Scotia "Transformation" Points To Rosier Future

Scotia Holdings of the UK reported a strong 38% increase in sales toL10.1 million ($16.2 million) in the first-half of 1997, coming mainly from the transformed Efamol nutrition business. Increases in R&D expenditure rose by 26.4% to L10.8 million, and this contributed to a net loss of L12.8 million for the period, which was in line with expectations. Scotia's share price rose 18.5 pence to 436 pence on the day (September 24).

Chief executive David Horrobin said that 1997 has been a turning point for the company, evidenced by its first major licensing deal, for its photodynamic therapy for cancer Foscan (temoporfin), with Boehringer Ingelheim and Kyowa Hakko (Marketletter September 22). This $54 million deal has transformed Scotia, he said, noting that it has been criticized in the past for not adopting this route of raising cash, and provides an important validation of Foscan's potential, which offers significant advantages over first-generation PDT products such as QLT's Photofrin (see page 19 and Marketletter April 17). Foscan could reach the market by the end of 1999, or early in 2000, said Dr Horrobin. The licensing deals do not cover follow-up compounds, or areas outside oncology.

Prior to these deals, Scotia had about a year's worth of cash in reserve at the current burn rate of L13 million per half year, but now has access to over L60 million, enough to last for around two years, said Dr Horrobin. Further fund-raising is not being considered at the moment, and the firm is confident that licensing deals and the establishment of Efamol and LipidTeknik as independent divisions will bring in more cash.