Shares in British drug-maker Bioglan Pharma, which has a secondary Irish market listing, tumbled after plans to acquire a division of Bristol-Myers Squibb collapsed and the firm breached its borrowing limits.
Bioglan and most analysts said, however, they were sure banks would continue to provide backing, not least because Bioglan also announced a review of strategy, including cutting about 100 jobs.
Shares in Bioglan, which makes and markets treatments for skin complaints such as acne and eczema, plunged to a new low of 10.99p sterling - a far cry from last year's high of 950p. At the close the shares were down to 25.5p.
Bioglan's problems stem from its attempts to buy the dermatology business of Bristol-Myers Squibb. Only a month after talks opened in July, Bioglan's finance director, Mr Peter Johnson, and stockbroker ABN Amro walked out in apparent protest at the cost of the estimated €800 million (£630 million) deal.Analysts said Bioglan's debts had risen to £115 million sterling (€184 million) from £105 million at the end of July - more than five times its current market capitalisation.
"It's a real mess, but they're starting to do the right things," said an analyst who declined to be identified. "It produces decent turnover, its branded product margins are good and it has a presence in major markets," he added.
Chairman and chief executive Mr Terry Sadler, who will give up both jobs but stay with the firm in a strategic role, said he had erred in pursuing the acquisition. "It was always an ambitious move. We did our best . . . but the markets moved against us," he said.
