Washington, D.C. 20549

                                     FORM 6-K

                        Report of Foreign Private Issuer
                       Pursuant to Rule 13a-16 or 15d-16
                     of the Securities Exchange Act of 1934

                          For the month of April, 2003

                                 SkyePharma PLC
                (Translation of registrant's name into English)

            SkyePharma PLC, 105 Piccadilly, London, W1J 7NJ, England
                    (Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.

                         Form 20-F..X... Form 40-F.....

Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

                               Yes ..... No ..X...

If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82- ________


For Immediate Release                                             2nd April 2003

                                 SKYEPHARMA PLC

                     for the year ended 31st December 2002

Financial Highlights

-    First year of profitable trading

-    Turnover up 51% to GBP70 million (2001: GBP46 million)

-    Operating profit GBP5 million (2001: operating loss GBP5 million)

-    EBITDA GBP17 million (2001: GBP3 million)

-    Net income GBP1 million (2001: net loss GBP9 million)

-    Earnings per share 0.2 pence (2001: loss per share 1.8 pence)

-    End-2002 cash GBP28 million (GBP51 million pro forma including Endo/Enzon)

Operating Highlights

-    Nine approved products, three FDA-approved delivery technologies

-    Paxil CR launched in USA; now one-third of new prescriptions

-    DepoMorphine and Propofol IDD-D licensed to Endo for North America

-    Novartis filed Foradi in USA and Europe

-    New US and European licensees for Solaraze

-    Strong pipeline: 1 filed, 2 in Phase III, 6 Phase II

Ian Gowrie-Smith, SkyePharma's executive chairman commented

"2002 was a very  important  year for  SkyePharma.  We  achieved  our first full
year's profit on turnover up 51% to GBP70 million. With turnover expectations in
the region of GBP100 million this year, we are confident of further  significant
growth  in  profitability  in  2003  and  thereafter.   Our  recently  announced
partnership with Endo Pharmaceuticals to market our lead products,  DepoMorphine
and Propofol  IDD-D,  reinforces our confidence in continued  growth in 2004 and

For further information, please contact:
SkyePharma PLC                                       Buchanan Communications Ltd
Ian Gowrie-Smith - Executive Chairman                Tim Anderson / Nicola How
Michael Ashton - Chief Executive Officer             Tel No: 020 7466 5000
Donald Nicholson - Chief Financial Officer
Peter Laing - Director of Corporate Communications
Today on Tel No: 020 7466 5000 and thereafter on Tel No: 020 7491 1777


SkyePharma  has completed its  transformation  from the  developmental  phase to
profitability.   2002  also  included  some  major  milestones  in  our  planned
transition from being a provider of contract drug delivery  services to becoming
a speciality pharmaceuticals company.

SkyePharma is evolving

2002 was a momentous  year for  SkyePharma.  We achieved  our first full year of
profitable  trading.  Although  previous  years have seen a pattern of declining
losses,  it is  gratifying to report that the  commercial  potential of our drug
delivery technologies is now reflected in profitability.

April saw the  successful US launch of Paxil CR by our partner  GlaxoSmithKline.
Paxil, an SSRI  antidepressant,  is GlaxoSmithKline's  largest product,  with US
sales alone of GBP1.4 billion in 2002.  Paxil CR uses our proprietary  GeoMatrix
technology to reduce  gastrointestinal  side-effects,  a well-recognised problem
with this class of drug.  Improved  tolerability  means a higher  proportion  of
patients remain on therapy.  By the end of the year, Paxil CR accounted for over
30% of all new Paxil prescriptions, an initial growth rate that exceeded our own
estimates.  The successful  commercialisation  of an improved version of a major
product such as Paxil CR strongly  validates  our oral delivery  technology  and
enhances SkyePharma's credibility in the global pharmaceutical marketplace.

Our portfolio of launched products is expanding...

Successful  as Paxil CR is  proving  to be, it is  important  to  emphasise  the
growing strength and breadth of SkyePharma's  product  portfolio.  There are now
nine  approved  products,  validating  three  of our  five  delivery  technology
platforms.  Marketed  products  include  Xatral  OD,  a once  daily  version  of
Sanofi-Synthelabo's  Xatral,  used to  treat  the  urinary  symptoms  of  benign
prostatic  hypertrophy.  Xatral OD is  currently  on the  market  in Europe  and
certain  other  markets and is awaiting  approval in the USA.  Another  marketed
product is Solaraze, a topical gel for a common skin condition,  now sold in the
US  and  Europe.  Solaraze  was  launched  in  the US in  January  by  Quintiles
Transnational Corp (Quintiles) and European marketing rights were transferred in
May to Shire  Pharmaceuticals  (Shire).  Shire has  subsequently  also  acquired
rights for Australia and certain Pacific Rim territories. At the end of the year
we  transferred  US rights for the  injectable  drug DepoCyt,  a treatment for a
complication of late-stage  cancer, to Enzon, a partner capable of providing the
focused marketing required for this product.

....and our development pipeline is also well-stocked

Over the next  three  years we  anticipate  the  possible  launch  of four  more
products,  each of which we believe has the potential to generate  sales-related
revenues  that will equal or exceed  that  expected  from Paxil CR. The four key
products are our own DepoMorphine,  a long-acting  injectable analgesic for pain
relief after surgery; a dry powder inhaler  formulation of Novartis' asthma drug
Foradil;  our  own  HFA-powered,  metered  dose  inhaler  (MDI)  containing  the
bronchodilator  formoterol;  and Propofol IDD-D, an improved  formulation of the
sedative/anaesthetic  propofol.  Replacing less predictable contract development
and  licensing  revenues  with  sales-related  revenue is central to our goal of
effecting a change in the quality of our earnings  that,  in turn,  we expect to
underpin sustained and rising profitability.

At the end of the year,  we licensed  DepoMorphine  and  Propofol  IDD-D to Endo
Pharmaceuticals  (Endo) for North  America.  The agreement  provided us with $25
million upfront,  further milestone payments of up to $95 million and a share of
sales that  ranges from 20% to 60%. We believe  these  terms  validate  the high
potential we see for these products and justify our decision to undertake  Phase
III development  ourselves  instead of  outlicensing  the products at an earlier
stage.  We expect to submit  DepoMorphine  for FDA approval around the middle of
this year. Propofol IDD-D, currently in Phase II, is expected to enter Phase III
clinical trials by the end of 2003.

Reinforcing our delivery expertise

The acquisition of RTP Pharma Inc. (RTP), a Canadian company,  brought expertise
in  solubilisation  that  complements  our  own  techniques.  We  also  acquired
remaining rights to three topical delivery technologies from Bioglan. As part of
the same transaction,  we broadened our sustained-release  injectable technology
with Biosphere,  a technology that is complementary with our own DepoFoam.  This
expands our ability to deliver  biological drugs, an area of growing interest to
the  pharmaceutical  and  biotechnology  industries.  We now believe we have the
broadest-available range of drug delivery technologies.

Further strategic collaborations

To  meet  growing   interest  in  its  delivery   technologies   among  Japanese
pharmaceutical  companies,  we  opened a local  office  in  Osaka.  A  strategic
collaboration  with the privately held Japanese  company Kowa Company Ltd (Kowa)
led to a GBP25 million purchase of a 5% equity stake in SkyePharma in June. Kowa
is currently considering obtaining a 50% interest in SkyePharma's  manufacturing
facility in Lyon and we are also evaluating the application of SkyePharma's drug
delivery technologies to Kowa's products and pipeline.

Our licensing agreement with Enzon Pharmaceuticals, Inc. (Enzon) for DepoCyt was
accompanied  by a  broad  strategic  collaboration  to  exploit  our  respective
delivery   technologies.   Enzon's   proprietary  PEG  modification   technology
complements our own sustained-release injectable delivery systems,  particularly
in the  increasingly  important  area of  biological  drugs.  We look forward to
working with Enzon to develop future  products,  which will be jointly funded by
the partners.

