SkyePharma slips back into loss as inhaler licensing deal collapses

SkyePharma, the mid-cap drug company which posted its maiden profit in April, has slid back into the red after failing to sign a big licensing deal on time. It said yesterday that it would post a loss for the first six months of 2002. Analysts estimated a likely shortfall of £10m and investors sold Skyepharma shares down 6 per cent at 65p.

The company insisted it could make up for the lost revenues and profits later in the year and still hit market forecasts of an annual profit of £10m on revenue of £100m.

Michael Ashton, chief executive, said the company had expected to licence one of its innovative inhalers to a bigger pharmaceutical company by the end of June, but talks were still dragging on. Mr Ashton said he declined to negotiate "with a loaded gun to the head" and added that he feels better terms are available through continued negotiation.

He said: "If one deal falls into the second half, it doesn't squeeze the other ones into 2004, so we are reiterating our expectation of continued profitability for the full-year."

The scale of the first-half losses, which had been admitted as a possibility in April, took the market by surprise. Mr Ashton said the company has also failed to sign a second, smaller licensing deal, while some milestone payments from previous licensing deals had also been delayed.

SkyePharma has only just shaken its poor reputation which resulted from years of missed promises when profitability was put back and back.

The group released two pieces of better news alongside its profit warning yesterday. First, it has licensed the European marketing rights to DepoCyte, its painkiller for cancer patients, to privately-owned Mundipharma. And second, the company has filed its application to the US Food & Drug Administration for approval to launch the painkiller DepoMorphine.