Loss-making CeNeS attracts interest from five potential buyers

Cenes Pharmaceuticals, the biotech company forced to mothball all its research activities after running out of money, has attracted the interest of several potential buyers.

The company has received approaches for information from five interested parties, and it is understood that current management and shareholders are encouraging a sale.

CeNeS failed to attract rescue financing at the end of last year from shareholders, which still include a number of venture capital institutions. It has slashed costs by cutting its board members to five, suspending research and closing its US operations.

The group is now focused solely on selling four small painkilling products and developing a new form of morphine in a joint venture funded by Elan of Ireland.

Insiders said the approaches had come from private companies interested in acquiring the portfolio of marketed products, and from those seeking an interest in the morphine project, M6G. Analysts believe that sales of M6G could top £200m in the forms currently under development.

Elan itself has been tipped as a bidder in the past, although this is seen as unlikely now it has issued two profits warnings and come under fire for the way it accounts for its joint ventures. The Irish company already owns 10 per cent of CeNeS.

The UK group spent much of last year in takeover talks with Bioglan Pharma, but the offer collapsed when Bioglan began to unravel in the summer, before eventually going into liquidation.

CeNeS made a record loss of £69m in 2001 but now says it is self-sufficient into 2003.

The company, founded and chaired by the biotech entrepreneur Alan Goodman, is trying to sell off some of its mothballed assets and prospective drugs. Last week, it revealed promising data on one product for pain caused by a malfunctioning central nervous system, and said it may have a product that could be used to treat schizophrenia.