LONDON - Cortecs plc, which focuses on oral drug delivery, denied it is planning a rights issue, and says it is opting instead to preserve its development cash with a cost-cutting program that includes selling the corporate helicopter.
The company made the announcement last week when it published results for the year ended June 30, showing cash reserves down to £28.3 million (US$47.6 million) from £44.8 million in June 1997.
“We have no plans for a cash call,“ said Lord Patten, chairman. “There is no foundation whatsoever to the rumors about a rights issue. Instead, we have a new plan for raising non-dilutive funding to meet the financial needs of the company, with a lower consumption of development cash and with significant financial reserves.“
A review of all the company's activities is under way. Patten added, “I am determined to focus our resources and efforts on a small number of products that will make the most significant contribution to value during the next three years.“
Cortecs, based in London, is still without a permanent CEO, having ousted founder Glen Travers in June. Travers is suing the company for loss of office. “The company, having taken advice, intends vigorously to defend itself against such claims and does not expect any material unprovided liability to crystallize as a consequence of the action,“ Patten said.
Makes Sixth Macritonin Marketing Deal
Following Travers' departure, Cortecs has adjusted its commercialization strategy, and is looking for development and marketing partners. “This will assist in the careful management of shareholder resources and the building of shareholder value,“ Patten said.
Acknowledging another criticism of the previous regime, Patten said that, in the future, the company will “communicate as regularly and transparently as possible, but will avoid hype. From now on, we intend to aim for quarterly updates, rather than drip-feeding information onto the market.“
Overall, Cortecs reported a loss of £18 million, up from £11.7 million in 1997, on turnover up slightly to £7.9 million from £7.7 million. The shares closed down £0.08, at £0.51, when the results were announced on Sept. 15.
There was some good news for the company, which announced its sixth marketing deal for Macritonin, an oral version of salmon calcitonin for the treatment of osteoporosis, with Laphal Laboratories in France. Forecast sales under the six agreements over the next five years are US$700 million. *
Current Funding 'An Embarrassment'