The company which manufactured the drug that left six people seriously ill in hospital in a drug trial has filed for insolvency, it announced today.

The German company TeGenero said the "unforeseeable adverse reactions" caused by the drug TGN1412 "have made it impossible to attract the investment necessary for the company to continue operations".

Six previously healthy young men were left suffering multiple organ failure after taking part in the drug trial at Northwick Park Hospital, north west London, in March.

A statement from the company said: "TeGenero regretfully announces that, as of July 4, 2006, the management of the company has filed for the commencement of insolvency proceedings at the competent local court/insolvency court Wurzburg.

"The adverse events suffered by the volunteers in the TGN1412-HV trial were personally devastating for everyone at the company, dedicated as they are to the development of medicines which are intended to help people with serious disease conditions.

"The unpredictability of such effects presents a major challenge for the industry if it is to develop this kind of innovative and powerful treatments, and we regret that our company will not be able to continue working to find a solution in the present scope."

The company said that an investigation by the Medicines and Healthcare products Regulatory Agency (MHRA) had found "no deficiencies in relation to the standard of the pre-clinical testing of TGN1412 by TeGenero, consistent with strict regulatory requirements, and have concluded that the adverse reactions experienced by the volunteers in the TGN1412- HV trial were completely unforeseeable".

The MHRA report in May found that the company who ran the trial, Parexel, failed to follow proper procedures for carrying out the tests. It also said there was no contract in place between TeGenero and Parexel at the beginning of the trial.

It concluded, however, that the adverse reaction, which left the men fighting for their lives with multiple organ failure, was the result of an "unexpected biological effect".

TGN1412 was manufactured as a treatment for rheumatoid arthritis, leukaemia and multiple sclerosis.

An expert working group is examining the implications of the trial for future research using humans. It is due to report at the end of August or early September, and will provide advice on how future trials of monoclonal antibodies should be designed.

Martyn Day, the solicitor representing four of the men involved in the trial, three of whom have refused publicity, said the news had come as a "shock". He added: "We are very concerned by this development. It comes at a time when our four clients are waiting for the outcome of a series of medical tests that will decide their future.

"The announcement that TeGenero has gone into liquidation is going to greatly add to their fears of being able to get proper compensation. This terrible uncertainty that they are facing is made much worse by this development. It’s been a real shock to them that it’s reached this stage."

Ann Alexander of law firm Irwin Mitchell, which represents two of the victims, said: "I am not surprised that this company has filed for insolvency, however I am surprised they have chosen to do so before the compensation claims were even considered, thereby causing further alarm and psychological distress for our clients.

"However it is my opinion that this announcement should not affect in any way the claims our clients have following this tragic incident. We believe that there are good grounds against both TeGenero, who manufactured the drug, and Parexel who were responsible for managing the trial.

"I would also fiercely dispute the statement by TeGenero that the adverse reaction of our clients to this drug was unforeseeable. We believe there is increasingly strong scientific evidence which supports our view."

Ms Alexander said she would be writing to the expert group asking it to "look especially hard at the regulations relating to companies manufacturing and testing all drugs and the issues of insurance".

She continued: "These companies need to be prepared if things go wrong. "The total liability limit on TeGenero’s insurance is £2m - this is wholly inadequate and we call for greater scrutiny into the precautions these companies should be made to take."

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