JOB losses are expected at struggling drug discovery company Oxford Molecular, which has issued a profit warning.

The group, which employs about 90 people at Oxford Science Park and 300 worldwide, is "pursuing reorganisation options to materially reduce overall costs".

A spokesman, Kevin Smith, said: "There will definitely be some job losses, but the process of working out what is going to happen is still going on."

Weak sales figures have been blamed on delays in product launches and to the fact that bigger pharmaceutical companies have not outsourced their IT as quickly as expected.

The group produces molecular modelling software used by researchers to speed up the discovery of new drugs.

Sales in the group's Discovery Solutions division, at Cambridge, have grown in line with expectations, but this will be outweighed by losses in the Software Solutions division, based in Oxford, where sales in the second half of the year have been below plan.

Oxford Molecular made a £208,000 loss before tax on £21.5m turnover last year, when it closed a US office.

The company has seen its share price on the London Stock Exchange plummet over the year. Many employees have shares, which now stand at 31p, compared with a high of 232p.

In 1997 it had made a profit for the first time since it was set up nine years ago. Chairman Douglas Brown said future activity would focus on areas showing significant growth. He said: "Concentration on these activities will allow for a significant reduction in corporate and head office costs. The implementation of these changes will impact adversely on the profit and loss account in the current year."

He said the board was also reviewing its investments, considering a "range of strategic alternatives."

Story date: Monday 06 December

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