Biotech Ardana folds as fails to find buyer

LONDON (Reuters) - Scotland's Ardana (ARA.L) has gone into voluntary administration after failing to refinance the business or find a buyer, underlining the tough environment facing many small British biotech companies.

The Edinburgh-based specialist in reproductive health said on Monday it shares had been suspended as administrators from Ernst & Young took over running of the company.

"The board of Ardana has taken these steps after it became apparent that a possible refinancing or a possible sale or merger under discussion could not be completed within a timeframe during which the board believed the company would have sufficient cash reserves to continue trading," it said.

Despite the sale of a few companies to large pharmaceutical groups, Britain's biotechnology sector has struggled recently with an increasingly difficult financing environment.

Lack of funding makes it difficult for companies to advance experimental products into later-stage -- and more expensive -- clinical testing.

Industry analysts say the credit crunch has aggravated the problem by making stock market investors more averse to risk and discouraging them from putting funds in high-risk sectors like biotech, while potential buyers of young companies have become more cautious.

(Reporting by Ben Hirschler; Editing by Quentin Bryar)