BioWorld International Correspondent
LONDON - SkyePharma plc is taking out a high-interest £35 million (US$68.9 million) loan to pay for the Phase III development of its asthma drug flutiform. The move comes just over a year after the company raised £35 million (then $61.4 million) in a heavily discounted and hugely unpopular rights issue that was earmarked for Phase III of the combination asthma product.
That led subsequently to the resignation of the founding CEO Michael Ashton and the restructuring of the company.
The £35 million loan from an unnamed Irish lending firm is repayable over 10 years, with the schedule based on expected receipts and royalties for certain products (not including flutiform), at a rate 5.85 percent above U.S. and Euro bank rates.
The money allows the London-based company to maintain the frequently stated target of filing this year for approval of flutiform in 2009.
In a statement, SkyePharma explained that the overall costs of the flutiform program have increased since the time of the rights issue. The Phase III design agreed to with the U.S. Food and Drug Administration includes three efficacy studies and an increased level of respiratory monitoring. Further costs have arisen also due to a couple of supply issues.
However, at the time of the rights issue, Ashton said the money was raised to ensure that SkyePharma had sufficient funds to complete Phase III development without a partner. Since then the company has agreed a joint development deal with Kos Pharmaceuticals Inc. (since acquired by Abbott Laboratories Inc.) in which costs are shared.
SkyePharma said the total cost of completing its share of the flutiform development program now is estimated at £35.6 million.
The drug delivery company made the announcement of the loan more palatable by combining it with the news that it expects negotiations for the sale of its injectable drugs business, based in San Diego, to "conclude shortly."
Frank Condello, CEO, said the loan "allows us to secure the completion of the development and launch of flutiform, as well as maintaining progress with the early product pipeline in oral and inhalation products."