Skyepharma has moved to ease concerns among investors who are worried about the firm’s ability to refinance the terms of convertible bonds that could result in liabilities of almost £90 million over the next two years.

Holders of these bonds could demand repayment of £69.6 million in May next year and a further £20 million in June 2010. This would have a terrible effect on SkyePharma’s finances so the company has carried out “a detailed appraisal of a number of potential approaches” to renegotiate or refinance the convertible bonds “well before” May 2009.

As part of its interim management report, SkyePharma’s board said it “continues to have a reasonable expectation that the convertible bonds can be renegotiated or refinanced “in a timely manner”. It added that “detailed work” is now being carried out with a view to making a proposal to key bondholders and announcing plans to deal with the issue shortly after the announcement in the summer of the results of two Phase III efficacy trials for Flutiform (fluticasone and formoterol), the company's flagship product for the treatment of asthma.

The report was not all doom and gloom, however, and SkyePharma said revenues in the first quarter “have shown an encouraging start to the year”. Royalty income rose on the launch by AstraZeneca of Pulmicort (budesonide) HFA-MDI in several markets and payments from Abbott Laboratories’ Kos Life Sciences unit for additional studies on Flutiform.

SkyePharma said it remains on track to file Flutiform in the USA in the first quarter of 2009. Earlier this month, the company said that a Phase III efficacy study evaluating the drug in adolescent and adult patients, the first of several being carried out in preparation for regulatory filing, met its primary endpoints.

The company also noted that manufacturing revenues were boosted by the initial sales of a new formulation of the high blood pressure drug Sular (nisoldipine), developed with Sciele Pharma, which was launched in the second half of March.

Cunningham to replace Condella as CEO
Once the restructuring has been completed, SkyePharma said that Mr Condella will be succeeded by chief operating officer Ken Cunningham in the top post. Prior to joining SkyePharma in April 2006, he was
CEO at Arakis, which was acquired by Sosei of Japan in 2005 and he has also worked at Alza Corp, Sequus, GlaxoSmithKline and Warner-Lambert. Mr Condella will continue on the board as a non-executive director once the changes take place