• aaiPharma Inc., of Wilmington, N.C., cut its headcount by more than 10 percent during the second quarter in hopes of getting back on track by next year. So far this year, the company has had a delayed regulatory filing, a near Nasdaq delisting and several changes in its senior management due to an SEC investigation on unusual sales in its Brethine and Darvocet product lines during the second half of last year. AaiPharma has made adjustments related to the recognition of revenue for those products. "We are in a mode where everything is being watched, checked, rechecked and, if necessary, changed," Fred Sancilio, executive chairman and CEO, said in a conference call Monday. He replaced Philip Tabbiner as CEO in April. The company reported revenues of $51.5 million in the second quarter, compared to $66.1 million in the second quarter of 2003. Net income increased to $7.2 million, or 25 cents per diluted share, due to a net gain of $37.5 million from the sale of the M.V.I. and Aquasol product lines. The company has $5.9 million in cash. By reducing 125 full-time jobs, it will save about $10 million a year in salaries and benefits, Sancilio said. AaiPharma's stock (NASDAQ:AAII) dropped 31 cents Tuesday to close at $3.08.

• Abbott Laboratories, of Abbott Park, Ill., said the FDA approved an expanded indication for Humira (adalimumab) to include improvement in physical function for adult patients with moderately to severely active rheumatoid arthritis. The agency based its approval on a supplemental biologics license application filed in September. In 2002, Humira was approved to reduce the signs and symptoms and inhibit the progression of structural damage in adult patients with moderately to severely active rheumatoid arthritis who have had an inadequate response to one or more disease-modifying antirheumatic drugs.

• Acuity Pharmaceuticals Inc., of Philadelphia, filed an investigational new drug application with the FDA to begin Phase I trials of Cand5, its lead product candidate for wet age-related macular degeneration. The small interfering RNA product uses RNA interference to shut down the production of genes that promote the overgrowth of blood vessels - vascular endothelial growth factor - that leads to vision loss in the disease. Acuity said it is the first company to file an IND to take a siRNA therapeutic into clinical trials, which are scheduled to begin next month.

• Alkermes Inc., of Cambridge, Mass., said Eli Lilly and Co., of Indianapolis, would continue to invest in the further development of an inhaled formulation of insulin. Lilly made the decision following the completion and analysis of data from a Phase II study, the achievement of commercial manufacturing powder production scale-up, and the development and testing of the commercial pulmonary insulin inhaler system. Phase II data on Alkermes' AIR technology showed that patients with Type I diabetes achieved glycemic control levels similar to injected insulin. Alkermes and Lilly formed the collaboration in the spring of 2001. Alkermes' stock (NASDAQ:ALKS) gained $1.82 Tuesday, or 21.4 percent, to close at $10.33. (See BioWorld Today, April 3, 2001.)

• Arena Pharmaceuticals Inc., of San Diego, achieved a $3 million milestone from Merck & Co. Inc., of Whitehouse Station, N.J., after completing assay development under their cardiovascular collaboration. Nearly two years ago, they entered an agreement focused on a group of G protein-coupled targets discovered by Arena, which said they might represent targets for cardiovascular disease. Arena already has received a $4 million milestone payment related to animal testing of small molecules from the program. (See BioWorld Today, Oct. 18, 2002.)

• AVI BioPharma Inc., of Portland, Ore., signed a Cooperative Research and Development Agreement with the U.S. Army Medical Research Institute of Infectious Diseases. The five-year agreement provides for testing of AVI's Neugene antisense therapeutics against several viruses, bacteria and toxins, including poxviruses, anthrax, Ebola and Marburg viruses.

• Bionomics Ltd., of Adelaide, Australia, said research on its angiogenesis drug target BN069 conducted at the Hanson Centre of the Institute of Medical and Veterinary Science, also in Adelaide, was published in the Proceedings of the National Academy of Sciences. Results suggest that inhibitors of BN069 alone or in combination with other cancer drugs may be potent inhibitors of tumor cells and the angiogenic process. Bionomics is developing BN069 gene-silencing molecules as therapeutic candidates in collaboration with the Louisiana Gene Therapy Consortium.

• Caprion Pharmaceuticals Inc., of Montreal, was awarded a $13.1 million contract by the National Institute of Allergy and Infectious Diseases, a part of the National Institutes of Health in Bethesda, Md., to carry out biodefense research. Under the five-year contract, the company will study molecular events that enable bacteria to subvert the immune system through research that aims to define new pathways and proteins to provide a basis for the development of immunotherapy targets, vaccines and diagnostic candidates. Caprion will use its quantitative protein-profiling technologies to analyze pathogen and host proteins involved in Brucella infection.

• Cellomics Inc., of Pittsburgh, and IBM Corp., of Somers, N.Y., released an information technology product designed to improve understanding of the ways in which drug candidates or targets affect cellular function. Called the HCi Appliance, the product combines Cellomics' High Content Informatics software with servers, storage and management software from the computer giant.

• Cephalon Inc., of West Chester, Pa., and CIMA Labs Inc., of Eden Prairie, Minn., said the Federal Trade Commission cleared Cephalon to complete its acquisition of CIMA. The companies expect the $515 million transaction to close within the next few days. It was first reported last fall. (See BioWorld Today, Nov. 5, 2003.)

• Depomed Inc., of Menlo Park, Calif., and Biovail Corp., of Toronto, said their new drug submission for Glumetza was accepted for review by Canadian regulatory authorities. The product is a once-daily, extended-release formulation of metformin HCl for Type II diabetes.

• GB Therapeutics Ltd., of Mississauga, Ontario, gained a worldwide exclusive license to CHF3381 from Chiesi Farmaceutici SpA, of Parma, Italy. The molecule, which is a dual-mechanism N-methyl-D-aspartate antagonist and monoamine oxidase-A inhibitor, initially will be targeted for neuropathic pain. Phase II trials are expected to begin in the second quarter of next year. Financial terms were not disclosed.

• GeneGo Inc., of St. Joseph, Mich., licensed its MetaCore data-mining suite to Bristol-Myers Squibb Co., of New York. The product combines analytical tools, data content and algorithms for understanding interconnected pathways that are affected in common human diseases.

• Genentech Inc., of South San Francisco, said the FDA approved the manufacturing of Avastin (bevacizumab) at the company's facility in Vacaville, Calif. Avastin received FDA approval earlier this year for use in combination with intravenous 5-flourouracil-based chemotherapy as a first-line treatment for metastatic colorectal cancer, and is the first FDA-approved therapy designed to inhibit angiogenesis. (See BioWorld Today, Feb. 27, 2004.)

• Genstruct Inc., of Cambridge, Mass., said findings from one of its discovery programs reported at the Drug Discovery Technology World Congress in Boston point to probable molecular causes and mechanisms involved in androgen-dependent prostate carcinoma. The company used its Molecular Epistemics discovery platform to build and interrogate an Oncology Knowledge Assembly model using computer-aided causal reasoning. The findings showed the utility of causal reasoning models for hypotheses generation, and demonstrated a new approach to systems biology and drug discovery, the company said.

• ID Biomedical Corp., of Vancouver, British Columbia, reported data from a preliminary immune response analysis of an expanded Phase II adult safety study of its Group A streptococcal vaccine, StreptAvax vaccine. The vaccine induced high titers of antibodies to all 26 serotypes of Group A streptococcus it targets. The vaccine also appears to have been well tolerated, and there were no vaccine-related serious adverse events. The company expects to begin the next phase of testing in the first quarter of next year.

• Introgen Therapeutics Inc., of Austin, Texas, said Phase II data reported at the International Head and Neck Cancer Conference in Washington showed that Advexin has clinical activity and a positive safety profile as a cancer treatment. The product supplies high concentrations of the tumor-suppressor p53 protein to cancer tissue to selectively kill cancer cells. Two Phase III trials of Advexin are under way in recurrent squamous-cell cancer of the head and neck. Phase II studies in head and neck, lung and breast cancer have shown that it has clinical activity as a monotherapy and in combination with radiation and chemotherapy.

• Ligand Pharmaceuticals Inc., of San Diego, was named a defendant in a class-action lawsuit. The complaint charges the company and some of its executives with violations of the Securities Exchange Act of 1934 through failures to disclose wholesale inventory destocking as the company was unloading Avinza inventory, which was set to expire, onto wholesalers to show strong demand for Avinza and to meet sales expectations. Other allegations also relate to the drug. Last week, the company's stock fell 40 percent in a single day following the resignation of its independent accounting firm and earnings that fell short of estimates.

• Medical Discoveries Inc., of Twin Falls, Idaho, said pharmacokinetics data from a rabbit study of its MDI-P compound showed that the product's average in vivo half-life is 17.3 minutes. The company said the figure is notable because it demonstrates that MDI-P's pathogen-killing activity is compressed within short time frames, and the truncated half-life results in characteristics associated with a lower toxicity profile. The compound initially will be developed to target HIV.

• Memory Pharmaceuticals Corp., of Montvale, N.J., and F. Hoffmann-La Roche Ltd., of Basel, Switzerland, extended by two years their PDE4 collaboration under a 2002 agreement. Under the extension, Roche is committed to $5.25 million in funding for Memory's research efforts over a minimum of 18 months. Memory added that the extended deal would enable it to further develop what it called a promising target.

• Morphotek Inc., of Exton, Pa., entered an agreement to allow Baxter Healthcare Corp., of Deerfield, Ill., to manufacture its lead therapeutic antibody, MORAb-003, which is being developed for ovarian and other cancers. The monoclonal antibody recognizes a cell-surface antigen overexpressed in 90 percent of all ovarian cancers and a subset of other epithelial cancers. It was obtained from an ongoing collaboration with the Ludwig Institute for Cancer Research in Hilden, Germany. The agreement involves the optimization of lead antibodies that target cell-surface cancer antigens.

• Norak Biosciences Inc., of Research Triangle Park, N.C., said that H. Lundbeck A/S, of Copenhagen, Denmark, exercised its option to screen another of its G protein-coupled receptor targets of interest using Norak's Transfluor technology. The option was part of a December 2002 screening collaboration between the companies. Under the new agreement, Norak will develop a Transfluor cell line expressing the GPCR target of interest to Lundbeck, and then will screen the cell line on its high-throughput imaging systems against a compound library of Lundbeck's choice. Financial terms were not disclosed.

• Novadaq Technologies Inc., of Toronto, raised $9 million through a private equity financing. The company said it would use the funds to complete development of its product for the diagnosis and treatment of age-related macular degeneration and to pursue development of its cardiac bypass surgery product. Novadaq is developing two medical systems that use the chemical properties of indocyanine green dye in combination with devices. The funding was led by H.I.G. Ventures and included Ventures West. In conjunction with the investments, H.I.G.'s Aaron Davidson and Ventures West's Barry Gekiere joined Novadaq's board.

• OriGene Technologies Inc., of Rockville, Md., said the Structural Genomics Consortium at the University of Toronto and Oxford University in the UK gained access to the TrueClone collection for use in their structural genomics program. The collection includes more than 22,000 non-redundant, full-length human cDNA clones.

• Par Pharmaceutical Cos. Inc., of Spring Valley, N.Y., paid $7 million to purchase 875,000 common shares of New River Pharmaceuticals Inc., of Radford, Va., as part of the latter's initial public offering last week. The purchase price was $8 per share. Par's investment represents a 5 percent ownership of the outstanding common stock of New River, a specialty pharmaceutical company developing versions of widely prescribed drugs such as amphetamines and opioids.

• Paul Royalty Fund II LP, an affiliate of Paul Capital Partners in New York, agreed to purchase royalty rights relating to U.S. sales of Estorra from Aventis SA, of Strasbourg, France. The deal remains subject to the successful completion of the proposed buyout of Aventis by Sanofi-Synthelabo SA, of Paris. The divestment by Aventis was a prerequisite for the FTC to approve Sanofi's takeover bid. In exchange for the rights, Paul Royalty will provide Aventis with milestone and fixed payments totaling up to $115 million after the U.S. commercial launch of Estorra. The insomnia product, which remains under FDA review, is being developed and will be marketed by Sepracor Inc., of Marlborough, Mass.

• Sequenom Inc., of San Diego, entered a research collaboration with the Chinese University of Hong Kong for further development of a prenatal diagnostic application on the MassArray platform. The agreement includes the placement of a MassArray Compact DNA-analysis system at the university's department of chemical pathology. The collaboration's goal is to accelerate the introduction of non-invasive prenatal tests from the laboratory into the clinical diagnostic market through large-scale studies and benchmark analysis against existing invasive methods for prenatal testing.

• Signet Laboratories Inc., of Dedham, Mass., released the Acuity Mouse-on-Mouse Polymer Detection System. The product is designed to be sensitive enough to allow researchers to use mouse monoclonal antibodies on mouse or rat tissues.

• V.I. Technologies Inc., of Watertown, Mass., said that in an effort to protect its shareholders, it demanded an immediate delisting of its stock from the Berlin-Bremen Stock Exchange. The company said the listing was made without its prior knowledge, consent or authorization.

• YM BioSciences Inc., of Mississauga, Ontario, and its majority-owned subsidiary, CIMYM Inc., said their cancer drug TheraCIM hR3 was designated an orphan drug to treat glioma by the European Medicines Agency for the Evaluation of Medical Products. TheraCIM hR3 is licensed to CIMYM by the Center for Molecular Immunology at the University of Havana in Cuba. The designation provides TheraCIM hR3, a humanized monoclonal antibody, with up to 10 years of market exclusivity in Europe. Oncoscience AG, of Wedel, Germany, holds the European rights to the product.