British Biotech's health relies on cancer drug approval

MARKET REPORT

There are stirrings at British Biotech, the drugs group which has had an eventful time as the stock market has sought to judge the potential value of its cancer drug, Marimastat.

The shares rose 17p to 219.5p following meetings arranged with institutional investors by stockbroker Greig Middleton.

Since coming to market four years ago, BritBio shares have swayed from 32p to top 300p. But after a summertime peak they have been under pressure with a pounds 143m cash call attracting a humiliating 49 per cent take-up and pointed questions asked about the results so far put forward for Marimastat.

Greig is a bull of the shares and no doubt helped to smooth feelings over a Marimastat presentation due next month at a leading medical conference in Vienna. Five sets of clinical data are due to be revealed on the treatment which is now in final phase three studies, ahead of hoped-for regulatory approval.

The rest of the drugs sector was mixed with Cortecs International continuing to decline, off 12p at 181.5p, and Scotia drawing strength from an upbeat research statement, gaining 25.5p to 563.5p.

ML Laboratories shaded to 286.5p although Panmure Gordon was on the buy tack. The stockbroker said the shares were selling on a 50 per cent discount to its risk-adjusted valuation.

It sees losses turning into profits of pounds 5m for the year ended last month and pounds 12m this year. For 2000, Panmure Gordon is prepared to shoot for pounds 106m.

The rest of the market was in ragged retreat with Footsie off 29 points to 3,999.4, the first time it has slipped below 4,000 for eight trading days.

New York remained a depressing influence and a gilts retreat added to the distress.

BSkyB, the satellite television group, increased its fall this week to 100p with a 39.5p drop to 596.5p as the latest Rupert Murdoch cash-raising exercise nagged at sentiment.

Pearson, only a few days ago touted as a Murdoch takeover candidate, fell 19p to 711.5p.

Scottish Television gave up 14p to 762.5p with Salomon Brothers declaring the shares were overvalued without a bid. "If no bid, no upside - underperform," was the securities house's succinct observation. The boardroom bust-up left Emap 32p lower at 712.5p.

British Gas continued to draw direction from the Shell bid story, up another 3p to 189.5p, and BAA rose 14p to 519.5p as the Civil Aviation Authority's price review came in much as expected and Merrill Lynch held out a 560p target.

Electricities are again on takeover alert. East Midland Electricity once again led the charge with a 19p advance to 519p. There is a strong conviction a US strike is near. South West Water rose 4.5p to 705p, awaiting the Westminster verdict on the twin bids.

Rentokil Initial, pondering whether to appeal against the John Clark judgement, had to contend with NatWest Securities switching its stance from hold to sell; the shares fell 12p to 421p.

Cookson, the industrial materials group, firmed to 245p as Henderson Crosthwaite said electronic demand was beginning to recover.

Profits this year would be flat at pounds 180m but Henderson looks for pounds 208m next year and pounds 245m in 1998.

British Petroleum fell 18p to 670p with SBC Warburg said to have turned negative on the sector.

Abbey National gained 9p to 610.5p with HSBC James Capel thought to be positive but Salomon support for Barclays failed to prevent a 7.5p fall to 986p.

SR Gent, the clothing group, moved ahead during the session. After the market closed it admitted it was in takeover talks. The shares ended 9p firmer at 62.5p.

Black Arrow, the office furniture group where predators are thought to hover, added 3p to 63.5p

Loftus Road, the Queens Park Rangers and Wasps group, exceeded its 72p placing price, closing at 74.5p after 76.5p. Only part of the capital is traded with the offer to club supporters and other investors still to be completed.

Bakyrchik, the gold group, gave up another 2.5p to 195p and Philippine Gold lost 15p to 182.5p.

Alan Sugar's arrival in the Betacom boardroom lifted the shares 3.5p to 18.75p. His Amstrad group has 66 per cent of Betacom, an electronics producer.

Arcadian International, the hotel group planning a cash call, put on 3.5p to 45p and recent high flyer Seet gave up 5p to 52.5p. Tadpole Technology had a volatile session, falling to 26.5p and closing off 5.5p at 30p.

TAKING STOCK

rShares of My Kinda Town, the theme restaurant chain, sizzled 16p higher to 163.5p, a peak.

Takeover talk was on the menu with the market looking at Groupe Chez Gerard and Whitbread as likely predators. Chez Gerard let it be known a year ago it would like to swallow MKT which takes in such names as Henry J Bean and Chicago Rib Shack. The group is capitalised at around pounds 40m.

rTim Simon, who created Quotient, a computer group taken over by ACT for pounds 27.7m, is returning to market with his latest computer operaton, Mondas.

John East & Partners is placing 2 million shares at 75p giving a pounds 4.5m capitalisaton. Quotient was best known for a the development of a stockbroking computer system.