SkyePharma chief stirs up biotech ferment at Micap

Multi-millionaire Ian Gowrie-Smith, the chief executive of FTSE 250 drugs company SkyePharma, is attempting to raise £3.5m for the yeast-based biotechnology minnow Micap, due to float on AIM later this month.

SkyePharma invested £2m in Micap in January by buying a 26.7 per cent stake, valuing the company at £8m. Micap specialises in "micro-encapsulation"; active agents in yeast that are subjected to the treatment can then change the taste or texture of a given product or drug.

The institutional placing - led by Glasgow-based stockbroker Brewin Dolphin - values the company above £10m, giving SkyePharma a minimum £2m paper profit on listing on the junior market.

The involvement of the Australian-born Mr Gowrie-Smith and SkyePharma with Micap began after a previously planned £5m institutional placing with rival broker Collins Stewart was pulled last December. Mr Gowrie-Smith, a former stockbroker, came to the fore as he merged Medeva with the then Celltech Chiro-Science in November 1999 to form Celltech Group in a £1.3bn deal. Skye's interest in Micap comes because its technology can mask the unpleasant taste of an orally taken medicine, as well as increasing the time it takes for an orally taken drug to enter a patient's system.

Micap also signed a royalty-based deal with Firmenich - the world's third-largest flavour and fragrance company - to incorporate its technology into the flavours used by Firmenich in savoury products such as crisps, fried food coatings and soups.

Mr Gowrie-Smith joined the Micap board as chairman following Skye's investment, replacing Sigma Technology Management's Neil Crabb as non-executive chairman.

Sigma, the specialist biotech- nology venture capital group, held a 13 per cent stake, according to the company's latest share register of 4 May, with the Bank of Scotland holding a 1.8 per cent stake.

The most recently filed accounts at Companies House reveal Micap made a pre-tax loss of £6.82m in the year to March 2002, which included a £3.38m goodwill write-off from the reorganisation of two of its subsidiary companies.