The Investment Column: British Biotech

BRITISH BIOTECH finally put its troubled past to rest yesterday, including a pounds 2m cash outflow in its half-year results for settling actions with both the Securities and Exchange Commission in the US, and with Andy Millar, a former director.

But the future still looks risky for British Biotech, if less so than previously. The company yesterday warned that crucial trial data for Marimastat in pancreatic cancer would be delayed a few weeks, and is due by February now.

Fortunately, this is for logistical reasons only, but the shares fell 8 per cent on the news. On the upside, a cost-reduction programme is nearly complete. Cash burn in the half year lessened from pounds 17m to pounds 12m, while pre-tax losses narrowed to pounds 11.4m from pounds 16.6m. The group still has pounds 86m of cash in its coffers.

While a partnership deal with Schering-Plough of the US is a vote of confidence in Marimastat, British Biotech is not relying on the drug.

It is in talks to acquire up to five new products, either through licensing deals or through straightforward acquisitions. Until news of these breaks, the shares, at 28.5p, are highly speculative.