SkyePharma shares rise on GSK's Paxil plans

Shares in SkyePharma leapt by a quarter yesterday after GlaxoSmithKline said it was launching a new drug that has been formulated by the mid-cap biotech company.

GSK is to launch a controlled-release version of Paxil, an anti-depressant which, in its current form, is one of the world's top 10 best-selling drugs.

The controlled-release drug, Paxil CR, is based on a SkyePharma technology which GSK, then SmithKline Beecham, licensed in 1995. Many analysts had long since written off the chances of Paxil CR getting on the market, although Michael Ashton, SkyePharma's chief executive, said his company had always believed GSK was quietly working on the drug.

He said: "A lot of people had taken the position that this drug was not going to be launched and this has been a wet blanket over the share price. It is nice that our controlled-release technology will now be attached to a major product and the size of the GSK salesforce means it will have some oomph behind it."

Paxil – also sold as Seroxat – brings in revenues of about £2bn for GSK. The new formulation is approved in the US as a treatment for depression and panic.

SkyePharma shares jumped 13p to 65.75p. No financial details of the deal were disclosed, although SkyePharma will receive a one-off payment from GSK on launch and a percentage of royalties in the low single digits.