Glaxo Wellcome ditches Biotech alliance

Glaxo Wellcome said yesterday that it would not now proceed with work on two new arthritis compounds from British Biotech after toxicity problems forced it to abandon early clinical trials on British Biotech's pill for arthritis and bowel disease. Glaxo had paid British Biotech pounds 11m for the rights to develop the drug, called BB-2983. In a sector already floored by a plague of bad news this year, British Biotech's shares fell heavily, closing 10 per cent down at 134p.

British Biotech called the news "disappointing," but said that BB-293 was at a very early stage of development, where high failure rates were common. "This is what happens in normal drug development." The company said that although BB-2983 and British Biotech's key cancer drug marimastat belong to the same class of MMP inhibitor compounds, the development of marimastat, currently in final stage clinical trials, was "completely unaffected".

While both drugs are known to cause joint pain, the toxicity problems which halted the BB-2983 trials were "totally unexpected" and had never been seen in marimastat. The group said that it is currently collecting toxicity data on another of its MMP inhibitors, BB3644 for multiple sclerosis which it is developing itself. British Biotech said the absence of cash from Glaxo for developing the drug was not material to its funding plans. Jo Walton, drug analyst at Lehman Brothers said BB-2983 was never expected to reach market before 2010 and was "irrelevant" to British Biotech's valuation, taking just 2p off her 150p net present value estimate.