ML boss makes pounds 55m in biotech boom

MAGNUS GRIMOND

Kevin Leech, the chairman and co-founder of ML Laboratories, yesterday sold a share stake worth pounds 55m as biotechnology stocks roared to new peaks in London.

The value of British Biotech, the largest, broke through the pounds 1bn barrier after one analyst reiterated his buy recommendation and several companies issued optimistic statements on current drug developments.

Mr Leech's Milner Laboratories is reducing its stake in the USM-listed ML Laboratories from 66 per cent to 54 per cent in a placing at 400p. The deal will raise pounds 55m for Milner, which is 66 per cent-owned by Mr Leech and is the vehicle through which he backed the medical inventor Jeremiah Milner before ML Labs was floated on the third market in 1987. The estate of the late Mr Milner owns the rest of Milner Labs.

ML is itself raising pounds 25m in a placing at the same price. The money is to be used in the development of Icodial, a kidney dialysis solution and the only one of ML's products on the market.

ML's shares rose 46p to a new high of 457p yesterday, despite the announcement of pre-tax losses which deepened from pounds 2.26m to pounds 3.4m in the year to September.

Excitement centred on the announcement that a clinical study of a potential Aids treatment was "progressing well". The tests involve a new anti-viral agent, D2S dissolved in Icodial, which it is claimed enables drugs to be delivered more effectively. But some analysts greeted the test results at London's Hammersmith Hospital with some scepticism, given that they covered only four patients with Aids.

British Biotech, continuing to benefit from November's announcement of promising results from its Marimastat anti-cancer drug, rose another 70p to a record close of pounds 21.68. The shares have risen 29 per cent in just under a fortnight, although the company remains at a loss to explain why.

The main propellant behind yesterday's share movement seems to have been a reiterated buy recommendation by Ian White, pharmaceuticals analyst at Robert Fleming. But the shares have gathered strength during a recent round of visits by management to institutional investors in London and Scotland. Earlier this month, Guardian Royal Exchange announced that it had raised its stake to 4.1 per cent. Sentiment was further buoyed this week after a new non-executive director, Henny de Ruiter, picked up 3,000 shares.

Elsewhere in the sector, Cortecs International, the Australian biotech company, saw its shares hit a peak, rising 33p to 270p. The company said it had achieved a "key milestone" in its development of a rapid, whole- blood, point-of-care diagnostic product for the detection of collagen breakdown, a key indicator of osteoporosis.