Scotia shares crash as diabetes drug is rejected

The power of national drug regulators to move markets in pharmaceuticials companies was demonstrated vividly yesterday. Scotia Holdings, the biotechnology group, saw pounds 189m wiped off its market value at one stage after announcing that the British health authorities had declined to clear for sale a diabetes drug. At the other end of the scale, shares in Glaxo Wellcome, the world's biggest drugs group, were spurred on to new peaks after Sweden approved its new Naramig migraine treatment, a follow-on to its blockbuster Imigran drug.

Scotia's shares crashed 245p before recovering to end 135p down at 435p after the company said it had received verbal notification from the UK's Medicines Control Agency that it could not at present recommend marketing approval for Tarabetic, a drug for treating diabetic neuropathy. The MCA is a key part of the process by which the Ministry of Health vets new drugs coming on to the market.

Analysts suggest Scotia's drug could achieve sales of anywhere between pounds 50m and pounds 400m, but David Horrobin, chief executive, suggested the market had overreacted: "This is potentially an important drug, but it is only one of 10 or so projects of equal importance."

The problem follows a meeting of the Committee on the Safety of Medicines, an advisory body to the MCA, which has raised concerns about the drug's efficacy. But Mr Horrobin questioned the expertise of the committee's members, saying none of them was expert in the field of diabetic nerve damage. He claimed the 10 to 15 people in the UK he described as "real experts" in this area were all "very strongly" in favour of the drug.

Yesterday's regulatory setback for Tarabetic came as Glaxo Wellcome saw its shares rise 36.5p to a new high of 1,154p, partly on hopes for itsNaramig migraine treatment, formerly called naratriptan. The approval by the Swedish Medical Products Agency means it will compete in Europe with Zeneca's Zomig, which it was announced yesterday haswon UK approval.

Glaxo is confident the new treatment will not compete with its Imigran drug, which it claims is used by only 7 per cent of migraine sufferers. The clearance is the first stage to marketing a drug which analysts suggest could reach sales of pounds 200m by 2000.

The drug industry has grown used to these moments of despair and elation after enduring a generation of an approval process born of the Thalidomide scandal of the early 1960s. The process of gaining approvals for drugs lengthened until in the 1980s it was taking 12 years from patenting a new compound to getting it on to the market. Since then, a new spirit of commercialism has taken root among the regulators. The all-powerful Food and Drug Administration offers drugs companies the option of paying a "user fee" which can speed up the process.

Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Syria civil war: Meet the military commander who says his soldiers will not rest until every inch of their war torn country is free of Islamist 'terrorists'

‘We won’t stop until Syria is back to normal’

Near the front lines with Islamist-controlled towns where Assad’s troops were besieged just last month, Robert Fisk meets a commander confidently preparing his soldiers for battle
The inside story of how Bill Clinton built a $2bn global foundation may undermine Hillary's chances

The inside story of how Bill Clinton built a $2bn global foundation...

... and how it may undermine Hillary's chances in 2016
12 best olive oils

Extra-virgin, cold-press, early-harvest, ultra-premium: 12 best olive oils

Choosing an olive oil is a surprising minefield. Save yourself the hassle with our handy guide
Rafa Benitez Real Madrid unveiling: New manager full of emotion at Bernabeu homecoming

Benitez full of emotion at Bernabeu homecoming

There were tears in the former Liverpool manager’s eyes as he was unveiled as Real Madrid coach. But the Spaniard knows he must make tough decisions if he is to succeed
Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?