Cambridge Antibody plummets on drug failure

Cambridge Antibody Technology's aim of becoming profitable by 2008 suffered a serious blow yesterday as the biotech company revealed that its most advanced new drug did not work.

Cambridge Antibody Technology's aim of becoming profitable by 2008 suffered a serious blow yesterday as the biotech company revealed that its most advanced new drug did not work.

Peter Chambré, the chief executive, opened up the possibility that he might reconsider the company's break-even target after trial results showed Trabio, a product for preventing scarring after eye surgery, was no better than a placebo.

CAT has spent £37m developing Trabio, which would have been a niche drug with annual sales of perhaps £75m in the years after its expected launch in 2006. It was the most advanced of the products which CAT is developing itself and on which it can earn the highest profits.

CAT shares tumbled 13 per cent to 595p as investors feared that Mr Chambré's aim of reaching sustainable profitability by 2008 had become more difficult.

The other, more important, hurdle is a court battle with Abbott over royalties from Humira, a blockbuster arthritis drug which the US pharmaceuticals giant developed using CAT technology. Abbott is paying only one-third of the royalties originally expected, in a move which could cost CAT £100m over the life of the drug. The case begins in the High Court later this month.

Mr Chambré said: "We have that 2008 target. Let's get through the Humira trial. We have been clear that the fourth quarter of this year is very important, first because of the first trial results from Trabio and secondly because of that other trial."

The company will wait for the results of a second trial due in the new year before finally deciding whether to discontinue work on Trabio, but said there was little chance it would show a different result.