The shares closed down 25.5p at 52.5p after Peptide said its flagship decapeptide allergy vaccine had failed in late-stage clinical trials. One analyst, who declined to be named, said: "The hit on the shares is not excessive. This was a major drug for the company and for it to fail in phase IIb trials is a real blow."The drug was hoped to have a general applicability across a range of allergies from hayfever to asthma.
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It includes the Franklin Templeton mutual funds and institutional accounts.. IN A STARK reminder of the risks facing biotechnology companies, Cambridge-based Peptide Therapeutics yesterday saw its market capitalisation fall by a third after it announced it had ceased development of one of its lead drugs The company is now worth just pounds 41.1m. "Their investment methodology means they have seen the share price fall on the screen.
It is not a surprise in as much as there has been talk of someone building up a stake."M&S shares have dropped from a peak of 547p in the wake of a 40 per cent slump in profits and a boardroom row over succession to the post of chief executive.Franklin Resources is a global investment management organisation based in San Mateo, California. The target turned out to be Allied Domecq.A spokeswoman for M&S said Franklin Resources had given it a list of the institutions on whose behalf it had bought shares, which included Merrill Lynch and Morgan Stanley.The company issued a section 212 notice that will force all the named institutions to reveal if they are buying on behalf of an institution that may be planning a bid.But one analyst, who asked not be named, said she doubted the move was a first step towards a hostile bid. A LEADING American value investment fund has taken a 3 per cent stake in Marks & Spencer, the beleaguered British retailer whose shares have slumped over the past year, it emerged yesterday. M&S informed the Stock Exchange that Franklin Resources had declared its stake after passing the 3 per cent limit that triggers the need for disclosure. Shares rose 6p or 1.6 per cent to 366.5p, in line with the surge in the FTSE-100 index yesterday.The news comes just weeks after rumours swept the market that Warren Buffet, the famous US investor, was building up a stake in a UK company, possibly M&S. But what of it? Just the outside chance of creating another FTSE 100 company (Airtours is highly likely to secure a FTSE 100 position with First Choice under its wing) is worth any number of birds in the hand, the City seems to be saying How short sighted..
By rejecting Kuoni, meanwhile, the City will have lost the opportunity to create a new travel industry force with earnings per share to match Airtours. If Airtours is unable to renew its bid on similar terms, First Choice may end up remaining independent. For reasons which have yet to be explained, the task of safeguarding the interests of the British consumer has been left by the Government to Karel Van Miert, the European Competition Commissioner.He shows few signs of doing what Mr Crossland wants; it is naive of the City to believe Airtours is going to be allowed a free run at First Choice. Mr Crossland has already profoundly misjudged the regulatory issues once, by assuring the City there was nothing to worry about.
Now he's doing it all over again.So perhaps the last laugh will be on the fund managers afterall. But it is the job of fund managers to form a view on the likely regulatory outcome. Margins have been restored to the industry average and sales are storming ahead. In return the City is proposing to sell the company to the competition, which is predictably prepared to pay a big premium for monopoly.It is not, it might reasonably be said, the City's job to worry about the effects of a takeover on competition - rather the reverse if it means more profit That job is for regulators. Even so, First Choice has put up a very reasonable case for the Kuoni merger, while the Airtours proposal is dependent on regulatory clearance from Brussels, which is questionable.Ian Clubb and Peter Long, chairman and managing director respectively of First Choice, have brought the company back from the dead in the two and a half years they have been in control, raising profits from nothing to a forecast pounds 60m this year and stock market value from pounds 120m to pounds 700m. They all desperately need to improve on their lousy investment performance, and Airtours' terms certainly look a good deal better than the alternative. The bird in the hand is not worth as much as the two in the bush, the City figures.This perhaps says more about the short term needs of P & D and others than their long term judgement.