Corporate governance issues

SkyePharma  as a company is committed to being a responsible  corporate  citizen
whose  operations are conducted with the highest  ethical  principles and in the
best interests of all stakeholders, be they shareholders,  employees,  customers
or  neighbours.  You will find in this year's  report a new section on corporate
social responsibility matters.

During the year we appointed two new  non-executive  directors.  David Ebsworth,
chief  executive of Oxford  GlycoSciences  and formerly chief executive of Bayer
Pharmaceuticals,  was appointed in April, followed in October by Torao Yamamoto,
senior managing director of the pharmaceutical division of Kowa.

The current year

We  believe   current  and  future  years  will  show  a  pattern  of  sustained
profitability  and  significant  growth.  For the current  year,  we  anticipate
turnover in the region of GBP100  million.  This target  largely  depends on the
level of milestone  payments we expect to receive,  although these partly relate
to prior year agreements. In 2003, as in prior years, our revenues are likely to
remain  concentrated in the latter part of the year and therefore it is possible
that we may  report  a loss  for the  first  half of the  current  year.  As our
pipeline of new products comes to market, we expect more predictable and regular
royalty income and profit sharing progressively to replace milestone payments as
our primary source of revenues.

The road ahead

We are proud to have  successfully  achieved our stated objective of moving into
profit for the  financial  year 2002.  Now we must build on this  foundation  by
ensuring sustained and growing  profitability.  We remain committed to realising
this  mission  through  using our leading  drug  delivery  technologies  for the
development and  commercialisation of enhanced  therapeutics,  both for partners
and for our own account.

Ian Gowrie-Smith
Executive Chairman


On the market

A key event of the year was undoubtedly the US launch of Paxil CR by our partner
GlaxoSmithKline.    The   SSRI    antidepressant    Paxil    (paroxetine)    was
GlaxoSmithKline's  largest  product  in  2002,  with US sales  alone  of  GBP1.4
billion.  Paxil CR is now  marketed  in the USA for  treating  depression  and a
second  indication,  panic  disorder.  Paxil CR has now been  filed for  another
depression-related  indication,  social anxiety,  and is currently in late-stage
clinical trials for pre-menstrual  dysphoric  disorder  (continuous usage filed,
intermittent  use to be filed later this year).  The latter  indication  will be
unique to Paxil CR as Paxil had never  been filed for this  indication.  We have
been  gratified  by the  successful  US  launch of Paxil  CR,  which is  rapidly
displacing the older version of Paxil. By the end of February 2003, Paxil CR had
captured one-third of new US prescriptions for the Paxil franchise - and no less
than 7% of all new US prescriptions for SSRI antidepressants.

Our  second   oral   product  on  the   market  is  a   once-daily   version  of
Sanofi-Synthelabo's  Xatral (alfuzosin), a treatment for the urinary symptoms of
benign prostatic  hypertrophy,  a common condition  affecting middle aged males.
Xatral OD has now been launched  throughout  Europe and also in Canada and other
territories in Africa,  Asia and Latin America.  The older multi-dose version of
Xatral  has now been  withdrawn  from the  market  in some  areas.  Our  partner
Sanofi-Synthelabo  reports that  combined  sales of both versions rose by 24% in
2002 to EUR182 million, an excellent performance considering the deceleration in
the growth of the entire  European  pharmaceutical  market last year.  The older
version  of  Xatral,  which had to be taken  three  times a day,  had never been
launched in the US. Our  improved  version,  to be known as  UroXatral in the US
market,  was filed with the FDA in December  2000 and  received an  "approvable"
letter  in  October  2001.  Additional  data  requested  by the FDA was filed by
Sanofi-Synthelabo  in December  2002 and we  anticipate  a US launch  later this
year.  Sanofi-Synthelabo  continues to invest in the development of this product
with Phase III trials ongoing for a second indication, acute urinary retention.

A third oral product,  re-formulated  by SkyePharma for the Therabel Group,  was
approved by the Belgian  regulatory  authorities  last year for local marketing.
Coruno is a  once-daily  Geomatrix  formulation  of  molsidomine,  used to treat
angina pectoris, a common symptom of coronary heart disease.  Therabel estimates
that sales will rise to around $40  million in several  years'  time,  following
further European launches.

DepoCyt is our first  sustained-release  injectable product to reach the market.
It is a treatment for  lymphomatous  meningitis,  a serious  complication of the
later stages of non-Hodgkin's  lymphoma.  DepoCyt, a long-acting  formulation of
the chemotherapy drug cytarabine, provides effective treatment and only needs an
injection every two weeks against every two days for conventional  cytarabine. A
Phase IV trial is ongoing, the results of which should provide the data required
to expand the indication to neoplastic meningitis associated with solid tumours,
a more common form of this distressing condition.  DepoCyt received FDA approval
in 1999 as an  orphan  drug and has  since  been  marketed  in the US by  Chiron
Corporation.  However during 2002 we decided to reacquire US product rights from
Chiron and  Canadian  marketing  rights from  Paladin  Labs Inc and to relicense
DepoCyt to Enzon.  At the end of last year Enzon paid $12  million for the North
American rights to DepoCyt.  We believe that Enzon,  which already  successfully
sells one  oncology  product,  OncasparTM,  can provide  the  focused  marketing
support  required for a niche product like DepoCyt.  Enzon concurs with our view
that the market for  DepoCyt  is  largely  under-developed.  Sales of DepoCyt in
North  America  in 2002  were  around $5  million,  well  below the peak  market
potential we see of approximately $50 million.  In Europe,  DepoCyt was licensed
to Elan Pharmaceuticals  (Elan) but following recent  well-publicised  financial
problems  Elan  decided  not to proceed  with the  planned  establishment  of an
oncology  business unit. We intend to relicense DepoCyt in Europe and expect the
product to be launched in the second half of the year.

Solaraze is a topical treatment for actinic  keratosis,  an increasingly  common
pre-cancerous  skin condition caused by excessive  exposure to the sun. Solaraze
was  originally  licensed  to Bioglan  Pharma plc  (Bioglan)  in both the US and
Europe but once Bioglan was placed in administration,  marketing rights reverted
to SkyePharma. We relicensed Solaraze to Quintiles in the USA which launched the
product in January 2002.  In Europe we relicensed  Solaraze to Shire in May 2002
for GBP15 million (of which GBP2.1  million is  contingent  on  conditions  that
include launch in various  territories).  Shire has now launched Solaraze in six
countries.  Shire has  recently  reinforced  its  commitment  to this product by
agreeing to pay up to GBP2.2 million (including  milestone  payments) for rights
to Solaraze in Australia and certain Pacific Rim  territories.  The incidence of
actinic keratosis is exceptionally high in Australia so we expect the results of
an ongoing clinical trial in that country to be helpful in supporting  marketing
efforts elsewhere.

Strategic developments

In March 2002,  we announced the  acquisition  of the  outstanding  59.8% of the
voting shares in RTP. This completed the  acquisition we had initiated in August
2001 and described in last year's Annual Report.  Under various  arrangements we
have issued,  in total, 50 million shares with a consideration  value of US$56.5
million (GBP39.4 million) including  acquisition costs. RTP, a Canadian company,
expands our  expertise in  solubilisation  technology  and brought a pipeline of
products  in   development.   This  includes  two   late-stage   products,   the
lipid-lowering   agent  fenofibrate,   and  Propofol  IDD-D,  a  nanoparticulate
formulation of the injectable  anaesthetic and sedative  propofol,  currently in
Phase II trials.  We decided to develop Propofol IDD-D ourselves  although North
American  rights  have since been  licensed  to Endo.  In order to help fund the
clinical  development of Propofol IDD-D and certain other projects  (notably our
own aerosol inhaler version of the bronchodilator formoterol), we entered into a
second agreement with Paul Capital Royalty  Acquisition  Fund ("Paul  Capital").
The details of this  agreement,  under which Paul  Capital  will  provide  US$30
million over the next two years in exchange for a share of future royalties on a
basket of our products, are discussed in the Financial Review.

