Rights issue funds British Biotech plans

BRITISH Bio-technology, which recently announced encouraging results for its cancer drug, hopes to raise up to pounds 93.6m from shareholders to finance future development.

The company, which is shortening its name to British Biotech, plans to raise pounds 46m through a rights issue now and the rest around the end of 1995, when shareholders can judge its research progress.

It has pounds 32.9m left from its flotation two years ago, enough to support its spending until June 1995.

However, James Noble, finance director, said the market can become nervous if it sees biotech companies with less than a year's funds in reserve.

The one-for-three rights issue of shares is priced at 400p, 25p less than the price at which the company floated. Yesterday's market price rose 5p to 470p.

Each unit of four new shares will include three warrants, exercisable at 525p in December 1995 and January 1996. Full exercise of the warrants will raise a further pounds 47.6m.

Mr Noble said British Biotech is issuing the maximum amount of warrants allowable under Stock Exchange rules.

British Biotech is also changing its share option scheme to offer better incentives to its staff after losing some key personnel to rivals.