Select Committee on Science and Technology Minutes of Evidence

Annex M

Letter from Baker & McKenzie, Solicitors, enclosing a copy of Mr Millar's affidavit

DR ANDREW MILLAR

  We act for Dr Millar who has asked us to provide you with the enclosed copy of his affidavit sworn on 14 May 1998.

  We have advised Dr Millar to request that certain information provided to you be kept confidential so as to preserve his position in the litigation brought against him by British Biotech for breach of the confidentiality terms in his contract of employment. We understand that he had already contacted you in this regard.

25 June 1998

In the High Court of JusticeQueen's Bench Divisionbetween:—

Andrew Millar

Plaintiff

— and —

British Biotech plc

Defendant

Affidavit of Dr Andrew Millar MA, BM, BCh, MRCP, FRCS, MFPM

  I, Dr Andrew Millar, of The Lawns, Winterbrook Lane, Wallingford OX10 9EF, Make Oath and say as follows:

  1.  I make this Affidavit in support of the application of Times Newspapers Limited ("The Times") to be released from the undertaking it gave to the Court on 29 April 1998 at the Suit of British Biotech plc ("Biotech").

  2.  Exhibited to this Affidavit and marked "AM1" is a paginated bundle of copy documents to which I will refer. Reference to page numbers in this affidavit are references to pages of "AM1". Except where otherwise expressly stated, the facts and matters referred to in this Affidavit are within my own knowledge and are true. Matters to which I depose which are not within my own knowledge I believe to be true. All matters have previously been disclosed to journalists at The Times, the Financial Times and Sunday Business before 25 April 1998.

  3.  A copy of the confidentiality agreement forming part of my contract with Biotech is exhibited below.

  4.  By letter dated 25 April 1998 (a copy of which is exhibited below), following a threat of legal action by Biotech, I gave an undertaking not to disclose "any confidential information as requested". At that time I told Biotech that I had spoken to various people at different times on different matters including confidential information, but I believed that I had not improperly disclosed such confidential information. I believed that my actions had been justified, because I suspected the stock market had been misled and that my actions were in the public best interest as well as the company's best longterm interest for the reasons I set out below. Furthermore, I have an overriding professional responsibility as a medical practitioner to the patients taking part in Biotech's clinical trials. If I have knowledge indicating that a study is likely to be negative, I have a duty to ensure that such study should be properly reviewed and, if necessary, closed down to prevent patients being exposed to the risk of an experimental compound without the justification of a potential benefit.

  5.  On the occasions when I have spoken to the press, it has always been in response to Biotech's press activity, including the original derogatory statements at the time of my suspension, the leaking of the Cameron McKenna report and the misrepresentation of this as a fair and independent investigation into my grievances and other company statements. The people to whom I spoke before 25 April are Perpetual, Mercury Asset Management, Kleinwort Benson, Jane Henderson, Paul Durman of The Times, Nils Prately of Sunday Business, Jonathan Guthrie of the Financial Times, the SEC and an FDA officer. To the best of my knowledge and belief there is nothing in this Affidavit which I did not disclose to any of the above and I have not therefore, breached my undertaking of confidentiality in making this Affidavit.

  6.  I have read the Affidavit of Paul Durman sworn in support of The Times application and I confirm its accuracy in so far as it recites matters within my own knowledge. In particular, I confirm and agree with what Mr Durman says about the Batimastat affair and the SEC investigation, the Cameron McKenna reports and the use which British Biotech have made of them in its attempts publicly to shore up its position by discrediting us.

My Background

  7.  I am a fully licensed medical practitioner and a member of the Royal College of Physicians and Fellow of the Royal College of Surgeons. I was the Director of Clinical Research at Biotech for six years from July 1992 until my dismissal on 20 April 1998. Prior to that I worked in various posts in the pharmaceutical industry from August 1984 onwards in the UK, Australia, Japan and Europe. I was never a Companies Act director of Biotech and never had a contractual responsibility for matters of corporate governance.

