Document:

OMNIBUS CONVERSION AGREEMENT

      This is an Omnibus Conversion Agreement (this "Agreement") dated January
12, 2004 by and among Astralis Ltd., a Delaware corporation (the "Corporation")
and SkyePharma PLC, a company incorporated under the laws of England and Wales
("SkyePharma").

                                    RECITALS

      WHEREAS, the Corporation and SkyePharma entered into a Purchase Agreement,
dated as of December 10, 2001 (the "Purchase Agreement"), pursuant to which
SkyePharma purchased 2,000,000 shares of the Corporation's Series A Convertible
Preferred Stock, par value $0.001 per share (the "Convertible Preferred Stock");
and

      WHEREAS, the Corporation and SkyePharma desire to enter into an Agreement
regarding the conversion of the Convertible Preferred Stock owned by SkyePharma.

      NOW THEREFORE, in consideration of the mutual promises and covenants set
forth in this Agreement and other good and valuable consideration, the receipt,
sufficiency and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:

                                   DEFINITIONS

      As used herein, the terms below shall have the following meanings.

            "Additional Shares" shall have the meaning provided in Section 3 of
this Agreement.

            "Affiliate" shall mean, with respect to any person, any other person
who, directly or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such person. For purposes of this
definition, "control" when used with respect to any person means the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by appointment of directors,
by contract or otherwise.

            "Amended Stockholders Agreement" shall mean an Amendment No. 1 to
the Stockholders Agreement, dated December 10, 2001, by and among the
Corporation, SkyePharma and the other signatories thereto, in the form attached
hereto as Exhibit C, to be entered into as a condition to the Conversion Closing
pursuant to Sections 8 and 9 of this Agreement.

            "Call Option" shall have the meaning provided in Section 3 of this
Agreement.

<PAGE>

            "Call Option Agreement" shall have the meaning provided in Section 3
of this Agreement.

            "Certificate of Designations" shall mean the Certificate of
Designations, Preferences and Rights of Series A Convertible Preferred Stock of
Astralis Ltd.

            "Common Stock" shall mean the Corporation's common stock, par value
$0.0001 per share.

            "Conversion Closing" shall have the meaning provided in Section 1 of
this Agreement.

            "Conversion Closing Date" shall have the meaning provided in Section
2 of this Agreement.

            "Conversion Price" shall have the meaning provided in Section 2 of
this Agreement.

            "Conversion Shares" shall have the meaning provided in Section 1 of
this Agreement.

            "Convertible Preferred Stock" shall have the meaning provided in the
recitals to this Agreement.

            "Corporation" shall have the meaning provided in the preamble to
this Agreement.

            "Corporation's Organizational Documents" shall have the meaning
provided in Section 4 of this Agreement.

            "Escrow Agreement" shall have the meaning provided in Section 3 of
this Agreement.

            "Filings" shall have the meaning provided in Section 4 of this
Agreement.

            "Indemnified Party" shall have the meaning provided in Section 10 of
this Agreement.

            "Indemnifying Party" shall have the meaning provided in Section 10
of this Agreement.

            "Losses" shall have the meaning provided in Section 10 of this
Agreement.

            "Private Placement" shall mean the offer and sale of Units resulting
in gross proceeds of not less than $4 million completed prior to January 31,
2004.

<PAGE>

            "Private Placement Closing Date" shall mean the date the Corporation
closes the Private Placement.

            "Purchase Agreement" shall have the meaning provided in the recitals
to this Agreement.

            "Registration Rights Agreement" shall mean the Registration Rights
Agreement dated December 10, 2001 by and between the Corporation and SkyePharma.

            "SkyePharma" shall have the meaning provided in the preamble to this
Agreement.

            "Third Party Claim" shall have the meaning provided in Section 10 of
this Agreement.

            "Transaction Documents" shall have the meaning provided in Section 4
of this Agreement.

            "Units" shall mean units consisting of one share of the
Corporation's Common Stock and Warrants to purchase one share of the
Corporation's Common Stock.

            "Warrants" shall mean warrants having (i) an exercise price of $0.73
and (ii) an expiration date that is four years from the date of the Private
Placement Closing Date.

      1.    Conversion.

            The parties hereby agree that on the Private Placement Closing Date,
SkyePharma shall convert all of its shares of Convertible Preferred Stock into
Common Stock at the Conversion Price provided for in Section 2 of this
Agreement, provided that all the conditions set forth in Sections 8 and 9 hereof
have been satisfied or have been waived in writing (the "Conversion Closing").
The Conversion Closing shall take place at the offices of McCarter & English,
LLP, 4 Gateway Center, 100 Mulberry Street, Newark, NJ 07102.

            At the Conversion Closing, the Corporation shall deliver to
SkyePharma a stock certificate representing the number of shares of Common Stock
that SkyePharma will be entitled to receive as a result of the conversion of its
Convertible Preferred Stock at the Conversion Price provided for in Section 2 of
this Agreement (the "Conversion Shares"), registered in the name of SkyePharma,
or at the direction of SkyePharma, in the name of one of its affiliates, and
dated the date of the Conversion Closing, against surrender by SkyePharma of its
certificate representing the Convertible Preferred Stock to the Corporation in
accordance with Section 3 of the Certificate of Designations.

