Paxil is shot in arm for SkyePharma

THE slow-release coating that SkyePharma has provided for the world's seventh-largest selling drug could put it on the fast track to profits this year.

The drug is Paxil, an anti-depressant made by Glaxo-SmithKline, and the deal will lift the biotech group into a market that it estimates could be worth $8bn (£5.6bn).

SkyePharma is the leader in this technique in addition to its oral, inhalation and injectable methods. Paxil with the new coating will be launched this month by GSK and will give SkyePharma a regular income from both milestone payments and royalties from sales estimated to be worth £1.9bn to GSK.

SkyePharma made its first operating profit of £4.8m in the last six months of the financial year to December 2001. This helped reduce losses to £9.4m against £19.7m in 2000.

Its strong portfolio includes new techniques for delivering drugs and drug development. They range from Solaraze, a treatment for skin cancer caused by exposure to the sun, and 48-hour pain relief for patients under the surgeon's knife.

Chairman Ian Gowrie-Smith says the group has moved to an era 'when we can anticipate increasing royalty income, both from launched clients' products... as well as our own products'. Last year turnover increased by 90% to £46.1m.

SkyPharma shares added 1/2p to 67 1/2p, having slumped to 49p last December on problems at former marketing partner Bioglan, which have now been successfully resolved.