A company source yesterday said a deal was "imminent". Shares in the company closed up 6.25p, or 20 per cent, at 37.25p yesterday following reports at the weekend that a licensing deal would be announced the company's annual meeting, scheduled for 23 September.
However, it now appears a deal is ready to be signed. Possible candidates for the partnership include US groups Merck, Pharmacia & Upjohn, and Eli Lilly.
The partnership agreement is expected to take the form of an upfront licence fee, with regular milestone payments tied to further trials.
The deal follows the publication last month of mixed results for Marimastat, a treatment for gastric cancer, in clinical trails. While the drug failed in its primary goal of prolonging overall survival significantly at a pre-determined end-point, the company claims it was successful if the data from nine patients, who violated the trial's protocol, were discounted.
The drug showed also significant effects in arresting the development of tumours, a secondary target of the study, prompting the company to approach regulators for possible marketing approval of the drug.
Even if Marimastat becomes a commercial product, it may not lead to a revival in the fortunes of British Biotech, whose shares crashed in 1997 after one its directors took issue publicly with its statements about drugs in development. The company's management has since been overhauled.
While there is no available treatment for gastric cancer after chemotherapy or operation, some observers doubt whether doctors would allocate resources to a treatment which adds perhaps only days to a patient's life.