NASDAQ:SKYE LSE:SKP

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Presentation to UBS Specialty Pharma conference
Michael Ashton Chief Executive 24 May 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 1.78 1 has been used
throughout. These dollar equivalent numbers do
not imply restatement from UK GAAP to US
GAAP. This presentation was updated on 19th May
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 395/705 mn
• (19 May 64p/share, 11.80/ADR)
• small equity stakes held by GlaxoSmithKline,
  Novartis and Kowa

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Drug delivery making good drugs better

• We normally work on drugs already proven safe and
  effective
• low risk of clinical failure
• short development times
• low development cost
• contrast with biotech!
• We rely on partners for sales and marketing

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Two business models
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A transforming business
Nine Ten approved products FDA approvals validate
three of our five delivery technologies Foradil?
Certihaler? approvable letter (Oct 03)
validates fourth (pulmonary)
Strong clinical pipeline 1 Filed, 4 x Phase III,
3 x Phase II
Changing quality of earnings
Strategic emphasis on royalty income over upfront
milestone payments Royalty income to replace
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)
Malmö
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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• Key marketed products
• Paxil CR? (GlaxoSmithKline)
• Xatral? OD / Uroxatral? (Sanofi-Synthélabo)

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Paxil CR? defending the Paxil franchise
Paxil CR? has captured 8 of the US SSRI
antidepressant prescription market

• first US generic competition for Paxil started
  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)
• Paxil CR? US sales
• 2003 650 mn
• 2004 800 mn (est likely peak)
• Q104 180 mn (37)
• SkyePharma royalty rate low single digits

It is very important to keep the sales effort
behind Paxil CR? John Coombe (GSKs CFO) Feb
2004
expect increase from start of US generic
competition
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Xatral OD/Uroxatral Sanofi-Synthélabo

• Once-daily Geomatrix? formulation of alfusozin
• uroselective alpha-blocker
• indication urinary symptoms of BPH
• On market in Europe ROW since 2000
• replacing multidose versions

• USA Uroxatral?
• new product on US market
• launched to urologists Nov 03
• launched to primary care Mar 04
• two USPs
• uroselection (no postural hypotension)
• no ejaculatory side-effects

• AUR indication approved Europe Ph III US
• 2003 world sales 222 mn (25 CER)
• Q104 world sales 72 mn (50 CER)
• 2006 forecast 500 mn (Sanofi-Synthélabo)
• SkyePharma royalty rate mid-single digits

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

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DepoDur? Endo, Medeus
US approved by FDA 18 May 04 Europe filed
Nov 03 (UK, then mutual recognition procedure)

• 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
  brain, needs less morphine than IV)

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DepoDur? - potential market

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

• 12 million key target surgeries a year across
  the US and major Europe
• surgeries associated with an ageing population
  are growing at 6-7 per annum
• market research indicates potential for 25 -
  40 patient share in major territories. Assumes
  pricing equivalent to IV PCA or epidural infusion
  (125 per surgical procedure)
• sales potential 250m
• exploring scope for premium pricing

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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, 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 Medeus Pharma (Mar
  04)
• rights for DepoDur? only throughout Europe
• SkyePharma bears development, manufacture costs
• Medeus bears marketing costs
• SkyePharma share of sales 35-50
• 50 share reached at sales well below 100 mn
• Rights for rest of world still available for
  licence

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Foradil? Certihaler? Novartis/Schering-Plough

• Active ingredient formoterol
• fast-onset, long-acting bronchodilator for
  asthma

• recent major study on maintenance use of
  formoterol raises value

• SkyePharma developed both Certihaler? device
  and formulation
• 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 Filed US Europe Dec 02
(launches expected in H2 04)

• FDA approvable letter issued Oct 03
• European approvals 2004 (Switzerland, Austria,
  Finland.)

