BTG said in a statement that it intends to complete preparations for and commence a US phase II clinical safety study of the novel injectable microfoam treatment for varicose veins.
The group said its preference was to have secured a partner to share the effort and cost of the safety study. The company now intends to move forward with the study alone.
It sought to allay investor worries about the financial impact of taking on the costly trials itself, with the even more expensive final Phase III trials to yet come. BTG said it is able to fund the Phase II trial from existing resources without affecting current development activities in its broader pipeline.
A key reason for deciding to go it alone is to maintain development progress with Varisolve and to continue to build value in the product while continuing discussions with possible partners. Louise Makin, BTG's chief executive officer, said the group recognises that 'some potential partners may first want to see positive data emerging from the study'.
Varisolve is a potential blockbuster but its development has been plagued with regulatory problems. The original Phase II clinical trials halted were in 2003 by the US Food and Drug Administration on safety grounds. Regulators were concerned about the risk of gas embolism after bubbles were found in the veins of some people being treated with Varisolve.
The upcoming Phase II features new protocols designed after talks with the FDA. A key objective of the trial is to address the regulator's concerns about gas embolism.
The statement today is big disappointment as investors had been hoping for success with moves to find a partner. Since the halting of the original Phase II trial in 2003, the group has made slow but steady progress with Varisolve, not least with talks with the FDA, so it was only natural for investors to have had high hopes of a collaborator coming on board.
Clearly talks with potential partners have not gone too well. It would, however, not be too far fetched to muse that problems with the US regulator and concerns about gas embolism were being cited by potential partners as a major risk factor in an attempt to knock down the terms of the deal.
BTG remains confident about prospects for Varisolve. As Makin indicates, under the circumstances, all BTG can do is at least begin to take the treatment though the Phase II safety trials in the hope that some good early data will emerge and a partner will come on as a result. Under this rosy scenario, BTG should be able to strike an even better deal than it has been pushing for.
The risk of failure again at Phase II however remains palpable and that together with the lack of a partner going into them helped to undermine sentiment in the stock this morning as BTG shares plummeted 28.25p or 17.4% to 136.25p.
