Gene therapy company Oxford Biomedica said it expected to see progress this year in its drug research, following a multi-million pound expansion.

The company, which has spent £2.4m on fitting out and equipping new labs and offices at Oxford Science Park, reported a pre-tax loss of £9.5m, up from £5.4m last year.

But it still has £32.6m in the bank, and said the loss was in line with the budget set when it raised £35.3m on the stock market in April. The workforce increased from 49 to 73 over the year.

Last week the company's shares jumped from 24p to 40p after it reported favourable early results from clinical trials of its two possible cancer treatments.

Twelve women with advanced breast cancer at the Churchill Hospital volunteered for an injection of MetXia. In several cases, the tumours shrank. In one case, the drug also appeared to act on a cancerous lesion which had not been treated directly. The firm said that if the drug was proved to treat secondary tumours, its market would be wider than anticipated.

The vaccine TroVax, designed to trigger an immune response to tumours, was given in low doses to four patients with advanced bowel cancer. Two im- proved.

Chairman Dr Peter Johnson said: "We expect to see results from our investment coming through in 2002, with a substantial expansion of the clinical programmes arising from our oncology and neurobiology activities, as well as a number of new product opportunities."