Hopes of a rescue for Scottish biotech Ardana ended in ignominy yesterday as the company went into voluntary administration.

The reproductive health specialist, which asked for its shares to be suspended late last Friday, appointed Ernst & Young yesterday as administrators.

Ardana's board said it had lost a race against time to complete a possible refinancing, sale or merger before cash reserves ran out. It said licensing discussions for individual development products had also had to be abandoned.

The board therefore "with great regret no longer believes that the company is in a position to continue its operations".

The administrators would continue to seek a buyer for the company and its assets.

Ardana was formed in July 2000 with a contract to commercialise research by the Medical Research Council's human reproductive sciences unit in Edinburgh. It raised £20m in 2003, floated at 128p in March 2005, and was seen as a role model for the sector.

But the UK sector has been hard hit by the funding squeeze which has choked off support for expensive later- stage product trials and clinical testing, while risk-averse stock market investors have aggravated the problem.

Ardana's former chief executive, Maureen Lindsay, stepped down before disappointing half-year results last October, and in December the company put some programmes on hold to focus on projects closest to generating commercial returns.

Ardana put itself up for sale in February, claiming "significant interest in potential licensing opportunities for one or more products", while Lindsay's successor, Dr Huw Jones, said the "successful execution of our strategy to sell or merge the company will enable the potential in the pipeline to be maximised".

In March, Ardana said it had received several takeover approaches, and by mid-May it was still confident of selling the firm or some of its products, but was also warning of a cash burn of over £1m a month on a £4m cash pile at the year-end in March. Critically, efforts to sell its most promising product under development, a testosterone cream, were damaged by a timing setback during clinical testing in the US.