials for all other indications and marketing/post-approval studies
• SkyePharma supplies product to Kos
21 Jun 06 121
US partner for Flutiform™ – why Kos?• successful, fully integrated US Specialty Pharmaceutical company
• strong financial position, no debt, excellent long-term outlook
• strong commercial capabilities, proven track record • 750 person sales force (>1000 by Flutiform™ launch), broad managed care, medical affairs and
customer services functions
• established presence in cardiovascular & asthma areas
• track record of respiratory market performance with Azmacort
• proven success in creating and building markets supported by quality medical and patient education
• excellent, therapeutically aligned R&D capabilities • clinical, regulatory, safety and surveillance strengths in CV, metabolic and respiratory disease
areas
• both partners see high potential in the product• superior product concept
• differentiated from competing combinations
• clear window of opportunity
21 Jun 06 122
Adrian AdamsPresident and Chief Executive Officer
Kos Pharmaceuticals
Cranbury, NJ, USA
Introducing
21 Jun 06 123
Overview of Kos Pharmaceuticals• founded in 1988, IPO in 1997 (Nasdaq: KOSP)
• named after Greek island of Kos – birthplace of Hippocrates
• fully integrated Specialty Pharmaceutical company
• core therapeutic areas: cardiovascular, respiratory, diabetes
• key marketed brands:
• 1400 associates (sales: 750, R&D: 225) – sales force increased to 900 by end ‘06
• headquarters in Cranbury, New Jersey – additional locations in NJ (Edison), FL (Weston and Hollywood) and NC (Raleigh)
21 Jun 06 124
Kos revenue growth record
*Includes international sales royalty (licensing revenue)
$497
$752
$294
$173
$84$55
70%
69%
51%
53%
106%
3%
9%
14%
15%
59%
® ®
®
®
®
®
$146$227
$321
$441$67
$108
$116
$103
$22
$27
$68
$70
$0
$75
$150
$225
$300
$375
$450
$525
$600
$675
$750
2000 2001 2002 2003 2004 2005
(in m
illio
ns)
Teveten /Teveten HCTCardizem LA
AzmacortAdvicor
Niaspan *
21 Jun 06 125
Kos - successful amongst “Big Pharma”
• HDL market creation and development• launched Niaspan into LDL-dominated market - HDL awareness very low
• 90 territory managers vs LDL “thousands”
• Kos commercial philosophy• SMART sales and marketing with quality medical education
• recruit experience and success, pay in top quartile
• invest into success
• successful and highly differentiated position• cholesterol franchise grown to around $600 mn – on way to billion dollars
• dominant managed care position – over 95% lives covered
• HDL drug of choice among cardiologists and primary care physicians
• most big pharma companies now attempting access into “Kos market”
21 Jun 06 126
Kos - inhalation history • 1993 Kos acquires Aeropharm Technology inhalation platform
• 1997 Kos becomes a full member of IPACT-1, granting the Company necessary data for environmentally safe HFA-134a
• 1999 Kos acquires IEP Group, Inc., a design and engineering company focused on proprietary inhalation devices
• 2003 Kos secures key HFA patent - involves innovative use of water as a stabilizing excipient
•scientific infrastructure and broad formulation and delivery device IP portfolio
•basis of inhaled insulin development – phase III ready in 2007
• 2004 Kos conducts strategic acquisition of global Azmacort franchise - represents first commercial entry into the respiratory market
• 2006 Kos and Skyepharma announce exclusive licence agreement for Flutiform in the USA
21 Jun 06 127
Kos - Azmacort returned to growth
98.0
91.5
98.8
91.2 91.7
86.8
79.7 80.9 81.183.6 83.6
89.1
84.9
78.7
87.2
13.112.8
14.2
13.113.6
13.112.5 12.6
13.9 14.2
16.4
13.7
12.8
14.4
11.850
60
70
80
90
100
110
120
TR
x (
in t
ho
us
an
ds
)
11
12
13
14
15
16
17
18
19
20
21
22
Ta
rge
t P
hy
sic
ian
TR
x (
in t
ho
us
an
ds
)TRx Target Physician Rx
