Investor relief at Skyepharma

BIOTECHNOLOGY company Skyepharma had more good news for long-suffering investors today as it announced it has acquired rights to drug delivery technology from developer Vectura, in exchange for a 4% investment in the business worth £2m.

The deal gives SkyePharma non-exclusive rights to Vectura's Aspirair dry powder inhaler device for delivering drugs to the lungs.

SkyePharma chief executive Michael Ashton said the Vectura deal will help the group enter the promising field of delivering protein and peptide drugs to the lungs.

The news is another shot in the arm for City stock watchers who have sat through a succession of disappointing announcements from the company, including three profits warnings up to January and a disastrous set of results in April.

Several analysts believe Skyepharma could finally be turning the corner, even after poor annual figures caused by delays to three key licensing deals last year.

Enthusiasm for Skyepharma shares has also grown since the company announced in April that the US Food & Drug Administration has approved DepoDur, its single-dose morphine treatment for pain after surgery.

Endo Pharmaceuticals of the US expects to market the drug by the end of the year.

Today‘s announcement of the deal with Vectura is also good news for Skyepharma‘s patient institutional investors, including Fidelity Investments (14%) and Jupiter Asset Management (5.2%). They have watched the stock drop from 79.25p in December to just 50.5p after January‘s profit warning.

Sentiment was not helped when the company unveiled an annual loss of £43.2m, compared with a £1.1m profit the year before.

Analysts say that Michael Ashton now has a greater chance of staying with the business, contrary to rumours earlier this year that he would fall on his sword.