Skyepharma announced an agreement with Novartis Pharma to jointly develop a new product for the treatment of asthma and chronic obstructive pulmonary disease (COPD). The product will combine Novartis' novel long-acting bronchodilator QAB149 with two Skyepharma technologies:

Skyehaler, a breath-activated multi-dose dry powder inhaler (MDDPI) device, to be marketed by Novartis as the Certihaler Skyeprotect, a powder formulation that protects the drug from atmospheric moisture to ensure product stability and dose-to-dose reproducibility

The product has already successfully completed a technical feasibility study at Skyepharma. Novartis will make an initial payment to Skyepharma on signature of the agreement. If the co-development project progresses successfully, Novartis will also make future payments on attainment of development milestones and will pay Skyepharma royalties on eventual sales.

Michael Ashton, chief executive of Skyepharma, said: "We are delighted by the decision of Novartis to select our formulation expertise and Skyehaler technology for this exciting new compound. This agreement further confirms our position as a leader in the development of products for the important and fast-growing respiratory market."

Patients with asthma and COPD use bronchodilators to open the airways in the lung, thereby improving their ability to breathe. Most bronchodilators are short-acting but in recent years long-acting bronchodilators have been introduced that have an extended duration of action and only need to be taken twice a day. QAB149 is a long-acting bronchodilator that is currently in Phase II trials for asthma.

An agreement has already been made to use Skyepharma MDDPI and formulation technology with Novartis' long-acting bronchodilator Foradil (formoterol fumarate). Foradil Certihaler was co-developed by Skyepharma and Novartis and was submitted for regulatory review in the US and Europe in December 2002. In October 2003 the US Food and Drug Administration (FDA) issued an "approvable" letter for Foradil Certihaler, meaning that the product can be approved by the FDA subject to resolution of certain outstanding issues.

Skyepharma PLC develops pharmaceutical products benefiting from world- leading drug delivery technologies that provide easier-to-use and more effective drug formulations.