Jefferies Healthcare Conference 1-4 June 2015

Skyepharma PLC Peter Grant, CEO Andrew Derodra, CFO

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Disclaimer The contents of this presentation and the information which you are given at the time of the presentation have not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000 (the “Act”). Reliance on this presentation for the purpose of engaging in investment activity may expose an individual to a significant risk of losing all of the property or other assets invested. 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 (the “Company”) nor shall it form the basis of or be relied on in connection with any contract or commitment whatsoever. No reliance may be placed for any purpose whatsoever on the information contained in this presentation and/or opinions therein. This presentation is exempt from the general restriction (in section 21 of the Act) on the communication of invitations or inducements to engage in investment activity on the grounds that it is made to:- (a) persons who have professional experience in matters relating to investments who fall within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (b) high net worth entities and other persons to whom it may otherwise lawfully be communicated, falling within Article 49(1) of the Order (all such persons together being referred to as “relevant persons”). Any person (whether relevant persons or otherwise) are recommended to seek their own independent financial advice from a person authorised for the purposes of the Act before engaging in any investment activity involving the Company’s securities.

This presentation does not constitute or form part of any offer or invitation or inducement to sell, issue, purchase or subscribe for (or any solicitation of any offer to purchase or subscribe for) the Company’s securities in the UK, U.S. or any other jurisdiction and its distribution, does not form the basis of, and should not be relied on in connection with, any contract or investment decision in relation thereto nor does it constitute a recommendation regarding the Company’s securities by the Company or its advisers and agents. Nothing in the presentation shall form the basis of any contract or commitment whatsoever. The distribution of this presentation outside the UK may be restricted by law and therefore persons outside the UK into whose possession this presentation comes should inform themselves about and observe any such restrictions as to the distribution of this presentation. The Company has not registered, and does not intend to register, any securities under the US Securities Act of 1933, as amended or to conduct a public offering of any securities in the US.

This presentation contains "forward-looking" statements, beliefs or opinions, including statements with respect to the business, financial condition, results of operations and plans of the Company. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond the Company’s control and all of which are based on the current beliefs and expectations of the directors of the Company about future events. Recipients should note that past performance is not necessarily an indication of future performance. Forward-looking statements are sometimes identified by the use of forward-looking terminology such as "believes", "expects", "may", "will", "could", "should", "shall", "risk", "intends", "estimates", "aims", "plans", "predicts", "continues", "assumes", "positioned" or "anticipates" or the negative thereof, other variations thereon or comparable terminology or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements may and often do differ materially from actual results. The significant risks related to the Company’s business which could cause the Company’s actual results and developments to differ materially from those forward-looking statements are discussed in the Company’s Annual Report and other filings. They appear in a number of places throughout this presentation and include statements regarding the intentions, beliefs or current expectations of the directors of the Company with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's business, concerning, amongst other things, the results of operations, financial condition, prospects, growth and strategies of the Company and the industry in which it operates. The Company will not publicly update or revise any forward-looking statements, either as a result of new information, future events or otherwise.

In considering the performance information contained herein, recipients should bear in mind that past performance is not necessarily indicative of future results, and there can be no assurance unrealised return projections will be met. Certain of the past performance information presented herein may not be representative of all transactions of a given type. Actual events could differ materially from those projected herein and depend on a number of factors, including the success of the Company’s development strategies, the successful and timely completion of clinical studies, securing satisfactory licensing agreements for products, the ability of the Company to obtain additional financing for its operations and the market conditions affecting the availability and terms of such finances.

The Company reports under IFRS. Where foreign currency equivalents have been provided for convenience in this presentation, the exchange rates applied are those used in the relevant financial statements from which the figures have been extracted.

