British Biotech is a step closer to dropping marimastat, the drug once hailed as a blockbuster treatment for cancer, after it failed in a key clinical trial.

Marimastat has now failed six trials. The latest one, on patients with small cell lung cancer, was seen as its best chance of success.

The company, based in Cowley, Oxford, said it was discussing the findings with US drug company Schering-Plough, which has rights to British Biotech's cancer portfolio.

Five years ago British Biotech was the star of the UK biotech sector. Its shares reached 3 on hopes that it would develop new cancer treatments.

But the company's research chief Andy Millar told a leading investor of his fears that shareholders were being given misleading information about the prospects for its drugs, including marimastat.

He was sacked, but later won an apology and the company was censured by the stock exchange for misleading investors.

Chief executive Elliot Goldstein said he hoped to announce the outcome of discussions with Schering-Plough by the end of March. "In the meantime, the turnaround strategy at British Biotech is firmly in place and has already made considerable progress," he said. "We are now concentrating resources on progressing our product portfolio of six drugs and on development of the antibiotic programme."