Glaxo to abandon chest infection drug

GlaxoSmithKline, Europe's number one drugmaker, is to abandon work on a promising antibiotic after side effects threatened to scupper its chances of being allowed on the market.

Factive, once seen as a potential wonder-drug for treating chest infections, was turned down by US regulators in 2000, and yesterday GSK said it was giving up trying to improve the product. Analysts still thought the drug could achieve sales of £250m a year, but GSK handed back the licence to Factive to South Korea's LG Chem Investment.

The UK firm no longer believes Factive, also known as gemifloxacin, will be able to sell well enough to justify putting the company's salesforce to work on the product.

LG said it would try to develop a safer version by itself, and GSK said it would work with LG for a "transition period" while regulatory approval was sought.

The set-back with Factive was one of several to hit GSK in the past 18 months, leaving doubts over the earnings potential of its pipeline of new drugs. The company has been searching for new drugs with which to refill its pipeline, and signed two deals yesterday.

GSK said it will pay up to $270m (£188m) to Nasdaq-listed Adolor for rights to sell alvimopan, a treatment for constipation for people coming out of surgery or taking opium-based drugs. The drug is currently in the third phase of human trials and could be on the market by 2004. GSK is paying $50m upfront, with additional milestone payments later. It is also to help with additional development work to extend the uses of the drug.

Tachi Yamada, the chairman of research and development at GSK, said: "Our objectives are to help patients recover from surgery faster and get out of hospital sooner, and also to improve the quality of life for people on chronic opioid medication."

GSK is also paying $150m to Unigene, a US biotech firm, to license a potential hormone treatment for osteoporosis. Pre-clinical trials of the hormone have suggested it could help to form new bone and reduce fractures.