Bottom Line: Sacking is a blow to biotechnology

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CELSIS International's sacking of its chief executive only nine months after the company's flotation is bad news for the nascent biotechnology sector. The risks involved in biotech companies are substantial enough without investors having to worry about management instability.

Tony Martin's former Celsis colleagues are harsh in their judgement. They say Dr Martin turned out to be 'ineffectual' and not up to running the company.

In his defence, Dr Martin was highly regarded by British Bio- technology, his former employer and one of the sector's blue riband stocks.

The least investors might expect of firms asking them for millions of pounds of research finance is that they have a capable and settled chief executive.

Dr Martin joined Celsis only about a year ago, but that still meant he had been at the company longer than both his chairman and his finance director.

Incredibly, Dr Martin's short spell with Celsis has left him with shares worth more than pounds 1.5m, a stake for which he paid only pounds 45,000. This seems an absurdly high reward for his alleged failure.

The Stock Exchange has relaxed its rules to allow young biotech companies, which lack a conventional trading record, to raise money by coming to the market. It would be a pity if this freedom was abused.

Investors in biotech companies have a temptation to ignore pre- flotation jiggling with ownership and capital structures as they focus on the firm's Big Idea. It may pay to be more suspicious.

One of the most disappointing aspects of Dr Martin's sacking is the damage it does to the reputation of Chris Evans, the 'Welsh wizard' behind both Celsis and Chiroscience, another recently listed biotech company.

Dr Evans looked to have great potential as a future stock market star. He has stumbled rather soon.

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