Memorandum submitted by Ms Jane Henderson
I have been asked to appear before the Science
and Technology Committee in connection with the above inquiry
relating to evidence given by Dr Andrew Millar concerning conversations
with me in February 1998.
I am an analyst with Goldman Sachs International
specialising in pharmaceutical companies. Before joining Goldman
Sachs in 1997, I was an analyst with the pharmaceutical team at
Natwest Securities, which covered, among other companies, British
Biotech. Goldman Sachs did not and does not now cover British
Biotech.
In January 1998 Malcolm Fallen, the company's
new Finance Director, and Katie Arber, the company's press relations
officer, visited Goldman Sachs to introduce Mr Fallen, and asked
us to consider initiating research coverage. As Goldman Sachs
had never previously considered this, in order to evaluate whether
we would wish to do so, a visit by the Goldman Sachs pharmaceutical
team (including myself) to the Oxford offices of British Biotech
was arranged for 12 February 1998. The visit was organised through
Katie Arber.
A day or so in advance of the scheduled date,
we telephoned Katie with a list of topics we wished to discuss
during the visit, and a list of members of management, including
Dr Millar, whom we expected to meet. Recently a new Head of Development,
Peter Jensen, had been appointed above Dr Millar, but we particularly
wanted to see Dr Millar because as Head of Clinical Trials he
had designed the clinical trials for Zacutex and Marimastat and
had developed critical relationships with the oncologists involved
in these trials. During our conversation on the day or so before
the scheduled meeting, Katie informed us for the first time that
Dr Millar was too busy to attend the meeting.
I was surprised to hear this, as I knew from
my experience at Natwest Securities that in the past Dr Millar
typically had been a key member of the management team involved
in presentations to analysts. I myself had attended several presentations
by the company in which Dr Millar had been a key participant,
and as a result I had some acquaintance with him. I therefore
telephoned him directly at British Biotech, to ask why he wasn't
going to be attending the meeting. I recollect that he said he
felt he simply couldn't represent the company at such a meeting,
and that as a result of the appointment of Dr Jensen he felt marginalised.
The conversation clearly was a difficult one for him. Given his
long involvement in the clinical trials program, I remained keen
to meet with him. I therefore asked if he would be prepared to
meet with me away from the company's offices while I was in Oxford
on 12 February. He indicated he might be willing to do so, but
no definite plans were made.
Following our meeting at British Biotech's offices
on 12 February, all of the attending Goldman Sachs analysts, including
myself, came away feeling that there were critical issues that
had not been addressed to our satisfaction during the course of
the visit. These issues included the company's management of finances
(we focused particularly on the company's decision to put money
into an expensive new building, rather than into clinical trials),
its commercialisation strategy and lack of contingency plans.
We were equally concerned that we had not been able to meet with
either Dr Jensen, the new Head of Development, nor Dr Millar,
the Head of Clinical Trials, and in addition by the comments of
the participating clinical trials staff to the effect that they
had not been given the opportunity to meet with Dr Jensen before
his appointment.
Immediately after I left the meeting I telephoned
Dr Millar and asked if he could meet with me off-site while I
was still in Oxfordshire. He agreed to meet with me for a half
hour or so at a pub called the Barley Mow.
I expressed to him in summary fashion our concerns.
He replied that he shared some of these concerns. He said that
his position in the company was very difficult, and asked my advice
on what to do. I advised him to share his concerns with the non-executive
directors of the company. He said that he had spoken to the non-executive
directors but that he felt they were ineffectual. I then said
something to the effect that it was the shareholders who actually
owned the company. I reminded him that the company had active
shareholders, including Perpetual. (I should mention that Perpetual
is a client of Goldman Sachs, and I speak regularly to Neil Woodford
and Margaret Roddan in particular, concerning the pharmaceutical
companies for which Goldman Sachs provides research coverage.
While I was at Natwest Securities, I had arranged a meeting between
Perpetual and the company in which Dr Millar had participated.)
I do not remember saying anything specific about contacting shareholders,
or concerning the mechanics of calling for shareholder meetings.
A few days after 12 February, I informed Neil
Woodford that Goldman Sachs would not be initiating research coverage
of British Biotech. I did not share our concerns with him, except
to suggest that he go have a look at the company's new Oxford
building.
I have had no further discussions of any substance
with Dr Millar since that meeting.
7 July 1998
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