Medisys halves in value as it warns of delays on syringes

Medisys became the latest casualty in the race to launch a safer syringe, more than halving in value yesterday after admitting its product had suffered yet more delays.

The company said wrangles over safety labelling and last minute testing would delay the US launch of its Futura syringe, which has a needle that retracts after use.

The company said the first shipments of the product had not yet reached Smiths Group, which is acting as its distributor in the US and which had been expected to start selling Futura this month. Milestone payments from Smiths and royalties will now be delayed.

The company's broker, Dresdner Kleinwort Wasserstein, slashed sales forecasts for the next two financial years by about a quarter, and said Medisys's first profit, due in 2004, would now only be tiny.

A number of small UK companies have been battling to design revolutionary syringes after the US – the world's biggest health market – introduced legislation to encourage the use of safer products.

All have been plagued by delays and disappointing sales. Earlier this month, NMT abandoned the race entirely, saying it would try to sell its needleless syringe to drug companies, rather than directly to hospitals.

Medisys shares, which have collapsed from a high of 166p in 2000, were down 5.75p to 4.75p yesterday.

The disappointment on Futura was only one part of a miserable trading update. Medisys also said that one of the US's biggest retailers had walked away from a deal to sell its new blood sugar measuring kit, whose launch will be delayed as a result. And the company is also likely to change its accounting policies, writing off product development costs as they occur and widening reported losses as a result.