The UK’s CeNeS Pharmaceuticals has posted an 11% increase in its net loss for the first half of 2007 to £4 million and its cash reserves have fallen from £5.4 million to £800,000 but the firm is facing the future with no little confidence.

The results may look slightly worrying but they do not take into account a recent placement which brought in £5.7 million, net of expenses. A fair chunk of the proceeds will go on preparing for Phase III trials of CeNeS' lead product, M6G (morphine-6-glucuronide) in the USA. Earlier this year, the firm unveiled positive data from a European Phase III trial for M6G for the treatment of post-operative pain and it says that “active discussions” are ongoing with respect to potential partnering deals for the drug.

These discussions seem to have been going on for some time but the question is getting the right partner. Talking to PharmaTimes World News recently, Jacob Plieth, an analyst at Edison Investment Research, noted that the financing came at a vital time for the firm and having that cash back-up will make it easier for CeNeS to thrash out a deal on better terms. As to who such a partner could be, Mr Plieth suggested that in Europe, Mundipharma might fit the bill.

The analyst believes that CeNeS’ current share price, which stands at around the 77 pence mark, “has been depressed by perceived uncertainty surrounding M6G” and significantly undervalues the company and its pipeline. The Cambridge-based firm recently awarded Japan’s Ono Pharmaceutical rights to develop and commercialise its general anaesthetic and short-acting sedative, CNS-7056, quite a deal given that the compound is still at the preclinical stage and CeNeS has also just announced that it has begun recruitment for the Phase II trial of its cancer pain treatment, CNS 5161. The drug is being developed under a co-development deal with Germany’s Ergomed. By Kevin Grogan