Biotech turnaround 'gathering pace'

By THIS IS MONEY
Updated:

 

DRUGS research group British Biotech has shown its turnaround was gathering pace as it reported a healthy reduction in pre-tax losses for the half-year. Losses at the Oxford-based firm were cut back by 3% to £8.4m in the six months to October 31 as its restructuring programme took shape.

Chief executive Dr Elliot Goldstein has been turning around the business after it was hit by the failure of its much-vaunted cancer treatment Marmistat. The group's shares plunged three years ago after its then top scientist Andrew Millar blew the whistle on the drug's ineffectiveness.

Dr Goldstein has downsized the firm, moved head office and focused on forming collaborations to develop drugs rather than working alone. The sale of the former head office and the group's pre-clinical research arm helped the group's cash balance edge up to £62.2m in the half-year.

And Dr Goldstein, who said the past was a 'dead issue', added he was confident of strong progress from a number of drugs in the development pipeline.

One being developed for heart surgery patients in conjunction with medical technology firm Biocompatibles was 'going gangbusters', he added. The group's Batimastat drug, initially developed for cancer, is being used on Biocompatibles' stents - tiny scaffolds used to keep clogged arteries open.

British Biotech's drug is coated onto the stents to help with the healing process and Dr Goldstein said the product could be on the market by 2003. More than 2.5bn stents are inserted in the US each year and Dr Goldstein said the product could worth 'tens of millions of pounds'.

Another trial for a small cell lung cancer drug was also seeing good results and a phase II trial could begin soon for a drug to combat leukaemia. Research has also started into the development of drugs designed to overcome antibiotic resistance.

'Over the next 12 months we look forward to generating the critical proof of principle data from our existing products and substantially expanding the product portfolio,' Dr Goldstein said. Turnover in the half-year rose to £722,000 from £50,000.

Investors welcomed the results and pushed the group's shares up 4% in early trading, 3/4p higher to 17 1/2p. They were trading at 148p in early 1998.

Dr Goldstein said: 'The sharp share price decline is behind us, and we have laid the foundations to build value over the next year or two. The turnaround at British Biotech continues to make good progress.'

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