Staff Writer

One hundred people have received notice of their layoffs from Transkaryotic Therapies Inc. as the company works to tighten its focus two months after receiving a negative FDA committee vote on its lead product, Replagal.

In an effort to reduce costs, the Cambridge, Mass.-based firm said it is narrowing its research and development plans. That strategy continues to factor in Replagal, being developed for Fabry's disease, and TKT said it plans to concentrate internal efforts specifically on protein replacement therapies.

"Right now the focus of our research and development activities is going to be in the area of rare genetic diseases," Justine Koenigsberg, TKT's director of corporate communications, told BioWorld Today.

The company said it informed its employees on Feb. 11 that it would reduce its 446-person work force to 346. Of the 100, about 80 were alerted this week. Koenigsberg said the cutbacks came from all areas of the company. She declined to provide specific cost-savings from the layoffs, but said such guidance would be made available when TKT reports its year-end earnings.

Efforts going forward include a program in Hunter's syndrome that has completed Phase I/II studies. Koenigsberg said TKT would advance a third rare disease program in the near term. The company has preclinical programs in Gaucher's disease and Morquio A syndrome.

But TKT continues to concentrate on Replagal (agalsidase alfa), already approved in the European Union and several nonmember European countries, as well as in Australia, New Zealand and Israel. FDA approval is proving more troublesome.

Two weeks into 2003, the FDA's 15-member Endocrinologic and Metabolic Drugs Advisory Committee unanimously questioned evidence of the drug's efficacy. Committee members said TKT's data was not persuasive or compelling in providing a positive effect for the genetic disease.

The panel concluded that two separate 24-week Phase II trials - one designed to demonstrate pain reduction and the other designed to demonstrate a biochemical effect on globotriaosylceramide (Gb3) content in heart biopsies - did not show treatment-associated effects. Fabry's disease is a lysosomal storage disorder caused by deficient activity of an enzyme called alpha-galactosidase A, causing Gb3 lipid accumulation in lysosomes, which can impair the function of several major organs, including the kidney and heart. (See BioWorld Today, Jan. 15, 2003.)

"We need to conduct a re-read of our pathology data," Koenigsberg said. "We have set a milestone for that to commence in the first or second quarter."

TKT appears to be in a race with Genzyme Corp., also of Cambridge, to win orphan designation for their respective Fabry's disease products. Such designation would ensure seven years of sales exclusivity in a market that has an estimated worth of $350 million annually in the U.S.

The day before TKT went before the panel, the same group voted 14-1 in favor of Genzyme's surrogate endpoint from its Phase III trial of Fabrazyme (agalsidase beta), saying the product is likely to predict a clinically meaningful effect. (See BioWorld Today, Jan. 14, 2003.)

FDA regulations prohibit more than one orphan drug per indication.

Within weeks, law firms lined up class action suits against TKT, alleging securities fraud related to charges that the company made false and misleading statements and failed to disclose material information concerning the status and progress of Replagal. Its shares (NASDAQ:TKTX) closed up 18 cents Wednesday at $5.55. More legal troubles surfaced days later when TKT disclosed a suit brought forward by a subsidiary of Geneva-based Serono SA alleging European patent infringement related to Replagal.

Midway through last month, TKT named Michael Astrue its new president and CEO after Richard Selden resigned.

As part of the refocusing, TKT said it would look to partner programs that fall outside its rare disease parameters, areas that "relate primarily to our gene-activated proteins and gene therapy," Koenigsberg said.

Among such programs, the company already has partnered Dynepo with Frankfurt, Germany-based Aventis Pharma AG. The erythropoietin enzyme was approved in Europe for anemia, though its launch has been delayed. A British court last month agreed to hear an appeal from Kirin-Amgen Inc., the Japanese affiliate of Thousand Oaks, Calif.-based Amgen Inc., in a patent infringement suit involving the product, though a prior opinion handed down from another UK court unanimously sided with TKT.

Plans are under way to file Dynepo for FDA approval.

The company also has completed Phase I trials for products to treat oncology and hemophilia A, programs respectively focused on granulocyte colony-stimulating factor and Factor VIII.