Examination of Witness (Questions 440
- 459)
TUESDAY 28 JULY 1998
DR PETER
LEWIS
440. But why? That is not usual, is it?
(Dr Lewis) No.
441. Had you no questions that you put at the
time as to why this happened?
(Dr Lewis) Well, he was very angry about something,
Dr McCullagh was very angry, and I said, "Well, we have been
discussing these things. I want this and I want that", and
he said, "You're in no position to negotiate. That's it",
so I was completely taken aback by this and in fact I was then
told to have a chat with the company's legal counsel and we had
a fairly civilised chat about severance arrangements, which I
have already discussed with you, about the half pay for a year,
and I thought, "Well, that's fine".
442. But, Dr Lewis, you were a member of the
Board with Dr McCullagh.
(Dr Lewis) Yes.
443. So did you not say to him, "What's
behind this? Why are you losing your temper like this? Why am
I suddenly being bounced?"
(Dr Lewis) Well, I did not because I had accepted
the fact. He had already fired the Finance Director in similar
sort of circumstances a couple of months previously and I was
actually rather wary that this was going to happen to me. When
this happened to the Finance Director, he said, "You're next
for the chop" et cetera, so I was actually anticipating
it. The discussions we were having were very amicable and I was
quite pleased about that.
Dr Williams
444. So in that previous twelve months, four
of the directors had been fired or had left the company?
(Dr Lewis) Yes.
445. Did the people who remained ask questions
about why that last person left or why the second person left,
the third and the fourth and why the Finance Director left? You
must have wondered or had conversations as to why he had left.
(Dr Lewis) In fact, it was amazing how few questions
were asked about why each individual person left. Different reasons
were given on different occasions. The fact of the matter was
there were five Executive Directors, including Dr McCullagh, and
four of us left just over a year's period.
446. But did all the reasons trace back to Dr
McCullagh?
(Dr Lewis) Yes, absolutely.
447. Take the Finance Director, why should he
have wanted him to leave?
(Dr Lewis) It was all about the same thing really.
He had this vision he wanted to pursue of going it alone, creating
a new Glaxo, and one went along with it to a certain point, it
was very inspiring, but then it became unrealistic and one disengaged
from it.
448. What about the new directors who came in,
the new replacements? We had the bankers here two weeks ago and
they spoke in glowing terms of the experience, the great knowledge
of the people who were on the Board.
(Dr Lewis) They were talking about the non-executives
I think. There was only one new recruit to the executive team
and that was Dr Pam Kirby who was the Commercial Director. She
replaced Ron Irwin who had left some months previously. There
was not anybody to replace the Finance Director and there was
not anybody to replace me actually for quite long periods of time.
Mr Beard
449. While this mayhem was going on the company
was putting out press releases saying things were going according
to plan, and again I quote what you have said in the statement
you have given us for this session: "Certainly during my
time the company was extremely scrupulous in handling investor
relations." Is it scrupulous to put these press releases
out on the one hand when there is this almost Shakespearean tragedy
going on in the background?
(Dr Lewis) The press releases related to product progress
and things being filed and they were scrupulous in terms of this
person giving a scientific paper at a scientific meeting and these
were accurate representations of what had gone on. As far as the
directors leaving, different reasons were given for each individual
director.
Dr Jones
450. What did the non-executive directors have
to say about this? Were they not concerned that so many people
were going?
(Dr Lewis) They said absolutely nothing. I put in
my statement that I was very surprised that they did not react
in any way. Certainly after I was bounced out of the company not
a single one of them called me or said anything to me.
Dr Gibson
451. Did they ever turn up at board meetings?
(Dr Lewis) They turned up at every board meeting but
I did not go to the final board meeting, after I had been fired
I just begged out of it.
Chairman
452. So you have given us a scenario over a
two month period when the Finance Director is fired, he turns
to you and says "you are next for the chop", the Chief
Executive comes along and gives you a bonus and says "we
cannot manage without you" and a week after that you are
fired too.