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Business summary

Oral & Inhalation drug development experts • Scientific expertise combined with proprietary technologies • Track record of complex product development

Recurring revenues, positive momentum • Long-term royalty and supply agreements • 16 approved revenue-generating products, 8 launched in last 3 years

Strong cash flow, earnings visibility • Strong cash generation from royalties and product supply • Portfolio of approved products launched in multiple countries

Investing for the next phase of growth • Strengthening pipeline with development of new products and technologies • Developments likely to include mix of own R&D, collaboration, in-licensing and M&A

• Proven development capabilities to address c.U.S.$29.3bn* global asthma and COPD market – covering both pMDI and DPI

• Cover full development cycle from pre-clinical R&D to post approval supply and support • Product approvals in more than 50 countries including U.S., Europe and Japan • Supporting Mundipharma in the development of a breath-actuated version of flutiform®

• 2014 commenced development of SKP-2075, a potential novel treatment for COPD

Expert developers of inhalation products

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* Source: Company analysis: i) Datamonitor COPD report, DMKC0047510, Publication Date: 30/10/2014 ii) Datamonitor Asthma report, DMKC0082148, Publication Date: 18/06/2014 iii) Extrapolation of main market sales to global numbers with a factor of 25%

Metered Dose (pMDI) Dry Powder (DPI)

Approvals in more than 50 countries Approvals in 31 countries, incl. U.S.

Products developed by SKP have included flutiform® and Pulmicort pMDI

Products developed by SKP have included Foradil® Certihaler®

New developments for RespiVert (Janssen Biotech)

Technologies: SkyeDry™, SkyeStabe™, SkyeFine™, IDD®- P

Technologies: SkyeProtect™ Device: Skyehaler

• Oral products incorporating Skyepharma technology achieved in-market sales of approx. U.S.$3bn in past 5 years

• Proven expertise and technologies for oral drug delivery • Excellent industry reputation and connections built up over many years • Oral drug delivery solutions and technologies used in 10 marketed products • Developing novel oral drug delivery technologies

Oral drug delivery experts

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Technology Delivery solution Product examples

Geomatrix™ Family of 8 controlled release mechanisms

Paxil CR®, Requip® Once-a-day, ZYFLO CR, Coruno, Sular®, Diclofenac-ratiopharm-uno, Madopar DR

Geoclock™ Customised release delay for chronotherapy LODOTRA® / RAYOS®, SKP-1041, SKP-1052

“Parachute” technology Gastroretention Xatral® OD / Uroxatral®

Particle engineering Improved bioavailability Triglide®

Proven credibility with multiple partners

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• Rejuvenated product portfolio driving growth in revenues and EBITDA • Balance sheet transformed – net debt eliminated • Laying down foundations for future growth:

− SKP-2075 - new inhalation therapy platform in development for COPD − Soctec™ - novel development of a gastro-retentive drug delivery platform

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Delivering substantial progress

EXPAREL® flutiform®

€m

GSK new once-a-day asthma/COPD products

U.S.$m

£m 2014 % Change 2013 Sales 73.8 18% 62.6

Operating profit* 22.7 67% 13.6

EBITDA* 26.1 46% 17.9

Net finance costs* (6.0) 59% (14.6)

Profit after tax* 16.1 - 0.8

As at 31 Dec 2014 As at 31 Dec 2013

Cash 32.4 96% 16.5

Net cash/(debt) 15.0 - (84.2)

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Financial highlights 2014

• Growth in revenues driven by flutiform® and EXPAREL® • Improving operational leverage in flutiform® supply chain • Balance sheet transformed by capital raise - £25m saved in future payments • £25m 5-year Revolving Credit Facility signed in April 2015

* Pre-exceptional †Debt shown on IFRS basis

†

• Revenues from 8 products launched since March 2012 represented 66% of total 2014 revenues (2013: 47%)

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New products represent 66% of revenues

0

5

10

15

20

25

30

35

40

45

H1 2012 H2 2012 H1 2013 H2 2013 H1 2014 H2 2014

Total revenues Revenues from 8 products launched since March 2012

£m

Rejuvenated product portfolio

Sales

Time

Introduction Growth Maturity Decline

flutiform® (France)

Relvar®Ellipta® (Japan)

flutiform® (14-day, Japan)

flutiform®

(Italy)

flutiform® (Germany)

flutiform®

(UK)

EXPAREL® (U.S)

RAYOS® (U.S.)

PAXIL CR® (Japan)

Requip® Once-a-Day (Japan)

Solaraze® (Europe)

Solaraze® (U.S.)

