Biotech looks in need of an injection of investor faith

MARKET REPORT

What goes up, must come down - such a thought should be haunting British Biotech, until a few weeks ago a high flyer and candidate for membership of the exclusive Footsie club.

The shares slumped another 102p to 2,508p. Since peaking at 2,315 last month they have been in almost relentless retreat. To some extent Bio is a victim, of its own success.

Last month it produced what can only be described as encouraging data about its Marimastat cancer drug. There are high hopes the phase III trials are going well and the treatment will have a realistic chance of being launched and becoming a legendary drugs blockbuster.

But, paradoxically, Marimastat's progress has raised stock market doubts about Bio's valuation.

Merrill Lynch set the cat among the pigeons when it said the shares were 30 per cent too high.

And with many investors sitting on huge profits - the shares have climbed from 462p since July - the temptation to lock in at least some of their rewards have proved irresistible.

This week there has been some heavy selling with one stockbroker unloading 1.2 million shares. Although that particular block was quickly mopped up sellers have kept the upper hand with the result that the fall has, in effect, become self-feeding, prompting more and more investors to take at least some of their profits.

Bio has experienced similar slides before. Each time, after shaking out nervous holders, the shares have rallied strongly. But this time round the jitters seem far more pronounced.

But as one drugs company looks in need of an injection another is riding high. Scotia Holdings was yesterday's star, jumping 55p to 778p as stories buzzed that a positive analytical note was about to appear. One suggestion was Scotia had met one leading investment house, thought to be Kleinwort Benson. The shares were 423p a year ago. Chiroscience was also in form, up 22p to 469p.

Oxford Molecular fell 8p to 329p as Cazenove placed 7.5 million shares at 320p. Original venture capitalist backers was thought to be selling. Last month Caz placed 15 million shares in the drugs software group, at around 300p.

The rest of the market dozed fitfully in a mid-summer haze. Once again it ignored a firm New York. After struggling throughout the session to hang on to a modest gain it surrendered in the last hour, ending 5.2 points down at 3,722.3. The futures expiry went smoothly.

GRE edged forward 2p to 260p as bid stories resurfaced. Commercial Union, the favourite to pounce, shaded 4p to 574p.

Another financial share, Schroders, had a lively session as Barclays de Zoete Wedd made positive noises. Ordinary shares jumped 32p to 1,360p and the non voters 20p to 1,048p.

Whitbread, still suffering from the reported row with David Lloyd, had to contend with rumours it was about to pay pounds 50 to pounds 60m for the Oddbins off-licence chain. The shares, with ABN Amro Hoare Govett saying they are overvalued, fell 11.5p to 718.5p.

Pelican, the restaurant chain which should serve up appertising year's figures next week, added 4p to 157p. It is regarded as a possible Whitbread target.

Jarvis Hotels when issued shares ended at 180p after being priced at 175p. They touched 193p with Seaq turnover put at 20.4 million shares.

Utilities continued to enjoy takeover speculation with at least two US groups, Florida Power and Houston Industries, said to be on the prowl. Southern Electric, seen as an anxious predator after its Southern Water failure, gained 13p to 715p.

Yorkshire Tyne Tees Television hardened to 1,138p as NatWest Securities lifted its profit forecasts. It expects pounds 17.5m this year, rising to pounds 81m in 1999.

Mersey Docks & Harbour slumped 26p to 378p following the escalation of its dockers dispute. BBA held at 313p. It is taking analysts to see its Swedish operations next week, a jaunt which is regarded as a bridge building exercise following its short lived intervention in the Lucas Industries/Varity merger.

The brighter outlook for the housing market lifted estate agents, Hambro Countrywide 8p to 86p and John D Wood 5p to 60p. Hambros, the merchant bank controlling Countrywide, added 4p to 230p.

Rhino, the video games retailer to be called Electronics Boutique, gained 1.5p to 17.5p following an encouraging statement. Chairman Joe Firestone said a 60 per cent sales increase had been achieved in 19 remodelled outlets.

