SKINCARE specialist Dermasalve has seen its share price plummet over the past two months to close last night at a low of 5.75p.

The Newcastle-based plc's share price has been cut in half since the middle of February and now stands at a third of the value that it did in April last year.

Directors yesterday said the fall could be linked to a planned shares placing to raise money for future acquisitions.

In a statement to the stock market, Dermasalve said: "The directors of Dermasalve Sciences plc have noted the recent fall in the share price of the company.

"The directors are in the final stages of arranging a placing of shares in the company in order to provide finance for the expansion of the business and confirm that they are not aware of any other reason for the fall in the share price."

Dermasalve was set up in 2003 by County Durham GP Mark Randle, who decided to develop a range of creams for dry and sensitive skin after his son reacted badly to some baby treatments.

The firm, which has also developed a range of patented gels, which are 99.9 per cent effective against the H5N1 avian flu virus and MRSA, wants to expand into Europe and the Far East. It first said it was considering a share placing to raise money in October.

Last September, the firm reported a half-year loss of £1.03m, on a turnover of £49,954, but said the outlook was very positive.