LONDON ¿ British Biotech said it is poised to broaden its portfolio through internal development and in-licensing after putting the problems of the last 15 months behind it. CEO Elliott Goldstein said the company would build on its world leadership in metalloenzyme inhibition and its financial strength ¿to optimize the probability of compounds completing development and entering the market.¿

Goldstein made the comment as financial results for the year ended April 1999 were published, showing the initial impact of the restructuring and cost cutting that began last year. Staff numbers have fallen by 32 percent to 311, and will fall to 280 as current trials of the oral anticancer treatment Marimastat are completed.

Cash burn was cut to #34.7 million (US$54.7 million) from #51 million in 1998, and the loss after tax fell to #39.8 million, from #44.9 million in 1998. This was after one-off charges of #8.5 million. As a result of the cost-cutting measures, annualized cash savings will reach #10 million by 2001.

Turnover for the year rose to #4.2 million from #500,000 in 1998, as a result of milestone payments from British Biotech¿s Japanese partners. With #97.8 million in cash, Oxford-based British Biotech has funding for the next three years.

The results also reveal the litigation against Andrew Millar, former head of clinical research, and the regulatory investigations by the Securities and Exchange Commission and the London Stock Exchange cost #1.5 million, while payments to departing directors amounted to #1.4 million.

Goldstein, who took over in September 1998, said, ¿The new management team has established a strategy which builds on the company¿s existing strengths, experience and resources.¿

That will involve taking one British Biotech compound into development each year, broadening the product portfolio through adding externally sourced compounds and getting compounds to the end of Phase II and then finding partners, rather than going through to market, as was the previous strategy.

In line with this strategy, additional investment has been made in medicinal chemistry and in business development, while the commercial operations in Europe and the biologicals scale-up facility in Oxford were closed and development and support operations in Oxford and Annapolis, Md., were rationalized.

Goldstein wants to change the culture at British Biotech in a bid to prevent any reruns of the internal disagreements over development strategy, which led to the suspension of Millar, and the undoing of the previous management. He wants to make the culture more open by ¿encouraging the sharing of information, and the discussion and resolution of issues that may arise.¿

The company also is seeking to sharpen its approach to development and clinical studies. It has appointed an independent safety committee and is in the process of establishing a scientific advisory board.

After scrapping Zacutex for the treatment of pancreatitis in March 1999 following its failure in a 1,500-patient Phase III trial, British Biotech has only two compounds in development. Its flagship product, Marimastat, failed to meet the primary endpoint in the first Phase III trial to report, in pancreatic cancer, in February 1999. Nine further Phase III trials are in progress with results in gastric cancer and pancreatic cancer expected in the second half of this year. The company says its will ¿continue to reassess the program as each trial reports.¿