SkyePharma has entered into an agreement with Kos Pharmaceuticals to jointly develop and market Flutiform, which the company believes could be a $1 billion-a-year new asthma treatment.

Flutiform is a combination product for asthma and chronic obstructive pulmonary disease (COPD). Under the agreement, Kos will have exclusive rights to market the product in the U.S. and a right of first negotiation in Canada. SkyePharma could receive up to $165 million in milestone payments on achievement of all regulatory and revenue targets -- of which $25 million has been paid -- together with royalties.

Flutiform consists of a fixed-dose combination of the long-acting bronchodilator formoterol with the inhaled steroid fluticasone in a proprietary metered-dose aerosol inhaler with a dose counter. It is currently in Phase III development for the indication of asthma in adults and adolescents and is expected to be submitted for approval by the FDA in the second half of 2007 and to reach the market in 2009.