  8.  As Director of Clinical Research at Biotech, I was responsible for overseeing the company's clinical research. This included advising on the strategy, implementation, analysis and reporting of the company's clinical trials. Clinical research entails undertaking trials of drugs on human beings in the later stages of the drug's development.

Clinical Research and Regulations

  9.  Matters pertaining to clinical research and the licensing of medicines are regulated in Europe by the recently created European Medicines Evaluation Agency ("EMEA") and its member states and in the United States by the Food and Drugs Administration ("FDA"). The FDA is, in general, more active than the EMEA in monitoring and regulating the conduct of clinical trials. In Europe the EMEA usually delegates its authority to doctors working inside companies who are effectively self regulating in the conduct of their clinical trials. However, in both Europe and the United States the marketing of drugs is equally unregulated. It is not possible to market a drug without a licence from the EMEA, or its member states of the FDA. If, when a company applies for a licence from the EMEA (or the FDA), the regulator is not satisfied that sufficient trials have been carried out to confirm the efficacy and safety of the drug concerned, the EMEA (and also the FDA) will require futher tests before granting a licence.

  10.  By its nature, the clinical research of drugs involves risks and failures. Broadly speaking, based on industry averages, a compound (or drug) entering Phase I testing (the first stage of clinical testing) has a less than 5 per cent chance of achieving a marketing licence. Drugs that reach Phase III have approximately a 60 per cent chance of achieving a licence. These statistics vary from survey to survey.

  11.  In order to gain a marketing licence, or registration, for a drug it is necessary to show that it is safe and effective. The efficacy of a drug, except in unusual circumstances, has to be shown to be "statistically significant". This means that there must be 95 per cent certainty that the drug works and that there is a less than 5 per cent chance that it does not. There are well described statistical methods for showing this.

  12.  During the process of clinical research there are therefore a number of different hurdles at which a drug may fail. As the process continues, however, the chances of clearing the remaining hurdles can be judged to improve, provided the data is properly interpreted and presented.

  13.  The results of clinical trials are therefore not perfectly predictable and it is not possible to be certain that a drug undergoing clinical trials will be successful. I have therefore become increasingly concerned by the approach of my former employers, Biotech, to the interpretation of clinical data and the impression that the company has given to its shareholders regarding the value (arising from the prospects of success) of the key drugs which were the subject of the clinical trials for which I was responsible.

  14.  In this Affidavit I set out my concerns regarding the status of the clinical trials of Biotech's key drugs and the way in which these results were publicised by the company.

Batimastat

  15.  Batimastat is an injectable anti-cancer drug developed by Biotech. Unusually, it is injected directly into the abdominal cavity (or tummy) which may cause predictable problems within the abdominal cavity. Following these predictable concerns about the safety of the drug which began to arise in October 1994, trials on the drug were suspended on 25 January 1995 and its development was subsequently abandoned. It has recently been brought to my attention by the shareholders and it is clear from the Cameron McKenna report that in the period from October 1994 to the suspension of trials on 25 January 1995, three Executive Directors, including the Chief Executive, Keith McCullagh, sold shares in the company, although I had reported problems with the drug to the Directors of the company before then.

  16.  On 13 October 1994 I sent a memo to 11 people within Biotech including Keith McCullagh, Peter Lewis and James Noble. A copy of the memo is exhibited below. In that memo I reported that patients in the Batimastat trials had experienced intra-abdominal problems including bowel obstruction (or paralytic ileus) which may be due to peritonitis and that all patients in all clinical studies should be informed of the risks (peritonitis is a serious clinical entity with a significant mortality). In that memo I advised the company of potential problems with the drug and need for caution in studies concerning it. These problems were of the "predictable type" to which I refer above.

