The agony at BritBio does not endanger its pounds 143m rights cash; the call has been underwritten by Kleinwort Benson.
The group has led a ragged retreat of the biotech shares. In May, the company and the sector were riding high with investors stampeding into the fledgling drug groups, many of them nursing little more than skyhigh hope factors.
Like most of the pack, BritBio is deep in the red. Last month it accompanied its pounds 143m cash call with a loss of pounds 25.1m. But it made encouraging noises about its Marimastat cancer treatment and Lexipafant, a pancreatic product.
All then seemed well. The shares, although below May's 3,265p peak, were comfortably above the rights price and there was little danger of the underwriters being called in to earn their rich fees.
But BritBio came under pressure. Merrill Lynch helped the shares on their way when it said they were overpriced and, as is so often the case in the stock market, there was a sudden change in sentiment. BritBio was not the only to suffer; most the so-called bio babes suddenly discovered just how tough the market can be.
Still, it could be argued BritBio has seen it all before. Last year its shares were 445p.
Among the other drug shares looking sick are Celltech, off 34p at 535p, after a peak of 683p; Chiroscience 8p down at 366p after 514p and Cortecs International 12p lower at 283p after 418p. The biobabes are collectively 44 per cent off their high points.
The sudden sickness in the drugs sector is threatening the flood of new issue. Beeson Gregory denied stories that Alizyme, due to arrive on AIM with a pounds 10m valuation, was in any danger. Cambrio from Henry Cooke Lumsden seems to be struggling and there is talk its valuation has been cut.
Amid the carnage the granddaddy of the sector and leader of the pack, Glaxo Wellcome added 6p to 879p.
Glaxo's display was in line with the rest of the market with the two leading indices making modest headway.
BSkyB, the satellite television station, was the best performing blue chip, gaining 14p to 468p following its digital TV deal with Bavarian mogul Leo Kirch.
Tomkins' attempt to throw off the yoke of the conglomerates image gathered strength with a 7p gain to 258p but Hanson, with NatWest lowering its sum-of-the-parts figure from 165p to 153p, shaded to 171.25p and BTR lost 3.5p to 243.5p.
Granada, as Whitehall rather belatedly cleared the pounds 3.9bn Forte bid, gained 9p to 834p and British Airways rose 6.5p to 549p on hopes of a settlement with its pilots.
Expectations of takeover bids, as always, drifted around. Earmarked for corporate activity were Standard Chartered, 17p higher at 652p and Cadbury Schweppes, 6p to 513p. Luxury goods group Vendome, on renewed hopes of a mop up bid from Richemont, the Swiss-based, South African controlled group, improved 13p to 618p.
Regional TV shares were again in demand with HTV up 7p to 357p and Yorkshire- Tyne Tees edging ahead 3p to 1,258p.
Tesco, on fears it is about to mount a pounds 2.5bn French supermarket strike which would provoke a rights issue, fell 2.5p to 300.5p.
BTG, the old British Technology Group, celebrated its inclusion in the supporting index with a 30p gain to 1,895p. It replaced the suspended Wickes.
Railtrack edged ahead 1p to 215.5p against its 190p flotation price. The shares have nudged 230p.
On the grey market British Energy, with the public offer closing today, was 111p to 113p.
Appleyard, the garage group, reversed 9p to 93p following accounting problems at its Ian Skelly Manchester dealership.
Frost, the petrol retailer caught in the cross fire of the superstores price war, edged forward 2p to 98p with PDFM lifting its stake to 14.3 per cent. There is talk a hedge fund has a substantial short position. Eurocamp fell 13p to 204p on a profit warning.
Ennemix rose 4p to 55p. After hours Lafarge lifted its stake to 49 per cent and its bid to 52.5p.
Avocet Mining, a gold and tungsten group which arrived through James Capel at 240p in March, gained 14p to 180p. The shares have been down to 142p.
On Ofex, Skynet, developing a car security system, jumped 55p to 250p. It was floated at 27.5p.Reuse content