In May, Bioglan's  administrators sold Bioglan AB, Bioglan's Swedish subsidiary,
to the Swedish healthcare company Wilh.  Sonesson.  At that time we acquired the
drug delivery business of Bioglan AB for GBP3.6 million in cash. This brought us
full  rights  to  several  topical  delivery   technologies  and  Biosphere,   a
sustained-release  injectable  technology that complements our own DepoFoam.  We
had previously  entered into a development and licensing  agreement with Bioglan
for some of these technologies in January 2001.

Finally,  in January 2003 we made an investment  of GBP2.0  million to acquire a
26.7%  stake in  Micap,  a small UK  company  developing  a novel  encapsulation
technology  based  on  yeast  cells.  Originally  developed  for use in the food
industry,  there are several  potential  applications of this technology to oral
and  topical  drug  delivery,  including  taste-masking  for  unpleasant-tasting
medicines.  SkyePharma  has an option over the  pharmaceutical  applications  of
Micap's technology.

Operational management reinforced

During the year we made some important appointments to strengthen and expand our
operational  management  team.  In January 2002, Dr Paul Wotton was appointed as
Global Head of Business  Development.  Paul was formerly a senior executive with
Eurand and Penwest and had previously worked for Merck and Abbott  Laboratories.
In May 2002,  Steven Thornton was appointed as President of SkyePharma Inc., our
US subsidiary.  Steven had held management posts at Elan, Bayer  Pharmaceuticals
and Eli Lilly.  In August  Neal  Fitzpatrick  became  Vice  President  of Global
Marketing,  coming from  similar  roles at Wyeth and  Bristol-Myers  Squibb.  In
addition during the year Dr Dick Jones joined us to become Senior Vice-President
for Research and Development at SkyePharma Inc., after research management posts
at Genentech,  Liposome  Technology and Matrix  Pharmaceuticals,  and Phil Duffy
became  Senior  Vice-President,   Operations,   having  previously  held  senior
management  roles  in the  pharmaceutical  industry,  most  recently  at  Ligand
Pharmaceuticals and Schein Bayer Pharmaceutical Services.

On the Way

We now have several products in late-stage clinical  development that we believe
have considerable commercial potential. In contrast with previous years, we have
undertaken the development of two of these products,  DepoMorphine  and Propofol
IDD-D, ourselves.

Foradil  Certihaler  is a new  version of  Novartis'  asthma  treatment  Foradil
(formoterol). We developed the multi-dose dry-powder inhaler device and also the
formulation  that ensures dose  consistency  regardless  of storage  conditions.
Novartis  filed the  product  with US and  European  regulatory  authorities  in
December  2002,  triggering  a  milestone  payment  to us.  On  normal  approval
timelines,  Foradil  Certihaler  should  reach the market in 2004.  The  current
version of Foradil, using Novartis' own single-dose inhaler, had global sales in
2002 of $260 million.  Novartis will market Foradil  Certihaler in Europe but in
the US the Foradil franchise is sub-licensed to Schering-Plough  Corporation - a
commercial  decision we welcome  given the  latter's  strong  position in the US
asthma market.  SkyePharma will receive a royalty on product sales and will also
manufacture for both parties.

DepoMorphine is our new analgesic for post-operative pain. Our sustained-release
injectable  technology  means a single  epidural  injection  immediately  before
surgery maintains a  therapeutically  effective level of morphine for 48 hours -
the period of peak pain.  Phase III trials in hip  arthoplasty,  lower abdominal
surgery,  caesarian  section,  knee surgery and major abdominal  surgery are now
complete. The double-blind  placebo-controlled  pivotal trial, involving 200 hip
surgery patients,  confirms that DepoMorphine is safe and effective and achieved
its primary  end-point  (a reduction in demand for  post-operative  fentanyl,  a
short-acting  analgesic available on demand to all patients).  We expect to file
DepoMorphineTM with US and European regulatory authorities in mid-year.

In December,  we granted  North  American  rights to  DepoMorphine  and a second
product, Propofol IDD-D, to Endo. We received $25 million upfront and additional
payments on  achievement  of milestones  of up to $95 million,  and our share of
combined  sales (out of which we will bear  manufacturing  costs) varies between
20% and 60%.  Endo,  a US  speciality  pharmaceutical  company with a 230-strong
sales  force,  had 2002  revenues  of $399  million.  In 2001 we decided to take
DepoMorphine   through   Phase   III   development   ourselves   (funded   by  a
royalty-sharing  agreement  with Paul  Capital),  expecting  that Phase III data
would  support  superior  licence  terms.  We feel that the Endo  licence  fully
justifies this decision,  with additional  licences,  in Europe, Japan and other
territories, still to come.

Propofol IDD-D is a novel  formulation of a widely used  injectable  anaesthetic
and sedative.  Our formulation will not support  microbial  growth, a recognised
problem with current versions,  and should provide uninterrupted sedation for 24
hours, making it ideal for the fast-growing  intensive care market. We commenced
Phase II trials last year (also funded by a royalty-sharing  agreement with Paul
Capital).  We expect Phase III trials to start later this year.  Propofol  IDD-D
was  licensed  in  December to Endo for North  America  and FDA  approval  would
trigger  payment of over half of the $95 million  contingent  milestones in this
agreement. We expect to license Propofol IDD-D in Europe this year.

In trials

SkyePharma has a well-stocked product pipeline, with no less than eight products
currently in the early stages of clinical  trials.  Below we feature some of the
more promising projects.

In the oral area, we are conducting  clinical studies of our once-daily  version
of  the   Parkinson's   disease  drug  Requip   (ropinirole)   for  our  partner
GlaxoSmithKline.  Requip is a  dopamine  agonist,  a class of drug  increasingly
recommended as first-line treatment for Parkinson's, but the current version has
to be taken three times a day. Our once-daily Geomatrix version is not only more
convenient for patients but also leads to more consistent  levels of the drug in
the blood.  We have now  completed  Phase II studies and expect to commence  the
Phase III trial later this year.

We are also developing an undisclosed oral product for Merck KGaA. This project,
involving our controlled-release technology, has successfully completed Phase II
trials and is expected to enter Phase III development later this year.

Currently we are developing  two asthma drugs in  metered-dose  inhalers  (MDIs)
powered  by  a  hydrofluoroalkane  (HFA)  propellant  gas.  These  HFA-MDIs  are
replacing  the older MDIs  powered by  chlorofluorocarbons  (CFCs)  whose use is
being  phased  out  because of the  effect of CFCs on the ozone  layer.  However
replacing CFCs with HFAs is not  straightforward  and requires  modification  of
virtually  every component of the MDI device and the  manufacturing  and filling
process.  The first is an  HFA-MDI  version  of  AstraZeneca's  inhaled  steroid
Pulmicort  (budesonide)  for the European  market.  This  project has  completed
pharmacokinetic  studies and should  commence  Phase III  pivotal  trials in the
second half of this year.  SkyePharma is also  developing an HFA-MDI  version of
the  long-acting  bronchodilator  formoterol.  This has now  completed  Phase II
development  and is expected to commence Phase III trials in mid-year,  on track
for planned filing in 2004. We anticipate selecting a suitable marketing partner
this year.

DepoBupivacaine,   our   sustained-release   injectable  version  of  the  local
anaesthetic  bupivacaine,  is in preclinical studies in the USA. We believe that
we will be able to extend the useful  anaesthesia  period from 12-18 hours to up
to  3  days.  This  should  make  the  product   suitable  for  the  control  of
post-operative  pain  in  patients  undergoing  certain   particularly   painful
procedures such as knee  arthroscopy and facial plastic  surgery.  Our agreement
with Endo for North American rights to DepoMorphine  and Propofol IDD-D includes
an  option  over  DepoBupivacaine,  on  terms  that  will be  negotiated  at the
conclusion of our Phase II studies.

