UK firm BTG has decided to go it alone and start a Phase II trial of Varisolve for varicose veins in the USA, despite previously saying that it wanted to find a partner there first.

Shares in the company fell 9% yesterday and another 2% this morning as investors took the announcement to mean BTG was struggling to find a licensee for the product, despite BTG’s assurances that it could easily fund the project using available resources.

Varisolve, an injectable microfoam-based sclerosant therapy, has already cleared Phase III testing in Europe without any safety issues emerging. But the US Food and Drug Administration has adopted a more cautious stance, saying it would like to see a trial to examine whether the treatment is safe in people with a condition known as patent foramen ovale (PFO), a heart defect in which a small hole connects the left and right chambers of the heart thought to affect up to 20% of the population.

The FDA halted a clinical trial of Varisolve in 2003 as a result of these concerns, wiping two-thirds off BTG’s share price. The agency’s concern is that Varisolve treatment could result in microbubbles crossing through the PFO and causing clinical effects in the brain such as microinfarcts. BTG’s Phase II study will involve 50 patients with PFO.

Despite the fall off, analyst Sam Fazell of Piper Jaffray said the decision to press ahead made good sense. “To park a product whilst looking for a partner is, in our view, the worst decision that a biotech company can make,” he said, noting that the Phase II trial will likely cost only around $8 to $10 million to carry out.

Piper Jaffray, which has a stake in BTG, believes that there is an untapped market for varicose vain treatment which Varisolve could address, with the USA a particularly fertile market for the drug. If cleared in the USA, the product could achieve peak sales of $750 million, according to Fazell.