LONDON - Vanguard Medica Ltd. lost more than 25 percent of its share price last week, following disclosure that SmithKline Beecham plc dropped plans to market Vanguard's lead product, the migraine treatment frovatriptan, which has completed Phase IIIa studies.

Vanguard's stock closed Friday down 26 percent, at £4.35.

This is a considerable blow for Vanguard, a development company set up in 1991 by executives from London-based SmithKline, which licensed in frovatriptan from the pharmaceutical firm in 1994.

CEO Robert Mansfield said Vanguard is pursuing discussions with other potential partners. “Under the terms of the original agreement with SmithKline,“ he said, “Vanguard now has an exclusive worldwide license to commercialize frovatriptan, in return for a royalty to SmithKline on net sales.“

He added that over the past year the company received several inquiries about marketing rights to frovatriptan from major health care organizations.

Vanguard, of Guildford, U.K., will be free to negotiate its own terms with partners. Mansfield said that following an initial review of the Phase III efficacy and safety data, “both companies had agreed that the data support an NDA [new drug application] submission.“ This remains on track for the end of 1998.

On the question of why SmithKline withdrew, Mansfield said the pharmaceutical company claimed “a conflict of priorities“ around the time when frovatriptan would require substantial marketing and sales force support.

“SmithKline has therefore reluctantly reached the conclusion that it could not commit the level of resources that the compound deserves to enable it to reach its full commercial potential.“

When Vanguard took over development of frovatriptan from SmithKline in 1994, the drug was at the preclinical stage. The company said the development program has consistently run ahead of the timetable.

More than 3,400 patients in 17 countries have taken part in the Phase III trial, which started at the beginning of 1997. Response rates in Phase II and Phase III were consistent, at approximately twice placebo levels, with the overall side effect profile similar to placebo.

Vanguard now expects additional Phase IIIb studies to be undertaken to further support the distinctive profile of the drug, a serotonin (5-hydroxytryptamine, or 5-HT) antagonist.

Mansfield said the development program and plans to submit the regulatory dossier will not be affected by SmithKline's decision. Vanguard already has set in place manufacturing and fully packed commercial supplies. *