West Coast Editor
With still no partner for its lead drug, carbohydrate-focused GlycoGenesys Inc. filed for Chapter 11 bankruptcy, laid off more than half of its work force, and the CEO stepped down - developments that took the starch out of the company's stock, which tumbled more than 70 percent.
GlycoGenesys' shares (NASDAQ:GLGS), which face delisting, ended Friday at 12 cents, down 30 cents, or 71.4 percent.
"We do have a plan," said Frederick Pierce, the Boston-based firm's interim CEO, formerly vice president of business development, and that plan will be shared later when details are concrete.
"Obviously, we wouldn't have taken these measures if we didn't think there was some value here," he said.
Former CEO Bradley Carver is staying with the company as a consultant and board member. John Burns, senior vice president and chief financial officer, was appointed to the added positions of interim chairman and treasurer.
Layoffs immediately will reduce payroll by about 40 percent, GlycoGenesys said.
In November, the firm chose Roswell Park Cancer Institute in Buffalo, N.Y., as the clinical site for its Phase I/II dose-escalation safety trial with the lead drug candidate, GCS-100, in patients with multiple myeloma. Secondary objectives include evaluating the response to GCS-100 as a monotherapy and in combination with dexamethasone, and determining pharmacokinetics of the drug when given alone and in combination.
"We look at Chapter 11 as a process by which we can reduce and contain monthly expenses," Pierce said. "We want to maintain our [MM] clinical trial as we look to secure either a strategic alliance or another alternative."
Evaluated in previous trials at low-dose levels in patients with colorectal, pancreatic and other solid tumors with stable disease, GCS-100, which targets galectin-3, has yielded partial responses, but no partners or other sources of cash have stepped up since October, when GlycoGenesys entered a stock purchase agreement for $20 million that it can access over the next two years. (See BioWorld Today, Oct. 25, 2005.)
"The $20 million from Fusion Capital was [intended to be] part of a two-step process," Pierce said. "We wanted to raise supplemental funding, and obviously, the marketplace spoke. It wanted to see a restructured business."
GlycoGenesys said in October that the firm had met with several pharmaceutical and large biotechnology companies that have shown an interest in partnering, but a deal was not expected until interim data emerged from blood-borne cancer trials in April. If those preliminary data are encouraging, the company said, it might decide to wait before entering a deal.
"Will we have interim data? Yes, but I'm not sure about the timeline," Pierce said Friday, adding that the company still is prioritizing internally.
About the bankruptcy, Pierce said GlycoGenesys had three choices.
"We could either finance fabulously and everything [would have been] fine, or not finance and restructure, or liquidate the company," he said.