NASDAQ:SKYE LSE:SKP

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C E Unterberg, Towbin Specialty Pharmaceutical
Conference Michael Ashton Chief Executive 27
October 2004
NASDAQSKYE LSESKP www.skyepharma.com UK
tel [phone] US tel [phone]

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Legal statement
This presentation does not constitute or form
part of any offer for sale or subscription or
solicitation of any offer to buy or subscribe for
any securities in SkyePharma PLC nor shall it or
any part of it form the basis of or be relied on
in connection with any contract or commitment
whatsoever. This presentation is only being
distributed to persons who fall within Article 8
of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) (No 2) Order 1997 or
Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order
1996, as amended.   This presentation includes
certain forward-looking statements with respect
to certain development projects, potential
collaborative partnerships, results of operations
and certain plans and objectives of SkyePharma
including, in particular, the statements
regarding potential sales revenues from Paxil CR,
targeted sales revenues from other products both
currently marketed and under development,
possible launch dates for new products, and our
revenue and profit guidance for the 2004
financial year. By their very nature
forward-looking statements involve risk and
uncertainty that could cause actual results and
developments to differ materially from those
expressed or implied. The significant risks
related to SkyePharmas business which could
cause our actual results and developments to
differ materially from those forward-looking
statements are discussed in SkyePharmas SEC
filings under the caption Risk
Factors. SkyePharma reports under UK GAAP.
Where US dollar equivalents have been provided
for convenience in this presentation, a fixed
exchange rate of 1.805 1 has been used
throughout. These dollar equivalent numbers do
not imply restatement from UK GAAP to US
GAAP. This presentation was updated on 22
October 2004
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SkyePharma in brief

• UK-domiciled speciality pharmaceutical company
• originally founded 1983, IPO 1996
• listed London (SKP), New York (ADR, SKYE)
• market capitalisation 605 mn
• (18 Oct 54p/share, 9.75/ADR, 622 mn shares in
  issue)
• small equity stakes held by GlaxoSmithKline,
  Novartis and Kowa

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Two business models
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A transforming business
Ten approved products Three launches anticipated
2005 Two products to be filed 2005 Four Products
in Phase III / Five Products in Phase II
Strategic emphasis on royalty income over upfront
milestone payments Royalty income replacing
milestones as main revenue source, driven by
Now Paxil CR?, Xatral OD/Uroxatral, Solaraze,
DepoCyt
Future Foradil Certihaler, DepoDur?,
HFA-formoterol, Propofol IDD-D?
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Global infrastructure
London (HQ)
Basel
Montreal
Osaka
San Diego
Global business development coverage
FDA/EMA approved manufacturing facilities
gt400 staff worldwide of which 50 scientists /
clinical staff
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• Marketed products
• Paxil CR? (GlaxoSmithKline)
• Xatral? OD / Uroxatral? (Sanofi-Aventis)
• Solaraze? (Bradley Shire)
• DepoCyt? (Enzon Mundipharma)

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Paxil CR? defending the Paxil franchise
Paxil CR? holds 7.5 of the US SSRI
antidepressant new prescription market

• generic competition for Paxil from 8 September
  03
• a prescription for Paxil CR? cannot be
  substituted with generic paroxetine
• but some indirect price pressure
• GSK still actively promoting Paxil CR?
• despite May 04 Appeals Court decision, GSK
  still aggressively defending last patent for
  Paxil (expires end-2006) should limit number
  of generic versions
• Paxil CR? US sales
• 2003 635m
• 2004 750m (est likely peak)
• H104 351m 26 CER
• 5 mn of non-US sales
• royalty rate low single digits
• potential increase from start of US generic
  competition
• dispute with GSK still proceeding

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Xatral OD/Uroxatral Sanofi-Aventis

• Once-daily Geomatrix? formulation of alfusozin
  for BPH
• two USPs
• highly uroselective (avoids postural hypotension)
• no ejaculatory side-effects (cf. Flomax)
• marketed in Europe ROW since 2000
• USA Uroxatral? launched Nov 2003
• primary care launch Mar 04
• main competitor Flomax (tamsulosin)
• Uroxatral? now holds 10 of combined
• NRx for Flomax and Uroxatral?
• AUR indication approved Europe Ph III US
• H104 world sales (all versions) 138 mn 35
  CER
• 2006 forecast 500m (Sanofi-Aventis)
• SkyePharma return on sales
• mid-single digits

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Solaraze? Bradley/Shire

• topical gel treatment for actinic keratosis
• active ingredient diclofenac in proprietary HA
  gel formulation
• alternative therapies for AK painful and/or
  disfiguring
• now marketed by Bradley in North America, Shire
  in Europe / Australasia
• H104 global in-market sales 12.5m
• US 8.7m (some wholesaler inventory build)
  Europe 3.8 m
• positive longer-term results from phase 3
  Australian study
• data will be used for Australian filing
• will support marketing elsewhere
• SkyePharma return on sales mid-teens