<PAGE>

      2.    Conversion Price.

            Subject to the satisfaction by SkyePharma of its obligations under
this Agreement and, pursuant to Section 3.4.11 of the Certificate of
Designations, the Corporation hereby agrees to modify the Conversion Price of
the Convertible Preferred Stock provided for in the Certificate of Designations
as follows:

            a.    In the event the Units offered in the Private Placement are
                  sold at a price between $0.50 and $0.70 per Unit, the
                  Conversion Price (as defined in the Certificate of
                  Designations) of the Convertible Preferred Stock shall be
                  $0.80 per share.

            b.    In the event the Units offered in the private placement are
                  sold at a price below $0.50 per Unit, the Conversion Price of
                  the Convertible Preferred Stock shall be an amount equal to
                  $0.80 multiplied by a fraction, the numerator of which is the
                  price for which each Unit is sold and the denominator of which
                  is $0.50.

            c.    In the event the Units offered in the private placement are
                  sold at a price above $0.70 per Unit, the Conversion Price of
                  the Convertible Preferred Stock shall be an amount equal to
                  $0.80 multiplied by a fraction, the numerator of which is the
                  price for which each Unit is sold and the denominator of which
                  is $0.70.

            The modification of the Conversion Price of the Convertible
Preferred Stock pursuant to this Section 2 shall be effective on the date of the
Conversion Closing (the "Conversion Closing Date").

      3.    Additional Shares.

            "Additional Shares" shall mean the difference between the number of
shares of Common Stock that SkyePharma would receive if it converted its
Convertible Preferred Stock at $1.60 per share and the number of shares of
Common Stock that SkyePharma will receive as a result of the conversion of its
Convertible Preferred Stock at the Conversion Price provided for in Section 2 of
this Agreement. At the Conversion Closing, the Corporation shall receive a call
option ("Call Option") with respect to the Additional Shares as provided in a
Call Option Agreement in the form attached hereto as Exhibit A ("Call Option
Agreement") by and between the Corporation and SkyePharma, to be entered into at
the Conversion Closing. Until the earlier of (i) the exercise of the Call Option
or (ii) expiration of the Call Option, as provided for in the Call Option
Agreement, the Additional Shares shall be held in escrow pursuant to an Escrow
Agreement in the form attached hereto as Exhibit B ("Escrow Agreement") by and
between the Corporation and SkyePharma, to be entered into at the Conversion
Closing.

<PAGE>

      4.    Representations and Warranties of the Corporation

            The Corporation hereby represents and warrants to SkyePharma that:

            (a)   Organization

            The Corporation is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. The Corporation
has all requisite corporate power and authority to own and lease its properties,
to carry on its business as presently conducted and to carry out the
transactions contemplated hereby. The Corporation is duly qualified to do
business and is in good standing in each jurisdiction in which such
qualification is necessary because of the property owned, leased or operated by
it or because of the nature of its businesses as now being conducted, except for
those jurisdictions where the failure to be so qualified would not reasonably be
expected to have, individually or in the aggregate, a material adverse effect on
the condition (financial or otherwise), operations, prospects, business, assets,
liabilities or earnings of the Corporation.

            The Corporation has, prior to the execution of this Agreement,
delivered to SkyePharma true and complete copies of its Certificate of
Incorporation (including the Certificate of Designations) and its By-Laws, each
as amended to date (collectively, the "Corporation's Organizational Documents").
Each of the Corporation's Organizational Documents as so delivered is in full
force and effect.

            (b)   Authorization

            The execution, delivery and performance by the Corporation of this
Agreement, the Call Option Agreement, the Escrow Agreement and the Amended
Stockholders Agreement (such documents, collectively, the "Transaction
Documents") and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all requisite corporate action on the part
of the Corporation and each of the Transaction Documents shall have been, duly
executed and delivered by the Corporation and are in full force and effect. The
Transaction Documents constitute the valid and binding obligations of the
Corporation, enforceable in accordance with their respective terms, subject as
to enforcement of (A) applicable bankruptcy, insolvency, moratorium or similar
laws relating to or affecting the rights and remedies of creditors and debtors
and (B) equitable principles generally, regardless of whether such principles
are considered in a proceeding at equity or at law. The execution, delivery and
performance of each of the Transaction Documents and the consummation of the
transactions contemplated hereby and thereby, and compliance with the provisions
hereof and thereof by the Corporation will not (a) violate any law or statute or
order, judgment or decree of any court, administrative agency or other
governmental body applicable to the Corporation, or its properties or assets or
(b) conflict in any respect with or result in any breach of any of the terms or
provisions or constitute (with due notice or lapse of time, or both) a default
under the Corporation's Organizational Documents.

