The future of Phytopharm (Other OTC: PHYOF - news) , a British biotech company, was left hanging in the balance on Monday after its major drug for treating Parkinson’s disease unexpectedly failed in a clinical trial.
Shares in Phytopharm plunged more than 80pc after its drug, Cogane, showed no benefits over placebo in the treatment of more than 400 patients with early-stage Parkinson’s, a condition where part of the brain becomes more damaged over time.
Analysts described the future of the company as “bleak”, with some attributing no value to the group’s remaining pipeline of drugs. One questioned the UK process of preclinical drug testing, describing it as a “lottery”.
Share price in Phytopharm over the past month.
Tim Sharpington, chief executive of Phytopharm, said the promise of “encouraging efficacy” in preclinical trials had “not translated” into clinical testing. He added the result had prompted a strategic review of the business, which will halt all R&D spend.
He said: "During the coming weeks we will further analyse these results with our scientific advisors to better understand whether to continue the development of Cogane and Myogane. In addition, a review of other strategic options for the company will be initiated by the board and shareholders will be kept informed of progress.”
The disappointing performance of Cogane is a blow for star fund manager Neil Woodford, whose Invesco (NYSE: IVZ - news) fund holds 56pc of the shares in Phytopharm. Other investors who will be caught out by the news include Perpetual, with 19pc of the shares and Henderson Global with 11pc.
Phytopharm is to hold an AGM next month.
Its shares were trading down 82.25 percent in early trading, giving it a market value of just over £6m.