  17.  Throughout October and November 1994 we received further reports of intra-abdominal problems suggestive or peritonitis in Batimastat Phase II studies. At that time I was not particularly interested in the company's press releases as this was not my responsibility. I am aware that on 15 November 1994 the Company issued a press release stating that "cancer drug Batimastat starts pivotal Phase III trials . . .". A copy of the press release is exhibited at pp 10-14 (the third page of the press release is missing from the only copy I have). This report stated that Phase II trials has been satisfactorily completed in 40 patients with late stage abdominal cancer and that Phase III was the final stage of clinical testing prior to applying for European marketing approval. It stated that the company was aiming to file an EMEA application for Batimastat by the end of the first quarter of 1996.

  18.  During the course of November we received further reports of bowel obstruction or peritonitis or other intra-abdominal problems in the trials increasing our concerns that the drug was causing problems.

  19.  On 17 November the Project Team Minutes (which were sent to Peter Lewis and probably Keith McCullagh, but I do not have a record) recorded that "the current series of adverse events in the Clinic has led to questions . . . about the formulation", and that it would be "worthwhile looking for associations between serious adverse events and different batches of Batimastat" meaning that we wondered whether Batimastat had changed from one manufacturing batch to another and was this causing the problems? All relevant managers in the company would have been at the meeting. On 30 November a press release circulated by Biotech stated, "Batimastat continued to make good progress . . . " A copy of the press release is exhibited at pp 15-25.

  20.  In December 1994 there was an informal agreement between the Clinical Department of Biotech and the company's investigators (Doctors) to stop recruiting patients over the Christmas period until matters were reviewed at a meeting on 10 January. On 19 December 1994 there was a Project Team meeting (the minutes of which were sent to Peter Lewis and Keith McCullagh) in which we referred to "real concerns on the adverse event profile". This means that the intra-abdominal problems including peritonitis seemed serious and might require action including formalising the temporary cessation of recruitment as permanent.

  21.  On 10 January 1995 I attended a meeting with the London Gynaecological Oncology Group at which it was clear that the trial for Batimastat was at a critical stage. The purpose of this meeting had been to discuss the high incidence of abdominal problems including severe pain, vomiting and paralytic ileus (bowel obstruction) observed in the first patients in the Phase III study. At that time seven out of nine patients treated with Batimastat had experienced severe symptoms which could best be explained by peritonitis. This was at variance with earlier trial experience which had shown good tolerability in most cases. It was not certain why tolerability had deteriorated but changes in manufacturing seemed most likely. However, because cold intra-peritoneal fluids can cause problems, it was agreed with the members of the London Gynaecological Oncology Group that the way in which the injection was administered would be altered by warming it to body temperature and that it would be tested on one patient at a time by an investigator with a specialist research interest in this unusual kind of drug administration. This would exclude all identifiable factors other than the change in manufacturing as the cause of the problem.

  22.  I relayed the intention to hold this meeting and its outcome to Peter Lewis and Keith McCullagh through normal day to day contact. The Phase III Batimastat study was the single most important operation of the company at that time. By now there was a significant doubt about the future of the study and the drug; and I know from my recollection of discussions with both Dr Lewis and Mr McCullagh at the time that they were fully aware of this.

  23.  On 23 January 1995 I received a telephone call about a further case of peritonitis, this time in the first patient to enter the study after the meeting on 10 January. I decided the study should be stopped and I informed Peter Lewis before a Board meeting on the same day.

  24.  On 24 January I contacted four doctors to tell them to stop the study and left messages for another two. We agreed that recruitment to the study should be halted and that clinicians should be immediately informed. On 25 January I sent letters to the clinicians concerned to tell them to stop recruiting patients for the trial. The wording about the problems in that letter had been discussed with Peter Lewis and rather toned down at his insistence.

  25.  Following my return from meetings which I had with the FDA to discuss the further conduct of Batimastat trials, Keith McCullagh and Peter Lewis asked me to restart the study. We had a number of tense meetings during which I said that I could not do so because we had not identified the cause of the peritonitis and could not therefore correct the cause, nor could we prove we had corrected the cause. The administration to patients could not therefore be justified. I came under extreme pressure to reopen the trials and was threatened with dismissal. I was sufficiently concerned that I kept a contemporaneous note of these events which I filed with David Slade of Wallingford, my solicitor at the time. A copy of the note is exhibited below.