Data Source: IMS
21 Jun 06 128
Kos - rationale for Flutiform™ licence• strong strategic rationale
• broadens Kos’ established presence in asthma/respiratory market
• good fit with Azmacort, coverage of mono and combo market
• growth opportunity beginning 2008/9
• 2 projected new products to launch a year during 2007-2009
• strong financial returns
• win-win financial terms
• potential blockbuster with $500 MM plus anticipated peak year sales
• synergistic partnership
21 Jun 06 129
Kos – delivering value on many levels• focussed and successful specialty pharmaceuticals business model
• SMART targeted sales and marketing approach – enhanced productivity, eliminates “waste”
• Focus in R&D - measured investments in “R” of R&D
• highly differentiated and sustainable cholesterol franchise• increasing awareness of benefits of HDL, move towards combination therapy
• Niaspan & Advicor - most effective HDL therapies available - Simcor™ opportunity
• financial strength & expanding commercial brands• strong cash position, no debt, strong earnings outlook in 2007 and beyond
• resources to fully exploit product franchises in CV, Metabolic and Respiratory Diseases
• robust Research & Development pipeline• one to two new products per year 2007 to 2009 – major potential with Simcor™ and Flutiform™
• Kos’ inhaled insulin opportunity in high potential market
• progress in “measured” HDL and atherosclerosis NCE development
NASDAQ:SKYE LSE:SKP www.skyepharma.comUK tel: +44 (0)207 491 1777US tel: +1 (212) 753 5780
Business Review Day 2006
SkyePharma oral and inhalation delivery technologies
Dr Guy VergnaultHead of Oral Business Unit
Dr Geraldine VenthoyeHead of Inhalation Business Unit
21 June 2006
21 Jun 06 131
SkyePharma delivery technologies• Oral
• most widely-used drug delivery route (~50% of all drugs taken orally)
• Inhalation• cost-effective metered-dose liquid aerosol and dry-powder inhalers
• enabling formulation technologies to ensure dose-to-dose consistency and extended shelf-life at room temperature
• Solubilization• multiple technologies to improve bioavailability
• Sustained-release injectable (unit to be divested)• DepoFoam : active dissolved in water within multivesicular liposome particles
• Biosphere : active dispersed in dry starch core within PLG shell
• Topical• multiple transdermal technologies - now licensed to Trigenesis (Dr Reddy’s)
21 Jun 06 132
Geomatrix™ - a family of oral DDS, not a single DDS
• why do we have more than one DDS ?
• physicochemical characteristics of the API
• pharmacological characteristics of the API
• answer to specific therapeutic needs
• zero order release cannot satisfy all needs for extended drug delivery
• recent developments in oral portfolio
• Geoclock™ press coated tablets
• chronotherapy
• colonic delivery
• pulse delivery
21 Jun 06 133
Chronotherapy Geoclock™
THE BODY CLOCKDisorders displaying circadian rhythm
modified Smolensky & Labrecque by Veski
Ischemic heart diseases
21 Jun 06 134
View of Geoclock after core disintegration
Shell opening
Empty cavity left by drug loaded core
Geoclock™ concept
21 Jun 06 135
Reference IR
Geoclock in vivo testing
-10
010
20
30
4050
60
7080
90
0 5 10 15 20 25 30 35 40
Time(h)
Plas
ma
conc
entr
atio
n (n
g/m
l) Geoclock(n=10)
Geoclock™ conceptPrednisone
Time (h)
0 4 8 12 16 20 24 28
Pla
sm
a c
on
ce
ntr
atio
n (
ng
/mL
)
0
5
10
15
20
25
DecortinTest FastedTest Fed
Reference IRGeoclock
doseIR dose
21 Jun 06 136
0
5
10
15
20
0 5 10 15 20
Time (h)
Pla
sma
Co
nce
ntr
atio
n (
ng
/mL
)
Fasted
Fed
GEOCLOCK™ for colonic drug delivery
Geoclock™ concept
21 Jun 06 137
In vivo profile methylphenidate HCl (2x10 mg vs Ritalin 20 mg)
GEOCLOCK™ for multiple pulse drug delivery
Geoclock™ concept
21 Jun 06 138
• proof of Concept in vivo trials have shown reliable performance of the Geoclock™ DDS
