New Medical Technology Group (NMT), based in Livingston, said that the retractable syringe technology it manufactured was too difficult and expensive to make, pricing it out of the market. The company's only major client to date is Switzerland's Roche, which uses the syringe in its new Fuzeon (enfuvirtide) HIV drug, and NMT has had to terminate this agreement.
Fuzeon is the first in a completely new class of HIV treatments called fusion inhibitors, and is priced accordingly. It costs in the region of $20,000 per patient per year, so the cost of NMT's syringe could be factored into the equation. However, NMT has been unable to convince other companies that its product is worth the price.
Furthermore, the company had been banking on winning orders from the hospital market, and last year hired 26 sales people to tackle the crucial US acute care market. Despite winning lots of orders, most of these were for small volumes, as the cost of the syringes meant that hospitals reserved them for high-risk uses only.
NMT was expected to bring in revenues of £10 million this year but post an operating loss of £4 million. With around £10 million in the bank, the time had come for some difficult decisions to be taken, said finance director Gerard Cassels.
The company said it will keep just 19 staff from a total of 155. It is retaining the intellectual property on the syringe technology and will continue to develop it while searching for new partners. In its stripped-down form, NMT will try to advance a cheaper, second-generation syringe and is expected to consider the outsourcing route for its manufacturing and marketing.
However, investors seemed less confident about the company's ability to weather the storm. NMT saw its shares lose more than 40 per cent of their value to just over 1.02 pence yesterday, valuing the company at £8.8 million.
The development of retractable syringes in Europe has been plagued with difficulties, with fellow UK firm Medisys experiencing a number of delays bringing its own product to market. The market is much more advanced in the US, however, with a number of retractable devices on the market.