British Biotech looking for links

TROUBLED British Biotech has appointed Dr Peter Fellner - chief executive of industry rival Celltech - as its non-executive chairman with a clear mandate to achieve a merger as soon as possible in Europe or the US.

He promptly opened the door to such a move by saying: 'There is currently a significant opportunity to create value within the biotechnology sector through the consolidation of companies with good R&D and, or, pipeline products, which are hampered by high cost bases and inadequate financial resources.'

Fellner, 58, is also chairman-designate at Celltech. His appointment at British Biotech will follow the retirement of Christopher Hampson after four years. No details of his pay package were revealed.

British Biotech has been seeking a merger for the past four years. Last month, chief executive Elliot Goldstein resigned following the collapse of merger talks with Germany's MorphoSys. He left with a pay-off of one year's basic pay - £379,000 in 2001. Since then there have been behind-the-scenes moves aimed at achieving a merger and Fellner's appointment is designed to facilitate these.

British Biotech has cash of £42.8m and insiders believe this will be used by Fellner as the bait for other companies to merge with it. Today, it revealed losses slightly down in the six months to October to £8.1m from £8.4m. The shares rose 0.9p to 4.4p.