E&Y in talks with possible Scotia buyer
Administrators from Ernst & Young have revealed the firm is in 'exclusive talks with a preferred bidder' for Scottish biotechnology company Scotia.
The Big Five firm said the bidder was interested in becoming a ‘future funder and development partner’.
Andrew Wollaston, one of three E&Y administrators appointed in January to run the company, said the bidder was interested in developing the drug Foscan and derivative products such as Bacteriochlorin and photodynamic therapy.
‘The bidder is a substantial enterprise with substantial resources and funding,’ Wollaston said.
E&Y took over at Scotia in January after a decision by the European Medical Evaluation Agency not to grant approval for the photdynamic drug Foscan, citing possible side-effects.
Scotia had thrown significant resources into the development of Foscan and debts had risen to Pounds 60m, forcing it into administration.
But on 28 June Scotia was thrown a lifeline when the drug regulator overturned an earlier decision to block the firm’s key drug, raising hopes that the business could be revived.
Scotia considered Foscan crucial to its long-term viability, but said today that it need more than Pounds 25m to take it to market.
Other options being considered by E&Y is Scotia raising the money for Foscan itself, forming an alliance with another pharmaceutical company, or a complete takeover by a rival group.
Whatever option is taken, Scotia will need to refinance a Pounds 50m bond issue convertible into shares at 340 pence in March 2002. When trading in Scotia shares was suspended in January they were valued at 18-1/2p, giving the plc a market cap of Pounds 16m.
In 1996, the company stock peaked at 815p.
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