Xatral®

Paxil CR® (Ex-Japan)

Requip® Once-a-Day (Ex-Japan)

Breo® Ellipta® (U.S.) COPD

Coruno®

Lodotra® (RoW)

Anoro® Ellipta® (U.S., Japan)

flutiform®

(South Korea)

Relvar®Ellipta® (UK, Germany)

Anoro® Ellipta® (Europe – first launches)

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flutiform® (Spain)

flutiform® (30-day, Japan)

Incruse® Ellipta® (UK)

Incruse® Ellipta® (U.S.)

Breo® Ellipta® (U.S.) Asthma

Inhalation Products Primary Indication Licensee / Partner

flutiform® – E.U. & other / Japan Asthma Mundipharma / Kyorin †Relvar® / Breo® Ellipta® COPD & Asthma (U.S., Europe) / Asthma (Japan) GlaxoSmithKline †Anoro® Ellipta® COPD (U.S., Europe & Japan) GlaxoSmithKline

†Incruse® Ellipta®

COPD (U.S. & Europe) GlaxoSmithKline

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Revenues from 16 approved products

Oral Products Primary Indication Licensee / Partner

Xatral® OD / Uroxatral® BPH (urinary symptoms) Sanofi

Requip® Once-a-day Parkinson’s disease GlaxoSmithKline

Paxil CR® Depression GlaxoSmithKline

Sular® Hypertension Shionogi

ZYFLO CR® Asthma Cornerstone Therapeutics

Coruno® Angina Therabel

LODOTRA® / RAYOS® RA pain & stiffness Horizon Pharma

Triglide® Lipid disorders Shionogi

Madopar DR® Parkinson’s disease Roche

Diclofenac-ratiopharm® uno Pain / inflammation Teva

† Technology licence, product not developed by Skyepharma *A product of Skyepharma’s former Injectable Business now Pacira Pharmaceuticals, Inc

Other Products Primary Indication Licensee / Partner

Solaraze® Actinic keratosis Sandoz / Almirall

*EXPAREL® Pain management Pacira Pharmaceuticals

• flutiform® combines most commonly prescribed ICS1 with fast onset LABA2

flutiform - novel combination asthma treatment

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Product Developer ICS LABA Inhaler

flutiform® Skyepharma3 fluticasone propionate formoterol pMDI

Seretide/Advair4 GSK fluticasone propionate salmeterol DPI/pMDI

Symbicort4 AZ budesonide formoterol DPI/pMDI

Foster/Fostair Chiesi beclametasone formoterol pMDI/DPI

Dulera (U.S. only) Merck & Co mometasone formoterol pMDI

Breo/Relvar Ellipta GSK5 fluticasone furoate vilanterol DPI

3 and licensees

1 Inhaled corticosteroid (anti-inflammatory) 2 Long acting beta2 agonist (bronchodilator)

4 plus generics in certain markets 5 includes technology under license from Skyepharma

flutiform® - launched in 26 countries*

Launched in 20 European countries, plus Australia, HK, Israel, Japan, Singapore, South Korea Approved in Argentina, Kuwait, Macau, Malaysia, Philippines, Poland, Portugal, Romania, Taiwan, UAE

Latin America (Sanofi) Approved in Argentina; NDA under review in Colombia; joint review of impact of currency weakness

United States Available Japan (Kyorin)

120-puff version launched Dec. 2014 56-puff version launched 2013

Europe & RoW (Mundipharma) 2014 launches incl. France, Italy (as Abriff®), Spain, S. Korea, Austria, Israel, Singapore Approved in 34 countries Applications under review in 14 countries

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* At 12th May 2015

flutiform® - in-market sales up 272% in 2014

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€m

Source: Internal calculations using IMS Health data, Q4 2014, based on sales to pharmacies excluding certain minor countries not covered by IMS

“We are encouraged by the growth of flutiform® for the treatment of bronchial asthma in Europe and in an increasing number of important markets around the world. Sales continue to rise in line with our expectations and we are pleased to be making progress in other areas, including filing a paediatric indication in Europe, advancing international COPD studies and developing a breath-actuated version.” Antony Mattessich, Regional Director, Europe, Mundipharma, March 2015

