Go-ahead for ML kidney treatment

ML LABORATORIES, the pharmaceutical research company that has been one of the best stock market performers over the past five years, yesterday moved closer to fulfilling its promise when it secured the first marketing approval for its kidney failure treatment.

The approval, by the British Medicines Control Agency, sent the shares up 55p to pounds 11.60. They were launched on the third market at 70p in 1987, and have been quoted on the Unlisted Securities Market since 1990. The group has made losses every year since it was floated, and it announced yesterday that it had lost pounds 887,000 before tax in the year to September 1992, up from pounds 496,000 the previous year.

The strong performance of its shares reflects the market's hope that its Dextrin 20 will quickly become the leading treatment for kidney failure. It has fewer side- effects than the existing dialysis method and, because it uses a glucose polymer rather than a glucose solution, is suitable for diabetics. They account for 20 per cent of kidney failure patients and are currently restricted to using kidney machines.

ML says 4,500 people in Britain and 465,000 worldwide use dialysis, with a further 4,500 treated by machines. The market is growing by 9 per cent a year. It hopes to gain marketing approval for its product in all European countries by mid-1994 and in the US a year later.

The group has been expanding its manufacturing facilities and the first phase, giving it the ability to supply 20 per cent of the British dialysis market, will be completed in March. The second phase, large enough for half the anticipated European demand, will be ready in the middle of next year.

It is also in talks with potential partners about distribution. Stuart Sim, finance director, said a decision on whether to seek a partnership would be made 'very quickly' but any arrangement would have to give ML 'a very great share of the rewards. A traditional royalty agreement would not be acceptable.'

Angelos Anastasiou, pharmaceuticals analyst with Panmure Gordon, said the approval meant ML could make profits of between pounds 1m and pounds 3m this year, and he predicted it could make as much as pounds 110m by 1997. But he said this year's results would depend on distribution arrangements.

The group is proposing a four- for-one bonus issue to make its shares more marketable.