City & Business: Biotech catches a cold

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The Independent Online
THE biotechnology sector has had a busy year. More than half-a-dozen bio- tech companies have made it to the stock market with not much to offer shareholders beyond a test-tube full of hope. Most, however, are now languishing at a discount to their issue price.

One of the more established companies is British Bio-technology Group. It is about as blue chip as this greenest of species ever gets. Its hopes are pinned on Batimastat, an anti-cancer drug that attacks the enzymes responsible for spreading tumours around the body.

In March, the company announced an opportunistic rights issue to raise pounds 46m. All looked well at the time and the shares rose 5p to 470p. But since then the stock market has fallen and sentiment has waned a bit in this ultra- risky sector. The share price has been falling and on Friday it closed just 8p above the 400p rights price.

The underwritten cash call closes tomorrow. It all looks a bit wobbly, though advisers Kleinwort Benson should still get it away. But if this one flops, the biotechnology sector can wave goodbye to any more share issues for a good long time.