LONDON - SkyePharma plc said it is changing its strategy and raising #60 million to fund the development of its own portfolio. To date, the drug delivery specialist has concentrated on developing products for pharmaceutical companies in return for royalties and milestones. It now also will develop its own drugs to late-stage trials and then license them out to marketing partners.

Chairman Ian Gowrie-Smith said the move would allow SkyePharma to prove its technology and dramatically increase its royalty rates. "If we are to retain leadership in and realize value from our drug delivery technologies, we must invest in them. The best way to do this is to take our own products further down the development pipeline."

The company, based in London, has selected three projects that it will develop to the end of Phase III. These include DepoMorphine, a 48-hour sustained-release injection of morphine for treating post-operative pain, which has just completed Phase II studies in hip replacement patients.

Gowrie-Smith noted that the demand for drug delivery technology is growing rapidly, with average reward rates increasing from 3 percent to 5 percent in 1996 to 13 percent to 15 percent today. But by taking products to late stage development rates can be further enhanced - up to 50 percent in the case of DepoCyt, SkyePharma's sustained-release injection for the treatment of cancer-related neoplastic meningitis. - Nuala Moran