“flutiform® grew strongly in 2014, particularly in the fourth quarter, in this highly competitive market. The response from clinicians and patients to this new combination therapy has been very positive, and we look forward to continuing to roll out the four-week version across Japan.” Masahiro Yamashita, President & CEO, Kyorin Holdings Inc., March 2015

2014 v. 2013 Q4 vs Q3

Europe/ROW +218% +27%

Japan +913% +124%

Total +272% +45%

• Mundipharma making substantial investment in the flutiform® franchise

flutiform® - initiatives for future growth

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Line Extension Status

European paediatric asthma indication Filed for regulatory review in Europe in January 2015

COPD (Europe) >1,500 patients, recruitment continuing

Novel breath-actuated version flutiform® canister coupled with Mundipharma’s breath-actuated device

China / Asia Pacific - COPD Clinical trials commenced 2014

China - Asthma Clinical trials commenced 2014 Launch anticipated within 4 years

• 2014 in-market sales U.S.$188.5m (2013: $76.1m), up 148% • Product of Skyepharma’s former Injectable Business, now Pacira

− Skyepharma eligible for 3% of net sales* until patents expire (September 2018) plus milestones (see below)

• Launched in 2012 for single-dose infiltration to produce postsurgical analgesia • Pacira analysts’ consensus indicates trigger of U.S.$250m annual net sales* for

U.S.$8m milestone could be achieved in 2015

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EXPAREL® - generating revenue and milestones

* On a cash-received basis in the U.S., Japan and 5 major EU countries

EXPAREL® annual worldwide net sales*

Skyepharma milestone

$100m $8m received 2014

$250m $8m

$500m $32m

First major E.U. country sale

$4m

EXPAREL® in-market sales U.S.$m

• Dry powder inhalation formulation technology licensed to GSK • Low single digit royalties capped at £9m per annum for life of patents

(earliest expiry in U.S., Europe, Japan, Nov 2019) related to Relvar®/ Breo® Ellipta®, Anoro® Ellipta® and Incruse® Ellipta®

• Breo® Ellipta® approved by FDA for once-daily treatment of asthma in April 2015, in addition to COPD indication

• Analysts forecast Skyepharma £9m royalty cap will be reached in 2017

GSK royalties – emerging new revenue stream

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In-market sales of Relvar/Breo, Anoro, Incruse

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Pipeline product candidates (disclosed)

Mundipharma has filed marketing authorisation applications in some Rest of World markets † Complete response letter received January 2010 and additional studies are required o Partial

Oral Primary Indication Feasibility Phase I

Phase II Phase III

Filed Licensee / Partner

SKP-1041 Sleep maintenance Somnus

SKP-1052 Nocturnal hypoglycaemia Available

Soctec™ Gastro-retentive Available

Other technologies Various Available

Inhalation Primary Indication Feasibility Phase I

Phase II

Phase III

Filed Licensee / Partner

flutiform (ROW) Asthma o o Mundipharma

flutiform (LATAM) Asthma o Sanofi

flutiform (Europe) COPD Mundipharma

flutiform (U.S.) Asthma † Available

flutiform (Canada) Asthma Available

SKP-2075 COPD Available

Various Asthma/COPD o o Janssen Biotech (RespiVert)

• COPD − Affects an estimated 210m people worldwide - major cause of death − Market size: $8.4bn* in U.S., Japan and top 5 E.U. countries − Unmet medical need – inflammation not sufficiently treated with LABA/ICS,

LABA, LAMA or LABA/LAMA • Mode of action – inhalation of ultra-low dose of theophylline with an ICS to

reactivate ICS as anti-inflammatory agent for COPD − Uses known molecules in a novel way – lower risk than new chemical entities

• Skyepharma commenced development of lead product candidate, SKP-2075 − Skyepharma acquired all global rights and IP including granted patents in

Europe, Japan and U.S. in 2014 − Plan to conduct a phase II study sized to produce statistically significant data − Investment estimated at c. £14m (2014 – 2017) − Funded out of Skyepharma’s ongoing cash generation

• Aim is to partner following proof of concept • Potential opportunities in combination with LABA, LAMA, LABA/LAMA