<PAGE>

            (c)   Authorization and Validity of Conversion Shares

            The issuance, sale and delivery of the Conversion Shares have been
duly authorized by all requisite corporate action of the Corporation, and, when
issued, sold and delivered on the Conversion Closing Date in accordance with the
terms of the Certificate of Designations and this Agreement, will be duly and
validly issued, fully paid and nonassessable and will not create or vest any
preemptive or other similar rights, or cause any adjustment in the number of
securities issuable pursuant to, or the conversion or exercise price of, any
outstanding rights to purchase, acquire or subscribe to shares in the
Corporation or securities convertible into shares of the Corporation by any of
the beneficial holders of shares of the Corporation or any securities
convertible into, or exercisable for, shares of the Corporation, and will be
free and clear of all liens. (d) No Consent or Approval Required

            No notices, reports or other filings ("Filings") are required to be
made by the Corporation with, nor are any consents, registrations, approvals,
permits or authorizations ("Consents") required to be obtained by the
Corporation from, any governmental or regulatory authority, agency, commission,
body or other governmental entity, in connection with the execution and delivery
of this Agreement and the performance by the Corporation of its obligations
hereunder, except such Consents or Filings as have already been duly and validly
obtained or filed, or with respect to any Filings that must be made after the
Conversion Closing, as will be filed in a timely manner.

      5.    Representations and Warranties of SkyePharma.

            SkyePharma hereby represents and warrants to the Corporation as
follows:

            (a)   Due Organization

            SkyePharma is a company duly organized and validly existing under
the laws of England and Wales.

            (b)   Authorization; Execution and Delivery of Agreement

            SkyePharma has all requisite power and authority to execute this
Agreement and the Transaction Documents, to perform its obligations hereunder
and thereunder and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
action on the part of SkyePharma. This Agreement has been duly executed and
delivered by SkyePharma and this Agreement constitutes the legal, valid, binding
and enforceable obligation of SkyePharma, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to creditors' rights and
general principles of equity.

<PAGE>

            (c)   No Consent or Approval Required

            Other than as a result of the reporting requirements under the
Securities Exchange Act of 1934, no Filings are required to be made by
SkyePharma with, nor are any Consents required to be obtained by SkyePharma
from, any governmental or regulatory authority, agency, commission, body or
other governmental entity, in connection with the execution and delivery of this
Agreement and the performance by SkyePharma of its obligations hereunder, except
such Consents or Filings as have already been duly and validly obtained or
filed, or with respect to any Filings that must be made after the Conversion
Closing, as will be filed in a timely manner.

      6.    Legends.

            The Conversion Shares and the Additional Shares shall bear a legend
substantially as follows:

                  "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
                  ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
                  SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
                  LAW. THE SECURITIES MAY NOT BE PLEDGED, HYPOTHICATED, SOLD OR
                  TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
                  STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933
                  OR ANY APPLICABLE STATE SECURITIES LAW OR AN EXEMPTION
                  THEREFROM UNDER SUCH ACT OR LAW."

            The Additional Shares shall bear a legend substantially as follows:

                  "THESE SECURITIES ARE SUBJECT TO A CALL OPTION AGREEMENT DATED
                  JANUARY 20, 2004 BETWEEN ASTRALIS LTD. AND SKYEPHARMA PLC AND
                  NO TRANSFER OF SUCH SECURITIES SHALL BE VALID OR EFFECTIVE
                  UNLESS PERMITTED UNDER THE TERMS OF SUCH AGREEMENT. COPIES OF
                  SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST
                  MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE
                  SECRETARY OF ASTRALIS LTD."

      7.    Registration Rights.

            The parties hereto agree that the Conversion Shares are Registrable
Securities under the terms of the Registration Rights Agreement. The Additional
Shares shall not be considered Registrable Securities while subject to the
Escrow Agreement. In the event the Call Option is not exercised, upon release
from escrow, the Additional Shares shall be considered Registrable Securities
under the terms of the Registration Rights Agreement.

<PAGE>

      8.    Conditions to Obligations of SkyePharma at the Conversion Closing.

            The obligation of SkyePharma to consummate the Conversion Closing is
subject to the satisfaction or waiver of the following conditions on or prior to
the Conversion Closing Date:

            (a)   Corporate Proceedings; Consents; Etc

            All corporate and/or other proceedings to be taken by the
Corporation, its officers, directors and stockholders and all waivers, Filings
and Consents to be obtained by the Corporation in connection with the
transactions contemplated by this Agreement and the Transaction Documents shall
have been taken or obtained.

            (b)   Transaction Documents

            The Call Option Agreement, the Escrow Agreement and the Amended
Stockholders Agreement, in the forms attached hereto, shall have been executed
and delivered by the Corporation and each of the other signatories on the
signature pages thereto.

            (c)   Filings and Documents

            The Corporation shall have delivered to SkyePharma a certificate of
the Secretary of the Corporation at the Conversion Closing certifying that
attached thereto is: (i) a true and complete copy of the Corporation's
Certificate of Incorporation, as in effect at the Closing; (ii) a true and
complete copy of its By-laws as in effect at the Conversion Closing; and (iii) a
true and complete copy of all resolutions duly adopted by its Board of Directors
(x) authorizing the execution, delivery and performance of this Agreement and
the Transaction Documents, and (y) authorizing the consummation of the
transactions contemplated hereby, including the Conversion Price reduction in
accordance with Section 3.4.11 of the Certificate of Designations premised on a
determination by the Board of Directors that such decrease would be in the best
interests of the Corporation.