• industrial scale expertise
• many opportunities for specific timed or targetted drug delivery
• one product in late-stage clinical development
• Nitec product
• supportive patent applications should provide protection beyond 2023
Geoclock™ concept
21 Jun 06 139
Solubilization technologies for oral route
• increasing number of APIs have poor solubility
• formulation issues
• bioavailability issues
• food effect
• can result in under- or over-dosing
• poor dose proportionality
• SkyePharma technology solutions• Dissocubes®
• SLN® (Solid Lipid Nanoparticles)
• IDD® (Insoluble Drug Delivery)
21 Jun 06 140
Solubilization technologies for oral route
• right combination of particle size and stabilization system
• challenge of solid dosage form formulation
• conflicting targets
• requires specific “savoir faire”
• Triglide™ - first approved product based on IDD-P• commercial scale – 500 litre suspension
• manufactured in SkyePharma’s Lyon plant
21 Jun 06 141
Solubilization technologies for oral route
21 Jun 06 142
Inhalation technologies - devices• SkyeHaler™ – “next generation” multi-dose breath-
actuated dry powder inhaler
• accurate, robust and simple to use
• medium-resistance device suitable for all types of patient
• available at commercial scale manufacture volumes
• HFA powered metered-dose aerosol inhaler
• developed to meet stringent new regulatory guidelines
• proprietary design incorporating dose counter
• supplied for Ph III clinical programs from the commercial scale manufacture site
21 Jun 06 143
Inhalation technologies - formulation
• SkyeProtect™ and SkyeDry™
• “intrinsically” protect a powder or liquid suspension from the detrimental effects of moisture ingress and thereby stabilise labile compounds in the formulation
• ensure accurate, consistent and reproducible dosing
• SkyeStabe™
• protects aerosol valve gaskets from abrasion
• improves inhaler functionality throughout can life and shelf life
• better suspension homogeneity provides superior dose uniformity
• SkyeFine™
• maximises the fine particle fraction (and therefore the dose delivered to the deep lung) in the dose emitted by a metered-dose aerosol inhaler
The use of a range of novel excipients to optimise dose-to-dose repeatability - a major hurdle for regulatory approval of inhalation products
NASDAQ:SKYE LSE:SKP www.skyepharma.comUK tel: +44 (0)207 491 1777US tel: +1 (212) 753 5780
Business Review Day 2006
Early-stage pipeline
Dr Ken CunninghamChief Operating Officer
21 June 2006
21 Jun 06 145
Early-stage pipeline
• SKP-1032 : opioid-NSAID combo BID
• SKP-1041 : non bzd hypnotic TRT
• SKP-6005 : PPARα /PPARγ combo OD
• SKP-6006 : ARB CR OD
• only SKP-1032 and SKP-1041 will be presented today
21 Jun 06 146
Opioid – NSAID combo
Short-term treatment of
moderate-to-severe acute pain
SKP-1032
21 Jun 06 147
• combines an anti-inflammatory dose of an NSAID with the potency of an opioid analgesic
• useful for orthopaedic surgeries, sprains, fractures
• only combination of an opioid with this NSAID
• selected NSAID is preferred by physicians
• selected NSAID perceived as more effective than ibuprofen
• greater potentiation of opioid effect with the selected NSAID compared with ibuprofen
• 12-hour pain relief with rapid onset
• avoids peaks and troughs and breakthrough pain
• SkyePharma product will be Schedule III
SKP-1032 – clinical advantages
21 Jun 06 148
SKP-1032 - opioid PK profile
0 4 8 12 16 20 24 28 32 36 40 44 48
Time (hours)
Pla
sma
con
cen
trat
ion
s (n
g/m
L)
MR1 MR2 MR3
Mean plasma concentration for opioid prototype formulations in fasted conditions (n=16)
21 Jun 06 149
SKP-1032 - market opportunity
• high volume market (167 mn TRx MAT 04/06)
• good pricing for branded products
• opiate combinations will remain the mainstay of treatment for moderate-to severe pain - little innovation in R&D