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DepoCyt? Enzon / Mundipharma

• intrathecal injectable treatment for
  lymphomatous meningitis
• active ingredient cytarabine in DepoFoam?
  formulation
• increases period between injections from every
  2-3 days to every 2 weeks
• approved in US as orphan drug (10,000 for
  course of 6 injections)
• marketed by Enzon in US, Mundipharma in Europe
• H1 04 global in-market sales 2.7m
• clinical trial in solid tumour patients now
  fully enrolled
• expect to file data with FDA Q105
• approval would roughly triple the number of
  eligible patients
• substantial milestones due on approval
• SkyePharma return on sales 30

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• Three key near-term
• pipeline products
• DepoDur? (previously DepoMorphine?)
• Foradil? Certihaler?
• Propofol IDD-D?

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DepoDur? Endo, Zeneus
US approved by FDA 18 May 04 Europe filed
Nov 03 (EU mutual recognition, UK as reference
country)

• Clinical trials (1000 patients) highly
  statistically significant
• hip/knee surgery, lower abdominal surgery,
  caesarean section
• Sustained-release morphine for relief of pain
  after surgery
• given as a single epidural injection
  before/during operation
• morphine released evenly over 48 hours (period
  of peak post-op. pain)
• minimizes breakthrough pain
• with conventional PCA, patient must react to
  pain
• no need for catheters and infusion pumps (
  savings for hospital)

• Disadvantages of conventional morphine
• effective analgesic but short-acting
• repeat doses need a catheter and an infusion
  pump
• catheter problems main barrier to wider use of
  epidural analgesia
• epidural route desirable (delivers direct to
  CSF, needs less morphine than IV)

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DepoDur? - potential market

• knee replacements revisions
• hip replacements revisions
• major abdominal surgery
• caesarean sections
• thoracic
• vascular

• 10-12 million key target surgeries a year in USA
  and Europe
• surgeries associated with an ageing population
  are growing at 6-7 per annum
• market research indicates potential for
• USA
• Procedure share 16-50
• Price per procedure 125-175
• estd sales potential 300 - 400m

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DepoDur? - potential endorsed

• USA/Canada
• 120m milestone deal with Endo Pharmaceuticals
  (Dec 02)
• rights for DepoDur? and Propofol IDD-D?
• option on related pipeline products including
  DepoBupivacaine
• SkyePharma bears development and manufacture
  costs
• Endo bears marketing costs
• SkyePharmas share of sales 20-60
• based on combined sales of DepoDur? and Propofol
  IDD-D?
• gt50 share if combined sales gt250 mn
• Europe
• 100m milestone deal with Zeneus Pharma (Mar
  04)
• rights for DepoDur? only throughout Europe
• SkyePharma bears development and manufacture
  costs
• Zeneus bears marketing costs
• SkyePharma share of sales 35-50
• 50 share reached at sales well below 100m
• Rights for rest of world still available for
  licence

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Foradil? Certihaler? Novartis/Schering-Plough

• formoterol (fast-onset, long-acting
  bronchodilator) in Certihaler? dry-powder inhaler
• formulation keeps powder dry, ensures accurate
  consistent dose
• now also being used in second collaboration with
  Novartis (QAB149)
• Schering-Plough to market in key US market,
  Novartis elsewhere
• global sales of Foradil? in inconvenient
  single-dose DPI 300 mn (2003)
• filed US Europe Dec 02
• FDA approvable letter issued Oct 03
• Novartis has filed additional data requested
• European approvals began H1 04 (Switzerland,
  Austria, Finland, Netherlands.)
• SkyePharma return on sales 10 (royalty
  manufacturing return)

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Propofol IDD-D? Endo, SkyePharma

• improved version of AstraZenecas injectable
  anaesthetic Diprivan
• SkyePharmas formulation unique - cannot support
  microbial growth
• no need for a preservative
• 2 emulsion ( lower injection volume and less
  lipid)
• not a generic
• designed for continuous uninterrupted 24-hour
  sedation
• ICU sedation is fastest-growing segment of
  Diprivan market

• Ph II completed (5 mn milestone payment from
  Endo)

• North America Endo (same terms as DepoDur?)
• Europe/Japan licensees to be appointed
• est. sales potential for Propofol IDD-D? 200
  mn

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Pipeline status

• Requip (GlaxoSmithKline)
• once-daily oral formulation of ropinirole (for
  Parkinsons disease)
• therapeutic benefits improved compliance
• SkyePharma managing clinical studies for GSK
• Ph III started Jun 03 (enrolment completed
  Q104)
• filing 2005
• Pulmicort HFA-MDI (AstraZeneca for Europe)
• Pulmicort (budesonide) inhaled steroid (for
  asthma)
• Ph III trial complete
• filing early 2005
• DepoBupivacaine (SkyePharma)
• long-acting injectable formulation of local
  anaesthetic
• designed to provide 48-72 hours of local pain
  relief after out-patient surgery
• Ph I trial started in Europe Sep 03 Ph II to
  start late 04

