A possible merger between UK pharmaceutical companies SkyePharma and Innovata will not now go ahead, according to statements released by the two firms, although SkyePharma says it is still discussing a number of other offers.
SkyePharma put itself on the block last November after respiratory drug delivery specialist Innovata tabled a bid for the company, and in December said it had received a number of bids, both for the company as a whole and for certain individual assets.
Innovata has now said it will not be pursuing the merger after deciding its all-share offer would not be competitive with cash-based offers from other companies.
SkyePharma, which develops products based on a range of drug delivery technologies, is thought to be hoping for an offer that will improve its cash position as it continues a costly effort to bring a combination inhaled product for asthma - Flutiform (formoterol plus fluticasone) - to market.
Last September, the company was forced to raise £35 million ($62m million) in a discounted rights issue to fund Phase III trials of Flutiform after failing to find a partner for the project, disappointing investors who hoped a deal would have advanced SkyePharma's efforts to reach profitability.
In a statement, SkyePharma said it was still looking for an offer for the whole company, but had not yet received one it felt could be recommended to shareholders.
If approved Flutiform could be a massive product for the company, competing with blockbuster brands such as GlaxoSmithKline's Advair/Seretide (salmeterol and fluticasone) and AstraZeneca's Symbicort (formoterol and budesonide).
But SkyePharma will need a big partner with plenty of marketing muscle to claw market share from Advair and Symbicort, which dominate the market for combination products to treat asthma and chronic obstructive pulmonary disease.
Market research consultancy Datamonitor recently predicted that the world asthma/COPD market will increase by 35% to over $18 billion by 2011, largely driven by the success of the combination drugs. Advair, already leading the market, is expected to achieve sales of around $5 billion this year, although Symbicort is expected to close the gap, helped by a new, more flexible dosage regimen (see this article for details).