British Biotech shares closed the day down 15.5p at 70p, a two-year low. The company was forced to make its statement after the news had leaked out, prompting investors to speculate that the company's clinical trials had hit problems.
In its statement, the company insisted that its development programmes were unaffected. Marimastat, its potential cancer cure, is currently undergoing final stage III clinical trials while Zacutex, developed to treat acute pancreatitis, is also close to hitting the market. British Biotech said it "continues to be encouraged by the progress of its clinical trials".
Sources close to the company said Dr Millar was sent home on Wednesday after it was alleged that he had been discussing the company's research programmes with outsiders.
The company has launched an investigation over the supply of information about British Biotech's progress to investors. Dr Millar has been at the company since 1992, and had regularly taken part in presentations to investors and analysts. The company said there was no evidence that Dr Millar had profited from inside information.
He is understood to have been unhappy at British Biotech since the company made Dr Peder Jensen its development director and chief medical officer in January. Dr Millar applied for the job but was not selected.
Dr Jensen sits on the main board and is responsible for all the company's research and clinical development. He is also Dr Millar's boss.
If Dr Millar leaves the company, he will be the third high-profile departure from British Biotech's senior management team in the past two years. Earlier Peter Lewis, the research director, and James Noble, the finance director, had resigned.
Analysts said Dr Millar handled the company's relationships with clinical research laboratories. Those contacts will have to be rebuilt by his successor.
British Biotech has suffered a series of upsets in the past few years. In 1996, the company's shares soared to 326p as it almost became the first biotech company to enter the FTSE 100 index of leading companies. However, management departures and setbacks in clinical trials dragged the shares back. Last month, its shares lost 30 per cent of their value when a European industry regulator put an application to market Zacutex on hold.Reuse content