SKP-2075 – targeting inflammation in COPD

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* Chronic obstructive pulmonary disease. Forecast. Datamonitor, DMKC0047510 , Publication Date: 03/10/2014

• Gastro-retentive oral drug delivery platform − Absorption window for many (c.40%) drugs

limited to upper gastro-intestinal (GI) tract − Aim is to retain drug delivery device in upper GI

tract as long as possible • Soctec™ - designed to meet the challenge

− Initial technical feasibility completed − Preliminary study in healthy volunteers: initial

data supports concept − Patent application filed

• In 2015 carrying out further work to: − Optimise technology, produce additional data − Prepare for manufacture of clinical trial material

• Seeking partners to work on potential applications with active ingredients

• One of several new oral drug delivery technologies under development

Soctec™ - targeting gastro-retention

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Easy to swallow capsule Floats when enters stomach Active ingredient released for delivery to

absorption window or local action in stomach Potential for sustained release and multiple

pulsed release Potential in poorly and highly soluble drugs

• Nocturnal hypoglycaemia is a side-effect of insulin treatment for patients with diabetes mellitus − Frequently unrecognised and often leads to poor metabolic control − Up to 15% of diabetics with nocturnal hypoglycaemia require intensive assistance − There are no drugs that address this condition

• SKP-1052 uses side effect of a known drug, with delayed release Geoclock™ technology − Initial clinical study supportive of concept − Patented concept − Regulatory advice supportive

• Seeking partnering/funding for further development

SKP-1052 - targeting nocturnal hypoglycaemia

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Summary

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Existing projects and royalty streams • Continue to optimise value of current agreements • Funded R&D, milestones and long-term royalties

Product supply • Run supply chain for strategic royalty-generating products • Long-term source of recurring profitable revenues

Inhalation • Strengthen pipeline by developing products to value inflection points for outlicensing • Mix of in-house innovation, collaborations, in-licensing, acquisitions

Oral • Strengthen technology base via in-house innovation and in-licensing/small acquisitions • Target unmet needs and hard to copy / genericise concepts • SKP-1052 (nocturnal hypoglycaemia) – seek funding partner(s) for further development

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Group strategy

• Business performing well – growing recurring revenues from royalties and product supply − Board expects further substantial growth in revenues in 2015, compared with

2014, mainly from the products launched since March 2012 − Revenues from flutiform® product supply are likely to continue to grow

significantly and steps are being taken to expand manufacturing capacity − Based on current analysts’ forecasts, EXPAREL® has potential to achieve

$250m of net sales, triggering $8m milestone − Growth of revenues from newly launched products likely to more than offset

declines from older products • Strengthened balance sheet enabling measured investment in new

Inhalation products, Oral drug delivery technologies and corporate opportunities to drive next phase of growth

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Summary

• Peter Grant Chief Executive Officer

• Andrew Derodra Chief Financial Officer

• Jonathan Birt Investor Relations

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Contact information

Head Office: Skyepharma PLC 46-48 Grosvenor Gardens, London SW1W 0EB United Kingdom Tel: (+44) 20 7881 0524 ir@skyepharma.com

LSE:SKP www.skyepharma.com

Appendices

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• flutiform® − Further launches and in-market sales growth − Progress with COPD trials − Filing in E.U. of breath-actuated version

• EXPAREL® − Continued sales growth - $8m milestone payable on $250m sales − Resolution of regulatory matters

• Inhalation – progress with SKP-2075 • Oral

− Progress with Soctec™ − Progress with other novel oral drug delivery technologies − Progress with financing for development of SKP-1052

• Additional licensing/development opportunities

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Potential news flow 2015/16

The Board Frank Condella Non-Executive Chairman • Joined 2006 • CEO 2006 - 2008 • President/CEO Columbia Labs • Previous Exec: IVAX; Faulding; Roche;

Lederle

Jean-Charles Tschudin Non-Executive Director Senior Independent Director Chairman Nomination Committee • Joined 2007 • Non-Exec Director Sinclair IS Pharma • Previous Exec: Astellas; Cardinal