TAKING STOCK

Tullow Oil rose 3p to 86p as stories filtered through that a rights issue may be rolled out next week.

There were suggestions of a one-for-eight call at 80p. The company has interests in Britain, Senegal, India and the Czech Republic but it is its involvement in Pakistan which is the jewel in its crown. Development of the Pakistani fields could prompt the cash call.

There is also speculation that Tullow has had bid approaches - British Gas is one name in the frame.

Vision, a leader in miniature camera technology, will suffer further losses in the year ending next month but then move into profit, stockbrokers Albert E Sharp and Greig Middleton agree. Sharp looks for pounds 3m and GM pounds 3.7m. The shares held at 288p.

PROMOTED VIDEO
Life and Style
fashionHealth concerns and 'pornified' perceptions have made women more conscious at the beach
Arts and Entertainment
tv
Sport
Ojo Onaolapo celebrates winning the bronze medal
commonwealth games
Arts and Entertainment
Rock band Led Zeppelin in the early 1970s
musicLed Zeppelin to release alternative Stairway To Heaven after 43 years
Arts and Entertainment
High-flyer: Chris Pratt in 'Guardians of the Galaxy'
filmHe was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
Sport
Van Gaal said that his challenge in taking over Bobby Robson's Barcelona team in 1993 has been easier than the task of resurrecting the current United side
footballA colourful discussion on tactics, the merits of the English footballer and rebuilding Manchester United
Life and Style
Sainsbury's could roll the lorries out across its whole fleet if they are successful
tech
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Travel
The shipping news: a typical Snoozebox construction
travelSpending the night in a shipping container doesn't sound appealing, but mobile crash pads are popping up at the summer's biggest events
Arts and Entertainment
'Old Fashioned' will be a different kind of love story to '50 Shades'
film
Arts and Entertainment
Tracey Emin's 'My Bed' is returning to the Tate more than 15 years after it first caused shockwaves at the gallery
artTracey Emin's bed returns to the Tate after record sale
Arts and Entertainment
Smart mover: Peter Bazalgette
filmHow live cinema screenings can boost arts audiences
Environment
Neil Young performing at Hyde Park, London, earlier this month
environment
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Project Manager (HR)- Bristol - Upto £400 p/day

£350 - £400 per annum + competitive: Orgtel: Project Manager (specializing in ...

Graduate / Trainee Recruitment Consultant - IT

£25000 per annum + OTE £40,000: SThree: Orgtel are seeking Graduate Trainee Re...

HR Business Partner - Banking Finance - Brentwood - £45K

£45000 per annum + Benefits: Ashdown Group: ** HR Business Partner - Senior H...

PA / Team Secretary - Wimbledon

£28000 - £32000 per annum + Benefits: Ashdown Group: PA / Team Secretary - Mat...

Day In a Page

Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
How live cinema screenings can boost arts audiences

How live cinema screenings can boost arts audiences

Broadcasting plays and exhibitions to cinemas is a sure-fire box office smash
Shipping container hotels: Pop-up hotels filling a niche

Pop-up hotels filling a niche

Spending the night in a shipping container doesn't sound appealing, but these mobile crash pads are popping up at the summer's biggest events
Native American headdresses are not fashion accessories

Feather dust-up

A Canadian festival has banned Native American headwear. Haven't we been here before?
Boris Johnson's war on diesel

Boris Johnson's war on diesel

11m cars here run on diesel. It's seen as a greener alternative to unleaded petrol. So why is London's mayor on a crusade against the black pump?
5 best waterproof cameras

Splash and flash: 5 best waterproof cameras

Don't let water stop you taking snaps with one of these machines that will take you from the sand to meters deep
Louis van Gaal interview: Manchester United manager discusses tactics and rebuilding after the David Moyes era

Louis van Gaal interview

Manchester United manager discusses tactics and rebuilding after the David Moyes era
Will Gore: The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series

Will Gore: Outside Edge

The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series
The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz