BioWorld International Correspondent
LONDON - The new brooms at SkyePharma plc described how they intend to sweep things up, as they set out the future business strategy and plans for the product portfolio in a day-long business review held in London last week.
"All companies want to grow up some day," said Frank Condella, CEO. "We need to develop into a company that markets its own products."
Using its proprietary drug delivery technologies to develop products under contract still will be a core part of the business, but as Condella noted, the royalty rates in general are in single figures. While there is an additional margin in doing the manufacturing, too, SkyePharma needs to take products further up the development pathway, as it has with the asthma product Flutiform.
"Eventually we want to market our own products, but we are several years away from that," Condella said.
To move into profitability in the shorter term, SkyePharma is divesting its injectable drugs unit, to focus on oral and inhaled delivery routes.
Condella said the injectables business in San Diego has significant potential but also requires significant investment in R&D and capital expenditure. "This would be much higher than SkyePharma wants to invest in the next two to three years," he said. The unit is integrated and stand alone and therefore easy to divest. "It's not a lot of work and pain to carve [it] out."
The injectables business has two proprietary technologies, Depofoam for water soluble molecules and Biosphere for delivering insoluble and soluble molecules. The two can be used in combination and can be applied also to biologicals. But although SkyePharma has done feasibility studies on human growth hormone and others, it does not have the cash to move those products along.
London-based SkyePharma is doing four feasibility studies for pharmaceutical partners on new protein drugs and claims a significant advantage for Depofoam over pegylating proteins to extend the half-life.
"There is no need to change the molecule. Whatever goes into the matrix, comes out of the matrix. This makes it easier in terms of approval," Condella said.
But the key asset is Depobupivacaine, a controlled-release version of the local anesthetic that is effective for 48 to 96 hours, compared to six to 10 hours for the current formulation.
"Phase III trials are due to start in the second half of 2006, but this will depend on the progress of divestment of the business, because the new owner will want a say," Condella said.
Divesting the business in San Diego will improve the rest of SkyePharma, letting management focus and improve the balance sheet. In 2005 the oral and inhalation parts of the company would have broken even. "In other words, we will get profitable sooner [by divesting]," Condella said. There have been several expressions of interest and he hopes to complete the transaction by the end of 2006.
The other preoccupation is the Phase III trials of Flutiform, a combination asthma treatment. The FDA has approved the development plan of three double-blind studies of 12 weeks duration and a 12-month safety study, which completed recruitment last week. This should lead to a filing in the second half of 2007.