Currency fluctuations saw UK group SkyePharma post an 8% drop in sales to £19.7 million for the first six months of the year, and revenues are forecast to remain relatively flat for the second half.
The group’s sales were also dented by a £1.1 million dip in royalty income to £8.2 million for the period because of reduced turnover and royalty rates following the entry of generic rivals to Xatral OD in Europe.
On the plus side, continuing operations (excluding the group’s injectables business sold in March) booked an operating loss of £8.8 million, down 19% from the prior year, after R&D spending slipped 3% to £13.8 million and selling and administration expenses plummeted 75% to £400,000.
Commenting on the group’s performance, Dr Jerry Karabelas, SkyePharma’s non-executive chairman, said: “Substantial progress has been made in the first half to reshape the group, focus the activity on oral and inhalation products, ensure that the Company has adequate financial resources to meet its objectives, and ensure the timely completion of the Flutiform Phase III program.”
Last month, shares in the group took a bashing after US regulators asked for more information on the asthma drug Flutiform, delaying its filing. But Karabelas insists that “although there is an unexpected delay to the planned date for filing Flutiform in the US to the second half of 2008, the Board continues to have confidence in the potential for significant growth being created for shareholders in the coming years. This growth will arise from the commercialisation of Flutiform by our partners, the continued contribution from the royalties of our eleven approved products, and the further development of our pipeline.”
With regard to the outlook for the second half of the year, Karabelas said the group is “not expecting revenues in the second half of 2007 to be significantly different from the first half whereas costs are expected to ramp-up due to increased rate of development expenditure on Flutiform.”
And over the next year, he said the company is expecting further country by country launches of various products should lead to growth in revenues during 2008, and concluded: “Our objective remains to move into operating profit (before finance costs) during the course of 2008 and we reiterate our target to move into profit (after tax) in 2009.”