Early-stage development

We also  have  many  projects  ongoing  in our  laboratories.  Some of these are
feasibility  studies for partners,  while others are projects that we may decide
to develop  ourselves before seeking  licensees.  A few examples are highlighted

The delivery of protein  drugs is an  increasingly  important  challenge for the
pharmaceutical  industry.  There are already over one hundred protein or peptide
drugs on the market (with many hundreds more in clinical  development)  and this
type of drug normally  cannot be given orally because  proteins will not survive
passage  through  the  digestive  system.  However the short  half-life  of most
protein drugs means that injections  usually need to be given  frequently and as
injections  are unpopular with  patients,  compliance  tends to be poor. Our two
sustained-release  injectable  technologies,  DepoFoam  and  Biosphere,  make us
well-positioned  to add value to currently marketed proteins and peptides and to
develop new compounds.  Two projects in this field were  commenced  during 2002.
With  DepoFoam,  we  announced  a  collaboration  agreement  with the UK company
GeneMedix plc (GeneMedix) to develop a sustained-release  injectable formulation
of a  protein  drug,  recombinant  Interferon  alpha-2b.  This is  used  for the
treatment  of  hepatitis  C and our  target  is a single  injection  that  would
maintain therapeutically effective blood levels of interferon for up to 28 days.
With Biosphere,  we have successfully  completed proof of principle studies with
another protein drug,  human growth hormone,  and will commence  clinical trials

Our 2001  strategic  collaboration  with  Astralis  Ltd  (Astralis)  covers  the
development of Psoraxine, a unique injectable treatment for psoriasis, a chronic
skin disorder that affects approximately 3% of the world population. There is no
approved cure for psoriasis and most approved  treatments provide only temporary
or incomplete  relief and may also cause  serious side  effects.  Psoraxine is a
protein that  stimulates  cells from the patient's  immune system to reverse the
inflammatory process responsible for psoriasis symptoms.  Astralis has completed
clinical studies in Venezuela using first  generation  Psoraxine to treat nearly
3,000 psoriasis  patients,  the vast majority of whom responded  positively with
few side effects.  We are working with  Astralis to develop a  second-generation
product,  now being  produced in the USA, and to validate the promising  results
from  Venezuela  in US clinical  studies  that will be used for  regulatory  and
marketing  approval.  Following the recent completion of toxicological  studies,
Astralis expects authorisation to commence US clinical trials later this year.

One of the major  trends in asthma  therapy  in recent  years has been the rapid
adoption  of  combination  therapy.  Physicians  have  found that  combining  an
anti-inflammatory  inhaled steroid with a long-acting  bronchodilator produces a
synergistic  effect.  We have  ongoing  feasibility  studies  involving  several
combinations of the long-acting  bronchodilator  formoterol with various inhaled
steroids,  both in our dry-powder inhaler and metered dose aerosol versions.  We
would look to take the selected candidates into clinical development this year.


We are  well-positioned  to build upon our  pipeline,  composed of both internal
projects and partnered products.  We expect a growing proportion of our revenues
to come from  royalties  from  marketed  products  and from those that have been
outlicenced but have still to reach the market.  This will reduce our dependence
on  milestone  payments,  improve the quality of our  earnings  and underpin the
company's continuing profitable growth.

Michael Ashton
Chief Executive Officer



Turnover  for the year  ended  31  December  2002  increased  by 51% to  GBP69.6
million,  compared to GBP46.1m in 2001.  This  represents  a  cumulative  annual
growth of 41% since 1996.

Contract research and development revenue,  increased by 45% to GBP55.4 million.
Milestone  payments and payments received on the signing of agreements  amounted
to GBP47.7  million  and  included  revenue  from Shire for the rights to market
Solaraze in Europe,  Endo for the US and  Canadian  marketing  and  distribution
rights  for  DepoMorphine  and  Propofol  IDD-D and from Enzon for the rights to
DepoCyt in North America. A key milestone was also received from GlaxoSmithKline
for the  completion  of Phase II clinical  trials for Requip in  November  2002.
Milestone  payments  and  payments on signing  will  continue to be an important
component of revenue in the near term.

Manufacturing  and  distribution  revenues  increased  by 15% to GBP7.4  million
compared to GBP6.4 million in 2001.  This comprises  contract  manufacturing  of
GBP5.4 million and SkyePharma's share of DepoCyt sales and manufacturing,  which
amounted to GBP2.0 million.  Included in contract  manufacturing revenue is some
GBP1.8  million in respect of Foradil DPI for Novartis  and GBP1.0  million from
Kowa under our collaboration on NK-104.

Royalty  income of GBP6.8  million has increased  more than fourfold from GBP1.5
million in 2001 and derives principally from Paxil CR, which was launched in the
US in April 2002, Xatral OD and Solaraze.

Cost of sales

Cost of sales consists of research and development expenditures,  including: the
costs of  certain  clinical  trials  incurred  on  behalf  of our  collaborative
partners; the direct costs of contract manufacturing;  direct costs of licensing
arrangements and royalties  payable.  Cost of sales were GBP24.8 million in 2002
compared to GBP18.8  million in 2001.  The resulting  gross profit  increased by
over 64% to GBP44.7 million compared to GBP27.3 million in 2001,  primarily as a
result of the increased  milestone payments and payments received on the signing
of agreements.


Selling,  marketing and  distribution  expenses were GBP4.8  million,  unchanged
compared  to 2001.  Our own  research  and  development  expenses  in the period
increased by GBP11.4 million,  or 63%, to GBP29.3  million,  due to an increased
expenditure on projects such as DepoMorphine, formoterol HFA, budesonide HFA and
Propofol IDD-D.

Amortisation of intangible  assets increased by GBP2.7 million to GBP6.5 million
in 2002.  This  includes an increase in the  amortisation  charge on goodwill of
GBP1.5  million  relating to the  acquisition of RTP and Bioglan AB. In addition
there are increased  amortisation charges on intellectual property in respect of
DepoCyt licenses.

Other  administration  expenses were GBP13.7 million in 2002 compared to GBP12.2
million  in  2001.  The  increase   mainly  relates  to  the  inclusion  of  the
administration  costs of  SkyePharma's  new  operations in Canada and Sweden and
one-off charges  relating to professional  fees resulting from the  transactions
undertaken during the year.

Other operating income

In December 2000  SkyePharma  signed an agreement  with Paul Capital to fund the
clinical  development and regulatory  submission of DepoMorphine in return for a
sale of a portion of future  royalty  and  revenue  streams  from  DepoMorphine,
Xatral OD, Solaraze and DepoCyt. During 2002, SkyePharma received GBP6.4 million
of cash under this  agreement and  recognised  income of GBP9.7  million in line
with  expenditure on the project.  No royalty payments were made to Paul Capital
under this agreement during the year.

In March 2002 SkyePharma signed a second agreement with Paul Capital principally
to fund the  clinical  development  of  Propofol  IDD-D and  formoterol  HFA. In
return,  SkyePharma has agreed to sell a portion of the potential future royalty
and revenue streams from these,  and seven other products from the drug pipeline
to Paul Capital.  SkyePharma  received  GBP11.6  million of cash and  recognised
income of GBP4.5  million on a cost to complete  basis.  During the year royalty
payments  of GBP0.7  million  were made to Paul  Capital  under this  agreement.
Further details are provided in note 3; Other operating income.

Deferred income

The Directors continue to believe that the Group's revenue recognition policy is
appropriate, reflecting on the one hand the appropriateness of recording revenue
where costs  associated  with the revenue have been expensed and the deferral of
revenue where there are future obligations connected with the revenue.

During  2002,  the Group  deferred a further net GBP6.3  million of turnover and
other income  under this policy,  including  amounts  relating to the  licensing
agreements  with Endo,  Enzon and Shire,  in  addition  to the  GBP11.7  million
deferred at the end of 2001. This results in a total deferral of GBP18.0 million
by the end of 2002 comprising:

                                         31 December                                                  31 December
                                                2001             Received         Recognised                 2002
                                                GBPm                 GBPm               GBPm                 GBPm
Contract development
and licensing revenue                            7.0                 58.6             (55.4)                 10.2
Other operating
income                                           4.7                 17.3             (14.2)                  7.8
                                                11.7                 75.9             (69.6)                 18.0

This  deferred  income  will be released in later years in line with the related
costs or as associated obligations under the relevant contracts are satisfied.

