Penny stock Sareum, which develops drugs to combat cancer, saw its losses widen in the second half of 2011, in line with the board's expectations.
The firm's losses after tax deepened from £0.26m to £0.33m, which the firm said reflects an increase in research and development. Pre-tax losses totalled £0.36m versus £0.28m in the second half of 2010.
The company ended the half year with net assets of £0.55m, most of which was accounted for by £0.53m in cash. The cash pile stood at £0.62m at the end of 2010, so it is diminishing but not at a precipitous rate.
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Despite moving further into the red, the company is sticking by its present structure and funding model as it believes this is making the most effective use of available funds and resources to drive programmes forward rather than being used to build infrastructure.
Revenues from early deals will be used to progress the in-house programmes and reduce the need to generate investment from shareholders, the company said.
The board reckons that, despite the current economic environment, the appetite for licensing deals in the pharmaceuticals arena remains strong and the company expects at least one licensing deal to be completed in 2012.
Operating losses rose from £283m to £361m as the firm developed its drug discovery programmes. The firm's biggest success during the period was the selection of the pre-clinical candidate compound from the Chk1 inhibitor programme which is run as a joint collaboration with The Institute of Cancer Research and Cancer Research Technology. This compound has been submitted to further testing to generate pre-clinical safety data.
The share price fell 12.31% to 1.43p by 15:09.
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