March 9, 2010 / 8:00 AM / 10 years ago

UPDATE 2-Ark pulls drug application, weighs sale of company

* Cerepro withdrawal follows EU request for further trial

* Ark reviewing strategic options, including sale of firm

* Defeat for first gene-based drug to be considered in EU

* Shares down 15 percent

(Adds shares, market value)

LONDON, March 9 (Reuters) - Ark Therapeutics AKT.L pulled its bid to sell brain cancer drug Cerepro in Europe on Tuesday, after regulators requested a further clinical trial before approval, and said it was considering the sale of the company.

Ark had hoped to convince experts at the European Medicines Agency to reverse last December’s negative decision on the drug, the first gene-based medicine to be considered for approval in Europe.

But the agency’s Scientific Advisory Group on Oncology determined that current data did not provide sufficiently reliable evidence of clinical benefit and more tests were needed.

This second rebuff is a bitter disappointment to Ark, although it had been expected by many analysts.

Shares in the group fell 15 percent by 0825 GMT, valuing the business at around 24 million pounds ($36 million).

Cerepro, a pioneering gene therapy medicine for high-grade glioma, was always pivotal to Ark’s future and the group said it would now consider all its strategic options.

“Ark has initiated a full review of its substantial portfolio of assets, their potential and alternative strategies and options to optimise shareholder value,” it said in a statement.

The review will also consider a number of approaches that have already been received and the company said it had initiated further discussions with a number of parties which may or may not lead to an offer being made for the company.

As a result, Ark is now deemed to be in an offer period under the UK Takeover Code. ($1=.6672 Pound) (Reporting by Ben Hirschler; Editing by Hans Peters)

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