London, UK and Montreal, Canada - July 5, 2000 - SkyePharma PLC ("SkyePharma") (NASDAQ: SKYE, LSE:SKP) announced today that SkyePharma Inc. has granted the exclusive Canadian marketing and distribution rights for DepoCyt^TM to Paladin Labs Inc. ("Paladin") (TSE: PLB). The terms of the deal include an up-front payment to SkyePharma of US$1.0 million, additional milestone payments tied to certain future events and a significant share of future revenues from the product.

DepoCyt^TM (sustained-release cytarabine) is a chemotherapeutic agent approved for sale in Canada for the treatment of lymphomatous or neoplastic meningitis, serious complications of certain haematological malignancies and solid tumours. DepoCyt^TM is an injectable sustained-release formulation of the chemotherapeutic agent cytarabine. Using SkyePharma's proprietary drug delivery technology, DepoCyt^TM gradually releases cytarabine into the cerebral spinal fluid (CSF) and extends the dosing interval to once every two weeks as compared to the standard intrathecal chemotherapy dosing of two times per week. DepoCyt^TM is marketed in the United States by Chiron Corporation (NASDAQ:CHIR) and is currently awaiting regulatory approval in Europe.

"This transaction provides SkyePharma with a proven Canadian specialty sales and marketing partner for DepoCyt, and secures value for a product that is already approved in Canada," noted Michael Ashton, Chief Executive Officer of SkyePharma. "The quality of this deal with a specialist partner like Paladin reinforces our strategy to develop products to a later stage to increase significantly SkyePharma's share of potential income."

Mr. Jonathan Goodman, President & Chief Executive Officer of Paladin stated, "We are excited to have secured the exclusive Canadian marketing and distribution rights for DepoCyt from SkyePharma, a leading drug delivery company with an impressive pipeline of therapeutic products. Paladin looks forward to bringing this specialty product to Canadian neuro and haematological oncologists and their patients for whom treatment options are currently unsatisfactory."

Paladin Labs Inc.
Paladin Labs, headquartered in Montreal, Quebec is a Canadian developer, marketer and distributor of innovative pharmaceuticals, currently offering products in urology, dermatology, rheumatology and other specialty markets. For more information about Paladin, please visit the Paladin Web Site at www.paladin-labs.com or send e-mail to info@paladin-labs.com.

Paladin Labs Inc. is a public company whose shares trade on the Toronto Stock Exchange under the symbol PLB.

SkyePharma PLC
SkyePharma PLC, one of the world's leading drug delivery companies, develops and manufactures advanced drug delivery solutions. Its technologies include oral controlled release, injectable, inhalation and topical systems. For company information, visit SkyePharma on the World Wide Web at www.skyepharma.com.

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Paladin Labs Inc