  26.  On 10 February Peter Lewis called a meeting to discuss Batimastat. The meeting focused on our recent findings relating to the drugs. Following that meeting the company prepared a press release to announce the suspension of the Batimastat trial.

  27.  As I was concerned I drafted a further note dated 15 February 1995, (exhibited below) which I also left with my solicitor, referring to this press release which was prepared for 17 February. It was due to be an announcement that the Batimastat study was being suspended. This announcement did not mention peritonitis but underplayed its severity and talked of "reduced patient tolerance" and "pain and discomfort". The press release issued on 17 February suggested that trials would resume in June. This was not known at that time and was difficult to justify. A copy of the press release is exhibited below.

  28.  In May 1995 pressure was put on me again to restart the Batimastat trials. I was concerned that a press release the Company wished to put out would understate information relating to the possible risks of the study and overstate our success in reducing the imflammatory effect of the drug. During discussions with Peter Lewis and Keith McCullagh I was told that I was being destructive and was invited to resign. Eventually in September or October (I do not have written records available) we restarted a very limited pilot type study in a very small number of patients and used a dose of about 1/10 that which had caused peritonitis. This study and the project were eventually discontinued.

Marimastat

  29.  Marimastat is an anti-cancer treatment to be taken orally, also being developed by Biotech. In September or October 1995 I was asked to attend a meeting for analysts in London to discuss this compound. When I was asked how long the drug would take to complete Phase III trials, I estimated that it would take more than two years in the fastest possible clinical situation, namely pancreatic cancer. The share price dropped £0.50p within minutes of my presentation. I was criticised by Keith McCullagh the next day for giving this information which they believed to be pessimistic. I was simply being realistic and rather optimistic in that I outlined the quickest posible study. John Raisman apparently said "You can't stand scientists up in front of the city".

  30.  On 30 November 1995 and 21 May 1996 the company issued two up beat press releases about Marimastat (exhibited below). These two press releases and subsequent share dealing in December 1995 by three of the Directors of the Company have since been the subject of an American Securities and Exchange Commission ("SEC") enquiry. At the time I advised on both press releases and said to Keith McCullagh, James Noble, Peter Lewis and Paul Littlewood that I believed they could contravene the Medicines Act (and the US equivalent Food, Drugs and Cosmetic Act) in that they concerned the efficacy and safety of an unlicensed product. This could be regarded as promotion in accordance with the definitions in Association of the British Pharmaceutical Industry Guidelines (Biotech is a member of ABPI) and could be considered not allowed either under the Medicines Act or these guidelines which accompany it.

  31.  Although I had seen the draft press releases, and I believed that the numerical data on which they were based was good and valid, I was concerned that the data was very preliminary and should have been used for internal purposes only, rather than sent out to be interpreted in the headlines of the lay press. Had I been in a position to do so, I would not have authorised those press releases as I believe that they may give a misleading impression of the availability of a new anti-cancer drug to patients. I believe that they may also exaggerate the chances of success to investors.

  32.  In May 1996 we were just starting a survival trial in the form of a Pancreatic Cancer Study 128. I had planned this as a Phase II study but the Executive Directors insisted in defining it as a Phase III study. In November 1996 we received preliminary evidence from this Pancreatic Cancer Study 128 which was inconsistent with great optimism. A higher proportion of the patients receiving Marimastat had died than those on the control drug which is a recognised treatment for pancreatic cancer. I excluded a toxicity problem by appropriate analysis and from then on continually informed Peter Lewis of the situation and my concerns regarding optimism which did not change. From then on I continued to raise my concerns with Peter Lewis.

  33.  In February 1997 I was reprimanded by Peter Lewis allegedly on Keith McCullagh's direction for "attempting to demoralise senior management" after warning a Research and Development strategy meeting that we should not plan on obtaining registration of the drug Marimastat on the basis of Study 128. I said this was based on the early emerging data from that study. I also said that we should not bank on obtaining registration for another of our drugs, Zacutex.

