LONDON - Cortecs plc announced a further shift in strategy accompanied by a #5 million (US$8.24 million) financing and plans to change the name of the company to Provalis plc.

This follows 18 months of internal and external reviews initiated when founder and CEO Glen Travers, left the company at the end of 1998.

Since then Cortecs has rapidly reduced the size of the company to cut costs, closing its London and New York offices, selling off business units and cutting UK staff numbers from 209 to 130.

This has brought the cash burn down below #10 million per annum, and it is expected to fall still further.

CEO Phil Gould told BioWorld International, "I hope this is the line in the sand. Provalis will be a new company, with a new strategy, and a new purpose." The "Pro" in Provalis is meant to reflect professionalism, while "Valis" implies vitality and energy.

Cortecs, based in Deeside, Wales, now has three areas of business: sales and marketing of branded pharmaceuticals, point-of-care diagnostics and vaccine development.

Gould said that with the overheads from the rest of the business removed, the ethical pharmaceuticals business has been trading profitably for the past six months, and he expects the diagnostics business to break even in this financial year, and to be profitable thereafter.

The #5 million is earmarked for the expansion of the diagnostics business which includes doctor's office tests for Helicobacter pylori, bone density monitoring in osteoporosis and insulin monitoring in diabetes.

The development program has been scaled right back to focus on vaccine development in infectious diseases where Cortecs has rights to more than 30 antigens, and where there is interest from potential partners.

Other development programs, including Macrulin, an oral formulation of insulin, have been "parked," and Cortecs will not do any more work on them until it finds partners.

"We are out talking to potential partners but I don't expect anything to happen within the next year," Gould said. Cortecs now will operate its R&D on a virtual company model, and will fund the work from the rest of the business rather than from fund raising.

"The biotechnology model of going back to the market for more and more money on clinical endpoints is not realistic any more," he said. "The market now understands that there is a high level of risk in drug development."

"We can break out of that cycle because we are in the fortunate position of having businesses with turnover. In the future we will fund R&D from our operating units and will partner programs in the early stages of development. We will not be raising any more money for R&D."

The change in name to Provalis is subject to shareholder approval.