BioWorld International Correspondent

LONDON - SkyePharma plc finally signed a U.S. partner for its combination asthma treatment Flutiform, after a year of prevarication that forced the company into an unwelcome rights issue and led to the resignation of both the founding chairman and the CEO.

The deal with Kos Pharmaceuticals Inc. has a total potential value of $165 million on achievement of regulatory and milestone payments, of which $25 million has been paid up front, plus a royalty rate that starts in the mid-teens on sales by Cranbury, New Jersey-based Kos.

On the face of it, it is not much of an improvement on the deal valued at up to $160 million that SkyePharma pulled out of in September 2005 after signing a heads of agreement and announcing the deal to the markets. In December 2003, the London-based company had ditched an earlier deal for the product with a headline value of $90 million.

SkyePharma subsequently launched a heavily discounted rights issue, raising £35 million (US$61.4 million) to enable it to move Flutiform into Phase III work. That proved the final straw for disaffected shareholders, who at the beginning of the year forced a complete change of personnel at the head of the company.

The deal gives Kos exclusive rights in the U.S., with a right of first negotiation for the Canadian market. SkyePharma said it remains in negotiations with potential partners in Europe and the rest of the world.

The Phase III trial of Flutiform began in February, with SkyePharma targeting submission of the NDA in the second half of 2007 and launch in 2009.

The product consists of a fixed-dose combination of the bronchodilator formoterol with the inhaled steroid fluticasone, in a proprietary inhaler. In the Phase II trial, completed in 2005, Flutiform behaved as if the two component drugs had been taken separately, with rapid onset of bronchodilation that was maintained for 12 hours, with no sign of drug-drug interactions.

The active ingredients are formulated with SkyePharma's proprietary SkyeDry technology, which stabilizes them and ensures a reproducible dose even after long storage. It also gives the product patent protection until 2019.

Kos specializes in the cardiovascular and respiratory markets, with a cholesterol product Niaspan and a recently acquired inhaled steroid product, Azmacort.

"We expect Kos to have more than 1,000 [sales] representatives by the time that Flutiform is launched," said Frank Condella, SkyePharma's newly installed CEO. "We believe Kos brings a therapeutically focused marketing approach that will optimize the commercial potential of Flutiform in the key U.S. market."