  34.  It has since been brought to my attention by the shareholders that in March or April 1997 Peter Lewis traded shares to a value of approximately £600,000. I do not recall being aware of this at the time.

  35.  In April 1997 I was asked by Biotech to represent it at depositions to be taken in the United States with regard to the SEC enquiry into press releases concerning Marimastat. I gave a lengthy deposition and, at the time, was obliged to defend what the Executive Directors had said in their press releases, even though I had not been happy with the company's original press release, and had let this be known to the Executive Directors and Paul Littlewood and furthermore was not an authorising signature.

  36.  On 15 May I personally handed a memorandum entitled Interim Clinical Data to McCullagh which was blind copied to Alan Cornish, the head of Biometrics (a department in Biotech). A copy of the memorandum is exhibited below. It detailed the pessimistic early clinical trial data. I did this because there appeared to me to have been some misunderstanding between McCullagh and Lewis with regard to the need for realism in the company's plans. I wanted to confirm in writing to Keith what the situation was and what I had told Peter Lewis.

  37.  On 18 June 1997 I wrote a memo to Keith McCullagh in response to his request for a summary of the current position with regard to the Marimastat trials. The memorandum is exhibited below. I referred him to memoranda dated 23 June 1995 and 23 January 1996 regarding the clinical plans for Marimastat. In both of those documents it was stated that, while the proposed clinical studies were selected on the basis of rapid completion, there were reasons to believe that the approach to be taken may not be the best way in which to demonstrate efficacy. I indicated that although "current corporate strategies assume high probability of success for these trials. However, it is necessary to plan for a finite risk of failure. I recommend a corporate direction which includes the possibility that Marimastat may be an effective therapy, but efficacy may not be demonstrated until after the turn of the century. This takes account of my assessment that all studies are being performed as rapidly as possible and speed cannot be increased." My concern at the time was that the company was basing its overall strategy on the assumption of rapid and certain success of Marimastat even though, as with any clinical trial, the chances of success could not be guaranteed. I did not believe that the Board's approach was consistent with the best long term interests of the company and its shareholders. I was concerned that the existing trial results were not consistent with a high chance of achieving the criteria required for a marketing licence within the next two or three years.

  38.  On 30 December 1997 Biotech applied on my directives to the FDA to seek approval for a data analysis to compare doses of the drug. The Executive Directors reacted extremely to this request for permission and I was told that they were concerned that we were leaving "a legal paper trail about data" by Alan Drummond supported by Malcolm Fallen. They told me it was not right to have an interim analysis and that this would invalidate the study. I disagreed.

  39.  In accordance with my predictions, on 14 January 1998 we received a four line fax from the FDA approving our request without problems. Throughout January and February I continued to recommend an interim analysis of the drug in the best long interests of the drug and the Company. However, the Executive Directors refused to follow this approach. Changing the dose may increase the chance of the overall programme on Marimastat yielding positive results. This would be in the company's long term interests.

  40.  Although a promising drug, Marimastat, as with any drug undergoing clinical trials, faces demanding hurdles in proving itself as a treatment for cancer. I estimate the chance of Marimastat proving itself a useful medicine in cancer and obtaining marketing approval at about 40 per cent. This is broadly similar to the chance for a "typical" late Phase II compound and without concrete evidence of an effect on clinical outcome, in this case survival.

Zacutex (Lexipafant)

  41.  The third key drug being developed by Biotech is Zacutex. This is a treatment for pancreatitis. It is currently Biotech's most advanced compound.

  42.  I first raised important considerations regarding the trials for Zacutex on 28 March 1994 when (together with Lloyd Curtis, the Study Physician) I prepared a memo to the Executive Directors and others regarding strategic considerations for our clinical studies of the drug which was then known as "BB-882". We pointed out that "in developing this plan we had gone for a minimalist approach, which may involve some risk but nonetheless should provide a basis for an application for a marketing authorisation, which could be shored up at the appeal stages by new data from other trials". We therefore made it clear that it was not a foregone conclusion that the data would be accepted by the regulatory authorities. In May 1994 Lloyd Curtis and I discussed the need for a dose comparison study at some length with Peter Lewis. We warned that if a dose comparison study was not undertaken we could face regulatory and commercial liability (and a subsequent delay in registration). However, he overruled us and the dose comparison study was not followed. A single dose study (214) was therefore undertaken. This was to become a major objection of the EMEA.