            (d)   Representations, Warranties and Covenants

            Each representation and warranty of the Corporation shall be true
and correct in all material respects as of the Conversion Closing Date; the
Corporation shall have complied in all material respects with its covenants and
agreements to be performed at or prior to the Conversion Closing Date; and the
Corporation shall have delivered to SkyePharma a certificate of the Chief
Executive Officer of the Corporation, certifying as to the foregoing matters.

<PAGE>

            (e)   No Litigation

            No litigation or other formal proceeding shall have been instituted
or threatened seeking to enjoin any of the transactions contemplated hereby or
seeking damages in respect thereof, and no injunction or temporary restraining
order shall have been issued with respect to any of the transactions
contemplated hereby.

            (f)   Private Placement

            The Private Placement shall have been consummated on the terms
specified on Annex A hereto resulting in gross proceeds of not less than $4
million prior to January 31, 2004.

      9.    Conditions to Obligations of Corporation at the Conversion Closing.

            The obligations of the Corporation to consummate the Conversion
Closing is subject to the satisfaction or waiver of the following conditions on
or prior to the Conversion Closing Date:

            (a)   Representations and Warranties and Covenants

            Each representation and warranty of SkyePharma shall be true and
correct in all respects as of the Conversion Closing Date, as if made on and as
of each such date.

            (b)   Transaction Documents

            The Call Option Agreement, the Escrow Agreement and the Amended
Stockholders Agreement, in the forms attached hereto, shall have been executed
and delivered by SkyePharma.

            (c)   No Litigation

            No litigation or other formal proceeding shall have been instituted
or threatened seeking to enjoin any of the transactions contemplated hereby or
seeking damages in respect thereof, and no injunction or temporary restraining
order shall have been issued with respect to any of the transactions
contemplated hereby.

            (d)   Convertible Preferred Stock Certificates

            SkyePharma shall have surrendered the certificates representing its
Convertible Preferred Stock for conversion.

      10.   Indemnification; Survival.

            (a)   Indemnification by the Corporation

            The Corporation (the "Indemnifying Party") hereby agrees to
indemnify and hold harmless SkyePharma and its respective affiliates, directors,
officers and employees (each an "Indemnified Party") from and against any and
all liabilities, judgments, claims, settlements, losses, damages, fees
(including attorneys' and other experts' fees and disbursements), Liens, taxes,
penalties, obligations and expenses (collectively, "Losses") incurred or
suffered by any such person arising from, by reason of or in connection with the
Agreement or the Transaction Documents or any of the transactions contemplated
hereby or thereby. The Corporation will reimburse SkyePharma for any legal and
other fees and expenses (including the cost of any investigation and
preparation) incurred in connection therewith as such expenses are incurred.
Notwithstanding the foregoing, the Company shall not be required to indemnify
SkyePharma against losses, damages, liabilities or claims arising from any
claims relating to the duties of SkyePharma to its stockholders. This
indemnification provision shall be in addition to the rights of SkyePharma to
bring an action against the Corporation for breach of any term of this Agreement
and the Transaction Documents.

<PAGE>

            (b)   Procedures Relating to Third Party Claims

            An Indemnified Party seeking indemnification pursuant to Section 10
shall give prompt notice to the Indemnifying Party from whom such
indemnification is sought of the assertion of any claim or assessment, or the
commencement of any action, suit or proceeding, by a third party (including any
holder of securities of the Corporation) in respect of which indemnity may be
sought hereunder (a "Third Party Claim") and will give the Indemnifying Party
such information with respect thereto as the Indemnifying Party may reasonably
request, but no failure to give such notice shall relieve the Indemnifying Party
of any liability hereunder (except to the extent the Indemnifying Party has
suffered actual and material prejudice thereby). The Indemnifying Party shall
have the right, exercisable by written notice to the Indemnified Party within 14
days of receipt of notice from the Indemnified Party of commencement of or
assertion of any Third Party Claim, to assume the defense of such Third Party
Claim, using counsel selected by the Indemnifying Party and reasonably
acceptable to the Indemnified Party; provided, that the Indemnifying Party shall
not have the right to assume the defense of a Third Party Claim if the
Indemnified Party shall have determined in its reasonable discretion that a
conflict may arise in the event the Third Party Claim involves both the
Indemnified Party and the Indemnifying Party, in which case such Indemnified
Party shall have the right to control the defense of such Third Party Claim
using counsel selected by the Indemnified Party and the Indemnifying Party shall
reimburse the Indemnified Party for its reasonable legal and other fees and
expenses (including the cost of any investigation and preparation) incurred in
connection therewith promptly as such expenses are incurred. In addition, if the
Indemnifying Party fails to give the Indemnified Party the notice complying with
the provisions stated above within the stated time period, the Indemnified Party
shall have the right to assume control of the defense of the Third Party Claim.
In no event may any Indemnifying Party settle or compromise any Third Party
Claim without the prior written consent of an Indemnified Party, which consent
shall not be unreasonably withheld.

            (c)   Contribution

            If the indemnification provided for in this Section 10 is
unavailable to or insufficient to hold harmless an Indemnified Party in respect
of any Losses, then each Indemnifying Party shall contribute to the amount paid
or payable by such Indemnified Party as a result of such Losses in such
proportion as is appropriate to reflect the relative benefits received by the
parties. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the Indemnified Party failed
to give the notice required under subsection (b) above, then each Indemnifying
Party shall contribute to such amount paid or payable by such Indemnified Party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the parties with respect to the events which
resulted in such Losses, as well as any other relevant equitable considerations.

