British Biotech calls in Fellner to kick start industry consolidation
Thursday 05 December 2002
Peter Fellner, currently chief executive of Celltech, has been appointed chairman of British Biotech and promised to kick start consolidation in the bombed out biotech sector.
He will initially take a non-executive role but is expected to move into an executive post next spring to steer British Biotech into a vital merger.
He unveiled ambitious plans to use the pioneering biotech company as a "nucleus" for a group combining several of the UK's smaller quoted drug developers.
"British Biotech has a strong balance sheet and embedded within the company are groups of high quality people working in clinical development," he said. "I am quite attracted by the idea of using it as a consolidation vehicle.
"It will be a challenge, but the environment for biotech currently is more difficult than I have known since I joined it in 1990, and it looks as if these difficulties will go on longer. That will be a catalyst to consolidation this time."
British Biotech has a £43m cash pile but no products anywhere near launch. Other companies in the sector have more advanced drugs but are burning cash trying to prove they work.
British Biotech reduced its interim losses to £8.1m in the six months to 31 October from £8.4m last year by selling many of its pre-clinical development facilities and cutting costs.
Mr Fellner argued that a string of deals could create a company with critical mass and better able to attract funding from shareholders or product licensees. Investors expressed their enthusiasm by chasing British Biotech shares up 29 per cent to 4.5p.
They peaked at 145p in 1998 but the company's supposed wonder drug for cancer, marimastat, failed to work and a previous management was ousted after claims that it failed to give timely information to shareholders on marimastat's disappointing performance in clinical trials. The company is still being threatened with legal action from lawyers representing some shareholders but no formal proceedings have begun.
Mr Fellner dismissed suggestions this potential liability could scupper his plans to woo merger partners, saying he had taken advice and concluded the claims were groundless. British Biotech said there has been greater interest from other biotech players since the departure, in October, of Elliot Goldstein, its chief executive.
Mr Fellner replaces Christopher Hampson, who retires at the end of the month, but will only move into an executive role when he is able to step back from the chief executive post at Celltech.
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