The announcement coincided with the announcement from rival Chiroscience that its Dexketoprofen pain killer and arthritis therapy had been launched last week in Spain by its partner, Menarini, Italy's largest pharmaceutical group.
The timing and size of the rights issue surprised the market. It comes less than five months after British Biotech raised pounds 47.5m from the exercise of warrants, which was expected to cover its cash needs until 1997.
The group revealed yesterday it had net cash of pounds 66.6m in April, but James Noble, finance director, said they had been considering ways of raising money since January. The indications they had had from big shareholders were that this should be the last fund-raising before the company became self-financing through drug sales and that it should come on the back of successful results for Marimastat, British Biotech's novel cancer treatment.
Hopes for this drug have fuelled a surge in the group's share price, which briefly touched pounds 38 last month after encouraging phase II results were released. The new money will finance the final stage of tests before the product receives official approval.
Phase III trials for inoperable pancreatic cancer have already begun and over the next few months at least seven separate trials will be started and run in parallel to determine Marimastat's effectiveness against a range of cancers. A pilot trial in Aids patients is also to be started.
The money will also pay for the completion of trials on Lexipafant, a treatment for acute pancreatitis, set to be the company's first product on the market, probably in early 1998.
Around pounds 20m of the cash is to be earmarked for a three-year project to build new chemistry laboratories in Cowley, near Oxford, which will bring all UK operations onto one site. But a much of the cash being raised will be used to set up a sales and marketing network in North America, France, Germany, Spain and Italy, marking the company's transition to a fully- fledged pharmaceuticals group.
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