  43.  Against my judgement, in November the Executive Directors requested that the Zacutex trial be upgraded from Phase II to Phase III status on the grounds that the trials could possibly produce data leading to registration. This was true, but conventionally Phase III studies will probably, rather than possibly, lead to registration and we did not really have sufficient data to make this case.

  44.  Study 214 was first analysed in September 1996 at which time the main analysis appeared to be in favour of Zacutex but was not "statistically significant" which indicated that the drug worked but did not prove it. This was to become a major objection of the EMEA. However there was a potentially important mortality difference which required investigation. I carried out a re-analysis of the data and I pointed out that this may not be sufficient for registration. From recollection I told Keith McCullagh that although I thought that the drug worked, we did not have absolute proof. I believed that it could form the basis of a marketing approval application ("MAA") but asked him to tell me that he could live with the drug being rejected before the application was made. McCullagh said yes. When Pam Kirby, the Company's incoming Commercial Director, joined in October 1996 I also described the full history of the 214 study to her and made it clear to her that there was a real chance that the MAA could be rejected and we did not have dose justification.

  45.  Meanwhile we had started another study of Zacutex in pancreatitis in the US (Study 215). This was a similar study to 214 but included a dose comparison.

  46.  From November 1996 I became aware that emerging clinical data from Study 215 was not the same as the results of Study 214 and was not consistent with the company's optimism. I had to consider the possibility that we had misled ourselves with the results of study 214. In fact the data raised possible toxicity concerns which is why I continued to review it. I frequently appraised Peter Lewis of the situation and my concerns. In December (or November) 1996 the company issued a further upbeat press release against my advice which I am unable to locate (I do not have a written record of this).

  47.  In February and March 1997 data from trial 215 on Zacutex continued to give a pessimistic picture of the prospects for gaining a marketing licence for the drug. I discussed this with Peter Lewis on a regular basis. As stated earlier, I was reprimanded in February 1997 for "attempting to demoralise senior management" after warning a Research and Development strategy meeting that we should not plan on a definite registration for Lexipafant/Zacutex and our other key drug, Marimastat.

  48  At this time James Noble, the Company's Finance Director resigned and, unknown to me at the time, I now understand that Peter Lewis was also arranging to leave the company. It has also been brought to my attention that Peter Lewis sold shares to a value of approximately £600,000 at some time in March or April. My concerns continued to grow with regard to Zacutex.

  49.  On the day I returned from the deposition to the SEC enquiry in the United States into the Marimastat press releases (Friday 9 May) I asked Neil Graham of Biotech's Regulatory Department whether or not we had received any preliminary responses from the EMEA to our application for registration to Zacutex. I was told that they would be due next week. I subsequently found out that we had received the responses on Wednesday or Thursday but Neil had been directed on pain of dismissal not to disclose this.

  50.  At that time I was shown a press release on the clinical data of trial 214 which was to be issued at the same time as the presentation of this data at a conference of the American Gastroenterological Association. I did not believe it would be appropriate to issue the release at this stage of the regulatory process—I thought it would be imprudent to issue an upbeat announcement before we had received confirmation of the licence from the EMEA. Furthermore I was privy to the pessimistic data on study 215, as was Peter Lewis. I was told that I had no right of veto and that I was being asked to approve the press release purely to ensure its "medical correctness". I was satisfied that the medical content of the press release was correct and, although I let it be known that I was against the press release going out because it might adversely affect our negotiating position with the EMEA and I thought it unduly optimistic, I signed it. The press release is exhibited below.

