Assistant Managing Editor
In the wake of the FDA's second rejection of non-small-cell lung cancer candidate Xcytrin, Pharmacyclics Inc. is slashing its work force by 40 percent and refocusing resources on its earlier-stage pipeline in cancer and immune-mediated diseases.
The company, which reported a net loss of $12.7 million, or 49 cents per share, for the last six months of 2007, intends to get its cash burn down to $16 million over the 12-month period starting April 1. At the end of this quarter, Pharmacyclics projects a cash position of $20 million, and believes that will be sufficient to advance its early stage compounds, which include one Phase I-stage program and two in late preclinical development.
Executives from Pharmacyclics could not be reached for comment, but the firm said in its press release that severance payments, amounting to about $400,000, will be recognized in the third quarter.
Shares of Pharmacyclics (NASDAQ:PCYC) fell 4 cents Friday to close at $1.16.
The restructuring move comes two months after the Sunnyvale, Calif.-based firm received a not approvable letter for Xcytrin (motexafin gadolinium) injection in combination with radiation in NSCLC patients whose disease with brain metastases. That news sent company shares falling 26 percent, to close at $1.74, even though the FDA had indicated its dissatisfaction with trial data last February when it refused to file the new drug application. Pharmacyclics, however, persisted, resubmitting the NDA over protest two months later with data analysis that showed a 6.4 month improvement in time to neurologic progression over radiation treatment alone. (See BioWorld Today, Feb. 22, 2007, and April 24, 2007.)
The company has not given up on Xcytrin, which is finishing up testing in midstage trials in combination with radiation in glioblastoma and pediatric glioblastoma, as a monotherapy in lung cancer patients and in combination with chemotherapy in both lung cancer and gliomas. But Pharmacyclics hopes to put further development of the drug into the hands of another company, seeking either a partnership or out-licensing opportunity.
Xcytrin is a redox-active drug designed to disrupt redox-dependent pathways in cells and to inhibit oxidative stress-related proteins.
The company's new focus, instead, will be on early stage programs, starting with PCI-24781, a pan-histone deacetylase (HDAC) inhibitor that is in Phase I trials in patients with solid and hematologic tumors. A Phase I/II study in hematologic cancers is expected to start in the second quarter, and that trial will involve the use of a biomarker, RAD51, to confirm preclinical data showing that high RAD51 levels coincide with stronger efficacy.
In its preclinical pipeline, Pharmacyclics has PCI-32765, a small-molecule tyrosine kinase inhibitor designed to block Btk, which has shown efficacy in animal models of arthritis and also might have potential in B-cell lymphomas. A second preclinical candidate, PCI-27483, is a small-molecule inhibitor of Factor VIIa, which is associated with blood clotting, angiogenesis and tumor growth. Both of those programs are slated to start clinical testing in the third quarter.