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SkyePharma chairman quits ahead of time

Board of drug delivery firm hopes it can win over investors seeking alternative executive chairman

The board of embattled drug delivery firm, SkyePharma, is hoping to appease dissident investors after Ian Gowrie-Smith, the company's longstanding chairman, brought forward his departure from the company, resigning ìwith immediate effectî.

A group of rebel shareholders led by North Atlantic Value have been seeking to name Bob Thian, head of biosciences group, Whatman, as the new head of SkyePharma. In defiance, the SkyePharma board installed its own new top management team, lead by Argeris `Jerry' Karabelas as chairman.

Frank Condella, a former head of European operations at Ivax and Ken Cunningham, a former chief executive of British biotech group Arakis, were named as chief executive and chief operating officer respectively.

Gowrie-Smith's decision has been made so SkyePharma can ensure that the only proposal for shareholders to consider at the impending extraordinary general meeting was ìwhether Mr Thian is suitable to become executive chairman,î the company said in a statement.

ìIt is the board's strong opinion that Mr Thian is not suited to this role as he does not have the right experience and because it will conflict with his existing taxing commitments,î SkyePharma added.

On announcing his departure, Gowrie-Smith said the board would not wish to go to an EGM but if forced to, ìit will fight to the bitter endî. He also accused North Atlantic Value and other rebel investors of being more concerned about raising their reputations as activist shareholders than fighting for the best interests of shareholders.

ìWe are delighted and relieved that Mr Gowrie-Smith has stepped down with immediate effect,î said an adviser to North Atlantic Value. ìWe continue to press for Bob Thian to be pushed forward.î

It remains to be seen whether discontented shareholders will see Gowrie-Smith's full departure as an adequate concession on the part of the board, bearing in mind that his resignation had always been their primary objective.

SkyePharma shares rose 2.4 per cent to 42.25p on the news.

30th September 2008

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