  51.  The following Sunday 11 May, I received a telephone call at home from Keith McCullagh at about 5 p.m. In that telephone call he told me that the EMEA had raised major objections to Zacutex. I was not surprised by the objections as I knew the data and analysis had problems, but I was surprised that we were in receipt of their letters and asked when the objection had been received by the company as I had inquired on Friday and had been told to expect them next week. I was told "late on Friday evening". I asked whether the press release could be stopped and McCullagh said no as it was "already on the wire". I arranged to meet with him the next day.

  52.  The report dated 5 May 1997 concerning the preliminary assessment of the drug Zacutex was the rapporteur's preliminary assessment report. I first saw this on Monday 12 May in McCullagh's office. In that report the rapporteur raised five major concerns with trial 214. Two were of the administrative or logistic type which could be dealt with relatively easily. Three related to fundamental difficulties with conclusions and would be difficult to overturn.

  53.  When the EMEA (which is basically a committee of Regulators from the twelve member states of the EMEA) makes its decision, it bases its findings on the report of its rapporteur and co-rapporteur. In this case the rapporteur was the Irish Medicines Agency and the co-rapporteur was the Danish Medicines Agency. It was their preliminary assessment which the Company received on or about 7 May and before 9 May. Although those reports expressly state that they do not represent the final position of the committee of the EMEA, it was those agencies which conducted the assessment of the trials and the suitability of the drug for a marketing licence. As it will be the rapporteur and co-rapporteur who have assessed the trials, the EMEA usually follows their preliminary assessments unless they have clearly missed something. The indication from the Danish Medicines Agency as the co-rapporteur was, therefore, as close as Biotech could get to the ultimate decision of the EMEA.

  54.  I subsequently discovered that the company had issued a second press release on 12 May, simultaneously with the press release about the clinical data in which they announced new appointments to the Company's Marketing Department. The message in these press releases was clearly upbeat as demonstrated by an article in the Financial Times which stated "these are momentous days for British Biotech". The press release is exhibited below.

  55.  I became increasingly concerned and started to attempt to get the company to correct the misleading impression it had given with its press releases. I could not, however, persuade the Executive Directors, Paul Littlewood and Katie Arber that the impression given undermined the company's credibility with and could hamper the chances of approval for the drug by the Regulators. I was also concerned that the impression given by the press releases could mislead the company's shareholders. I felt it was dishonest and unadvisedly risky from a corporate point of view.

  56.  On 15 May I personally handed a memorandum entitled Interim Clinical Data to McCullagh which was blind copied to Alan Cornish, the head of Biometrics (a department in Biotech). The memorandum is exhibited below. It detailed the pessimistic early clinical trial data. I did this because there appeared to me to have been some misunderstanding between McCullagh and Lewis with regard to the need for realism in the company's plans. I wanted to confirm in writing to Keith what the situation was and what I had told Peter Lewis.

  57.  On 21 May I was called to provide a presentation to the company's main Board and at that meeting stated the estimated probability of Zacutex getting marketing approval from the EMEA was approximately 40 per cent at the time we had originally submitted our application and may therefore be lower as we were now in receipt of major objections from the EMEA. It was not, however, until 5 February 1998 that the company eventually informed the stock market through a press release that EMEA approval had been withheld and in the meantime the business plans and presentations to shareholders and analysts remained upbeat.

My Concerns with the Company's Strategy

  58.  As set out earlier in my Affidavit I raised a number of concerns in the period from the end of 1996 regarding the chances of success of the company's clinical trials. Throughout, I believed that the company's strategies and business plans involving expenditure of over £50 million a year were overly optimistic in the light of the prospects of success of its key drugs. I have stated earlier in this Affidavit that clinical research into drugs is a risky business.

