Don't miss out on Oxford rights issue

Oxford Molecular is a slightly different animal from the usual biotechnology hopeful, given its concentration on producing the specialist computer software necessary to handle the massive amounts of data required to develop drugs nowadays. This $1bn market is growing fast, given the increasing inability of paper-based systems to cope and the added kicker provided by the relentless drive for efficiencies and speedier methods of drug discovery.

Oxford's success is underlined by two agreements with Glaxo Wellcome for the use and development of its Comms Manager basic software or "architecture" - to which was added yesterday a one-year deal with Astra Arcus, an offshoot of Astra, the Swedish drugs giant. The beauty of the agreement is that while Oxford gains access to Astra's huge resources, it retains the rights to any new software which emerges from the project.

Arguably less welcome for shareholders was news of yet another cash-raising to fund acquisitions, the latest in a string since the group floated at 80p a share three years ago. The one-for-seven rights at 360p a share will raise pounds 30.4m to meet the $22.5m (pounds 13.9m) cost of acquiring Genetics Computer and MLR Automation, two US pharmaceutical software companies. Unlike Oxford, which yesterday reported 1996 losses halved to pounds 1.85m, both the companies being picked up are profitable.

Genetics Computer, for which $20m is being paid, is described by Oxford as the pioneer of the use of computers in analysing the genetic map of man. Its Wisconsin Package suite of computer programmes, to be merged with Oxford's recently launched Omiga product, is used by over 30,000 researchers, the company believes. MLR's CSAP software package has been distributed by Oxford since last year. Oxford will have pounds 25m cash after the latest deals. With shares down just 6p at 402.5, investors should climb in.