Cenes Pharmaceuticals, the pain relief group that was briefly a darling of retail investors, is mothballing much of its drug development programme and parting company with two-thirds of its management team after failing to secure further funding.
The group, which employs 135 people in Scotland, Cambridge and the United States, failed to gain shareholder support for a fundraising and was yesterday consulting staff about possible job cuts.
CeNeS has also pulled the float of its pharmaceuticals services division on AIM, less than a month after announcing the plan. Cambridge Cognition, which provides drug screening services, is now likely to be spun off into a joint venture with private equity backing.
Daniel Roach, the chief executive, has stepped down, along with Martyn Collett, the commercial director, and five non-executive directors, as the company struggles to conserve cash. It said yesterday that it had £4.75m in the bank at the end of June, enough to last until the end of 2003.
Neil Clark, the finance director who will now also be the company's chief operating officer, said that CeNeS will concentrate on its portfolio of existing drugs, and one promising new pain relief treatment. "We are going to mothball some of our development programmes, but we have got partners and options. It is likely that there will be redundancies, but we are going through a period of examining our options," he said. Mr Clark said that M6G, an analgesic being developed in conjunction with the Irish pharmaceutical giant Elan, was the one "sacrosanct" project. Elan said yesterday it was investing another $2.2m (about £1.5m) in the project to keep CeNeS afloat.
Sales of pain products already marketed by CeNeS, which it purchased from GlaxoSmithKline last year, pushed turnover to £2.7m for the six months to 30 June, but that disappointed analysts and was down 28 per cent on the same period last year. Losses widened 31 per cent to £20.4m.
CeNeS shares, which touched 135p in March 2000, closed down 1.25p at 14.5p.
Join our new commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies