Oxford Glyco shares slide on worries over drug approval

Fears are mounting that Vevesca, the main drug being developed by Oxford GlycoSciences, may not be safe enough to win regulatory approval.

The biotech company released additional data on the drug yesterday, saying a number of patients in the latest human trials have suffered neurological problems leading to numbness and tingling.

European and US regulators have been asked to approve the drug for the treatment of Gaucher disease, a rare genetic disorder where the body has difficulty breaking down fat. Although there are little more than 3,000 sufferers – it is largely confined to Ashkenazi Jews – analysts believe the drug could have peak sales of more than £50m a year. The existing treatment is the most expensive drug treatment in the world.

OGS said it remained unclear whether the neurological problems were a side effect of the drug or were a complication of the disease itself.

Analysts have been growing increasingly sceptical that the drug will pass the approvals process successfully, or will not be limited to the treatment of mild Gaucher disease. They believe it is likely Vevesca will not reach the market this year as expected. Sales of the drug are planned to help pay for the development of other drugs in the OGS pipeline.

OGS shares have slid 40 per cent since the start of the year, and were down 42.5p, to 387.5p yesterday. The stock also suffered as full-year results for 2001 came in slightly below expectations. OGS lost £28.2m, compared with a pre-tax deficit of £16.8m in 2000. The increased cash burn reflected spending on the Vevesca trials and other pipeline drugs, while research and development costs are likely to climb further this year.

Turnover was up 60 per cent to £13.4m as OGS reaped income from drug discovery collaborations with Bayer, Pfizer and GlaxoSmithKline.