The Investment Column: Bio-tech shares out in the cold

Biotechnology shares? - you just can't give 'em away. Yesterday's crop of results was a sharp reminder of how bad things can get in the UK's unloved biotech sector where disappointing news from heavyweights like Scotia and British Bio has left shares almost 50 per cent off their yearly highs.

Take ML Laboratories. Shares in this controversial group hit the top at almost 470p early last year, before taking a long slide. Full-year results yesterday left the price at 111.5p, down another 23.5p. Then there's the disastrous Aromascan. Technical hitches with this group's electronic nose have left its shares at a 30p low, down from 182p at the start of last year. Then there's Cambridge Antibody Technology. This very promising biotech - albeit with a very young drug pipeline - which floated at 500p in March, finished yesterday 5p ahead at 375p after decent full-year results, but close to their 350p all-time low.

That said, ML's fortunes are looking better. The group's tie-up with Baxter to sell Icodial, ML's kidney dialysis fluid, should start to bring in a steady royalty stream next year as Baxter will have its first full- year of sales in 16 European countries. With 80 per cent of the dialysis fluid market and Baxter pretty positive about Icodial, the income looks of reasonable quality.

ML's dry powder inhaler licenced to Medeva is being rolled out across Europe, which should mean more royalties, and there is certainly an eager market for a good inhaler technology if that is what ML has. Other areas like Aids and cancer look more iffy. If the sector cheers up, as it might in 1998, ML could benefit. Wait for sentiment to improve.