MARKET REPORT : Delayed trials pose another setback for British Biotech

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What price British Biotech? The loss-making drugs group, once near to joining Footsie, has been in the stock market casualty ward this week following disquieting evidence that some of its key treatments are running behind schedule.

The shares recovered an early fall, struggling, in heavy trading, to a 2p gain at 154.5p; they were 201p on Wednesday. Then the group said it was expanding trials for Zacutex, a treatment for pancreatitis, which would delay any approval, and phase III trial data on its big-hope Marimastat cancer drug would not be available until early 1999.

The stock market has been wrestling with the BriBio price since excitement over its possible cancer treatment sent the shares soaring last year to a remarkable 326.5p.

They drifted steadily lower before falling steeply since Wednesday.

There is still a wide range of valuations. Credit Lyonnais Laing say the shares are a sell down to 100p; BZW believe they should be sold to 125p but Lehman Brothers reckon they are a buy at150p.

BriBio could have a difficult time; there is talk it is in the sights of two determined bear raiders, one a US fund.

The market, despite another strong display by sterling, moved confidently ahead with Footsie gaining 31.7 points to 4,799.5. Even the FTSE 250 index made headway, ending a five-day losing streak with a 22.1 advance to 4,408.3.

But BT, riding at a 501.5p peak a week ago, missed the fun. The shock profits warnings from its intended US merger partner, MCI, was an expensive misdial, sending the shares crashing 37p to 440.5p. At one time they were down 51p. Turnover was huge - approaching 200 million shares.

Granada, the leisure group, led the blue-chip leader board with a 48p (after 57p) gain to 786p. British Digital Broadcasting, the group it owns with Carlton Communications, was largely responsible. Granada, indulging in a round of investment meetings, talked enthusiastically about BDB's prospects and likely impact on trading. Carlton caught some of the attention, gaining 16.5p to 517p.

Lehman Brothers also helped the Granada show. It pointed out the shares had under performed, falling from a 978.5p peak. Analyst Fraser Ramzan said the fall was "unjustified", leaving the shares cheap.

First Leisure Corporation, where profits have disappointed, gained 9.5p to 316p as takeover stories re-appeared. Rank, also a poor performer, was named as the most likely bidder. It rose 9p to 368.5p.

But Bass, denied Carlsberg-Tetley and anxiously seeking a deal, could be the predator. Both groups have bingo and bowling interests. The brewing group would find FLC, valued at more than pounds 500m, the sort of deal which would satisfy its perceived need to put through a significant takeover.

In what has for months been an exceedingly sober brewing sector Bass rose 19.5p to 828.5p as the feelgood factor created by the building society windfalls spread wider. Whitbread improved 39p to 832p and Scottish & Newcastle 32.5p to 739p. Among the regional groups Greene King put on 16.5p to 697.5p.

Eurotunnel returned after the restructuring approval - and closed off 5p lower at 76.5p.

General Electric Co jumped 17.5p to 377p on the Government's concession it could increase its Plessey involvements and its decision to go for another joint venture, a pounds 1bn defence link with Finmeccanica, a state- owned Italian group.

Dairy groups were firm, seemingly on ABN Amro Hoare Govett support. The investment house expects the cost of their milk to be reduced. Northern Foods put on 7p to 212.5p and Unigate 12.5p to 501p.

British Land's pounds 140m property sale left some wondering about war chest ambitions. The shares rose 21.5p to 627p with possible target, Hammerson, up 16.5p to 477.5p.

LucasVarity, the car components group, fell 4p to 194p as more downgrades appeared. TI, the engineer, gained a further 12.5p to 495p as the market grew to appreciate its limited sterling exposure.

Somerfield, the supermarket chain reporting next week, hardened 6p to 193.5p, highest since its controversial flotation a year ago. Profits are expected to emerge at pounds 103m against pounds 86.2m.

Watts, Blake Bearne, the world's largest ball clay (it's used in sanitary ware) producer, fell 10p to 405p, a 12- month low. Long time shareholder, Sibelco, a Belgian group, recently nudged its stake past 50 per cent. UBS is looking for WBB profits of pounds 11.4m this year and pounds 12.8m next. The shares were 520p last year.