Operating results

SkyePharma  achieved its first full year profit  after tax of GBP1.1  million in
2002 compared to a net loss of GBP9.5 million in 2001.

The Group also  achieved a profit on  ordinary  activities  before tax of GBP1.3
million in 2002,  after a net interest  payable  charge of GBP3.4 million (2001:
GBP3.7 million),  which compares to a loss on ordinary  activities before tax of
GBP9.4  million  in  2001.  Earnings  before  Interest,  Tax,  Depreciation  and
Amortisation (" EBITDA"),  a commonly used  performance  indicator,  was GBP17.3
million in 2002 compared with GBP3.4 million in 2001.

Comparing  the first half of 2002 with the second  half,  the Group  recorded an
operating  profit of GBP6.7  million in the second half compared to an operating
loss of GBP2.0 million in the first half. The periods compare as follows:

                                                First Half            Second Half                       Year ended
                                                      2000                   2002                 31 December 2002
                                                      GBPm                   GBPm                             GBPm
Turnover                                              27.7                   41.9                             69.6
Gross Profit                                          15.4                   29.3                             44.7
Operating (Loss)/ Profit                             (2.0)                    6.7                              4.7
(Loss)/Profit before tax                             (4.0)                    5.3                              1.3

This  continues  a trend we have seen in  previous  years  where there is higher
income in the second  half  compared  to the first,  and we expect this trend to
continue in the near term.

The  acquisition  of  SkyePharma  Canada Inc  (formerly  RTP Pharma Inc) in 2001
contributed  revenue of GBP3.9 million in 2002, but negatively impacted the 2002
full year results by GBP1.9 million (2001: GBP0.6 million), primarily due to the
amortisation  of goodwill.  In addition  the  acquisition  of the drug  delivery
business of Bioglan AB in the first half of 2002  negatively  impacted full year
results for the Group by GBP1.6  million  (2001:  GBPnil),  being  primarily the
operating loss of the Swedish unit.

Earnings  per share for the year  increased  by 2.0 pence per share to 0.2 pence
per share (2001: 1.8 pence loss per share).  Foreign currency exchange movements
did not have a material  impact on the results of  operations  in 2002  compared
with 2001.

Cash balances and cashflow

SkyePharma  achieved its objective for the year of maintaining  the cash neutral
position it achieved in the second half of 2001. At 31 December 2002  SkyePharma
had cash and short-term deposits less overdrafts ("net cash") of GBP28.1 million
compared with net cash of GBP25.3 million at 31 December 2001.

However,  the  liquidity of the Group is  significantly  higher if cash receipts
from the licensing  deals with Endo and Enzon,  signed in late December 2002 and
received on 3 January 2003, are taken into account. Including these receipts net
cash amounts to GBP51.0  million and  represents an increase of GBP25.7  million
from 31 December 2001.

In 2002 there was a net cash inflow from operating  activities of GBP1.6 million
for the full year,  excluding the cash received from Endo and Enzon on 3 January
2003,  compared to GBP5.9  million in 2001.  Purchases of tangible  fixed assets
were GBP3.2  million  and  purchases  of  intangible  assets  amounted to GBP3.0

During the first half of 2002 the Group purchased the drug delivery  business of
Bioglan AB for GBP3.6  million in cash and the  assumption of GBP0.4  million of
net liabilities.

Purchases  of fixed asset  investments  were  GBP6.3  million,  of which  GBP5.2
million  was in  respect of the  acquisition  of  750,000  Series A  convertible
preferred shares of Astralis Ltd and GBP1.1 million was spent on the purchase of
SkyePharma  shares by the SkyePharma PLC General  Employee Benefit Trust for the
Deferred Share Bonus Plan as part of the Group's hedging strategy.

SkyePharma  received  GBP26.2  million of cash during the year from the issue of
Ordinary  Shares.  Of this GBP25.3 million was received in June 2002 following a
strategic  investments  by Kowa, a leading  Japanese  company  with  substantial
pharmaceutical  interests  and GBP0.9  million  was  received  in respect of the
exercise of employee  share options over Ordinary  Shares and 'B' Warrants.  All
outstanding 'B' Warrants which were not exercised lapsed on 31 December 2002.

Balance sheet

The  Group  balance  sheet at 31  December  2002  shows  shareholders'  funds of
GBP124.3 million (2001: GBP95.1 million). At 31 December 2002, goodwill, written
off to the profit and loss account reserve  amounted to GBP147.6  million (2001:
GBP152.5 million).

At 31 December 2002  SkyePharma had fixed asset  investments  totalling  GBP19.9
million.  The  investments,   explained  more  fully  in  note  8;  Fixed  Asset
Investments,  include  Astralis Ltd, a US company,  and Transition  Therapeutics
Inc, a Canadian company.

The Group's fixed asset investments are held in development stage pharmaceutical
companies,  and are held as long term investments  associated with collaboration
agreements or as part of SkyePharma's  long-term strategy.  During the last year
world stock markets have experienced substantial declines, and development stage
healthcare companies suffered some of the worst declines. The Board continues to
review the  underlying  performance  of the  individual  companies  and does not
believe  that current  market  conditions  provide a reliable  basis for valuing
these  investments.  The investments  have therefore been carried at cost on the
basis  that  there has been no  permanent  diminution  in value.  The Group will
continue to monitor its  investments  and the underlying  value of the companies

Current asset investments include a GBP3.25 million, 5% coupon, convertible loan
note from GeneMedix PLC. This has been recorded at GBP2.0 million at 31 December
2002 being the lower of cost and net realisable value assuming conversion.

At 31  December  2002 bank and other  non-convertible  debt  amounted to GBP11.3
million  (2001:  GBP14.5  million)  consisting  principally  of a GBP7.8 million
(2001:  GBP7.4  million)  property  mortgage  secured  on the Swiss  assets.  In
addition  the  company  has 6%  Convertible  Bonds due 2005 of  GBP58.4  million
(GBP58.0  million).  Net of cash and short term deposits this amounts to GBP41.6
million (2001: GBP47.2 million).

Throughout the majority of 2002, GBP30 million of the 6% Convertible  Bonds were
subject to an interest rate swap agreement,  swapping a fixed rate obligation of
6% for a floating rate,  which at 31 December 2002 was paying a floating rate of
5.75%. The swap is cancellable at the option of the fixed rate payer.

Following the US launch and first commercial sale of Paxil CR by GlaxoSmithKline
in April 2002, all 12 million 'A' Deferred Shares were converted into 12 million
Ordinary Shares in August 2002 with no impact on shareholders' funds.

The SkyePharma 'B' Warrants, which entitled holders to exercise ten 'B' Warrants
to acquire one Ordinary  Share at an effective  price of 40 pence,  lapsed on 31
December 2002.

Forward looking statements

The  foregoing  discussions  contain  certain  forward-looking  statements  with
respect to certain development projects,  potential collaborative  partnerships,
results of operations  and certain plans and  objectives  of  SkyePharma.  These
include in particular the statements  regarding potential turnover  expectations
in 2003, sales revenue from Paxil CR and other products, both currently marketed
and  under  development,   possible  launch  dates  for  new  products  and  the
expectation of achieving sustained profitability and continued growth.

By their 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 are
discussed in SkyePharma's SEC filings under the caption "Risk Factors".