  59.  At different times I expressly informed Peter Lewis, Keith McCullagh, Pam Kirby, John Raisman, Alan Drummond, Malcolm Fallen and eventually Peder Jensen, of the situation with regard to the emerging early clinical trial data from Study 215 (Zacutex). Although preliminary data it was indicative of a likely negative outcome for Zacutex's MAA and consequently the product. The Executive Directors did not appear to recognise the significance of this data in their decision making. While Mr McCullagh and Mrs Kirby were happy enough to hear about the data in May, while making a decision to extend the study, in September, Mr McCullagh claimed that the data was illegal and should be discontinued. He was claiming that I had acted improperly in obtaining this data. I disagree.

  60.  I recommended a second formal interim data review of the Phase III trial for Zacutex from September 1997 onwards with a view to checking the design and allowing the study to be halted if it could be clearly judged to be negative. I also recommended an interim review of Marimastat with the aim of establishing the optimum dose. This was refused by the Directors. These reviews were important in order to optimise and safeguard the long term future of the projects and therefore the company, its employees and shareholders.

  61.  As a medical practitioner I had a further overriding professional responsibility to patients in our studies in that if we knew or had reason to believe that a study was negative it should be stopped because it is unethical to expose people to the risks of an experimental compound without the justification of knowing there may be a clinical benefit.

  62.  Over a period of time it became increasingly apparent to me that much money was being spent (for example on new premises, marketing and setting up manufacturing arrangements) prematurely before Biotech had sufficient grounds to believe that the drugs concerned had a realistic prospect of fulfilling the criteria to obtain a marketing licence. As set out in this Affidavit, I have tried to raise my concerns to the Board over some time.

The Cameron McKenna Report

  63.  Following my suspension from Biotech on 11 March 1998, Biotech retained the solicitors Cameron McKenna to conduct an investigation into the SEC enquiry and share dealings in the company in January 1995. On 3 April Tony Marks and Elizabeth Bendall of Cameron McKenna came to my home to interview me regarding these incidents. I wanted to tell them about the events of last year relating to my concerns with the company and the extent to which I believed that the shareholders had been misled. They told me that it was not their remit to investigate these concerns and that they were interviewing me purely to find out about the Batimastat trials and the SEC enquiry. Nonetheless I raised my concerns with them regarding the company's business plans and their relationship to the events in the Zacutex and Marimastat clinical trials programme. Basically I told them what I have set out in this Affidavit and that I did not believe that the clinical trial programme at the time gave grounds for the company's optimism as relayed in press releases to its shareholders. I also said that the company's business plan is based on unfounded likelihood that the drugs will be registered soon.

  64.  Cameron McKenna asked me many questions regarding the Batimastat trials and I disclosed to them all the information available to me as set out in this Affidavit.

  65.  They also asked me about the SEC enquiry. I told them what I had said in my deposition to the SEC but added that I was concerned that the press releases issued at the time might have contravened the Medicines Act because they might be considered to make claims regarding the efficacy and safety of an unlicensed drug which would amount to promotion.

  66.  The Cameron McKenna report has been represented to and in the press as providing justification for the decision to dismiss me on 20 April 1998. I have reason to believe it was leaked as such to Sunday Business two days before the disciplinary hearing which resulted in my summary dismissal. However, the company has stated to me that the Cameron McKenna report has nothing to do with my disciplinary hearing and has refused to provide a copy of the report to me. I have, however, obtained a copy from another source. In my belief, so far from giving any grounds for my dismissal, it lends support to everything I have said publicly and in this Affidavit about British Biotech's over-optimistic and, at times, positively misleading presentation of its progress and prospects to the public. Moreover, no other investigation into my concerns was ever conducted with me by any of the Executive or Non-Executive Directors.

Sworn this 14th day of May 1998

at 7 St Martins Street

Wallingford

Oxfordshire

before meSolicitor/Commissioner for Oaths

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

BETWEEN:

ANDREW MILLAR

Plaintiff

and

BRITISH BIOTECH PLC

Defendant

EXHIBIT "AM-1"

  This is the exhibit marked "AM-1" referred to in the Affidavit of Dr Andrew Millar MA, BM, BCh, MRCP, FRCS, MFPM sworn this 14 day of May 1998.

  Before me

  A Solicitor

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Prepared 14 September 1998