• unique positioning in pain associated with inflammation
• target launch: 2010
IMS Oral Narcotic Combinations TRx - US
0
20
40
60
80
100
120
140
160
180
MAT APR 01 MAT APR 02 MAT APR 03 MAT APR 04 MAT APR 05 MAT APR 06
TRx m
n
Non-benzodiazepine hypnotic
Sleep maintenance
GeoClock™ tablets ensure optimum release profile
SKP-1041
21 Jun 06 151
SKP-1041 - product concept
0.00 2.00 4.00 6.00 8.00 10.00 12.00
Pla
sm
a level
HYP1 IR HYP2 CR SKP 1041
• SKP 1041 corresponds to expected in vivo profile
• in vitro data supports target profile
21 Jun 06 152
SKP-1041 – unique clinical advantage
• non-benzodiazepine hypnotic
• first hypnotic product specifically designed for patients who have difficulty with sleep maintenance
• lowest effective hypnotic dose
• no drug on board when not needed = “natural” sleep onset
• very short half-life, resulting in fast clear-headed awakening
21 Jun 06 153
SKP-1041 – insomnia patient segmentation
40% 36%
25% 24%
0%5%
10%15%20%25%30%35%40%
Woke up feelingunrefreshed
Awake a lot duringthe night
Difficulty fallingasleep
Woke up too early &could not get back
to sleep
2002 Sleep in America Poll
• delayed sleep onset affects only a minority of insomniacs
• maintaining continuity of sleep is a greater need
Based on interviews with 1,011 US adults
21 Jun 06 154
SKP-1041 - market opportunity• US insomnia market $2.4 bn in 2005
(+29%)
• projected to reach $4.5 bn in 2010 (14% CAGR)
• SKP-1041 specifically designed to target sleep maintenance
• significantly differentiated from existing and late stage pipeline compounds
• good pricing expected based on pricing for Lunesta and Ambien SR
• protected concept (patent application filed)
• target launch: 2011
US INSOMNIA MARKET ($ bn)
0
1
2
3
4
5
2004 2005 2006 2007 2008 2009 2010
Sales
$ bn
Source: Cowen & Co April 2006
21 Jun 06 155
Fast track from technologies to marketed products
The 505 (b) 2 approval process
21 Jun 06 156
The 505(b)(2) approval process• Hatch-Waxman amendment to the Federal Food, Drug & Cosmetics Act to
allow an NDA based in part on data NOT generated by the applicant• scientific literature and/or
• data used to support the filing of a product previously approved by the FDA
• examples:• a new dosage form or formulation of an approved product
• a new indication of an approved product
• a new route of administration of an approved product
• substitution of an active in an approved combination product
• a pro-drug of an approved product
• 505(b)(2) applicants must certify non-infringement of patents
• 505(b)(2) approval earns 3 years of market exclusivity • 5 years for an NCE
• does not affect protection arising from specific IP
NASDAQ:SKYE LSE:SKP www.skyepharma.comUK tel: +44 (0)207 491 1777US tel: +1 (212) 753 5780
Business Review Day 2006
Summary
Dr Ken CunninghamChief Operating Officer
21 June 2006
21 Jun 06 158
Major objectives 2006
• divest injectable unit
• outlicense Flutiform™
• negotiations for non-US territories ongoing
• complete modifications to Certihaler™
• expand oral / inhalation pipeline
• work with licensing partners to drive revenues of marketed products
21 Jun 06 159
The new SkyePharma
• new leadership
• drive for sustainable profitability• accelerated by sale of injectables unit
• core business is oral and inhalation
• potential blockbuster in Flutiform™
• strong cashflow from existing royalties
21 Jun 06 160
Q&A
This presentation is being webcast
Please give your name and affiliation when asking questions
NASDAQ:SKYE LSE:SKP
www.skyepharma.com
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
Investor relations contacts
NASDAQ:SKYE LSE:SKP www.skyepharma.comUK tel: +44 (0)207 491 1777US tel: +1 (212) 753 5780
Business Review Day 2006
Back-up slides
These slides will not be shown
21 June 2006