<PAGE>

            (d)   Survival of Representations, Warranties and Indemnification

            Notwithstanding any investigation conducted or notice or knowledge
obtained by or on behalf of any party hereto, each representation and warranty
in this Agreement shall, to the extent relevant to a claim asserted by a party
hereto against the other party hereto, survive for a period of twelve months
following the Conversion Closing Date; provided, however, that the
representations and warranties of the Corporation shall survive in the event a
third party claim has been or is asserted against SkyePharma (whether or not
such claim is asserted within the twelve months following the Conversion Closing
Date). The indemnification provisions of this Section 10 other than with respect
to a claim for breach of a representation or warranty (which shall only survive
for twelve months following the Conversion Closing Date subject to the proviso
set forth above) shall survive until the fifth anniversary of the Conversion
Closing Date.

      11.   Anti-Dilution.

            SkyePharma acknowledges that the Conversion Price of the Convertible
Preferred Stock at the Conversion Closing will be as set forth in Section 2
hereof, notwithstanding Section 3.4 of the Certificate of Designations and any
adjustments to the Conversion Price to which SkyePharma could otherwise be
entitled as a result of the issuance of securities of the Corporation in the
Private Placement. This does not constitute a waiver of any of SkyePharma's
rights under the Certificate of Designations to an adjustment to the Conversion
Price as a result of the issuance of securities of the Corporation in the
Private Placement under Section 3.4 or otherwise if the conditions in Section 8
hereof are not satisfied and the Conversion Closing is not effected.

      12.   Notices.

            All notices, requests, demands and other communications which are
required or may be given under this Agreement shall be in writing and shall be
deemed to have been duly given when received if personally delivered; when
transmitted, if transmitted by telecopy, electronic or digital transmission
method; the day after it is sent, if sent for next day delivery to a U.S.
address by recognized overnight delivery service (e.g., Federal Express); and
upon receipt, if sent by registered or certified mail (or any substantially
similar form of mail), postage prepaid and return receipt requested. In each
case notice shall be sent to:

<PAGE>

                  If to the Corporation addressed to:

                           Astralis Ltd.
                           75 Passaic Avenue
                           Fairfield, NJ 07004
                           Attention:  Mr. Mike Ajnsztajn
                           Telecopier: +1-973-227-7169

                  With a copy to:

                           McCarter & English, LLP
                           4 Gateway Center
                           100 Mulberry Street
                           Newark, NJ 07102
                           Attn:  Jeffrey A. Baumel, Esq.
                           Telecopier: +1-973-624-7070

                  If to SkyePharma addressed to:

                           SkyePharma PLC
                           105 Piccadilly
                           London, England W1J 7NJ

                           Attention:  Company Secretary
                           Telecopier: +44-20-7491-3338

                  With a copy to:

                           Sullivan & Cromwell LLP
                           1 New Fetter Lane
                           London, England EC4A 1AN
                           Attention:  Kathryn A. Campbell, Esq.
                           Telecopier: +44-20-7959-8950

      13.   Entire Agreement.

            This Agreement constitutes the entire agreement and understanding
among the parties relating to the subject matter hereof and thereof and
supersede all prior proposals, negotiations, agreements and understandings
relating to such subject matter.

      14.   Agreements; Waivers.

            No term, covenant, agreement or condition of this Agreement may be
amended, or compliance therewith waived (either generally or in a particular
instance and either retroactively or prospectively), unless agreed to in writing
by the party to be bound thereby.

<PAGE>

      15.   Severability.

            In the event that any one or more of the provisions contained in
this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, then to the maximum extent permitted by law, such
invalidity, illegibility or unenforceability shall not affect any other
provision of this Agreement.

      16.   Governing Law; Successors and Assigns.

            This Agreement shall be construed in accordance with the laws of the
State of New York, without regard to conflict of law provisions thereof. Each
party hereto agrees that it shall bring up any action or proceeding in respect
of any claim arising out of or related to this Agreement or the transactions
contained in and contemplated by this Agreement, whether in tort or contract or
at law or in equity, exclusively in the United States District Court for the
Southern District of New York or, if such court is not available, the Supreme
Court of the State of New York for the county of New York (the "Chosen Courts")
and solely in connection with claims arising under this Agreement or the
transactions contained in or contemplated by this Agreement (i) irrevocably
submits to the exclusive jurisdiction of the Chosen Courts, (ii) waives any
objection to laying venue in any such action or proceeding in the Chosen Courts
and agrees not to commence any action in respect of any such claim in any other
court or forum, (iii) waives any objection that the Chosen Courts are an
inconvenient forum or do not have jurisdiction over any party hereto, (iv)
waives any right to a trial by jury and (v) agrees that service of process upon
such party in any such action or proceeding shall be effective if notice is
given in accordance with Section 12 of this Agreement.

