Small Talk: Phytopharm fights on without a broker to sell its story

Phytopharm, the biotech company trying to develop drugs from plants, is resigned to remaining without a broker until the end of the year - a situation that could put further downward pressure on its ailing shares.

The company has been without a house broker since June, and the stock has halved in value in the intervening months, languishing now at 51p, giving a market capitalisation of just £26m. Although main listed companies do not require a broker, it plays a vital role as cheerleader-in-chief for a stock, highlighting its investment attractions, organising roadshows for management to meet City fund managers, and finding buyers for unwanted shares in an attempt to keep the price stable.

Last week, Phytopharm put out news that patient trials of its experimental Alzheimer's drug, Cogane, have been completed and results are due in December, but it failed to halt the slide. Rumours in the market were that at least one of the company's top ten institutional shareholders was selling out, and with no house broker to generate interest, that has had a very serious effect on the price.

Canaccord resigned as broker in June after animal rights extremists put a bomb under the car of one of its executives. Phytopharm once had a partnership deal with a Japanese company that uses the services of Huntingdon Life Sciences, the animal testing firm.

Richard Dixey, chief executive, said he did not expect to sign up a new broker until after the 256-patient trial of Cogane reports. "There is interest from major brokers," he said, "but everybody knows that there is major data coming soon, so they are all waiting for that. Mounting a coherent roadshow requires clarity on this clinical programme."

Transense Technology

KBC Peel Hunt has just been appointed house broker for Transense Technology, a company trying to develop tyre pressure monitoring and power assisted steering products, but which has only nine months' cash left. Small Talk hears KBC has already hit the road with plans for a fundraising, and is having some success in piquing the interest of fund managers.

Victoria Oil & Gas

Victoria Oil & Gas continues to make good progress. The company, which floated in July last year, is building a portfolio of assets in Russia and the central Asian republics of the former Soviet Union. In a sector where share prices are driven by newsflow, investors ought to be pleased that Victoria has so much to say over the coming weeks and months.

First of all, there should be news any day that the company has been granted production licences covering its Kemerkol oil field in north-west Kazakhstan. Kemerkol was purchased in February for $8.5m (£4.7m) and tying up the legal niceties means it will be producing oil before the end of the year. These are old wells that are simply being re-opened, so it is a low-risk project that will help fund Victoria's more exciting gas exploration work in Siberia.

Consolidated Comms

Small Talk reported this summer on the difficulty Consolidated Communications Corp, a Hungarian telecoms firm, was having with a £3m-£4m fundraising and move from Ofex to AIM. It has now tied up the deal, but it raised only £1.4m, and two big creditors - the Dutch bank ING and a former chairman - had to settle for having loans coverted into shares instead.

Driver steers its way to £17m float

Are the directors selling? It is the first question a fund manager asks, and he or she may be reluctant to back a flotation if older investors are on the way out. Yet companies will continue to omit this fact from their press releases. Driver Group is the latest example (Steve Driver, founder, is selling £1.25m), but he won't have any problem with his £17m float. Driver is a profitable business which resolves contract disputes in the construction industry.