Powderject stock sinks further on delays to launch of anaesthetic

POWDERJECT PHARMACEUTICALS, one of the UK's most highly-rated biotechnology companies, fell from grace yesterday after revealing a delay of up to two years in the launch of its first product.

The lack of an expected announcement on a deal with SmithKline Beecham, the major pharmaceutical company, compounded a 15 per cent fall in the company's shares.

Powderject said the launch of Lidocaine, an anaesthetic which does not require a needle, could be set back by at least a year because it would now be aimed at children as well as adults. That would mean conducting further trials of the treatment on children, which are more complicated than those on adults.

Paul Drayson, chief executive of Powderject, said: "This was a difficult decision for Powderject to settle the way forward for the Lidocaine project. It would have been easier to stick with the adults-only strategy, but this is the best way to maximise the product in the long term."

He declined to indicate the size of the market for the expanded project but said the move would broadly double Lidocaine's sales.

The group was in advanced discussions with a marketing partner for Lidocaine, he added. However, he would not indicate a new launch date for Lidocaine, which had been expected to hit the market next year.

Dr Drayson also said Powderject's late-stage development of its patented powder-injection technology was taking longer than the company had expected at the time of its flotation in 1997.

Meanwhile, Powderject said its long-term future lay specifically in vaccine delivery. The group would be seeking to acquire both vaccines and vaccine companies in pursuit of its ambitions.

Speculation over a deal with SmithKline Beecham to market a Powderject vaccine for flu sent the shares to an all-time high of 1,005p last month.

Powderject also said a partnership with Boehringer Mannheim on a kidney disease treatment had been terminated.

The news sent the shares 152.5p lower to 830p, wiping pounds 110m from the value of company, now capitalised at pounds 620m. Dr Drayson and his family own a 17 per cent stake.

The company also unveiled positive data on phase two trials of Alprostadil, a treatment for impotent men who can't take oral treatments such as Viagra.