Cortecs in chaos as chief executive quits

CORTECS, the troubled biotechnology company, was plunged into chaos yesterday as it announced the departure of its chief executive, Michael Flynn, and warned of long delays in the development of its two star drugs. The news sparked a sharp fall in the company's share price

Shares in Cortecs, chaired by the former Conservative minister Lord Patten, shed more than half their value to close at an all-time low of 12.25p. They have now lost more than 93 per cent since their 189p peak last December.

The group revealed that its most advanced product, Macritonin, an oral treatment for osteoporosis, could face several years of delays. The company said that if the compound was not approved by European medical authorities in the first quarter of next year, a new application would have to be submitted. This "would delay significantly any product registration".

In the US, approval is not expected before 2004. The company also warned that high development costs could threaten the profitability of Macritonin, during its first years on the market.

Cortecs' other leading product, Pseudostat, a drug for chronic bronchitis and cystic fibrosis, needed more trials, which could put back its market launch.

Cortecs said that the setbacks would force it to slash costs to preserve its cash reserves of pounds 16.2m. It would ask independent consultants to carry out a wholesale review of its operations.

The company said that Dr Flynn "agreed to resign as acting chief executive". He will be replaced by the director of research, Phil Gould. The chief operating officer, Martin Preuveneers, also left yesterday.

Dr Flynn's resignation comes six months after the acrimonious departure of the executive chairman and co-founder, Glen Travers, who is now suing the company for over pounds 1.5m.