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Well-stocked pipeline
SkyePharma
Client products
marketed
approved
filed
Ph.III
Ph.II
Ph.I
feasibility
product
licence or partner
Paxil CRXatral OD Madopar DR Coruno Cordicant-U
no DiclofenacRequipzileuton UndisclosedStatin
NK-104 Undisclosed
GlaxoSmithKline Sanofi-Aventis Roche TherabelMun
dipharmaRatiopharm GlaxoSmithKlineCritical
Therapeutics NitecKowa Undisclosed
PULMONARY
Foradil CertihalerPulmicort HFA Formoterol
HFAQAB 149 Formoterol Combi
NovartisAstraZeneca SkyePharma
Novartis SkyePharma
Enzon/MundiPharma/Nippon SyakuEndo /
ZeneusAstralis SkyePharma SkyePharmaGeneMedix
DepoCytDepoDurPsoraxine DepoBupivacaineHGHIn
terferon alpha-2b
SkyePharma has an option on world rights for
PsoraxineTM, exercisable at the end of Phase II
TOPICAL
SolarazeMultipleStatus is most advanced project
Bradley/ShireDr Reddys (Trigenesis)
SOLUBILISATION
Fenofibrate Propofol IDD-D Multiple
SkyePharma Endo / SkyePharma Baxter
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Turnover growth record 1996-2004
CAGR H196 H104 38
m
69.6
Collaboration equity H1 H2
53.2
46.1
28.5
24.3
22.6
17.0
13.8
9.0
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H104 - new corporate developments

• Zeneus Pharma - DepoDur? for Europe
• 100 mn of milestones and 35-50 share of sales
• First Horizon oral cardiovascular product
• response to approvable letter filed with FDA -
  approval expected in Q4
• up to 50 mn in milestones 25 net royalty
• Critical Therapeutics zileuton
• oral leukotriene antagonist
• now in Ph III for asthma expect to file in
  2005
• Dr. Reddys dermatology portfolio
• Trigenesis now acquired by Dr Reddys
  reinforces marketing ability
• Vectura pulmonary alliance
• technology sharing Vectura DPI device more
  suited to delivery of macromolecules
• King terminated Altace agreement after
  announcement of acquisition by Mylan
• project was still at pre-feasibility stage of
  development

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2004 full year outlook

• performance will depend on timing and structure
  of deals
• deliberate strategic shift away from upfront
  payments to longer-term revenue-related milestone
  payments and higher share of profits
• short-term negative impact on revenues and
  cashflow
• expect further substantial increase in royalty
  income
• 2004-05 diminishing dependence on milestones
• 2004 profitability dependant on terms and timing
  of 1. pulmonary package deal
• 2. FDA approval of cardiovascular product

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Newsflow 2004 further progress

• Filings
• Requip? OD Europe (US 2005)
• Licence agreements
• DepoDur? (Europe) ?
• Pulmonary product package
• Unnamed pipeline product ?
• Dermatology assets ?
• Propofol IDD-D? (Europe)
• DepoBupivacaine? (Europe)
• Clinical data publications (by partners)
• DepoDur? Ph III ?
• American Pain Society, Vancouver 6-9 May
• Foradil? Certihaler? Ph III
• Uroxatral? Ph III

• Product approvals/launches
• Paxil? CR PMDD intermittent US ?
• DepoDur? US FDA approval 18 May
  ?
• DepoDur? UK
• Launch of DepoCyte? Europe ?
• Foradil? Certihaler? US FDA
  approvable Oct 03
• Foradil? Certihaler? Europe ?
• Cardiovascular product (First Horizon)
• Clinical trial progression
• Pulmicort HFA-MDI Ph III end ?
• Propofol IDD-D? Ph III start
• Formoterol HFA-MDI Ph III start
• Formoterolfluticasone HFA-MDI Ph II start
• Zileuton (Critical Therapeutics) Ph III start
  (COPD)
• Psoraxine? (Astralis) Ph II start ?
• DepoBupivacaine? Ph II start

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Investment highlights

• Strategic focus on royalties rather than upfront
  payments

Ten FDA-approved products validate drug delivery
technologies - DepoDur? approval demonstrates
successful development capability
Ten approved products Three launches anticipated
2005 Two products to be filed 2005 Four Products
in Phase III / Five Products in Phase II
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Investor relations contacts London Peter Laing,
Director of Corporate Communications 44-(0)207-491
-1777 plaing_at_skyepharma.co.uk New York Sandra
Haughton, US Investor Relations
Manager 1-212-753-5780 shaughton_at_skyepharma.com
and please visit our website
NASDAQSKYE LSESKP www.skyepharma.com