Bioglan, the skincare group fighting to stay afloat in the face of mounting debts, has been accused of misleading the market over the progress of clinical trials.
The company told investors in August that it had completed Phase I clinical tests of a painkilling spray, and had begun a second, bigger phase of trials. But CeNeS Pharmaceuticals, its partner in the project, said yesterday that Phase I trials were still not complete at the start of last month.
Bioglan refused to comment on the allegation that it had issued a misleading announcement to the Stock Exchange.
CeNeS, in which Bioglan has a 6 per cent stake, said on Tuesday that it was ending its partnership to develop the painkiller and seeking compensation for what it alleges is Bioglan's failure to comply with development obligations.
Yesterday, Bioglan suggested that CeNeS was attempting to wriggle out of its next instalment of funding for the project, worth £1m and due on 1 January.
Bioglan said CeNeS had expressed no dissatisfaction with the project until Tuesday's announcement, although CeNeS says it raised its concerns at a meeting on 2 October.
The prospect of a bitter legal wrangle added to Bioglan's woes and the shares fell 2p to 14p, despite news it had gained a month-long stay of execution from its bankers, the Royal Bank of Scotland.Reuse content