IDT not concerned by AstraZeneca decision on cancer drug

Pharmaceutical manufacturer Institute of Drug Technology (ASX:IDT) may pursue direct talks with the UK developer of an early-stage anti-cancer drug after licensee AstraZeneca dumped the project.

IDT signed a deal with AstraZeneca in May last year for the scale-up, development and manufacture of a compound called ZD9331, which had been licensed to the drug giant by BTG International and the Institute for Cancer Research.

But in an announcement today, AstraZeneca said it had decided not to pursue development of the compound because it had failed in clinical tests to show the differentiated profile required by the company.

The decision means ZD9331 reverts back to BTG, which is yet to decide whether or not they will pursue the drug's development.

It also means an end to the manufacturing agreement between IDT and AstraZeneca. IDT's managing director Dr Graeme Blackman said the Boronia, Victoria-based company had completed the initial contract and was not concerned that commercial development had stalled.

Blackman said IDT had not factored into its budget the potential ongoing fee-for-service revenues from the project because it was seen as speculative as to whether the drug would ever get that far.

As a result, he said the announcement was "benign" and did not affect the company's bottom line.

"You lose potential revenue to the extent that if it was going to be commercialised that could have happened, but we didn't factor that into our budget," Blackman said.

"We always anticipated that it was going to be a surprise on the upside."

He said there was always a risk new drug candidates might not prove as effective as early indications had suggested.

Blackman said he planned to visit the United Kingdom later this month and would be happy to speak with BTG about extending IDT's services if the British company chose to continue the project.

"We will commence discussions with BTG to offer our services and expertise to them to assist with further development of ZD9331 if BTG chooses to pursue the option of continuing the development or seeking licensees," he said.

"Meanwhile IDT continues to be very busy with a range of development and manufacturing activities for our local and international clients."