Shares in SkyePharma sank ten per cent today after the drug delivery firm confirmed that there are no contenders for a full takeover of the business.

The troubled company also announced the appointment of Argeris "Jerry" Karabelas as chairman, in defiance of rebel shareholders trying to force their own candidate on to the board.

Dr Argeris Karabelas, a former chief executive of Swiss drug maker Novartis, replaces Ian Gowrie-Smith as non-executive chairman, who resigned amid mounting shareholder discontent.

In a statement, SkyePharma confirmed that it had had not received a takeover offer it felt able to recommend to shareholders. The announcement came after smaller rival Innovata ceased its interest in the business last month.

After completing a three-month strategic review, the company said it will instead opt to sell its injectable drugs division, which comprises cancer drug DepoCyt and Depodur for treating pain after surgery.

SkyePharma has a number of drugs in the pipeline but analysts said that development costs were placing a burden on resources and would impact profitability for years to come.

Selling the injectables division will leave the company with its core business of oral and pulmonary drugs, including asthma treatment Flutiform, which needed an unpopular and heavily discounted rights issue in October to secure enough funds for final trials to take place.

Traders said the lack of bid interest combined with doubts over the future makeup of the board had undermined confidence in the business.

"Today’s news increases uncertainty, and markets never like uncertainty", one dealer commented.

Last week, three institutional investors filed notices for an extraordinary general meeting and have vowed to vote against any board appointment made before then.

The trio led by London-based fund North Atlantic Value want Bob Thian as a director, citing his experience as chairman of filter paper maker Whatman and past positions with companies such as Abbott Laboratories and GlaxoSmithKline.

But support for Mr Thian was dealt a blow earlier this week when Whatman issued a profits warning after suffering delays on an order for DNA storage.

By midday shares in SkyPharma were down 4.25p at 39.25p.

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