Spanish biotechnology group Zeltia has reported declining non-pharma revenues in 2005 and swelling R&D spending, as key drug development projects entered late-stage testing.

Zeltia’s revenues fell nearly 9% to 72 million euros last year, as R&D spending increased 24% to 47.5 million euros on faster-than-expected patient recruitment into cancer drug studies run by its subsidiary PharmaMar.

Spending on R&D at PharmaMar rose more than 20% to 37.8 million euros, while sister company NeuroPharma, specialising in Alzheimer’s disease, received 6.3 million euros.

Zeltia’s product pipeline includes Yondelis (trabectedin) for the treatment of soft-tissue sarcoma and ovarian cancer, currently in Phase III testing, and Aplidin (plitidepsin) in trials for haematological cancers.

The firm attributed the revenue decline to a 3.1% drop in sales of its wood protection and varnish products booked by Xylazel, its chemicals division, which is responsible for 70% of the firm's total revenue. Meanwhile hygiene products unit Zelnova reported revenues of 36 million euros in 2005, down from 45 million euros in 2004.

Zeltia also said it completed a capital placement in 2005 which raised 65 million euros. The firm says this will fund regulatory filings in 2006.