Shares in Skyepharma surged on Wednesday after the biotechnology company allayed fears that an important forthcoming asthma drug might be shelved.

Last year, the US drugs regulator said that the Flutiform treatment could not be approved without extensive further trials, prompting Skyepharma to reassess the drug’s viability. However, the company said on Wednesday that an application to European regulators was progressing smoothly, meaning that Flutiform could be launched in Europe this year.

The shares rose by 22 per cent to 46.25p in London.

Shawn Manning, an analyst at Singer Capital Markets, said that approval in Europe was likely to “get things moving again” with the US Food and Drug Administration.

Skyepharma’s bullish assessment of Flutiform’s prospects came as it published results for the year to December that beat analysts’ expectations.

Sales grew by 3.9 per cent to £58.1m, while exchange translation gains of £5.6m helped the company move from a pre-tax loss of £900,000 to a profit of £6.3m. Earnings per share rose to 15.3p from a loss of 6p.

Axel Muller, chief executive, called 2010 “a year of solid progress”, with royalty and manufacturing revenues rising from £42.6m to £47.9m.

Further sales growth this year depended on Flutiform’s approval in Europe and that of Exparel, an anaesthetic drug, in the US, the company said.

Mr Manning said that enthusiasm over the strong financial results would be tempered by the company’s “concerning” level of debt. This includes outstanding convertible bonds with a face value of £83m – more than nine times Skyepharma’s market capitalisation of £8.9m. The company has appointed Jefferies International to advise on its capital structure.

“That is the only fly in the ointment – if they get the bond debt out of the way, then the company will be sustainable going forward,” Mr Manning said.

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