SkyePharma Announces Amendment to CRC Finance Facility to enhance Anticipated Short-term Liquidity

SkyePharma PLC (LSE: SKP) announces that the Group has entered into an amendment agreement in respect of its existing CRC Finance Facility to enhance the Group's anticipated short-term liquidity position. End Quote

(1888PressRelease) August 04, 2011 - Under the amendment agreement, the obligation to pay 50% of further milestone payments or signing fees in respect of Flutiform licenses, up to approximately U.S.$9 million, will be deferred until 4 September 2013. The interest rate applicable to the Facility, which is variable based on Euribor and Libor, has been increased by 2 percentage points with effect from 1 July 2011. Prior to this amendment, the Board anticipated that U.S.$9 million of prepayments would fall due over the next two years, mainly out of launch milestones anticipated to be received following launches of Flutiform in major European countries. The obligation to make further mandatory prepayments out of Flutiform milestones and signing fees will be waived altogether if, by 4 September 2013, the Group's Convertible Bonds have been converted to equity or rescheduled or refinanced on certain terms, including that the earliest date on which the Bonds may be called for repayment is at least five years later than the date of such rescheduling or refinancing.

SkyePharma's Chief Financial Officer, Peter Grant, said: "This is the first of what we hope will be a number of initiatives to enhance the prospective liquidity position of SkyePharma. Retaining the proceeds of milestones and signing fees will assist with funding the working capital requirements related to the supply of Flutiform™ during its critical launch period."

On 28 July 2011 SkyePharma announced it had entered into an exclusive Development, License and Marketing Agreement with Sanofi in Mexico, Central and South America for Flutiform, its lead development product for the treatment of asthma. Under the agreement, SkyePharma is eligible for initial, approval and sales milestones potentially worth several million US dollars and a high single digit percentage royalty on net sales.

The European Marketing Authorisation application for Flutiform is currently under review and preparations continue to be made for the potential launch of Flutiform in Europe in H2 2011.

Contacts:

SkyePharma PLC

Axel Müller, Chief Executive Officer
Peter Grant, Chief Financial Officer
+44 207 881 0524

Singer Capital Markets Limited

Shaun Dobson / Claes Spång
+44 203 205 7500

Financial Dynamics

Jonathan Birt /Sue Quigley
+44 207 831 3113

About SkyePharma PLC

Using its proprietary drug delivery technologies, SkyePharma develops new formulations of known molecules to provide a clinical advantage and life-cycle extension. The Group has twelve approved products in the areas of oral, inhalation and topical delivery. The Group's products are marketed throughout the world by leading pharmaceutical companies.

About the CRC Finance Facility

The CRC Finance Facility was taken out in December 2006 and is a 10 year secured amortising loan facility which at inception totalled approximately £35.0 million at the exchange rates prevailing at that time. The Facility comprised initial commitments of U.S.$35.0 million and €26.5 million repayable over 10 years based on a minimum amortisation schedule. As at 31 December 2010 the Facility had outstanding principal sums of U.S.$27.5 million and €21.4 million. Following the amendment agreement announced above, interest rates applicable to the Facility from 1 July 2011 are as follows:

* On the U.S.$ component - 3-month U.S.$ LIBOR plus 7.85 per cent.
* On the first Euro 7.5 million of the Euro component - 3-month Euribor plus 12.85 per cent.
* On the balance of the Euro component - 3-month Euribor plus 7.85 per cent.

The Financial Times of 29 July 2011 quoted the following annual rates: U.S.$ LIBOR: 0.25395 per cent.; Euribor: 1.61 per cent.

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