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)
• Ph III to start Q204 target filing 2005
  target launch 2006

• 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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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 Nifedipine
DiclofenacRequipzileuton UndisclosedStatin
NK-104 Undisclosed Altace
GlaxoSmithKline Sanofi-Synthelabo
Roche TherabelMundipharmaRatiopharm GlaxoSmithK
lineCritical Therapeutics Merck
KGaAKowa Undisclosed King
PULMONARY
Foradil CertihalerPulmicort HFA Formoterol
HFAQAB 149 Formoterol Combi
NovartisAstraZeneca SkyePharma
Novartis SkyePharma
Enzon/MundiPharma/Nippon SyakuEndo /
MedeusAstralis SkyePharma SkyePharmaGeneMedix
Chugai
DepoCytDepoDurPsoraxine DepoBupivacaineHGHIn
terferon alpha-2b Undisclosed
SkyePharma has an option on world rights for
PsoraxineTM, exercisable at the end of Phase II
TOPICAL
SolarazeMultipleStatus is most advanced project
Quintiles/ShireTrigenesis
SOLUBILISATION
Fenofibrate Propofol IDD-D BusulfanMultiple
SkyePharma Endo / SkyePharma SuperGen Baxter
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2003 results summary

• 2003 loss primarily due to delays in completing
  3 key new agreements
• milestone payments 24m vs 48m in 2002
• royalty income nearly tripled
• since year-end, two key deals signed on
  excellent terms
• DepoDur? / Medeus
• undisclosed pipeline product / First Horizon
• dermatology package also outlicensed April 04
• commercial terms agreed for pulmonary package -
  with partner of choice
• subject to due diligence
• 20m convertible bond issue completed

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2004

• performance will depend on timing and structure
  of deals
• deliberate strategic shift away from upfront
  payments to longer-term milestone payments and
  higher share of profits
• short-term impact on revenues and cashflow
• expect further substantial increase in royalty
  income
• 2004-05 diminishing dependence on milestones
• further guidance to be issued once key deals
  completed

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Newsflow 2003 most targets met

• Filings
• DepoMorphine? US ?
• DepoMorphine? Europe ?
• Paxil? CR Social Anxiety FDA approval 17 Oct
• Paxil? CR PMDD intermittent ?
• (Paxil? CR PMDD continuous FDA approval 2 Sep)
• Corporate commercial agreements
• European licensing of DepoMorphine
• European licensing of Propofol IDD-D
• European licensing of DepoCyte? ?
• Licensing of Pulmonary products
• Licensing of Dermatology products
• Licensing deal with King Altace? ?
• Micap floated on AIM ?

• Product approvals/launches
• Uroxatral? US ?
• DepoCyte? Europe
• Foradil? Certihaler? US approvable 22 Oct
• Clinical trial progression
• Requip? Ph III start ?
• Propofol IDD-D? Ph II end ?
• Propofol IDD-D? Ph III start
• Pulmicort? HFA-MDI Ph III start ?
• Psoraxine (Astralis) Ph I start ?
• Clinical data publications
• DepoMorphine? Ph III
• Foradil? DPI Ph III
• Uroxatral? Ph III

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Key deals outstanding

• European rights for DepoDur? ?
• licensed to Medeus Pharma Mar 04
• 100 mn of milestones and 35-50 share of sales
• deal terms illustrate strategic drive away from
  upfronts to higher share of profits
• dermatology package ?
• licensed to Trigenesis Apr 04
• non-core products, pipeline and topical delivery
  technologies
• 20 mn in milestones and 10 royalty (35 of
  sublicence income)
• undisclosed cardiovascular pipeline product ?
• licensed to First Horizon May 04
• 50 mn in milestones 25 net royalty
• pulmonary package
• formoterol MDI, formoterol/fluticasone MDI,
  budesonide MDI (US rights)
• significant external/internal developments led
  to rejection of substantial offer late 03
• commercial terms agreed with partner of choice
  April 04 (subject to due diligence)
• alternative partners also at due diligence stage

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Newsflow 2004 further progress

• Filings
• Requip? OD Europe (US 2005)
• Licence agreements
• DepoMorphine? (Europe) ?
• Pulmonary product package
• Unnamed pipeline product ?
• Dermatology assets ?
• Propofol IDD-D? (Europe)
• DepoBupivacaine? (Europe)
• Clinical data publications (by partners)
• DepoMorphine? 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 approved 18 May
  ?
• DepoDur? UK
• Launch of DepoCyte? Europe ?
• Foradil? Certihaler? US FDA
  approvable Oct 03
• Foradil? Certihaler? Europe ?
• Clinical trial progression
• Propofol IDD-D? Ph III start
• Formoterol HFA-MDI Ph III start
• Formoterolfluticasone HFA-MDI Ph II/III 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
Strong near-term clinical pipeline 1 Filed, 4 x
Phase III, 3 x Phase II
Two major product launches expected in H2 04
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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