Here's more on BBIOY's trials:
BRITISH BIOTECH: Clinical trials and tribulations
Jonathan Guthrie reports on the problems at British Biotechnology
after the dismissal of Dr Andrew Millar
When British Biotechnology dismissed Dr Andrew Millar,
its head of clinical research, on Monday, it looked to
critics as if the UK's flagship biotech company was
dropping the pilot halfway through the hazardous journey
into port.
The job of Dr Millar was to supervise the clinical trials on
which the fate of the company now hangs. Final tests -
phase III trials - are being conducted on two blockbuster
products.
They are marimastat for cancer, with a potential market
of up to œ4bn a year, and Zacutex, a drug for acute
pancreatitis, with possible revenues of over œ1bn. If the
drugs work well, regulators will approve them for sale.
The resulting revenues should produce fat dividends, the
company hopes, from 2002 onwards. This would justify
the patience of investors for tolerating years of losses.
But the outlook for British Biotech will be bleak if final
trial results, expected in the first half of next year, are
poor.
Dr Millar could not increase the efficacy of the drugs. But
he could ensure the tests were run in a way that would
help convince regulators to approve them. According to
one fund manager with a stake in the company: "His job
was one of the most important at British Biotech,
because the whole valuation of the company depends on
whether clinical trials are conducted to a high standard."
That job now falls to Dr Peter Jensen, who in January
was appointed head of research, a position senior to that
of Dr Millar.
His task would look easier if previous results had been
better. But discouraging early data on marimastat hit the
shares in November 1996.
Zacutex has had bigger setbacks. Last July, US trials
were extended by a year because of disappointing
results in Europe. In February the company announced
that European drugs regulators were delaying approval
for Zacutex pending results from the US trials.
Investors fear that Zacutex and marimastat could suffer
the fate of batimastat, a cancer drug dropped by British
Biotech in 1995. This helps explain a slump in the share
price that has cut the market capitalisation from œ1.9bn
in 1996 - when inclusion in the FTSE 100 seemed likely
- to œ370m now.
The dismissal of Dr Millar has meanwhile dragged into
the open a debate on corporate strategy that British
Biotech would prefer to have kept private. Dr Millar was
fired for giving executives at Perpetual, the investment
manager with 8 per cent of British Biotech, details of this
debate at their instigation.
Dr Millar wanted British Biotech to sell drugs through
distribu-tion deals with big pharmaceuticals companies.
Harnessing their marketing muscle would mean giving
them a chunk of sales revenue. But in return British
Biotech would make big sav-ings on overheads, which
have grown steeply in recent years.
His views clashed with executives keen to keep as big a
proportion of sales revenue as possible for British
Biotech by selling through their own salesforce.
They feared he was weakening the hand of the company
in future negotiations with potential partners by
discussing the issues openly. Katie Arber, head of
corporate communications at British Biotech said: "We
are still evaluating how to approach the North American
market with marimastat, which could include
partnerships in several possible forms . . . but the
strategy of the company in Europe is to develop and
market its products itself, building up operations country
by country." Many stock market analysts are
uncomfortable with go-it-alone marketing in any territory.
It is a job they think big pharmaceuticals companies
should do. Their doubts about Britsh Biotech have
merely deepened with the dismissal of Dr Millar, and the
news that the US Securities Exchange Commission is
investigating whether press releases on marimastat test
results were over-optimistic.
There are also concerns that British Biotech waited nine
months before alerting the market to the objections of
European regulators to test results on Zacutex. But the
company said it corresponds frequently with regulators
during trials. It said investors would be swamped, and
rivals helped, if every exchange was published.
British Biotech may now be locked on to a course from
which it is too late to turn aside. |
