Proteus presses ahead with pounds 10m rights issue

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The Independent Online
PROTEUS International, the drug research company that recently parted company with UBS as its stockbroker, is pressing ahead with a pounds 10.4m fund-raising despite a precipitous fall in its share price.

Since mid-January, Proteus's price on the Unlisted Securities Market has tumbled from 472p to 290p. The one-for-seven rights issue, underwritten by Allied Provincial Securities, is at 280p a share.

UBS resigned only four months after its appointment following a disagreement over how quickly Proteus would be able to bring its products to the market.

Kevin Gilmore, chairman, said Proteus had wanted to press ahead with the rights issue because of the need to finance annual spending of pounds 7m on research and development, and because there was no guarantee the share price would recover. The money from the issue would help bolster confidence in Proteus. 'It's the performance of the company that will eventually resolve this situation,' he said.

Proteus will receive its first income this year and expects revenue to rise sharply by 1996 when it hopes to be marketing its adjuvant drug, which enhances the immune response of vaccines. Mr Gilmore said Proteus may not need to return to its shareholders for money.

Mr Gilmore and John Pool, his managing director, are not able to take up their rights to 2.2 million shares, so their joint holding will fall from 49.7 to 43.5 per cent.