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news.UK-based SkyePharma is said to be close to reaching a deal with a global pharmaceutical company which could be worth $160 million. The negotiations involve the company's asthma treatment, Flutiform.
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SkyePharma said it had agreed the main terms of a deal to help develop and market the respiratory medicine with an undisclosed party. The $160 million will include milestone payments and reimbursement of development costs, with double-digit royalties. The announcement has already boosted the company’s share price, and narrowed losses for 2004.
SkyePharma has also recently benefited from recent negotiations between GlaxoSmithKline and the FDA over manufacturing procedures impacting on the sale of Paxil; a drug which uses the controlled-released technology developed by SkyePharma. Since March of this year Glaxo has been prevented from selling the drug after FDA inspectors discovered production problems and seized the compound.
Following FDA discussions, it is believed the drug will be marketed again by the middle of this year. Glaxo has agreed to continue paying SkyePharma as if production had not been halted. The two companies have entered into an amendment agreement with in which Glaxo will make a one-time payment of approximately $10 million.
In addition, SkyePharma will also be entitled to an increase in the royalty rate from 3% to 4% on actual net sales of Paxil CR, with effect from 4 March 2005. Michael Ashton, SkyePharma’s Chief Executive, said: “The royalties from Paxil CR are currently the single most important income flow for SkyePharma”.