New start at British Biotech

By THIS IS MONEY
Updated:

 

Pharmaceuticals company British Biotech today moved to shuffle off its recently troubled past declaring its cost-cutting measures would soon start to reap savings. And it tried to draw a close on recent scandals saying that to its knowledge all official inquiries into its business had been completed.

In the last month British Biotech has paid around £200,000 to settle a dispute with a former employee and has been censured by the London Stock Exchange for the conduct of 'certain directors'.

The company today declared its new strategy which has so far included cutting staff numbers by 10% to 311 and reducing its spending would set the group on a path to sustainable growth.

The measures helped cut the group's pre-tax losses for the year to April 30 to £39.8 million, down from £44.9 million last year.

The cut in losses was also helped by increased turnover up to £4.2 million from just £454,000 last year.

The group said the measures would lead to annual savings of £10 million a year by 2001.

The results of trials of British Biotech's flagship product, the experimental anti-cancer drug Marimastat, are expected later this year the company said.

Development of Zacutex, the pancreatitis drug at the centre of last year's scandals, has been stopped.

The company was hit by scandal when a senior researcher Dr Andrew Millar went public to declare the company was spending money on fruitless trials into Zacutex.

The company reacted by firing Dr Millar and accusing him of sabotaging the trials by revealing the findings before testing was complete.

The case was settled out of court earlier this month with the company withdrawing its allegations against Dr Millar and paying him more than £100,000.

Last week the London Stock Exchange censured the company after concluding that certain directors had failed to notify shareholders of progress on Zacutex but had themselves continued to trade in British Biotech shares.

Chief executive Keith McCullagh resigned in the midst of the scandal but has denied he had traded in shares while in possession of price-sensitive information.

In its results statement the company appeared to make a veiled reference to the troubled past saying: 'The management team is committed to creating an open culture throughout the company, encouraging the sharing of information and the discussion of and resolution of issues which arise.'

Mr McCullagh was replaced by Dr Elliot Goldstein, who has taken on the task of turning the scandal struck company around.

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