By Razak Musah Baba

LONDON--Skyepharma PLC's (SKP.LN) shares fell sharply Monday after the company said it expects a delay in projected royalties from GlaxoSmithKline PLC, while reiterating that 2014 results are expected to be in line with the board's expectations.

The oral and inhalation drug-development company said revenue in the fourth quarter benefited from a 2.0 million euro ($2.4 million) payment from its licensee, Mundipharma International Corporation Ltd., following the launch of its key product flutiform--for the treatment of bronchial asthma--in Spain in December as well as growing royalties and income from flutiform and a share of higher Exparel net sales.

Skyepharma said drugmaker GlaxoSmithKline PLC's third-quarter sales of two products that use technology licensed by Skyepharma were below market expectations.

Consequently, Skyepharma said it expects royalties from the products should still reach the cap of GBP9.0 million per annum, but that they may be one year later than the board had expected.

Analysts at N+1 Singer have reduced their forecasts as a consequence and now forecast Skyepharma's GBP9 million royalty cap to be reached in 2017 from 2016.

The broker however remains positive on the company, and says 2014 has been a transformational year for the group, providing it with greater capability to invest in future growth opportunities with net research and development to increase in the coming years.

"We remain positive on the group and its pipeline," N+1 Singer adds.

At 1120 GMT, Skyepharma shares traded down 16.6% or 57 pence at 287 pence, valuing the drug delivery company at GBP300.3 million.

Write to Razak Musah Baba at razak.baba@wsj.com; Twitter: @Raztweet

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