SkyePharma has posted a 25% drop in first-half revenues to £22.1 million but says it hopes to meet full-year targets, provided it wins its first approvals for respiratory drug Flutiform.

Operating profit was also down - by 69% to £2.7 million - but the firm said this was in line with expectations and largely a result of non-recurring manufacturing revenues booked in the first half of 2010, as well as the loss of revenue resulting from AstraZeneca's decision to withdraw its Pulmicort pMDI (budesonide) asthma product in March.

Earlier this month, SkyePharma took a big step towards reducing its cost bas, with the leasing of its production plant in France to German contract manufacturer Aenova. The CMO is taking over the running of the facility in Saint Quentin-Fallavier and will pay SkyePharma rent of 1 million euros a year in cash for the first two years, after an initial six-month rent-free period, rising to 2 million euros on renewal.

All eyes at SkyePharma are now on asthma and chronic obstructive pulmonary disease candidate Flutiform (fluticasone and formoterol), which is key to the company's future. The product is currently under regulatory review in Europe and could be launched into its first markets later this year.

Meanwhile, "good progress continues to be made with two Phase III clinical trials of Flutiform in Japan and the Japanese New Drug Application is expected to be filed during the fiscal year ending March 2013," according to SkyePharma chief executive Axel Muller.

Nevertheless, the company expects costs to continue to be "substantial" during 2011 in the build-up to the product's launch and says these "will not be fully offset by milestones arising from the initial launches of Flutiform in Europe."

SkyePharma has arranged for Sanofi to manufacture and supply Flutiform from its facility in Holmes Chapel in the UK, and is committed to minimum production volumes, provided the product launches this year.