LONDON British biotech Phytopharm gave up its search for a treatment for Parkinson's Disease using a drug derived from subtropical plants on Tuesday and said it was looking to sell the business.
A month after the medicine, Cogane, failed in a clinical trial, Phytopharm said it would not commit any more money to further research and development and would cut staff.
The company said it had held exploratory merger talks with a number of parties.
Cogane's failure - the latest in a line that include Renovo, Minster and Antisoma - highlighted the all-or-nothing bet that small biotechs need to make to develop and launch drugs on their own.
Phytopharm suffered earlier setbacks. It abandoned research aiming to commercialize a drug for the management of obesity derived from a southern African cactus called Hoodia gordonii three years ago, to focus its efforts on Cogane instead.
It raised 24 million pounds ($36 million)from investors to fund research into Cogane.
The British company had hoped its compounds had the potential to be a new class of therapy for neurodegenerative diseases, such as Parkinson's and motor neurone disease.
Early trials indicated that Cogane could ease the symptoms and slow the progression of Parkinson's, a condition where part of the brain becomes more damaged over time.
However, the drug, derived from a member of the sapogenin class of compounds, last month failed to show any benefit over a placebo in a trial of 400 patients with early-stage Parkinson's.
The company said on Tuesday that a full analysis of the data confirmed the disappointing findings.
Shares in the group, which fell more than 80 percent when the trial results were published, were trading up 3 percent at 1.56 pence by 1016 GMT, valuing the company at about 5.4 million pounds ($8.2 million).
($1 = 0.6586 British pounds)
(Reporting by Paul Sandle; Editing by Erica Billingham)