Health; J&J; Schering-Plough

Thomas Werner Non-Executive Director Chairman Remuneration Committee • Joined 2009 • NED: Chairman 4SC; Board member:

Basilea; Blackfield; BSN; SuppreMol • Previous Exec: GSK; BMS

Peter Grant Chief Executive Officer • Joined 2006 as CFO • Appointed CEO 2012 • Non-Exec Director Abzena PLC • Previous Exec: Voice Commerce;

Eurodis Electron; WorldPay; Molins; General Electric; KPMG

John Murphy General Counsel, Company Secretary • Joined 2006 • Previous Exec: Medeva; Celltech; Pharmagene

Andrew Derodra Chief Financial Officer • Joined November 2013 • Previous Exec: Tate & Lyle;

SABMiller; Diageo; British Airways; Reed Elsevier

Non

-Exe

cutiv

e Ex

ecut

ive

Co. S

ec

John Biles Non-Executive Director Chairman Audit Committee • Joined March 2014 • NED: Bodycote; HellermannTyton;

Sutton & E Surrey Water • Previous Exec: FKI; Chubb Security;

Racal Electronics; PwC

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Fund Manager % Holding*

HBM Healthcare Investments 28.28%

Aviva Investors 7.95%

Legal & General Investment Management 5.96%

Standard Life 5.18%

BlackRock 5.01%

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Major Investors (disclosed)

* As publicly disclosed at 23 March 2015

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Locations

R&D Muttenz, Switzerland

Leased to Aenova: Manufacturing

Lyon, France

Corporate Headquarters London, UK

FTEs: 87* (Aenova FTEs: approx. 80) FTEs: 12*

As at 31 December 2014

• Facility leased to Aenova* from July 2011 to June 2016 − 2014 rental €2.0m (£1.6m at 31 December 2014 rates) per annum − Current good manufacturing practice (cGMP) status, approved by the EMA

(Europe), FDA (U.S.), ANVISA (Brazil) and KFDA (South Korea) − Capabilities include multi-layer tablets and DPI filling

• Aenova currently responsible for management and financial performance − Site restructuring plan implemented in Q1 2015 − Some of the costs of restructuring being reimbursed by Skyepharma (£1.1m

exceptional costs in 2014 results) − Aenova’s savings to be shared with Skyepharma

• In anticipation of return to Skyepharma in July 2016 − Seeking opportunities to add additional work into the facility − Potential investment to improve efficiency and expand capabilities

Lyon manufacturing facility update

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*Aenova is a contract manufacturing organisation

Results 2014

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• Significant growth in revenue and cash generation from rejuvenated product portfolio and transformed balance sheet

• Products launched since March 2012 represent 66% of total revenues (2013: 47%)

• Substantial growth in royalties and supply revenues from flutiform® − Total 2014 in-market sales €72.2m, up 272% − Japan - launch of 120-puff version; Q4 sales up 124% from Q3 − Progress with developments for COPD studies (Europe, Asia Pacific), Asthma (China)

and on breath-actuated version • Growing revenues and milestones from share of Pacira’s EXPAREL® • Restructuring of Lyon facility to improve efficiency • Strong balance sheet and cash generation enabling measured investment in new

Inhalation products and Oral technologies − Acquisition of the global rights and IP to commence development of SKP-2075 (COPD) − Preliminary study for Soctec™, a gastro-retentive drug delivery platform, supports

further development which is underway

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Highlights 2014

• Revenues up 18% − flutiform® and

EXPAREL®

• Gross profit up 39% − Improving operational

leverage in supply chain

• Operating profit* up 67% • EBITDA* up 46% • Loss for year £10.5m

− Exceptional charges £26.6m

− Tax charge £0.6m − Pre-exceptional net

finance charges £6.0m

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2014 results

* Pre-exceptional

£m 2014 2013

Revenue 73.8 62.6 Cost of sales (32.9) (33.2) Gross profit 40.9 29.4 Selling, marketing and distribution (1.5) (1.5) Research and development (12.1) (10.8) Corporate costs (3.5) (2.7) Amortisation (0.8) (0.9) Share-based payment charge (0.5) (0.3) Other income 0.2 0.4 Operating profit* 22.7 13.6 EBITDA* 26.1 17.9 (Loss)/profit for the year (10.5) 0.8 Basic EPS (pence) (12.3p) 1.8p Pre-exceptional Basic EPS (pence) 18.8p 1.8p

• Product supply £34.2m − Lower volumes of Lyon products − Growth of flutiform® supply

• Royalties £17.2m − Recent launches - flutiform® and others − Cessation of royalty payments on ZYFLO

CR® and Paxil CR™ in the U.S.

