Good trial results boost Glaxo shares

There was good news for both ends of the healthcare sector yesterday. Glaxo Wellcome announced encouraging results for its new hepatitis B treatment and medical products minnow Biocompatibles International received the all-clear to launch a follow-on to its successful Proclear durable product into the fast-growing US market for replacement contact lenses.

The news was worth 20p for Glaxo's share price, taking it to pounds 11.08, while Biocompatibles' jumped 82.5p to pounds 13.75.

The results of the latest clinical trials into the effectiveness of lamivudine, better known as Epivir, the anti-Aids drug, on the hepatitis B virus were well received by analysts, although forecasts of eventual sales vary widely from pounds 250m up to pounds 3bn or more.

They will form part of a regulatory filing in Asia later this year, the first time the drugs group has asked for official approval for a new drug in the East rather than the West.

Glaxo said a study of 358 Asian patients overseen by Professor C L Lai of Hong Kong had shown that between 59 and 67 per cent of chronic sufferers had shown improvements to their livers, the organ attacked by the disease, after using the orally administered drug for a period of 12 months.

This compared with only 30 per cent of those using placebo drugs whose liver condition improved.

The tests involved taking biopsies of the livers of the patients involved to seek out the symptoms of the disease, which can lead to both fatal cirrhosis - or scarring - and cancer and is passed on like Aids through bodily fluids and from mothers to offspring.

Glaxo said the results also compared well with the current treatment using interferon, where the equivalent percentage was more like 30 to 40 per cent.

Other tests showed that 16 per cent of patients using lamivudine resulted in undetectable levels of the hepatitis B antigen in the blood, an indicator of the extent of the virus in the body.

The potential market for lamivudine is huge. Hepatitis is carried by 350 million people around the world, of whom 95 per cent are in developing countries, particularly Asia, and 2 million die every year.

Glaxo said definitive conclusions on the product would have to await further analysis, but described the latest results as "extremely encouraging".

Analysts said the test results were in line with expectations, but their view of the prospects for lamivudine differ hugely. Stewart Adkins at Lehman Brothers has described lamivudine as having "the greatest commercial potential of any drug in Glaxo's short-term pipeline". Others, however, warned that the sample size was small and Glaxo still had to deal with pricing issues in the main developing country markets, which are less able to pay for expensive drugs.

One analyst suggested the company might effectively have to give the new drug away in developing markets. Glaxo said it was "discussing how to make the product available in China", probably the biggest potential market anywhere but with limited resources.

Lamivudine was discovered by BioChem Pharma, a Canadian company, and licensed to Glaxo. SmithKline Beecham of the UK and two US companies, Gilead and Bristol Myers Squibb, are developing rival hepatitis B treatments, but they are at an earlier stage than Glaxo.

Separately, Biocompatibles said it had won approval from the US Food and Drug Administration to market its new Proclear Compatibles monthly replacement contract lens products. Launched in the UK and northern Europe in February, the authorisation opens up the $800m US soft lens market. The group's Proclear durable lens, which has been on the market for two years, achieved pounds 3m sales out of the group's pounds 11m total for 1996.

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