Donald Nicholson
Finance Director

                                                                                 Year to                 Year to
                                                                             31 December             31 December
                                                         Notes                      2002                    2001
                                                                                 GBP'000                 GBP'000
Turnover                                                   2                      69,573                  46,126
Cost of sales                                              2                    (24,830)                (18,820)
Gross profit                                                                      44,743                  27,306
Selling, marketing and distribution expenses                                     (4,769)                 (4,804)
Administration expenses
  Amortisation                                                                   (6,506)                 (3,824)
  Other administration expenses                                                 (13,686)                (12,201)
                                                                                (20,192)                (16,025)
Research and development expenses                                               (29,285)                (17,918)
Other operating income                                     3                      14,219                   6,342
Operating profit/(loss)                                    2                       4,716                 (5,099)
Associated undertaking
  Share of loss of associated undertaking                                              -                    (75)
  Amortisation of goodwill                                                             -                   (503)
                                                                                       -                   (578)
Total operating profit/(loss): Group and share of
associates                                                                         4,716                 (5,677)
Interest receivable                                        4                       1,081                   1,251
Interest payable                                           5                     (4,464)                 (4,951)
Profit/(loss) on ordinary activities before taxation                               1,333                 (9,377)
Taxation                                                                           (224)                    (75)
Retained profit/(loss)                                                             1,109                 (9,452)
Earnings per Ordinary Share                               6
  Basic                                                                             0.2p                  (1.8p)
  Diluted                                                                           0.2p                  (1.8p)

There  was  no  material   difference  between  the  profit/(loss)  on  ordinary
activities before taxation and the historical cost profit/(loss) before taxation
in 2002 and 2001. All results represent continuing activities.

See Notes to the Preliminary Announcement.

                                                                                    Year to                Year to
                                                                                31 December            31 December
                                                                                       2002                   2001
                                                                                    GBP'000                GBP'000
Profit/(loss) attributable to shareholders                                            1,109                (9,452)
Net currency translation effect                                                         903                     28
Lapse of warrants                                                                     1,096                    271
Total recognised gains and losses for the year                                        3,108                (9,153)

The 'B' Warrants  relating to the  acquisition  of Krypton lapsed on 31 December
2002. The fair value of the lapsed warrants of GBP1,096,000 has been transferred
from  non-distributable  reserves  to  retained  profits.  In 2001 the class 'C'
Warrants relating to the debenture issue lapsed.  The fair value of the warrants
at issue of  GBP271,000  was  transferred  from  non-distributable  reserves  to
retained profits.  The lapse of warrants represents a transfer of value from the
warrant  holders to existing  shareholders.  In  accordance  with FRS4;  Capital
instruments,  this is shown as a recognised gain,  although total  shareholders'
funds remain unchanged.

                                                                                Year to                 Year to
                                                                            31 December             31 December
                                                                                   2002                    2001
                                                                                GBP'000                 GBP'000
Shareholders' funds at the beginning of the year                                 95,145                  68,952
Total recognised gains and losses for the year                                    3,108                 (9,153)
Goodwill adjustments on deferred consideration                                    4,837                     148
Equity shares issued/allocated, net of expenses                                  43,816                  29,599
Exercise of share options, net of expenses                                          700                     459
Non-equity shares converted to equity shares                                   (11,310)                       -
(Decrease)/increase in shares and warrants to be issued                         (5,780)                   5,780
Revaluation of shares and warrants to be issued                                 (4,837)                   (148)
Issue of warrants                                                                   311                       -
Exercise of warrants                                                              (624)                    (56)
Lapse of warrants                                                               (1,096)                   (436)
Net movement in the year                                                         29,125                  26,193
Shareholders' funds at the end of the year                                      124,270                  95,145

                                                                             31 December             31 December
                                                          Notes                     2002                    2001
                                                                                 GBP'000                 GBP'000
Fixed assets
Intangible assets                                           7                    100,015                  98,228
Tangible assets                                                                   45,504                  44,952
Investments                                                 8                     19,902                  14,211
                                                                                 165,421                 157,391
Current assets
Stock                                                                              1,256                   2,278
Debtors                                                                           35,207                  14,022
Investments                                                                        1,961                       -
Cash and short-term bank deposits                                                 28,061                  26,892
                                                                                  66,485                  43,192
Creditors - amounts falling due within one year
Deferred income                                                                 (15,069)                (11,690)
Other creditors                                                                 (19,402)                (23,498)
                                                                                (34,471)                (35,188)
Net current assets                                                                32,014                   8,004
Total assets less current liabilities                                            197,435                 165,395
Creditors - amounts due after more than one year
Convertible bonds due 2005                                                      (58,377)                (57,962)
Deferred income                                                                  (2,960)                       -
Other creditors                                                                 (11,627)                (12,220)
                                                                                (72,964)                (70,182)
Provisions for liabilities and charges                                             (201)                    (68)
Net assets                                                                       124,270                  95,145

Capital and reserves
Share capital                                                                     62,546                  58,402
Share premium                                                                    316,419                 287,357
Shares and warrants to be issued                                                       -                  10,617
Other reserves                                                                     9,311                  10,720
Profit and loss account                                                        (264,006)               (271,951)
Shareholders' funds
Attributable to equity interests                                                 112,960                  72,525
Attributable to non-equity interests                                              11,310                  22,620
                                                                                 124,270                  95,145

Approved by the Board of Directors on 2 April 2003 and signed on its behalf by:

I R Gowrie-Smith
Executive Chairman

D Nicholson
Finance Director

See Notes to the Preliminary Announcement

                                                                                 Year to                 Year to
                                                                             31 December              31December
                                                      Notes                         2002                    2001
                                                                                 GBP'000                 GBP'000
Net cash inflow from operating activities               (b)                        1,552                   5,909
Returns on investments and servicing of finance
Interest received                                                                    943                   2,741
Interest paid                                                                    (3,913)                 (4,370)
Interest element of finance lease payments                                         (130)                   (170)
                                                                                 (3,100)                 (1,799)
Taxation                                                                           (224)                    (75)
Capital expenditure and financial investment
Purchase of intangible fixed assets                                              (3,035)                   (310)
Purchase of tangible fixed assets                                                (3,238)                 (7,673)
Purchase of fixed asset investments                                              (6,285)                 (8,273)
                                                                                (12,558)                (16,256)
Purchase of drug delivery business of
Bioglan AB                                              9                        (3,595)                       -
Purchase of RTP Pharma Inc.                                                            -                 (4,118)
Net cash acquired with RTP Pharma Inc.                                                 -                   5,436
                                                                                 (3,595)                   1,318
Cash outflow before use of liquid resources
and financing                                                                   (17,925)                (10,903)
Management of liquid resources
Net (increase)/decrease in amounts held on
short-term bank deposit                                                          (3,872)                  14,668
Issue of Ordinary Share capital                                                   26,168                     468
Issue of warrants                                                                    311                       -
Debt due within one year:
  Repayment of loans                                                             (2,992)                 (4,502)
Debt due beyond one year:
  Repayment of loans                                                               (929)                    (85)
Capital element of finance lease payments                                          (937)                   (772)
                                                                                  21,621                 (4,891)
Decrease in cash                                                                   (176)                 (1,126)


(a)    Reconciliation of movements in net debt
                                                                                    Year to                Year to
                                                                                31 December            31 December
                                                                                       2002                   2001
                                                                                    GBP'000                GBP'000
Decrease in cash in the year                                                          (176)                (1,126)
Cash outflow from decrease in debt and
lease financing                                                                       4,858                  5,454
Cash outflow/(inflow) from increase/(decrease)
in liquid resources                                                                   3,872               (14,668)
Change in net debt resulting from cash flows                                          8,554               (10,340)
Amortisation of issue costs on convertible bonds                                      (415)                  (416)
Finance leases acquired with subsidiary                                               (361)                      -
New finance leases                                                                     (91)                   (95)
Chiron promissory note                                                                (621)                      -
Translation difference                                                              (1,505)                   (21)
Movement in net debt in the year                                                      5,561               (10,872)
Net debt at beginning of the year                                                  (47,162)               (36,290)
Net debt at end of the year                                                        (41,601)               (47,162)

Net debt is defined as cash and liquid resources less borrowings.

