NASDAQ:SKYE LSE:SKP www.skyepharma.com UK tel: +44 (0)207 491 1777 US tel: +1 (212) 753 5780

1. C E Unterberg, Towbin Specialty Pharmaceutical Conference Michael Ashton Chief Executive 27 October 2004 NASDAQ:SKYE LSE:SKP www.skyepharma.com UK tel: +44 (0)207 491 1777 US tel: +1 (212) 753 5780

2. 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 SkyePharma’s business which could cause our actual results and developments to differ materially from those forward-looking statements are discussed in SkyePharma’s 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

3. 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

4. Two business models

5. Developing own products for out-licence Integrated pharmaceutical developer Drug delivery service provider 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: PaxilCR, Xatral® OD/Uroxatral®, Solaraze®, DepoCyt® Future: Foradil® Certihaler®, DepoDur, HFA-formoterol,Propofol IDD-D

6. Lyon New York Global infrastructure London (HQ) Basel Montreal Osaka San Diego Global business development coverage FDA/EMA approved manufacturing facilities >400 staff worldwide of which 50% scientists / clinical staff

7. Marketed products • Paxil CR (GlaxoSmithKline) • Xatral OD / Uroxatral (Sanofi-Aventis) • Solaraze (Bradley; Shire) • DepoCyt (Enzon; Mundipharma)

8. PaxilCR – defending the Paxil® franchise Paxil CR holds ~7.5% of theUS SSRI antidepressant new prescription market • generic competition for Paxil®from 8September ‘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) • H1’04: $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

9. Xatral® OD/Uroxatral®Sanofi-Aventis Once-daily Geomatrix formulation of alfusozin for BPH • two USPs: • highly uroselective (avoids posturalhypotension) • 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 • H1’04 world sales (all versions) €138 mn +35% CER • 2006 forecast: €500m (Sanofi-Aventis) • SkyePharma return on sales: mid-single digits

10. 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 • H1’04 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

11. 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 Q1’05 • approval would roughly triple the number of eligible patients • substantial milestones due on approval • SkyePharma return on sales: 30%

12. Three key near-term • pipeline products • DepoDur (previously DepoMorphine) • Foradil Certihaler • PropofolIDD-D

13. 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 mustreact 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)

14. 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 est’d sales potential: $300 - 400m DepoDur - potential market

15. 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 • SkyePharma’s share of sales:20-60% • based on combined sales of DepoDur and Propofol IDD-D • >50% share if combined sales >$250 mn Europe • €100+m 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

16. 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)

17. Propofol IDD-DEndo, SkyePharma • improved version of AstraZeneca’s injectable anaesthetic Diprivan • SkyePharma’s 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 • North America: Endo (same terms as DepoDur) • Europe/Japan: licensees to be appointed • est. sales potential for Propofol IDD-D: ~$200mn • Ph II completed ($5 mn milestone payment from Endo)

18. Pipeline status • Requip® (GlaxoSmithKline) • once-daily oral formulation of ropinirole (for Parkinson’s disease) • therapeutic benefits + improved compliance • SkyePharma managing clinical studies for GSK • Ph III started Jun ’03 (enrolment completed Q1’04) • 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

19. ORAL INJECTABLE Well-stocked pipeline SkyePharma Client products licence or partner product feasibility Ph.I Ph.II Ph.III filed approved marketed GlaxoSmithKline Sanofi-Aventis Roche TherabelMundipharmaRatiopharm GlaxoSmithKlineCritical Therapeutics NitecKowa Undisclosed Paxil CRXatral OD Madopar DR Coruno Cordicant-Uno DiclofenacRequipzileuton UndisclosedStatin NK-104 Undisclosed PULMONARY Foradil CertihalerPulmicort HFA Formoterol HFAQAB 149 Formoterol Combi NovartisAstraZeneca SkyePharma Novartis SkyePharma Enzon/MundiPharma/Nippon S’yakuEndo / ZeneusAstralis * SkyePharma SkyePharmaGeneMedix DepoCytDepoDurPsoraxine *DepoBupivacaineHGHInterferon alpha-2b * SkyePharma has an option on world rights for PsoraxineTM, exercisable at the end of Phase II TOPICAL Bradley/ShireDr Reddy’s (Trigenesis) SolarazeMultipleStatus is most advanced project SOLUBILISATION Fenofibrate Propofol IDD-D Multiple SkyePharma Endo / SkyePharma Baxter

20. Turnover growth record 1996-2004 CAGR H1’96 – H1’04: 38% £m 69.6 Collaboration equity H1 H2 53.2 46.1 28.5 24.3 22.6 17.0 13.8 9.0

21. H1’04 - 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. Reddy’s – dermatology portfolio • Trigenesis now acquired by Dr Reddy’s – 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

22. 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

23. Newsflow 2004 – further progress 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 Formoterol+fluticasone HFA-MDI Ph II start Zileuton (Critical Therapeutics) Ph III start (COPD) Psoraxine (Astralis) Ph II start  DepoBupivacaine Ph II start • 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

24. Changing quality of earnings driven by rising royalties from PaxilCR, Xatral® OD/Uroxatral®, Solaraze, DepoCyt® - withForadil® Certihaler®, DepoDur, HFA-formoterol & Propofol IDD-Dclose behind Investment highlights • Strategic focus on royalties rather than upfront payments • TenFDA-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

25. Investor relations contacts: London Peter Laing, Director of Corporate Communications 44-(0)207-491-1777 plaing@skyepharma.co.uk New York Sandra Haughton, US Investor Relations Manager 1-212-753-5780 shaughton@skyepharma.com …and please visit our website NASDAQ:SKYE LSE:SKP www.skyepharma.com