Maxim Pharmaceuticals Inc. put in place a realignment plan following last month's FDA guidance that an additional Phase III trial would be needed to gain approval of Ceplene for acute myeloid leukemia.

The San Diego-based company will reduce its work force by 12, leaving it with 39 associates, in order to secure enough funding through mid-2006. Most of the reductions are related to Maxim's Ceplene development programs, which are winding down.

The company's stock (NASDAQ:MAXM) fell about 20 percent, or 45 cents Tuesday, the day the realignment was announced, to close at $1.82. It closed Wednesday unchanged.

Ceplene has missed its endpoints in several trials recently, including Phase II trials in hepatitis C and renal-cell carcinoma announced Tuesday.

Phase II data of Ceplene, used in combination with Peg-Intron and Rebetol, showed the therapy did not improve virological response in hepatitis C patients, compared to treatment with Peg-Intron and Rebetol alone. The trial, which was conducted in cooperation with Kenilworth, N.J.-based Schering-Plough Corp., indicated the combination therapy was generally well tolerated.

Another Phase II study of Ceplene plus interleukin-2 in metastatic renal-cell carcinoma showed a trend toward improvement in overall survival, but not tumor response, when compared with IL-2 alone. A second study in that indication, conducted in the UK, showed no difference in overall survival or tumor response between the treatment groups.

However, for leukemia, the drug has had positive results when used with IL-2, meeting its primary endpoint, a measure of improvement in leukemia-free survival. (See BioWorld Today, May 13, 2004.)

To move forward in that indication, Maxim plans to seek a worldwide development and marketing partner for Ceplene, as well as its oral histamine formulation. The company now will focus its efforts on its apoptosis modulator discovery and development program through the screening of new compound libraries, and it plans to advance lead oncology compounds toward the clinic. Maxim also intends to hire an investment banking firm to help the company identify opportunities to build its assets.

The company learned from the FDA in January that another Phase III leukemia trial was needed for Ceplene. (See BioWorld Today, Jan. 19, 2005.)

That news followed negative Phase III findings from September from a confirmatory trial of Ceplene and IL-2 in advanced malignant melanoma patients, which failed to demonstrate an improvement in overall patient survival. Maxim has said it will no longer pursue that indication. (See BioWorld Today, Sept. 21, 2004.)