(b)    Reconciliation of operating profit/(loss) to net cash inflow from
       operating activities
                                                                                    Year to                Year to
                                                                                31 December            31 December
                                                                                       2002                   2001
                                                                                    GBP'000                GBP'000
Operating profit/(loss)                                                               4,716                (5,099)
Depreciation                                                                          6,101                  4,778
Amortisation                                                                          6,506                  3,824
Decrease/(increase) in stock and work in progress                                     1,022                  (642)
Increase in debtors                                                                (21,585)                (7,478)
Increase in deferred income                                                           6,339                 11,690
(Decrease)/increase in other creditors                                                (313)                  1,688
Increase/(decrease) in provisions                                                       133                (2,051)
Other                                                                               (1,367)                  (801)
Net cash inflow from operating activities                                             1,552                  5,909

c)      Analysis of net debt
                                       At 1                   (excluding        Non-                             At 31
                                    January         Cash        cash and        cash         Exchange         December
                                       2002         flow     overdrafts)     changes        movements             2002
                                    GBP'000      GBP'000         GBP'000     GBP'000          GBP'000          GBP'000
Cash at bank and in hand              9,451      (1,828)               -           -            (229)            7,394
Bank overdraft                      (1,618)        1,652               -           -             (34)                -
Short-term bank deposits             17,441        3,872               -           -            (646)           20,667
                                     25,274        3,696               -           -            (909)           28,061

Debt due within one year            (4,792)        2,992               -           -             (42)          (1,842)
Debt due after one year             (7,961)          929               -       (621)            (470)          (8,123)
Convertible bonds                  (57,962)            -               -       (415)                -         (58,377)
Finance leases                      (1,721)          937           (361)        (91)             (84)          (1,320)
                                   (72,436)        4,858               -     (1,127)            (596)         (69,662)

Total                              (47,162)        8,554           (361)     (1,127)          (1,505)         (41,601)

Cash at bank and in hand and  short-term  bank  deposits are  aggregated  on the
balance  sheet.  Debt  includes  a  bank  loan,  secured  mortgage,  the  Chiron
promissory note and convertible bonds.

Non-cash  changes  relate  to  the  amortisation  of  the  issue  costs  on  the
convertible  bonds, the issue of the Chiron promissory note and the inception of
new finance leases.


1       Accounting policies

Accounting convention and presentation

The  results  for the year  ended  31  December  2002,  extracted  from  audited
financial  statements,  have been  prepared in  accordance  with the  accounting
policies set out in the Report and Accounts for the year ended 31 December 2001.
The Group has  applied  one new  accounting  standard  during  the  period.  The
publication of FRS19; Deferred Tax has not required any amendment to the Group's
existing accounting policies.  The financial  information in this statement does
not  constitute  statutory  accounts  within the  meaning of Section  240 of the
Companies Act 1985.

The financial information for the year ended 31 December 2001 has been extracted
from the  Statutory  Accounts for that period  which have been  delivered to the
Registrar of Companies.  The Auditors'  Report on these Accounts was unqualified
and did not contain a statement under Section 237 of the Companies Act 1985.

Revenue recognition

Turnover  comprises  contract  development  and  licensing,  royalty  income and
manufacturing  and  distribution.  Contract  development  and  licensing  income
represents amounts invoiced to customers for services rendered under development
and licensing  agreements  including  milestone  payments and technology  access
fees.  Contract  revenue is recognised when earned and  non-refundable  and when
there are no future obligations  pursuant to the revenue, in accordance with the
contract terms.  Refundable  contract  revenue is treated as deferred until such
time as it is no longer refundable. Royalty income represents income earned as a
percentage of product sales.  Advance royalties received are treated as deferred
income until  earned,  when they are  recognised  as income.  Manufacturing  and
distribution revenues principally comprise contract  manufacturing fees invoiced
to third parties and income from product sales.

Research and development costs

Research  costs are  charged  as an  expense  in the  period  in which  they are
incurred.  Development  costs are also recognised as an expense in the period in
which  they  are  incurred,  unless  all of  the  criteria  are  met  for  asset
recognition. The major asset recognition criteria include: the ability to define
clearly the product or process,  demonstration of its technical  feasibility and
that a commercial market for it exists. Development costs recognised as an asset
do not exceed the probable  net amount to be recovered in marketing  the product
or process and they are amortised over the estimated economic life.

Foreign currency transactions

Foreign currency  transactions by Group companies are recorded in local currency
at the exchange rate ruling on the date of  transaction.  Assets and liabilities
expressed in foreign  currencies  are  translated  into sterling at the exchange
rates ruling at the balance sheet date. Exchange differences which relate to the
retranslation  of net  assets  of  overseas  companies  are  taken  directly  to
reserves.  All other foreign  exchange  differences  are taken to the profit and
loss  account  in the year in which  they  arise.  The  Group  uses the  average
exchange rates  prevailing  during the year to translate the results of overseas
subsidiaries  into  sterling and year-end  rates to translate  the net assets of
those undertakings.

2       Segmental analysis

The Group's operations relate wholly to one class of business,  pharmaceuticals.
Further  analysis  of  turnover,   operating   profit/loss  and  net  assets  by
geographical area is set out below, together with an analysis of cost of sales.

                                                                                    Year to                Year to
                                                                                31 December            31 December
                                                                                       2002                   2001
                                                                                    GBP'000                GBP'000
(a)    Turnover
       By class of business:
       Contract development and licensing
         Milestone payments                                                          47,736                 28,379
         Research and development costs recharged                                     7,705                  9,857
                                                                                     55,441                 38,236
       Royalties receivable                                                           6,751                  1,468
       Manufacturing and distribution                                                 7,381                  6,422
                                                                                     69,573                 46,126

       By location of customer:
       North America                                                                 34,047                  5,482
       UK                                                                            21,000                 21,411
       Europe                                                                        10,333                 16,511
       Rest of the world                                                              4,193                  2,722
                                                                                     69,573                 46,126

       By location of operation:
       Europe                                                                        34,449                 30,268
       North America                                                                 35,124                 15,858
                                                                                     69,573                 46,126

                                                                                    Year to                Year to
                                                                                31 December            31 December
                                                                                       2002                   2001
                                                                                    GBP'000                GBP'000
(b)    Cost of sales
       By class of business:
       Contract development and licensing                                          (12,649)                (7,917)
       Royalties payable                                                            (1,374)                  (572)
       Manufacturing and distribution                                              (10,807)               (10,331)
                                                                                   (24,830)               (18,820)

                                                                                    Year to                Year to
                                                                                31 December            31 December
                                                                                       2002                   2001
                                                                                    GBP'000                GBP'000
(c)    Operating profit/(loss)
       By class of business:
       Pharmaceuticals                                                                4,716                (5,099)
       By location of operation:
       UK                                                                           (7,695)                (6,840)
       Europe                                                                         7,652                  6,985
       North America                                                                  4,759                (5,244)
                                                                                      4,716                (5,099)

3       Other operating income

Paul  Capital  Royalty  Acquisition  Fund have  provided a total of $30  million
between  2000  and  2002,  to  fund  the  clinical  development  and  regulatory
submission  of  DepoMorphine,  in  return  for the sale of a  portion  of future
royalty and revenue streams from DepoMorphine,  Xatral OD, Solaraze and DepoCyt.
Income  of  GBP9.7  million  (2001:  GBP6.3  million)  was  recognised  as other
operating  income under this agreement on a cost to complete  basis.  No royalty
payments have been made to Paul Capital under this agreement during the year.

In March 2002 the Group announced  another  transaction under which Paul Capital
will pay SkyePharma a further $30 million  during 2002 and 2003,  principally to
fund the clinical  development of Propofol IDD-D and HFA-formoterol.  In return,
SkyePharma  has agreed to sell a portion of the  potential  future  royalty  and
revenue  streams from these,  and seven other products from the drug pipeline to
Paul Capital.  Income of GBP4.5 million  (2001:  GBPnil) was recognised as other
operating  income  under this  agreement  on a cost to complete  basis.  Royalty
payments of GBP0.7  million ($1 million)  have been made to Paul  Capital  under
this agreement during the year, and are included within royalties payable.

