Corixa Corp. reported its third-quarter earnings, also saying that it is restructuring the company "to focus on priority programs with the greatest opportunity for near-term success" and reducing its work force by 18 percent.
The downsizing will include unfilled positions as well as existing ones and is expected to save the company $8 million annually. Seattle-based Corixa expects to incur a fourth-quarter restructuring charge of up to $2.5 million.
The cuts will leave Corixa with 344 employees at its facilities in Seattle, South San Francisco and Hamilton, Mont.
Steven Gillis, Corixa's chairman and CEO, said in a prepared statement that company research has "yielded more opportunities than we can financially afford to pursue at this time." He added that the company is pursuing "the greatest opportunities for near-term commercial success."
Following the restructuring, those opportunities do not include Melacine, its vaccine for melanoma. The company has discontinued U.S. development, basing that decision on the required additional Phase III trial that would most likely take another five to seven years to complete. Corixa said it is in discussions to outlicense or sell the program. (See BioWorld Today, March 1, 2002.)
The company said it will focus on its core areas of expertise, namely monoclonal antibodies, vaccines and adjuvants and TLR4 agonists and antagonists. Its pipeline includes its MPL adjuvant, which is partnered with affiliates of London-based GlaxoSmithKline plc and Wyeth, in Phase III trials in allergies, hepatitis B and herpes.
The company is developing PVAC in psoriasis, but how much interest there is in the program remains to be seen. A research note from SG Cowen Securities Corp.'s Phil Nadeau questioned whether that might be the next program cut.
Beneath Melacine, "the next most mature product in Corixa's pipeline is PVAC," Nadeau wrote. And while the U.S. Phase II trial in mild to moderate psoriasis is fully enrolled with results expected by the end of the year, Nadeau doesn't "believe that PVAC will rescue Corixa's pipeline." He said the commercial potential of any injectable biologic in mild to moderate psoriasis is "questionable," and added that Corixa will make a decision on the program once all data are available.
The company reported total third-quarter revenues of $7.4 million. Excluding acquisition-related charges, net loss applicable to common shareholders and diluted net loss per common share were $21.9 million and 40 cents, respectively. Consensus estimate had the company losing 37 cents per share for the quarter.
The company reported cash, cash equivalents and investments of $200.9 million as of Sept. 30.
The company launched Bexxar, which consists of an antibody specific to the CD20 antigen on B cells conjugated to radioactive iodine-131, in the quarter, having begun pushing the drug within 30 days of receiving FDA approval for non-Hodgkin's lymphoma in late June. Corixa did not disclose Bexxar revenues in its earnings, but a research note from Thomas Dietz, analyst with Pacific Growth Equities in San Francisco, said the launch "is progressing rapidly." Dietz noted that Corixa, along with partner GSK, received full CMS reimbursement codes three months after approval and said a survey shows doctor awareness for the drug is high. (See BioWorld Today, July 1, 2003.)
Corixa's stock (NASDAQ:CRXA) fell 50 cents Friday to close at $6.20.