BioWorld International Correspondent
LONDON - Oxford GlycoSciences plc is restructuring to reduce its burn rate by £3.5 million per annum and focus on inherited storage disorders and oncology.
The move will see the company reduce expenditures on its flagship proteomics technology platform by 40 percent, or £2.4 million (US$3.8 million) per annum. It has also closed its facility in Bridgewater, N.J.
David Ebsworth, who became CEO in July, said that following a strategic review and the cost cutting, the company has a renewed direction. "We see OGS becoming an R&D-based pharmaceutical company with a focus on products for oncology and inherited storage disorders, supported by world-class proteomics."
The changes will see the company, based in Abingdon, drop its discovery programs in central nervous system and infectious diseases. Three business units, Oncology, Inherited Storage Disorders (ISD) and Proteomics, will be set up, which will report separately beginning in January.
Proteomics will aim to achieve profitability in 2003, and ISD in 2005. Oncology will become the main area of strategic investment for OGS's £150 million cash pile. "This will fund the development of high-quality oncology products, both from the development of our existing in-house portfolio and from strategic acquisitions of products and, where appropriate, companies," Ebsworth said. "The aim is to attract the best clinical oncology programs in the industry."
OGS will exploit targets discovered by its proteomics technology to uncover novel modes of action. It expects its first in-house-discovered oncology drug to enter Phase I in 2003.
The Proteomics unit is forecast to have revenues of £14 million from licenses and collaborations for 2002. Ebsworth said that as a result of the reduced cost base, "We believe the Proteomics unit will be able to compete effectively for business not previously available to it."
Overall, Ebsworth said the new organization would provide greater transparency and form "the basis for an improvement in OGS's performance, a reduction in cash burn and a restoration of shareholder value."
OGS shares fell by 9 percent to £1.45 last week, giving the company a market capitalization of £80 million.