(Dr Lewis) Exactly.
Chairman: Thank you.
Mr Beard: But then given a retainer.
Mr Jones
453. Can I ask you about the circular to shareholders[2]
which British Biotech issued in May 1998. You said in your first
submission to us that you agree with most of the circular's points.
Which points do you not agree with?
. (Dr Lewis) They were very minor things
really. There were certain things that were not accurate but I
do not think they were maliciously put in at all. For example,
there was a reference to Batimastat. There was a lot of stuff
about Batimastat, which was a long time ago, and they referred
to pleural effusion Batimastat being in phase three and it never
was, it was phase two, the earlier programme. There were little
inaccuracies like that throughout the thing. Frankly, the people
who put the thing together, apart from Dr McCullagh, were not
there at the time anyway so I do not think there was anything
malicious about it.
454. Can I ask you some questions about Batimastat
and take you back to November 1994 and Batimastat, as I understand
it, is a cancer treatment which is injected directly into the
stomach?
(Dr Lewis) Yes.
455. We are dealing with very ill people here.
(Dr Lewis) Yes.
456. The Project Team noted that there were
poor results from the trials, particularly an increase in the
number of people suffering from peritonitis and abdominal abnormalities
and they suggested that some unintended alteration had been made
to the formulation of Batimastat. How likely is it that was due
to a change in formulation? Does this happen in clinical trials?
(Dr Lewis) Yes, it does happen and I thought it was
the explanation. It is a little bit complicated. The thing that
is in that document you have referred to is a different type of
trial from the one that was eventually stopped. That was giving
the drug to patients with a dry abdomen, in other words they did
not have fluid in the abdomen, whereas the trial that all the
fuss about was in a different type of patient with ovarian cancer
and these women had a lot of fluid in the abdomen. We were giving
the material actually to be dissolved in a lot of proteinaceous
fluid. As regards to whether it was a reasonable explanation for
the change in tolerability was in some way due to a different
formulation. It was perfectly possible, and we did see there was
a somewhat different crystalline structure in the new material
which was made in the larger scale, used in the phase three trial,
compared to the stuff we had been using earlier which was in a
smaller scale. There are plenty of precedents for that. The classic
example is asbestos where you have got the same chemical material
but it is in two different forms and one is very toxic as a crystal
and the other one is not. There is a precedent for crystal forms
of the same chemical material having different biological effects.
457. How important was Batimastat to British
Biotech's overall business?
(Dr Lewis) It was not terribly important actually.
When it started it was pretty important because it was the only
one of the matrix metalloproteinase inhibitors that we had on
the go. During the course of the end of 1994 we finally got an
orally active agent, Marimastat. That was potentially so much
more important a compound than Batimastat that in fact a lot of
the things that happened with the injectable Batimastat, us in
fact giving up on it early, were due to the fact that it was no
longer really important to the company. One of the reasons I did
not make a big fuss and persist with that clinical trial was Marimastat,
but Dr Millar stopped prematurely. It was simply because we were
moving on anyway to the oral agent, Marimastat, which has got
obviously a lot more potential than a drug which has to be injected
in large volumes into the abdomen which is a terrible way of giving
a pharmaceutical.
458. How much did the company invest in Batimastat?
(Dr Lewis) It was about half the research effort for
about two years and at a stage when the company was spending probably
£15 million, £20 million a year on research. So I suppose
the total investment in that compound was about £20 million.
459. You do not consider that was wasted because
you went on to develop Marimastat?
(Dr Lewis) Yes, and in fact it was very, very useful
in determining all sorts of things. It was very, very useful in
pre-clinical models for cancer because it was a drug that could
be administered to animals and had a long duration of action and
we could see anti-cancer effects, whereas Marimastat in animals
was very, very rapidly metabolised and you had to give it very
frequently during the day in order to see any effect. Marimastat
was not very good pre-clinically whereas Batimastat, was very
good, and the reverse was true when it got into the human patient.
2 Not printed. Back
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