Shares in Antisoma have taken a nosedive after the UK biotechnology firm announced that an experimental drug has failed in a mid-stage clinical trial for ovarian cancer.

The company said a 75-patient Phase II trial of ASA404 (formerly AS1404) in recurrent, platinum-sensitive ovarian cancer compared the drug plus chemotherapy with the latter alone. However, there was no advantage in median time to tumour progression in the ASA404 arm compared with control arm and one-year survival rates were 74% for the ASA404 arm and 92% for the chemotherapy arm.

Antisoma said that based on these data, “development in ovarian cancer will not be a priority” for ASA404, which was the subject of a major deal signed with Novartis in April - potentially worth up to $890 million - under which the Swiss drug giant gained global rights to the compound.

The news led to Antisoma shares closing down 15% at £0.37 but it would seem that the markets have overreacted a little as ovarian cancer is not the most important indication for ASA404. Chief executive Glyn Edwards noted that “our ovarian cancer trial has not produced positive results like those seen with ASA404 in lung cancer”, adding that “we're very pleased with the progress made by Novartis to date” in the latter indication “and look forward to working with them to fully evaluate the drug in other cancers".

Denise Anderson at Kepler Equities issued a note saying that the data represents bad news for Antisoma but "since a launch in ovarian cancer would have been years away, our forecasts for Novartis remain unchanged with the failure". She added that ovarian cancer is hard to treat so it is therefore not possible to form too many conclusions about whether ASA404 is likely to work in a large number of tumour types”.

Novartis hopes to start enrolling patients into a Phase III trial in non-small cell lung cancer early in 2008 and to explore the potential benefits of the compound in various other solid tumours.