• Milestones £9.1m − €5m: launch of flutiform® in France and Spain − $8m: EXPAREL® $100m worldwide net sales

• Contract development £8.3m − Supporting development of breath-actuated

version of flutiform® for Mundipharma − Development for Respivert on new molecules

for COPD/Asthma − flutiform® Japan development in prior year

• Other revenues £5.0m − Lyon rent − EXPAREL® share of higher net sales

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Revenues

1.7 5.0

• Guidance for 2015: c. £10m • Planned mix of self-funded and customer-funded development

− Leverages Skyepharma’s capabilities − Reduces risk whilst driving next phase of growth

• Main focus for self-funded net investment − Investment, as planned, in SKP-2075 out of the total £14m expected to 2017 − Continuing development of novel oral drug delivery platform technologies, including Soctec™ − Feasibility work for a novel inhalation product based on known chemical entities, with a view to

early partnering

• Customer-funded development − Collaborative developments – both oral and inhalation

• Leverage growing underlying profitability by measured investment in developing new products and technologies to overlay additional growth in medium to longer-term

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Investing in R&D to drive future growth

£m 2014 2013

Contract R&D revenue 8.3 10.3 R&D costs (12.1) (10.8) Net investment (3.8) (0.5)

• Increased revenue reflecting further launches (France, Spain, Japan 30-day and full year of Japan 14-day)

• Underlying demand growing • Improving economies of scale • Supply chain requires continuing investment in:

− Working capital to support growth in volumes − Maintenance of product supply – process and quality parameters (£2m - £4m

per annum for 2015 and 2016) − Capital expenditure to meet anticipated growth in demand (spend to date is

£16.9m, of which £2.5m incurred in 2014 (cash outflow: £1.7m))

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flutiform® supply chain – improving operational leverage

£m 2014 2013 Supply revenue 29.0 20.6

Cost of sales (26.0) (23.4)

Gross profit 3.0 (2.8)

• Expected to increase to c.£10m - £12m in 2015 • flutiform® manufacturing capacity (c.£7m - £9m)

− Continuous improvement actions and existing scale-up plans underway − Based on recent increases in demand forecasts, additional investment (c.£4m -£6m)

to achieve a faster step up in planned capacity over the next 12 months − Creating capacity to allow for potential launch of breath-actuated version, if

successfully filed and approved − These investments and any additional volumes are expected to improve economies

of scale • To improve efficiency and capabilities in Lyon, potential c.£1m - £2m • Other capital expenditure plans relate to support for R&D activities and IT

improvement projects

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Capital expenditure

£m 2014 2013 flutiform® supply chain 1.7 3.4 Other capex (net) 1.2 - Total capex (cash) 2.9 3.4

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Net cash

£m 2014 2013

Non-convertible bonds - (66.8)

Paul Capital note (NPV) - (0.7)

CRC finance (9.7) (24.5)

Property mortgages (6.6) (7.3)

Other (1.1) (1.4)

Total debt (IFRS) (17.4) (100.7)

Cash & cash equivalents 32.4 16.5

Net cash/(debt) 15.0 (84.2)

• Strong increase in cash generation − Improved operating performance − flutiform® supply chain positive gross profit and cash flow contribution − Net proceeds of capital raise less bond repayment

• Funding for capex and accelerated debt repayment

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Cash flow £m 2014 2013

Operating cash flow 29.9 14.2 Capex (2.9) (3.4) Net interest (3.1) (3.6) Debt repaid (including costs) (16.1) (7.1) Exchange/other (0.1) - Capital raise less bond repayment (inc. costs) 8.2 - Total Cash Flow 15.9 0.1

Net Cash at 31 December 32.4 16.5