Scotland’s Ardana Biosciences, which specialises in reproductive health products, says that its cash position is such that it is now seeking a buyer or merger partner to fund drug development.

The company has issued an interim statement for its fiscal third quarter which shows that its cash position at the end of January had gone down to £6.1 million, compared with £17.4 million a year ago. Given this state of affairs, Ardana has held a strategic review which concludes that “shareholder value is more likely to be maximised through seeking a sale or merger partner which will be better placed to fund the company’s extensive clinical development portfolio”.

Specifically, Ardana said that the current Phase II programmes for its flagship product Teverelix LA, in prostate cancer and benign prostatic hyperplasia, have now been completed and positive preliminary results were announced last year. However, further planned development programmes will not be initiated.

As for the firm’s Testosterone Cream product, for the treatment of male hypogonadism, a Phase III study in the USA began in 2007 and enrolment is now complete. In addition, differentiation studies, from which positive preliminary results were announced at the end of last year, will be completed but further activity is on hold. “All other development, manufacturing, commercial and overhead activities will be scaled back or halted," Ardana added, “reducing both cash commitments and headcount.

Analysts believe that Ardana is an attractive company but its cash reserves have weakened its negotiating position with potential buyers. The firm’s shares have fallen over 30% in the last year and it is valued at around £17 million.