The Burrill Report


Swiss firm Cytos Biotechnology is taking severe measures to address the upcoming maturity of a $51.8 million (CHF 41.1 million) convertible bond due in February 2012 that includes cutting its workforce from 82 to 10 employees and reducing the size of its executive board. The company said all of its programs would be put on hold except for its lead immunotherapeutic, CYT-003-QbG10, which has been shown to be safe and efficacious in three phase 2 studies for the treatment of allergic asthma and allergic rhinitis. Partnered programs with Novartis and Pfizer and payments related to these programs are not affected by this decision. CEO Wolfgang Renner also resigned. Despite these measures, the company says it may still face a shortfall of as much as $21.4 million. It is looking at all possible options including a convertible bond restructuring geared towards keeping the company as a going concern and maximizing the value of CYT003-QbG10.

Regeneron Pharmaceuticals’ shares fell as much as 13 percent after the U.S. Food and Drug Administration said it would extend its target date to complete a priority review of the Eylea biologics license application for the treatment of wet age-related macular degeneration to November 18, a three month extension from the original date by which the agency was expected to decide on its application to market the drug. The extension is a result of the agency classifying recent responses to questions regarding the chemistry, manufacturing, and controls section of the application as a major amendment to the application. The new action date will give the agency additional time to review the information submitted.

Endo Pharmaceuticals terminated its research program and collaboration related to the development of investigational pain drug axomadol. Topline results from a phase 2 study comparing it to a placebo in the treatment of patients with moderate to severe chronic low back pain did not meet predetermined study endpoints. Endo had licensed exclusive rights to develop and market axomadol in the United States and Canada from the German firm Grunenthal in February 2009.

Gentium’s share price plunged 31.4 percent after the Italian drugmaker voluntarily withdrew its application with U.S. regulators to market defibrotide for the treatment of veno-occlusive disease, a potentially life-threatening condition, which typically occurs as a significant complication of stem cell transplantation. Gentium withdrew is application following recent correspondence from the U.S. Food and Drug Administration identifying numerous deficiencies regarding the company’s submission for marketing approval. In its initial review, the FDA raised concerns regarding the completeness of the datasets for both the treatment and prevention studies, requested the company conduct additional quality reviews of the original datasets and databases, and also requested additional details regarding the conduct and monitoring of the trials by the independent review committee. Gentium felt it had too short of a deadline to address all the issues and said it plans to resubmit the application after addressing the issues. Defibrotide has been granted orphan drug status in both the United States and Europe.
The U.S. Patent & Trademark Office rejected Amarin’s application for a patent covering AMR101, an experimental heart drug derived from fish oil, Dow Jones Newswire reported. American depository shares of the Irish drugmaker fell as much as 9.5 percent on the news. Some analysts have projected annual sales of the drug exceeding $2 billion. Amarin had asked for a patent covering a method of treating high triglycerides with an active ingredient in AMR101. The patent office had issued its objections in a preliminary rejection in June saying the application’s claims weren’t patentable because they amounted to “double-patenting” of claims cited in another patent application, reported Dow Jones. The other patent is still pending and covers the composition of the drug.

Life Technologies is instituting layoffs as part of an effort to cut expenses by as much as $20 million, the San Diego Union Tribune reported. The company said it was instituting “a number of previously disclosed cost-savings efforts.” It did not say how many jobs were being eliminated or in what departments. The company has 11,000 employees worldwide. Previously CEO Greg Lucier said the company was accelerating cost-cutting efforts that had been planned for 2012 in the face of soft demand for the company’s products, production problems with its Japanese partner for its SOLiD sequencers following the earthquake in Japan, and a shift to an internal rather than an outsourced sales team in China.


August 19, 2011
http://www.burrillreport.com/article-cytos_biotechnology_slashes_80_percent_of_workforce.html