Advanced Viral Research Corp. said it is selling a manufacturing facility in the Bahamas and reducing its work force to 10 employees, allowing the company to focus on three clinical studies to be conducted in Israel.
Twenty-three employees will be released. The manufacturing facility in Freeport, Bahamas, was acquired in 1987 and was used to manufacture Advanced Viral's lead product, Product R, which is being produced at the company's plant in Yonkers, N.Y., where Advanced Viral is headquartered.
How much the work force reduction and the selling of the 29,242-square-foot facility will help the company financially was not disclosed. Company officials reiterated to BioWorld Today the points in Advanced Viral's press release, in which company chairman Eli Wilner said: "The board recognizes the difficulty of raising venture capital at terms favorable to the company given the current investment environment. As a result, we have made the painful but necessary decision to conserve capital by curtailing activities not directly related to the support of the Israeli clinical studies and our FDA commitments. Our singular objective is to ensure the long-term success of the company by doing everything necessary to bring Product R to market as efficiently and quickly as possible."
Product R is a nontoxic peptide-nucleic acid that appears to stimulate the proinflammatory responses required to combat viral infections and to work against autoimmune-type inflammatory responses, Advanced Viral said. In June, Advanced Viral received a series of approvals from the Ministry of Health in Israel to begin clinical trials - it was approved for Phase I/II trials in patients who have failed highly active antiretroviral therapy and require salvage therapy; for a Phase I trial in patients with hematopoietic and lymphoid tumors, including acute lymphocytic leukemia, Hodgkin's disease and non-Hodgkin's lymphoma, who also manifest symptoms of cachexia; and for a Phase I study in cachexia in patients with solid tumors.
Advanced Viral said the trials are expected to begin before the end of the year, and anticipates the trials should help facilitate the investigational new drug application process with the FDA.
In October, Advanced Viral presented data on Product R at the American Association for Cancer Research conference in Hilton Head Island, S.C. Results showed the product induced differentiation of the human promyelocytic leukemia cell line HL-60 in cell culture.
About a month earlier, the company said it completed a $3 million financing that would allow it to move the Israeli studies forward. It entered a securities purchase agreement and sold to certain investors 21.5 million shares of its common stock for gross proceeds of about $3 million, or 14 cents per share. It also issued warrants to purchase an aggregate of about 16.1 million shares of the its common stock that are exercisable for five years the date of issuance at an exercise price of 25 cents per share, subject to adjustment.
Advanced Viral's stock (OTCBB:ADVR) fell nearly 2 cents Friday, or 20 percent, to close at 7.5 cents.