BioWorld International Correspondent

LONDON - TeGenero AG, the company behind the drug trial fiasco that put six healthy volunteers into intensive care, announced it is filing for insolvency after failing to raise new funding from investors.

In a statement on its website, the company said the unforeseeable adverse reactions caused by its monoclonal antibody TGN1412 in the Phase I safety trial "have made it impossible to attract the investment necessary to continue operations."

The news comes a week after the most seriously affected volunteer, Ryan Wilson, age 20, left Northwick Park Hospital in London following four months of treatment. In an interview with BBC Television, Wilson, who is using a wheelchair, said he will have to return to the hospital for surgery to amputate toes and finger ends.

The timing of the insolvency is dictated by German law, but it raises concerns for the compensation claims of the six affected volunteers. TeGenero said the legal representatives of the volunteers have been informed that it has filed for insolvency, adding that the claims would continue to be handled by its insurers.

In its second report into what went wrong, the Medicines and Healthcare products Regulatory Agency (MHRA), the UK regulator, said it uncovered some discrepancies in the Phase I safety trial of TeGenero AG's TGN1412, but stuck to the original conclusion that the life threatening cytokine storm suffered by six health volunteers was due to "an unexpected biological effect."

"We are satisfied the adverse incidents that occurred were not as a result of any errors made in the manufacturer of TGN1412, its formulation, dilution or administration to trial participants," said Kent Woods, chief executive, when the report was released on May 30.

Announcing its insolvency, Wurzburg, Germany-based TeGenero, noted the MHRA had cleared it of any wrongdoing, and said, "The unpredictability of such effects presents a major challenge for the industry if it is to develop this kind of innovative and powerful treatment, and we regret that our company will not be able to continue working to find a solution in the present scope.

"The adverse events suffered by the volunteers in the TGN1412 trial were personally devastating for everyone at the company, dedicated as they are to the development of medicines which are intended to help people with serious disease conditions," the statement continued.

The company said it has been supporting the official investigations, as well as developing laboratory tests of its own to try to establish what happened, and will continue to make its expertise available.

TeGenero was founded in 2000 with €200,000 (US$254,519) seed funding. It raised €9 million in a first round in May 2002, and has taken more than €1 million in a number of grants. The company completed a second round in March 2005, but did not disclose how much was raised. The two main shareholders are the venture capital firms HBM Bioventures Partners and BioM VC GmbH, of Munich.

Following the insolvency filing, the company's assets and its management will be supervised, in accordance with German rules, by an interim-insolvency receiver until insolvency procedures have been initiated by the relevant court.

An expert group set up by the UK government is investigating the wider implications of the TeGenero trial fiasco and considering what changes to clinical trials procedures may be required.