Ark braves biotech blues by coming to market

Despite terrible market conditions across the UK biotechnology sector, an Anglo-Finnish speciality drugs maker is planning to float on the London Stock Exchange.

Ark Therapeutics, which has carved out a niche generating cancer and vascular disease treatments, will be the first biotech to seek a full listing for over 18 months. The last, XTL Biopharmaceuticals, has seen the value of its shares plunge more than 60 per cent since coming to market.

Ark acknowledges the risks of floating at a time when investors are losing faith in biotech business models, but believes that it offers precisely what the market is looking for but not finding elsewhere: a healthy pipeline of new drugs.

Ark, which has drawn its staff from a range of drug-discovery groups, has based its strategy on select areas of research. It will arrive on the market with six products at various stages of development, treating problems from malignant brain tumours to the side-effects of HIV drugs.

Ark has also latched on to the advantages of working in areas of drug research in which rivals are not involved. Where only one company is working to cure a particular condition, the US and European drugs authorities have mechanisms that greatly speed up the otherwise lengthy clinical trials. Ark's directors are confident the first of the company's products will be released by 2004.

Although the issue is expected to be chiefly taken up by institutional investors, 25 per cent of the shares will probably remain free-floating. The listing, which is being jointly handled by Nomura and WestLB Panmure, is expected to give Ark a market valuation of £130m to £140m.