            This Agreement shall bind and inure to the benefit of the
Corporation and SkyePharma and the respective successors, assigns, heirs and
legal representatives (as the case may be) of the Corporation and SkyePharma.
The rights granted pursuant to this Agreement may not be assigned or otherwise
conveyed by either party or by any subsequent assign of any of such rights
without the written consent of the other, which consent shall not unreasonably
be withheld; provided, however, that no such written consent shall be required
if the transfer is to any Affiliate or partner of SkyePharma.

<PAGE>

      17.   Counterparts.

            This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

      18.   Further Assurances.

            Each of the parties shall execute and deliver such further
instruments and documents and take such further actions as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated hereby.

      19.   Cumulative Remedies.

            All rights and remedies of each party hereto are cumulative of each
other and of every other right or remedy such party may otherwise have at law or
in equity, and the exercise of one or more rights or remedies shall not
prejudice or impair the concurrent or subsequent exercise of other rights or
remedies.

      20.   Termination.

            This Agreement may be terminated by either party if the other party
is in material breach of this Agreement and such breach is not cured within ten
days following the delivery of written notice thereof. Such termination right
may be exercised only by the delivery of written notice of such termination by
the terminating party to the other party and such termination will not relieve
any party of liability for its prior breach. This Agreement shall terminate at
the earlier of (a) March 1, 2004 or (b) by the mutual written consent of the
parties hereto, except that in each case each representation and warranty in
this Agreement and each agreement or covenant in this Agreement including the
indemnification provisions hereof shall survive such termination.

<PAGE>

            IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first written above.

                                        ASTRALIS LTD.

                                        By: /s/ Mike Ajnstztajn
                                            ------------------------------
                                            Name:  Mike Ajnsztajn
                                            Title: Chief Executive Officer

                                        SKYEPHARMA PLC

                                        By: /s/ Donald Nicholson
                                            ------------------------------
                                            Name:  Donald Nicholson
                                            Title: Finance DirectorCALL OPTION AGREEMENT

      This is a Call Option Agreement (this "Agreement") dated January 20, 2004
by and between Astralis Ltd., a Delaware corporation (the "Corporation") and
SkyePharma PLC, a company incorporated under the laws of England and Wales
("SkyePharma").

                                    RECITALS

      WHEREAS, the Corporation and SkyePharma entered into a Purchase Agreement,
dated as of December 10, 2001 (the "Purchase Agreement"), pursuant to which
SkyePharma purchased 2,000,000 shares of the Corporation's Series A Convertible
Preferred Stock, par value $0.001 per share (the "Convertible Preferred Stock");
and

      WHEREAS, the Corporation and SkyePharma have entered into an Omnibus
Conversion Agreement, dated as of January 12, 2004 ("Omnibus Conversion
Agreement"), pursuant to which SkyePharma agreed to convert the Convertible
Preferred Stock on the date hereof upon the closing of a qualifying private
placement of the Corporation's securities resulting in gross proceeds of not
less than $4 million, subject to the conditions set forth therein, including the
execution of this Agreement.

      NOW THEREFORE, in consideration of the mutual promises and covenants set
forth in this Agreement and other good and valuable consideration, the receipt,
sufficiency and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:

                                   DEFINITIONS

      As used herein, the terms below shall have the following meanings:

      "Accounting Firm" shall have the meaning provided in Section 2 of this
Agreement.

      "Additional Shares" shall mean the 12,500,000 shares of Common Stock
representing the difference between the number of shares of Common Stock that
SkyePharma would receive if it converted its Convertible Preferred Stock at
$1.60 per share and the number of shares of Common Stock that SkyePharma will
receive on the date hereof as a result of the conversion of its Convertible
Preferred Stock at the conversion price provided in the Omnibus Conversion
Agreement, subject to adjustment for stock dividends, subdivisions,
reclassifications, recapitalizations, splits, combinations or exchanges of
shares which affect all shares of Common Stock.

      "Affiliate" shall mean, with respect to any person, any other person who,
directly or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such person. For purposes of this
definition, "control" when used with respect to any person means the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by appointment of directors,
by contract or otherwise.

      "Closing Date" shall mean the date hereof.

<PAGE>

      "Common Stock" shall mean the Corporation's common stock, par value
$0.0001 per share.

      "Convertible Preferred Stock" shall have the meaning provided in the
recitals to this Agreement.

      "Corporation" shall have the meaning provided in the preamble to this
Agreement.

      "Corporation's Call" shall have the meaning provided in Section 1 of this
Agreement.

      "Dosing Period" shall mean the period during which a person receives
injections of the Corporation's Psoraxine formula for the treatment of
psoriasis.

      "Escrow Agent" shall mean American Stock Transfer & Trust Company.

      "Escrow Agreement" shall mean the Escrow Agreement of even date herewith
by and among the Corporation, SkyePharma and the Escrow Agent.

      "Follow-Up Period" shall mean the period following the Dosing Period
during which a person receiving injections of the Corporation's Psoraxine
formula is evaluated for the prevalence of psoriasis.

      "Milestone Event" shall mean the completion of the Dosing Period and
Follow-Up Period for the treatment of no fewer than 80 persons in Phase II
clinical trials for the Corporation's Psoraxine formula for the treatment of
psoriasis (but in no event earlier than July 21, 2004) without regard to results
or any qualitative measurements with respect thereto.

      "Omnibus Conversion Agreement" shall have the meaning provide in the
recitals to this Agreement.

