THE PHARMACEUTICAL research company ML Laboratories is asking shareholders for pounds 15.8m to finance a plant to manufacture a treatment for kidney failure which it hopes to market shortly.

Optimism about the prospects for the treatment, Dextrin 20, made ML one of the best-performing shares last year. The price almost trebled to 903p despite the fact that ML has never made a profit since the shares were placed on the third market in 1987. They have been traded on the Unlisted Securities Market since 1990.

Dextrin 20 is intended as a more effective alternative to kidney dialysis with fewer side-effects. ML recently filed an application with the Department of Health to market it and Kevin Leech, chairman and chief executive, is 'confident that the licence will be granted in the near future'.

Shareholders are being offered one new share for every 10 held at 650p. ML's shares closed 28p lower at 735p yesterday. Milner Laboratories, controlled by Mr Leech, which owns 75.05 per cent of the shares, will not be taking up its rights. They will be renounced to Hoare Govett, the group's adviser, for no premium.

Part of the funds will be used to extend the pilot manufacturing plant in Liverpool to build up stocks ahead of marketing approval. The group also intends to build a dedicated manufacturing plant for the treatment. 'Early indications are that following receipt of the licence the product will rapidly penetrate the market,' Mr Leech said.

A large-scale study in 11 renal units around the country, completed in February, found that the treatment was more effective and predictable than traditional dialysis. Most patients asked to continue with the treatment after the trial was completed.