SkyePharma, which has posted a solid set of financials for the first half of 2012, has been boosted by an agreement to renegotiate its £83 million debt restructuring.
There had been some concern that some holders of convertible bonds could call for repayment as early as November 2013, which would have had a dramatic effect on the company's chances of survival. However, earlier this summer, SkyePharma chief executive Peter Grant told PharmaTimes World News that discussions were taking place with the firm's backers to deal with the situation and these talks have clearly been fruitful.
SkyePharma says agreement has been reached with "a significant majority of bondholders" to the extent that £22.2 million of the aforementioned bonds will be converted into equity (some 48% of the holdings in issue following the transaction) at £1.00 per share (compared with a closing stock price of £0.94 on August 22).
Furthermore, the £60.8 million balance will remain outstanding as non-convertible bonds on amended terms. This means that the earliest date at which bondholders may redeem is November 2017, with bonds carrying a 6.5% interest rate.
UK approval for Flutiform
The agreement is another sign that things are very much on the up at SkyePharma which finally won European approval for the asthma drug Flutiform (fluticasone and formoterol) in July. Last week, the Medicines and Healthcare product Regulatory Agency granted marketing authorisation in the UK for the combo, which will be sold by Mundipharma and should be launched later this year. Approvals have already been granted in Germany, Cyprus, the Netherlands and the Slovak Republic.
As for the first-half financials, revenues came in at £19.8 million, down 10% compared to the like, year-earlier period, while pre-exceptional operating profit rose 37% to £3.7 million, reflecting reduced investment in R&D and cost savings. SkyePharma ended the period with cash and equivalents of £11.0 million.
Mr Grant noted that the regulatory approval for Flutiform represents "significant validation of the group’s proprietary respiratory technology and expertise in a complex treatment area". Regarding the bond proposals, he said they will provide "the most appropriate, cost-effective and timely method of refinancing".