This latest controversy is disclosed in a recent filing with the Securities and Exchange Commission, the American financial regulator.
Bioprogress said it had reviewed the allegations made against the former company officer, and conducted a preliminary investigation.
“In the company’s view, it is unable to take any further action itself in relation to these allegations, and the board of directors has, therefore, decided to refer these matters to appropriate regulatory authorities,” the document says.
Last week, nobody at Bioprogress was available to explain the nature of the complaint. Richard Trevillion, chief executive, was out of the country on holiday. “Everyone’s away,” said a spokeswoman.
The disclosure in the SEC filing comes after rumours circulated in the City of inappropriate dealings in the shares of Bioprogress. The Financial Services Authority, the UK regulator, would not discuss whether it was looking into the matter.
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Bioprogress has disclosed that the allegations “do not relate directly to the assets or the business of the company”. One of those familiar with the Cambridge firm said that this suggested the allegations relate to share dealings.
When Bioprogress floated on the Alternative Investment Market three years ago, its shares soared in value because of the potential of its gelatine-free tablet coatings. The firm quickly attracted a large following among retail investors.
However, the company has endured a series of setbacks over the past 18 months, causing the shares to crash from a peak of 155p to a low of 27Åp. The price has since recovered to 44p.
Dan Farrow resigned as finance director at the end of April. A few days later, Bioprogress said it had “taken steps to ensure that this resignation has no adverse effect upon the operations of the group”.
In June, Farrow was replaced by Peter Keen, a well-known biotech veteran who worked closely with Chiroscience’s Sir Chris Evans for many years, and who has more recently worked at Arakis, a private drug- development company that was sold for £106.5m last year.
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Keen lasted only two months before he, too, resigned last week because of “a difference in management style”. He has been replaced by Hiral Patel, who joins from Grant Thornton, the accountancy firm that acts as Bioprogress’s auditor.
Farrow could not be reached for comment last week. Keen declined to expand on the reasons for his departure.
Bioprogress hopes to use its Tab Wrap polymer coatings to improve existing medicines — either by making them easier to swallow, or improving their speed of action. The company has said it is working with several of the world’s largest pharmaceutical companies.
It is already generating revenues, but remains loss-making, running up a £9.5m deficit last year.