Development work on one of Celltech's most exciting new drugs has been abandoned after trials revealed serious side effects.
The biotech group's new treatment for asthma and other lung diseases caused one patient to suffer a swollen bowel earlier this week, and the US regulatory authorities advising shutting the testing programme down. Merck, the US pharmaceuticals giant which has been conducting the trials, and which would have paid royalties to Celltech if the drug ever reached the market, decided to scrap the development work, and Celltech's shares dipped 6 per cent to 280p.
Peter Allen, Celltech's finance director, described Merck's decision as "a bolt from the blue". He said: "We are very disappointed. They are being very cautious but it is their right to choose."
It was not clear yesterday why the drug, known as a PDE-4 inhibitor, should cause colitis, but similar drugs being developed by other pharmaceuticals groups do not appear to have caused the side effect.
Merck is continuing its asthma collaboration with Celltech and is likely to take a different PDE-4 inhibitor into human trials. Mr Allen said: "They have put a huge amount of resource behind the collaboration and we see this more as a delay than anything else."
The Merck-supported drug was one of only five Celltech drugs being trialled on humans and the project was valued by some analysts at up to £100m.