4       Interest receivable
                                                                                    Year to                Year to
                                                                                31 December            31 December
                                                                                       2002                   2001
                                                                                    GBP'000                GBP'000
Interest                                                                              1,081                  1,215
Share of interest receivable of associate                                                 -                     36
                                                                                      1,081                  1,251

5       Interest payable
                                                                                 Year to                 Year to
                                                                             31 December             31 December
                                                                                    2002                    2001
                                                                                 GBP'000                 GBP'000
Interest payable on bank loans, overdrafts and other loans:
  Repayable within five years, not by instalments                                     88                      91
  Repayable within five years, by instalments                                        112                     470
  Repayable wholly or partly in more than five years                                 373                     360
Finance leases                                                                       130                     170
Interest on convertible bonds                                                      3,761                   3,860
                                                                                   4,464                   4,951

6       Earnings per Ordinary Share
                                                                                    Year to                Year to
                                                                                31 December            31 December
                                                                                       2002                   2001
Basic and diluted attributable profit/(loss) (GBP'000)                                1,109                (9,452)

Basic weighted average number of shares
in issue ('000)                                                                     577,018                526,250
Dilutive potential Ordinary Shares ('000)                                            20,077                      -
Diluted weighted average number of shares
in issue ('000)                                                                     597,095                526,250

For diluted earnings per Ordinary Share, the weighted average number of Ordinary
Shares in issue is  adjusted  to assume  conversion  of all  dilutive  potential
Ordinary  Shares.  In 2001 there was no  difference  between  basic and  diluted
earnings  per  Ordinary   Share  since  all  potential   Ordinary   Shares  were
anti-dilutive.  Shares held by the SkyePharma PLC General Employee Benefit Trust
are excluded from the weighted average number of shares.

7        Intangible fixed assets
                                                                   Intellectual        Development
                                                     Goodwill          property              costs              Total
Group                                                 GBP'000           GBP'000            GBP'000            GBP'000
At 1 January 2002                                      75,762            30,496              1,716            107,974
Exchange adjustments                                        -               663                 62                725
Additions                                                 285             3,401                  -              3,686
Acquisitions                                            3,970                 -                  -              3,970
At 31 December 2002                                    80,017            34,560              1,778            116,355
At 1 January 2002                                       6,154             2,974                618              9,746
Exchange adjustments                                        -                82                  6                 88
Charge for the year                                     3,799             2,483                224              6,506
At 31 December 2002                                     9,953             5,539                848             16,340
Net book value at 31 December 2001                     69,608            27,522              1,098             98,228
Net book value at 31 December 2002                     70,064            29,021                930            100,015

In May 2002, SkyePharma acquired the entire drug delivery business of Bioglan AB
for  GBP3.6  million  in cash  and  the  assumption  of  GBP0.4  million  of net
liabilities.   The  acquired  rights  included  Bioglan's  Biosphere  injectable
technology  and  those  rights  to  DermaStick,  Crystalip  and  ES-Gel  topical
technologies  that had remained with Bioglan after the January 2001  development
and   commercialisation   licensing   agreement   with  Bioglan.   See  note  9;

8       Fixed Asset Investments
                                                                investments           Own shares             Total
                                                                    GBP'000              GBP'000           GBP'000
At 1 January 2002                                                    13,659                  552            14,211
  Additions                                                           5,215                1,070             6,285
  Charge for the year                                                     -                (594)             (594)
At 31 December 2002                                                  18,874                1,028            19,902

Astralis Limited

Astralis Ltd is an emerging  biotechnology  company based in the US, and engaged
primarily in the research and development of novel  treatments for immune system
disorders and skin diseases.  The company is currently  developing two products.
Its primary product,  Psoraxine,  is an innovative vaccine under development for
the treatment of psoriasis. The company's second product is for the treatment of

During the year  SkyePharma  acquired  a further  750,000  series A  convertible
preferred shares of Astralis Limited for GBP5.2 million ($7.5 million). As at 31
December 2002 the total  SkyePharma  holding was 200,000 common  shares,  20,000
warrants and  1,750,000  series A  convertible  preferred  shares,  representing
approximately  23.0% of the ordinary  share  capital  assuming  conversion.  The
shares,  warrants and convertible  preferred  shares are held at cost of GBP12.7
million. As at 31 December 2002, Astralis had net assets of GBP4.9 million and a
retained loss for the year of GBP12.2 million.

Transition Therapeutics Inc.

Transition Therapeutics Inc. is a biopharmaceutical  company based in Canada and
engaged  primarily in the business of  developing  products for the treatment of
multiple sclerosis, diabetes and restenosis.

As at 31 December 2002, the total SkyePharma holding of Transition  Therapeutics
was 4,930,814  shares,  representing  approximately  8.2% of the ordinary  share
capital. The shares are recorded at cost of GBP2.2 million.

Cade Struktur Corp.

As at 31 December 2002, the total  SkyePharma  holding of Cade Struktur Corp., a
Canadian company,  was 869,086 shares,  representing  approximately 16.8% of the
ordinary  share  capital.  SkyePharma has not attributed a value to these shares
and they have been recorded at zero cost.  The shares were  originally  acquired
consequent upon the acquisition of the assets of Hyal Pharmaceutical Corp.

Other investments

The Group has other  investments  of GBP4.0 million in a  collaborative  partner
based in the US, representing  approximately 14.2% of the ordinary share capital
assuming  conversion,  recorded  at  Directors'  valuation  based on a number of
considerations  including  comparable  transactions  and discounted  future cash

Own shares

During 2001 the Company  established  an employee  share  ownership  trust,  the
SkyePharma PLC General  Employee  Benefit Trust.  The purpose of the trust is to
hold shares in the Company,  which may  subsequently be awarded to Directors and
employees under the Deferred Share Bonus Plan and Share Purchase  Plans.  During
the year, the trust purchased 2 million shares and 893,415 shares were allocated
at an average price of 66 pence per share. As at 31 December 2002 the trust held
1,805,681  shares at a carrying  value of GBP1.0  million with a market value of
GBP0.7  million.  This  shortfall  is not  considered  to  represent a permanent
diminution in value.

9       Acquisitions

Drug delivery business of Bioglan AB

On 13 May 2002 SkyePharma  acquired the entire drug delivery business of Bioglan
AB, of Sweden,  for GBP3.6 million in cash including  acquisition  costs and the
assumption of GBP0.4 million of net liabilities.

The acquired rights include Bioglan's Biosphere injectable  technology and those
rights to DermaStick,  Crystalip and ES-Gel  topical drug delivery  technologies
that   remained   with   Bioglan   after  the  January  2001   development   and
commercialisation licensing agreement.

The acquisition  method has been adopted and goodwill of GBP4.0 million arose on
the  acquisition.  By  consideration  of  the  likely  commercial  life  of  the
technology  acquired,  the Directors have determined that a suitable period over
which to amortise the goodwill is 20 years.

                                                                                                    Book values and
                                                                                            provisional fair values
Fixed assets
Tangible assets                                                                                                 676

Current assets
Debtors                                                                                                          44

Creditors - amounts falling due within one year                                                             (1,095)
Net current liabilities                                                                                     (1,051)
Net liabilities                                                                                               (375)

Satisfied by:
Cash                                                                                                          3,500
Expenses relating to the transaction                                                                             95
Consideration                                                                                                 3,595

Goodwill                                                                                                      3,970

Results of the drug delivery business of Bioglan AB

The drug delivery business of Bioglan AB prior to the acquisition formed part of
Bioglan AB and did not report as a separate unit.  During the period 13 May 2002
to 31 December 2002 the drug delivery business of Bioglan AB contributed  GBP0.5
million to turnover,  a loss of GBP1.5  million to  operating  profit and a cash
outflow of GBP1.3 million to net cash inflow from operating activities


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

                                                      SkyePharma PLC

                                                  By:/s/ Douglas Parkhill

                                                  Name:  Douglas Parkhill
                                                  Title: Company Secretary
Date: April 9, 2003