A Medical Device Daily

Vasogen (Mississauga) reported that because of regulatory delays it is forced to implement a drastic strategic restructuring to significantly reduce its cash burn and focus efforts on opportunities that it says are best able to provide long-term value.

The company said the plan re-focuses company resources on development of its VP series of inflammatory disorder drugs while the company seeks alternatives to fund further development of the Celacade System, the company's technology for the treatment of chronic heart failure.

The restructuring slashes Vasogen's workforce by about 85%, roughly 88 of the company's 104 full-time employees. It estimates having about two years of cash resources once the restructuring is complete. The company said it will have cash expenditures of about $2.6 million during the second quarter related to the restructuring.

It has retained JMP Securities to assist it in exploring other alternatives.

Vasogen in March reported delays with the FDA regarding the design of Advanced Chronic Heart Failure CLinical Assessment of Immune Modulation Therapy (ACCAIM II), a clinical trial to support an application for U.S. market approval of Celacade for the treatment of patients with NYHA Class II heart failure (Medical Device Daily, March 4, 2008).

It said that because of lack of access to capital and the FDA's opposition to "a relatively small trial utilizing a Bayesian statistical design," it has put on hold plans to fund ACCLAIM II, but that it will continue to work with the FDA to finalize the design of the trial and evaluate alternatives to fund such a study.

Vasogen also said that because of a much lower-than-anticipated revenue forecast for Celacade from its European marketing partner, Grupo Ferrer (Barcelona, Spain), it will halt "operational and financial support" for European commercialization and is exploring alternatives with Ferrer. It said that Ferrer's sales forecast was impacted by uncertainties surrounding the ACCLAIM II trial.

Chris Waddick, president/CEO of Vasogen, said, "the science underlying Celacade remains strong, and ... the rationale for its therapeutic use in the treatment of certain heart failure patients was evident in the subgroup analysis from the ACCLAIM trial. For these reasons, we plan to explore opportunities to support the further development of Celacade in the U.S. and continue working with Ferrer to evaluate alternative strategies to support the commercialization of Celacade in Europe."

Celacade technology targets the inflammation underlying chronic heart failure (CHF). Oxidative stress is known to initiate apoptosis (programmed cell death), a process that is inherently anti-inflammatory, according to Vasogen.

During an outpatient procedure, a sample of a patient's blood is drawn into the Celacade single-use cartridge and exposed to controlled oxidative stress. The treated blood is then readministered to the same patient intramuscularly. An initial course of treatment of three consecutive procedures is administered over a two-week period, with treatments then continued once a month.

The initial ACCLAIM trial studied 2,408 subjects with CHF at 175 clinical centers in seven countries. ACCLAIM II was designed to assess the ability of Celacade to reduce the risk of death or first cardiovascular hospitalization.

Vasogen said its VP family of drugs are based on synthetic 3D phospholipid-based structures with specific groups of surface molecules designed to modulate cytokine levels and control inflammation.

VP025, the lead product candidate from this new class of drugs, is being developed for the treatment of neuro-inflammatory disorders. VP015 is another product candidate from this class of drugs, with the potential to treat other inflammatory conditions, according to the company.