      "Proportional Adjustment" shall mean a proportionate adjustment made in
good faith to the price per share used in calculating the Purchase Price and the
number of shares of Common Stock or other securities constituting the Purchase
Multiple upon the occurrence of a stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of shares which affects all
shares of Common Stock, as described below. The price payable per share after
such change shall be adjusted so that the price that shall be payable for the
aggregate of the securities or shares (or share or fractional share) that are
received or held in respect of one Additional Share upon the effectiveness of
such change shall equal the price of one Additional Share prior to such change.
The number of shares constituting the Purchase Multiple shall be proportionately
increased or decreased by multiplying (a) the Purchase Multiple immediately
prior to the effectiveness of such change by (b) the number of the securities or
shares (or share or fractional share) that are received or held in respect of
one Additional Share upon the effectiveness of such change.

      "Purchase Agreement" shall have the meaning provided in the recitals to
this Agreement.

      "Purchase Multiple" shall have the meaning provided in Section 1 of this
Agreement.

<PAGE>

      "Purchase Price" shall have the meaning provided in Section 1 of this
Agreement.

      "SkyePharma" shall have the meaning provided in the preamble to this
Agreement.

      Section 1. Call Option

      Upon achievement of the Milestone Event, if such Milestone Event is
achieved prior to the third anniversary of the Closing Date, then until and
including such third anniversary of the Closing Date, the Corporation may, but
is not obligated to, exercise a right to purchase any or all of the Additional
Shares for the Purchase Price (as hereinafter defined) for cash, payable
immediately and as a condition precedent to the Corporation's exercise of such
right ("Corporation's Call"), subject to the other terms and conditions set
forth herein. The Corporation's Call shall be exercisable only in multiples of
2,500,000 Additional Shares (the "Purchase Multiple"). The minimum purchase
shall be 1 Purchase Multiple.

      The "Purchase Price" for purposes of the Corporation's Call shall be as
follows:

            a. In the event the Corporation's Call is exercised within two years
      of the Closing Date, the Purchase Price shall be the higher of (i) $0.80
      per share plus an amount equal to 30% of $0.80 per share per annum from
      the Closing Date accruing on a non-compounding rate on a quarterly basis
      or (ii) an aggregate of $16,000,000 (or, if less than all of the
      Additional Shares are purchased, the amount that would be payable for such
      Additional Shares on the second anniversary of the Closing Date), subject
      to the Proportional Adjustment provided in Section 2(c) below.

            b. In the event the Corporation's Call is exercised within three
      years of the Closing Date, but after the second anniversary of the Closing
      Date, the Purchase Price shall be $0.80 per share plus an amount equal to
      30% of $0.80 per share per annum from the Closing Date accruing on a
      non-compounding rate on a quarterly basis (such Purchase Price not to
      exceed an aggregate of $19,000,000, subject to the Proportional Adjustment
      provided in Section 2(c) below).

By way of example, if at any time prior to or on the second anniversary of the
Closing Date, 5,000,000 Additional Shares are purchased, the Purchase Price
shall be $6,400,000. If at the thirty month anniversary of the Closing Date,
5,000,000 Additional Shares are purchased, the Purchase Price shall be
$7,000,000.

      Section 2. Exercise of Corporation's Call.

            a. In the event the Corporation wishes to exercise the Corporation's
Call, it shall provide written notice of exercise to SkyePharma as provided in
Section 3 hereof, shall provide written notice of exercise to the Escrow Agent
as provided in the Escrow Agreement and shall pay the purchase price in
accordance with Section 2(b).

            b. Upon exercise of the Corporation's Call and delivery by the
Escrow Agent to SkyePharma of payment in full for the Additional Shares
purchased, SkyePharma shall no longer be deemed to be the owner of such
Additional Shares. Such purchase price shall be paid on the date of exercise by
wire transfer of immediately available funds in accordance with wire
instructions to be provided by SkyePharma.

<PAGE>

            c. If, after the date of this Agreement, the Additional Shares shall
have been changed into a different number of shares or a different class, by
reason of any stock dividend, subdivision, reclassification, recapitalization,
split, combination or exchange of shares which affects all shares of Common
Stock, the Purchase Price and the Purchase Multiple shall be adjusted by a
Proportional Adjustment. Upon any Proportional Adjustment, the Corporation shall
give written notice at least twenty (20) days prior to any Proportional
Adjustment, with an explanation of the nature of the Proportional Adjustment,
its effect on the Purchase Price and the Purchase Multiple, and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based. The adjustments to the Purchase Multiple or the Purchase
Price pursuant to the Proportional Adjustment shall not be effective until
SkyePharma and the Corporation shall deliver written instructions to the Escrow
Agent.

            d. In the event of a Proportional Adjustment in which the parties
are unable to agree on the Purchase Price, the Purchase Multiple or the
Additional Shares, such dispute shall be resolved by a mutually acceptable
internationally recognized accounting firm (the "Accounting Firm") which must be
agreed upon within ten (10) business days of the delivery of notice by the
Corporation to SkyePharma. If no Accounting Firm is agreed upon during such
period, the Proportional Adjustment shall become effective in accordance with
the terms set forth in such notice. The parties will instruct the Accounting
Firm to reach its conclusion regarding any such dispute within twenty (20) days
after its appointment. The report of the Accounting Firm shall be final,
conclusive and binding on the parties. The fees and expenses of such Accounting
Firm shall be borne equally by each of the Corporation and SkyePharma.

