Cantab seeking pounds 20m from float: Search for marketable product continues

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The Independent Online
CANTAB Pharmaceuticals, a research company seeking treatments for herpes and genital warts, hopes to raise up to pounds 20m when it joins the UK stock market's nascent biotechnology sector.

Cantab was set up four years ago by Alan Munro, the former head of immunology at Cambridge University. It has already obtained a quote on the Nasdaq market in the US, where it is valued at about pounds 34m.

The company and its advisers, Barclays de Zoete Wedd, hope to issue a pathfinder prospectus in two or three weeks. Share dealings should start by late October.

Cantab is most advanced with a drug to prevent the rejection of transplanted kidneys. The firm hopes to move on to large-scale testing next year, but the product is unlikely to get regulatory approval before at least 1997.

Like other biotech companies, Cantab will lose money until it secures a marketable product. It lost pounds 1.4m last year and pounds 1.2m in the first half of this year.

Baxter Healthcare Corporation, a large US group, is supporting the development of the kidney rejection product, and has paid Cantab pounds 4m already. Cantab could receive a further pounds 3m from Baxter.

Paul Haycock, Cantab's chief executive, said there were 20,000 kidney transplants a year in the UK and Europe. He believes Cantab could capture a large share of this niche market.

Dr Haycock said genital herpes is the largest of the markets that Cantab is addressing. More than 10 million people suffer from herpes, and another half-million contract the disease each year.

Cantab is also conducting research into cervical cancer and inflammatory bowel disease.

Most of Cantab's 53 employees are scientists, and 17 of them have PhDs. It has pounds 8.1m of cash.

Cantab's shareholders include NM Rothschild's Biotechnology Investments and Abingworth, the venture capital firm.

Dr Haycock said: 'UK investors have not really had much opportunity to invest in this kind of (biopharmaceutical) company. We are a splendid example.'

After British Biotechnology, Cantab will be only the second biopharmaceutical firm to obtain a listing - Celltech also plans a float. Tepnel Diagnostics, Anagen, Celsis International and Enviromed, which have all come to market in the last year, are testing equipment companies.