LONDON An experimental drug for severe sepsis from AstraZeneca and BTG failed to help patients in a crucial mid-stage clinical trial and its development will now be halted, BTG said on Wednesday.
Sepsis occurs when the body's immune system sets off a chain reaction and over-reacts to an infection, damaging vital organs.
The news is a blow for both companies' drug pipelines, although the development of CytoFab, or AZD9773, was always viewed by analysts as risky.
There are big potential rewards for a successful medicine to treat sepsis, which affects around 3 million people a year worldwide and has a 30 percent mortality rate. The drug industry, however, is littered with past failures in the area.
Deutsche Bank analyst Richard Parkes said CytoFab, if it had worked, might have generated 1 billion pounds ($1.6 billion) in annual sales, with BTG getting a royalty of around 25 percent - but he had only given it a one in five chance of success.
CytoFab is the second high-risk drug to flunk tests this week, following the failure of a keenly anticipated Alzheimer's treatment from Pfizer, Johnson & Johnson and Elan.
BTG said it expected to take a charge of approximately 28 million pounds ($43.82 million) in the current financial year related to the ending of the drug's development, following the failure of the Phase IIb study.
Nomura Code analyst Gary Waanders, who cut his recommendation on BTG to "sell" from "neutral", said he was not hugely surprised by CytoFab's failure, which reduced the fair value of BTG shares to 240-260 pence.
The setback is a bigger blow for BTG than its larger partner AstraZeneca and BTG shares initially tumbled more than 10 percent before paring losses to stand to 2.3 percent lower at 330 pence by 1110 GMT. AstraZeneca was also off 2.3 percent at 3,013p as its shares traded without a 58.1p interim dividend.
LILLY DRUG WITHDRAWN
Louise Makin, BTG's chief executive, said the results were "obviously disappointing", but added that the company's core business and trading continued on track.
For AstraZeneca, the news is a further blow to confidence in its research capabilities, following a series of earlier setbacks that had already narrowed its chances of finding new medicines to replace those going off patent.
A spokeswoman said the Anglo-Swedish group would continue to invest in innovative medicines where there was an unmet medical need and an appetite to pay for new treatments.
AstraZeneca bought the rights to develop CytoFab from Protherics in 2005, before UK-based BTG acquired that biotech company.
In the light of the clinical trial data, AstraZeneca has decided to halt any further development of the product and is handing the asset back to BTG, which has no plans to develop it further.
Doctors fighting sepsis have few treatment options. Eli Lilly last year withdrew its previously marketed sepsis drug Xigris from all markets after it failed to help patients live longer in a clinical trial.
(Reporting by Ben Hirschler; Editing by Jon Loades-Carter)