It was déja vu, but not the same.

In August 2002, when ViroPharma Inc.'s deal with Aventis Pharmaceuticals Inc. to develop Picovir (pleconaril) for the common cold ended - the arrangement was terminated by mutual consent, and ViroPharma's stock fell more than 25 percent - CEO Michel de Rosen told investors: "Today is the day when we begin to look forward again."

Part of that looking forward turned out to be reducing ViroPharma's work force by 63 percent, although that reduction included the 200-person sales force put together for Picovir, which Aventis bought for $15.4 million.

Last week, what might have seemed like a similar scenario unfolded. ViroPharma didn't lose any deals, but it did reduce its staff, this time by 70 percent. The company also started shutting down its biodefense program and said it would end the development of pleconaril for life-threatening diseases (though the work on an intranasal formulation for the cold with Schering-Plough Corp. will continue, as will a hepatitis C program with Wyeth).

ViroPharma was awarded in October two Phase I Small Business Innovation Research grants from the National Institutes for Allergy and Infectious Diseases - together they totaled up to $2.26 million. One is focused on the company's smallpox antiviral project, and the second award is for efforts in viral hemorrhagic fever viruses - Ebola, Lassa and Rift Valley fevers, and Machupo.

De Rosen's words about the latest move echoed the earlier one. He told BioWorld Financial Watch the cutbacks will provide "value, flexibility, freedom and power to make more moves going forward." The company's stock sank just more than 14 percent, so Wall Street apparently took the news as more bad tidings, but de Rosen said the news was misconstrued.

"There is another way to look at it, in fact a really different way to look at it," he said. "In 2002, the restructuring we implemented came after a not-approvable letter [from the FDA] for pleconaril," which came in March, with the Aventis-deal termination following in August. The oral version of the drug had failed in a Phase III trial in April 2000.

By offloading the sales force to Aventis, ViroPharma was "in a way, moving back to R&D," de Rosen said last week. "This time, it's nearly the opposite move."

The company is saying goodbye to fewer than 50 staff members in the current reduction, and - in line with the market's clamor for viable products - is taking aim at becoming a "development and commercial" firm, rather than one that is R&D based, de Rosen said.

"We do not want to be a primary-care company," he said. "We want to build franchises that will be focused and rooted in products we already have. The company used to be defined by its therapeutic, scientific focus. We now want to be more customer-focused, market-focused, and define ourselves according to the target audiences. We're far from being a perfect company, but I think business development wise, our track record is not bad."

ViroPharma will target two main areas: transplant centers, to which would be marketed mirabavir, the near-Phase I cytomegalovirus drug licensed from GlaxoSmithKline plc in August 2003; and gastroenterologists, to whom the company would sell the drug for hepatitis C (also preparing to enter Phase I) that is expected to emerge from a collaboration with Wyeth.

The company has experience building a sales force, de Rosen pointed out, saying, "We've done it before and we believe we can do it [again]."

De Rosen said the company will seek in the transplant and gastroenterology areas to "buy, in-license, or co-promote [more drugs] - there are many ways to skin the cat. We don't want to be too rigid. We've been approached [for deals] in the past months that are not exactly in these two bull's eyes, but not far," he added.

If Schering-Plough, which has an option agreement with ViroPharma for the intranasal pleconaril, goes ahead with a full licensing deal, ViroPharma would get $10 million and Schering-Plough would buy the existing drug inventory.

Pleconaril is "a brilliant product, potentially very big, but it's a primary-care product," de Rosen said, and therefore doesn't fit the plan. "We thought it made much more sense, in our new strategy that we've been working on for months, to out-license [the drug]."

The plan briefly took a back seat to more human concerns, de Rosen said last Tuesday.

"We've been spending a lot of energy preparing this, but today our energy was focused on the people of ViroPharma," he said, adding that "some of them were going out the door, and we saw people one by one." The decision to make the layoffs was "very painful," he said.

With those behind him, de Rosen and others remaining at the firm will start looking to bring more into the pipeline - but sensibly. He did not want to estimate how much time might elapse before the first catch is disclosed.

"It's not like you rush to a deal, just to say you've done a deal," he said.

"Look, I got burned before in my life, and I can tell you that for me and for my colleagues in the new ViroPharma, this will be the No. 1 priority. I'm going to spend 80 percent [of my time] on that."