Animal testing lab feels the heat

HUNTINGDON Life Sciences, one of Britain's biggest animal testing laboratories, faces another tough week after a big shareholder slashed its stake.

The company's share price dropped from 34p to 17.5p following news that Fleming's had reduced its 14 per cent holding and that anti-vivisection campaigners were planning a push to persuade institutional investors to withdraw.

Much of Huntingdon's stock is held by institutional investors in the UK and US, but on Wednesday Fleming's announced it was reducing its holding to below 3 per cent. Last week, about 15 million shares were understood to have been placed with market makers, but this did not prevent the price dropping throughout the week. Fleming's refused to discuss the detail of the disposal or its reason for the sale.

Although an unnamed North American financial institution is believed to have been building a long-term stake in the company, which has a market capitalisation of pounds 19.9m, and although its chief executive has said he is cautiously optimistic for the future, the share price remained low.

The company carries out thousands of experiments and pre-clinical trials for big pharmaceutical companies worldwide and employs more than 1,600 people at its laboratories in the UK, US and Japan.

Its chief executive, Christopher Cliffe, has been battling to turn the company round after last year's television documentary It's A Dog's Life exposed acts of cruelty to dogs. The Channel 4 programme in the "Undercover Britain" series led to a government inquiry and two employees being convicted of cruelty.

Mr Cliffe has said that big improvements to animal welfare have been made and that he is "quietly confident" of recovery despite what he calls a "campaign of intimidation" by animal rights activists which have included attacks on cars and visits to the homes of staff. He feels the activists are trying to put the firm out of business.

Channel 4 is to screen a second documentary, Countryside Undercover - The Follow Up, on Thurday.