      Section 3. Notices.

      All notices, requests, demands and other communications which are required
or may be given under this Agreement shall be in writing and shall be deemed to
have been duly given when received if personally delivered; when transmitted, if
transmitted by telecopy, electronic or digital transmission method; the day
after it is sent, if sent for next day delivery to a U.S. address by recognized
overnight delivery service (e.g., Federal Express); and upon receipt, if sent by
registered or certified mail (or any substantially similar form of mail),
postage prepaid and return receipt requested. In each case notice shall be sent
to:

                  If to the Corporation addressed to:

                  Astralis Ltd.
                  75 Passaic Avenue
                  Fairfield, NJ 07004

                  Attention:  Mr. Mike Ajnsztajn
                  Telecopier: +1-973-227-7169

<PAGE>

                  With a copy to:
                  McCarter & English, LLP
                  4 Gateway Center
                  100 Mulberry Street
                  Newark, NJ 07102
                  Attn:  Jeffrey A. Baumel, Esq.
                  Telecopier: +1-973-624-7070

                  If to SkyePharma addressed to:
                  SkyePharma PLC
                  105 Piccadilly
                  London, England W1J 7NJ
                  Attention:  Company Secretary
                  Telecopier: +44-20-7491-3338

                  With a copy to:
                  Sullivan & Cromwell LLP
                  1 New Fetter Lane
                  London, England EC4A 1AN

                  Attention:  Kathryn A. Campbell, Esq.
                  Telecopier: +44-20-7959-8950

            Changes in notice addresses may be made by a notice delivered to the
      Corporation pursuant to this Section 3.

      Section 4. Entire Agreement.

      This Agreement constitutes the entire agreement and understanding among
the parties relating to the subject matter hereof and thereof and supersede all
prior proposals, negotiations, agreements and understandings relating to such
subject matter.

      Section 5. Amendments; Waivers.

      No term, covenant, agreement or condition of this Agreement may be
amended, or compliance therewith waived (either generally or in a particular
instance and either retroactively or prospectively), unless agreed to in writing
by the party to be bound thereby.

      Section 6. Severability.

      In the event that any one or more of the provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, then to the maximum extent permitted by law, such invalidity,
illegibility or unenforceability shall not affect any other provision of this
Agreement.

<PAGE>

      Section 7. Governing Law; Successors and Assigns.

      This Agreement shall be construed in accordance with the laws of the State
of New York, without regard to conflict of law provisions thereof. Each party
hereto agrees that it shall bring up any action or proceeding in respect of any
claim arising out of or related to this Agreement or the transactions contained
in and contemplated by this Agreement, whether in tort or contract or at law or
in equity, exclusively in the United States District Court for the Southern
District of New York or, if such court is not available, the Supreme Court of
the State of New York for the county of New York (the "Chosen Courts") and
solely in connection with claims arising under this Agreement or the
transactions contained in or contemplated by this Agreement (i) irrevocably
submits to the exclusive jurisdiction of the Chosen Courts, (ii) waives any
objection to laying venue in any such action or proceeding in the Chosen Courts
and agrees not to commence any action in respect of any such claim in any other
court or forum, (iii) waives any objection that the Chosen Courts are an
inconvenient forum or do not have jurisdiction over any party hereto, (iv)
waives any right to a trial by jury and (v) agrees that service of process upon
such party in any such action or proceeding shall be effective if notice is
given in accordance with Section 3 of the Agreement.

      This Agreement shall bind and inure to the benefit of the Corporation and
SkyePharma and the respective successors, permitted assigns, heirs and legal
representatives (as the case may be) of the Corporation and SkyePharma. The
rights granted pursuant to this Agreement may not be assigned or otherwise
conveyed by either party (by operation of law or otherwise) or by any subsequent
assign of any of such rights without the written consent of the other, which
consent shall not unreasonably be withheld; provided, however, that no such
written consent shall be required if the transfer is to any Affiliate or partner
of SkyePharma and such Affiliate or partner agrees to be bound by the terms of
this Agreement.

      Section 8. Counterparts.

      This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

      Section 9. Further Assurances.

      Each of the parties shall execute and deliver such further instruments and
documents and take such further actions as may be reasonably required or
desirable to carry out the provisions hereof and the transactions contemplated
hereby.

      Section 10. Cumulative Remedies.

      All rights and remedies of each party hereto are cumulative of each other
and of every other right or remedy such party may otherwise have at law or in
equity, and the exercise of one or more rights or remedies shall not prejudice
or impair the concurrent or subsequent exercise of other rights or remedies.

<PAGE>

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.

                                        ASTRALIS LTD.

                                        By: /s/ Mike Ajnsztajn
                                            ------------------------------
                                            Name:  Mike Ajnsztajn
                                            Title: Chief Executive Officer

                                        SKYEPHARMA PLC

                                        By: /s/ Donald Nicholson
                                            ------------------------------
                                            Name:  Donald Nicholson
                                            Title:  Finance Director

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