Possible buying opportunity (stock well down on the news...) ? -
LONDON, Aug 17 (Reuters) - British drug group Glaxo Wellcome Plc (LSE: GLXO.L - news) could terminate a collaboration with biotechnology group Cantab Pharmaceuticals (LSE: CTB.L - news) because of U.S. regulatory pressures, the FT's online service said on Thursday.
Glaxo is believed to be considering stopping the development of at least one of two vaccines against genital herpes, a sexually transmitted disease, the Financial Times said.
The U.S. Federal Trade Commission was reported to have urged Glaxo to drop Disc HSV, a vaccine against genital herpes, because Glaxo's planned merger with SmithKline Beecham (LSE: SB.L - news) would give the enlarged group a dominant position in the market.
The drug group licensed the products, currently in Phase I clinical trials, from Cantab three years ago.
Glaxo's decision could be a blow for Cantab as it would force it to find another partner to fund the development of the products.
The FTC has already told SmithKline to sell Famvir, its anti-herpes drug, because Glaxo owns Valtrex and Zovirax, two rival products.
Under the deal signed with Cantab, Glaxo agreed to pay 11 million pounds, including an equity investment of six million pounds, for the rights to the vaccine.
The pharmaceutical group also agreed to fund the clinical trials for two versions of the vaccine: one product to prevent the disease and one to treat it. Glaxo was also to pay Cantab a percentage of sales when the products came to market.
The FT quoted industry sources speculating that the preventative vaccine, which is forecast to have a smaller market than the treatment, could now be dropped by Glaxo.
It is unclear whether Glaxo, which has a stake of about four per cent in Cantab, will have to pay compensation to the biotechnology company if the agreement is terminated. |
