The failure in late Phase II trials of BTG's Cytofab medicine for treatment of sepsis was met with indifference from investors. It helps that the potential upside from Cytofab had always been counted as an optional extra in BTG's portfolio. If anything, the failure emphasised the continuing barrenness of partner AstraZeneca's pipeline.
The reason the market reacted relatively calmly - the shares fell by about 5 per cent on the news - is because other trial results, particularly the PARAGON trial to test BTG's drug-eluting beads in colo-rectal cancer, as well varicose veins treatment Varisolve, have much greater bearing on BTG's ultimate aim of establishing itself as a successful specialist pharmaceutical company in the US. With the sales infrastructure being built to channel these products, and the company still earning good royalties from old standbys such as leukemia medicine Campath, management still has plenty of breathing space.
There is a potential risk from competition to Zytiga, a cancer medicine partnered with Johnson & Johnson. Zytiga could lose market share if Enzalutamide, a competing medicine developed by Medivation/Astellas receives relatively swift approval from the Food & Drug Administration. If Enzalutamide does ultimately make a dent in Zytiga's market, then this will hit BTG's royalties.
