Medpharma abandons float plan

Medpharma, a biotechnology company developing a spray to combat premature ejaculation, has abandoned plans to float the company on the stock market.

The group's failure to raise the planned £8m from a placing on the junior AIM market will disappoint sector watchers who had hoped the fundraising window was opening. For nearly three years, biotechs have found it extremely difficult to raise cash from the public markets.

Medpharma, which is run by two of the men who helped launch Pfizer's iconic impotence pill Viagra, failed to attract support because it has not yet generated any revenues from its portfolio of drugs. These include treatments for premature ejaculation and incontinence, a test for prostate cancer, and a drug that may strengthen orgasms.

Hoodless Brennan, the company's broker, conceded defeat earlier this month after twice delaying the float, which had originally been planned in March. Instead, Medpharma is close to tying up a £6m fundraising involving venture capital backing. News of a deal is expected by early next week.

Yesterday, sources said that the private fundraising valued the company at the same level as the flotation would have done. Some of the individuals who had expressed interest in the float will come on board as private backers.

Medpharma's chief executive, Murray Maytom, is newly hired from Pfizer, where he was global director of the men's health group responsible for Viagra. Mike Wyllie, chief technical officer, also helped launch Viagra at the US pharmaceuticals giant.

Andy Smith, fund manager of the 3i Bioscience investment trust, said he was pessimistic that the biotech funding window would be open for speculative ventures such as Medpharma soon. "What we need is a couple of really large companies with products close to launch to float in the US and then for their shares to go up."