The UK’s SkyePharma has found a buyer for its injectables business and is selling it to US investment consortium Blue Acquisition Corp, in a deal that could be worth more than $82 million.
Under the terms of the agreement, BAC, a group of financial investors that includes MPM Capital, OrbiMed and Sanderling Ventures, will make an initial payment of $20 million, while a further $62 million may reach the coffers of SkyePharma depending on the completion of the development and substantial future sales of its long-acting local anaesthetic, DepoBupivacaine (bupivacaine). A spokesman for the firm told PharmaTimes World News that the drug is currently on the verge of going into Phase III trials.
The injectables business, which includes two marketed products, DepoCyt (cytarabine) for lymphomatous meningitis and the painkiller DepoDur (morphine), generated revenues of £3.9 million and an operating loss of £11.7 million for the six months ended June 2006. SkyePharma added that the disposal “will eliminate the significant cash costs of operating and developing the injectable business.”
More funds raised
SkyePharma also announced that it plans to place 61.2 million shares with certain institutional shareholders which will raise £14.8 million to generate additional working capital, a move which comes just weeks after it secured a £35 million loan from UK and New York investment group Christofferson, Robb & Co. The funds from the latter will be used to finance late-stage studies of combination respiratory drug Flutiform (fluticasone and formoterol), which is in Phase III and is due to be launched in 2009.
SkyePharma also announced plans to restructure its existing secured financing facility with Paul Capital to a fixed amortisable note of $92.5 million, with an additional $12.5 million available if sales of DepoDur reach certain thresholds.
The disposal of the injectables business is good news for SkyePharma, especially as it announced its intention to sell in February last year. Chief executive Frank Condella said the sale will “relieve the company of a significant cash burn,” adding that the disposal and the financing deals “will put SkyePharma in a good position to build future value by further developing our strategic oral and inhalation products."