BioWorld International Correspondent
LONDON - Scotia Holdings plc is going into administration "in order to consider its future strategy," less than a week after the company asked for trading in its shares to be suspended.
The move follows the rejection of lead product Foscan by the European regulators. That followed a similar rejection by the FDA, leaving the company without enough money to appeal either decision.
"We need some more financial support before we can see the appeal process through," Chris Blackwell, executive director, drug development, told BioWorld International.
The three companies within the Scotia Group - Scotia Holdings, Scotia Pharmaceuticals Ltd. and Scotia QuantaNova plc - have been placed in administration, the first time that a UK biotechnology company quoted on the London Stock Exchange has met such a fate.
Andrew Wollaston, joint administrator at Ernst and Young, said the move did not mark the cessation of Scotia's R&D activities. "Our immediate strategy is to explore all options in order to preserve and enhance the company's key platform technologies, including Foscan."
He added that a number of options are available, including restructuring.
CEO Rob Dow said that going into administration was the best way to protect Scotia's intellectual property assets. "We are very keen to work with the administrators to seek a solution for the good of all the companies, which maximizes shareholder value and acknowledges the hard work of all our employees."
Scotia, based in Stirling, Scotland, employs about 200 people, and has funding until the end of March.
Blackwell said he is confident that Foscan, a photodynamic therapy for the treatment of head and neck cancer, will receive European approval on appeal. The company has not received formal notice of, or the reasons for, the rejection, but Blackwell noted that while the Committee for Proprietary Medicinal Products (CPMP) normally likes to come to a consensus decision, in the case of Foscan there was a "divergent vote."
Although the grounds for rejection are unknown, it is thought to be because overall Foscan did not show greater clinical efficacy than existing treatments. However, it is a far less invasive treatment, and Blackwell said it had shown benefits in patients with refractory tumors that were untreatable by other therapy. Twenty-five percent had a reduction in tumor mass, with 14 percent showing complete elimination of the local tumor. In addition, 48 percent of this patient group had palliative clinical benefits as accessed by the University of Washington Quality of Life Index.
"We are convinced these are very worthwhile benefits and think the CPMP can be convinced on appeal," he said.
Once Scotia receives formal notification of the rejection, it has 60 days to appeal. The CPMP, part of the European Medicines Evaluation Agency, then has to respond in 60 days.
Meanwhile, the company is working on an amendment to its U.S. NDA for Foscan. It was told by the FDA in November that it could include data from 83 additional patients, studied since the submission of the original cohort of 64 patients. Blackwell said it was expected the amendment would be filed in April.
Scotia's shares were suspended at 18.5 pence, valuing the company at £16 million (US$23.4 million). At its height, the market capitalization was more than £500 million. The outright sale of Scotia seems unlikely as the company has £50 million of convertible loans to be repaid next year.