"As a result, the board of Ardana has taken advice and, with great regret, no longer believes that the company is in a position to continue its operations." Ernst & Young was appointed as administrators. "to take such measures as they believe appropriate including continuing to seek a buyer for the company and its assets."
On Friday, Ardana requested trading in its shares, listed on the main London Stock Exchange, be suspended from trading pending clarification of its financial position.
The problems which cause Ardana's collapse have been felt across the whole biotechnology sector. These companies are high risk. Rewards often require investors to invest high levels of cash and wait years for a return.
In February, Wilson Totten, the CEO of Borders-based pharma company ProStrakan, and an industry veteran, said the conditions for raising cash in the equity markets were the worst in his career. "It is as bad as I have ever seen it. It was certainly a lot easier to raise money in the 90s and even easier in the 80s," he said at the time.
"The banks are wobbling, the equity markets are wobbling and people are looking for low-risk, and if necessary low-return, homes for their money. Biotech isn't that; traditionally it's a boom or bust sector."
Totten said ProStrakan, which is funded through to forecast profitability, had been approached by a number of biotech companies seeking a merger, but had rejected these saying they would add nothing to the company.