British Biotech seeks partner to boost development

British Biotech, the fallen star of the UK's biotech industry, yesterday said it is looking for a merger or large acquisition to bolster its pipeline of drugs under development.

The company said it is scouring mainland Europe and the US for a partner in its core areas of cancer or cardiovascular medicine.

British Biotech is sitting on £62.2m of cash after selling off its glittering headquarters in Oxford, disposing of its drug discovery business and cutting costs. The company said it had reduced its cash burn to £2.8m in the six months to 31 October, compared to £14m in the same period last year.

Elliot Goldstein, the chief executive, said he was not likely to find an acquisition in the cash-strapped UK biotech sector, where analysts are calling for speedy consolidation.

"We are not a bank. Ideally we are looking for a company with a good product pipeline and which is financially strong. We are not going to save our way to success, and a deal would not be about cost savings.

"Synergies would be in intellectual property, where we can put two ideas together, like in our current alliance with Biocompatibles. That company makes stents, to prop open arteries, but knows nothing about drugs; we have got the drug to put on the stent, but don't know anything about stents."

A European trial of the Biocompatibles stent, coated with the British Biotech drug batimastat to help prevent arteries closing up, are due to begin before the end of the year. British Biotech said it had finished recruiting for the study this month. The product is on course to be filed with regulators by the end of 2002 and on the market in 2003.

Interim results showed British Biotech narrowed its losses to £9.0m, from £12.2m in the six months to October 2000. The company said it is still in talks with potential partners for its antibiotics research unit, and reiterated its commitment to in-licensing new drugs.

It has given up trying to find any new drugs of its own after the repeated disappointment of Maramistat, once feted as a wonderdrug for the treatment of cancer but which has failed all its clinical trials.

Mr Goldstein said: "The turnaround at British Biotech continues to make good progress. Over the next 12 months we look forward to generating the critical proof-of-principle data from our existing products and substantially expanding the product portfolio."

British Biotech shares, which have collapsed from 270p in 1997, were up 0.75p at 17.5p.