The City has whipped itself into a frenzy in the belief that it can cash in on the holy grail of medical research - a cure for cancer. In their scramble not to miss out on the billions to be made from a cure, investors are brushing aside warnings from the medical establishment that it is too early to tell if a breakthrough has been made.
In spite of caution from researchers and clinicians, shares in an almost unknown company, British Biotech, have nearly doubled in value in two days. One buyer was said to have paid pounds 25 a share, five times what British Biotech's shares fetched just a couple of months ago.
British Biotech, an Oxford-based research company with a raft of potential therapies for cancer and arthritis, has only reported "positive interim findings" from clinical trials of the new drug Marimastat, involving 94 patients in advanced stages of cancers in the lower bowel, ovaries, prostate or pancreas. There was some evidence that tumours may have shrunk in about one-third of patients.
Hectic dealing in British Biotech shares put a value of more than pounds 800m on the company in spite the fact that it has never made a profit. Share dealers shrugged off a pounds 10m loss on Thursday morning to send the stock soaring from pounds 10 a share to pounds 16.75 last night.
Analysts were finding it hard to contain their enthusiasm for the company, which triggered the City's buying binge on Thursday by publishing a set of promising results from tests. One said: "The share price has huge potential. It could be bigger than Glaxo in the 1980s." From modest research beginnings, Glaxo grew to become Britain's largest company, worth more than pounds 30bn.
James Noble, Biotech's financial director, said: "The share valuation is always going to move around for biotechnological companies. When we had a problem with one of our drugs in February, the valuation of the company went down by a third. With a biotechnological company, the effect on shares is often quite volatile."
He added that there was still "a hell of a long way to go" on the trials with Marimastat, and it would not be made publicly available for some time.
Peter Brown, British Biotech's head of oncology, who helped develop Marimastat, said: "We have got an active drug, we have just got to find out if it's useful in the treatment of cancer and when we have got a drug in the market and making profits then maybe we can relax more. We know that the share price is artificial."
Senior cancer researchers and clinicians greeted with scepticism claims that the new drug could be a billion-pound cancer cure. Professor Gordon McVie, director of the Cancer Research Campaign, said: "I'd doubt it, based on the results so far. There's no way you can say that on 94 patients."
Marimastat is scientifically interesting because it acts against a different target compared to existing cancer drugs, according to Dr Fran Balkwill, a principal scientist with the Imperial Cancer Research Fund. It also has the advantage that it can be taken orally, at home, rather than injected in hospital. But Dr Balkwill added: "We must be extremely careful not to raise false hopes." Ann Barrett, Professor of Oncology at Glasgow University, said: "Often good effects in phase two trials are not borne out in phase three."
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