SkyePharma stumbles after AstraZeneca decision on asthma drug

SkyePharma's ($SKP.L) share price dropped March 7 on bad news from the company's partner, AstraZeneca ($AZN). AstraZeneca announced it would no longer make a hydrofluoroalkane (HFA) pressurized metered dose inhaler formulation of its asthma drug Pulmicort because of technical problems.

Shares of SkyePharma, which developed the HFA version of the treatment for AstraZeneca and earned mid-teen royalties on sales of the product, ended March 7 down 12.19 percent to £36.88. The London-based drug delivery specialist said that royalty income from the product accounted for about 5 percent of its total revenue for the first half of 2010 and the full year of 2009.

AstraZeneca, whose shares ended the day down 1.09 percent to $48.29 on March 7, said that it decided to stop making 100 and 200 microgram doses of the HFA pMDI version of Pulmicort because of "complex manufacturing issues related to technical aspects of the device" for that treatment. And the problems were not related to the treatment's active ingredient, budesonide, which is an inhaled anti-inflammatory glucocorticosteroid. AstraZeneca plans to continue sales of other formulations of budesonide which are taken with different devices, Reuters reported.

SkyePharma says on its website that its HFA version of Pulmicort was developed as an environmentally friendly alternative to the formulation of the treatment which uses chlorofluorocarbons (CFCs) as propellants. The firm's version of Pulmicort is one of 12 approved treatments that use its technology, company CEO Axel Müller said in a statement.

- here's AstraZeneca's release
- and SkyePharma's release
- read the Reuters report