Michael Ashton, the chief executive of the drug development group SkyePharma, yesterday insisted he was under no pressure to resign, despite the company's failure to tie up two vital licensing deals by a self-imposed deadline.
As the group reported a set of disappointing results, Ian Gowrie-Smith, the chairman who is stepping back to a non-executive role, revealed that he had offered to quit at the end of last year but had been told to stay by the rest of the board.
The two men put on a show of defiance, saying SkyePharma would not be bounced into licensing key drugs on unsatisfactory terms just to meet market forecasts. The company posted a net loss of £43.2m for 2003, compared with a profit of £1.1m the year before and below analysts expectations, even after it issued a profit warning in January.
The company is issuing £20m of convertible bonds to avert a cash crunch next year which could have been used by potential licensing partners to negotiate tougher terms. Instead, SkyePharma is hoping to secure lower upfront payments in return for higher royalties.
Mr Gowrie-Smith dismissed suggestions of a boardroom rift. He said: "Nobody I know could do a better job of running SkyePharma than Michael and we are the best of friends."
Mr Gowrie-Smith himself will move to a non-executive role after the annual shareholder meeting, having offered in December to step aside completely to pursue other business interests. The management is understood to retain the confidence of the company's biggest institutional shareholder, Fidelity, which owns 14 per cent.
He put the blame for the company's history of "over-promising and under-delivering" on advisers who suggested the company should set out explicit financial guidance for analysts. Significantly, yesterday's results did not include a forecast for the current year.
The company was still in advanced talks to license out its treatments for lung problems, Mr Ashton said, but had other potential bidders waiting in the wings if the talks were to fail.
SkyePharma attempted to shift the focus to royalties from existing products, which rose 177 per cent in 2003, but the company's dispute with GlaxoSmithKline - which denies SkyePharma's claim that it is entitled to substantially increased royalties on Paxil CR, the anti-depressant it helped create - is likely to go to arbitration.