Under the direction of a new CEO, Oxford GlycoSciences plc released a plan Thursday to reduce its burn rate and improve performance by dividing its business into three separate units.
Located in Oxford, UK, OGS intends to become a research and development-based company with a focus on products for oncology and inherited storage disorders, supported by a proteomics division, David Ebsworth, OGS's CEO, told BioWorld Today.
Formerly the global head of pharmaceuticals at Bayer AG, of Leverkusen, Germany, Ebsworth came on board as OGS CEO July 1, replacing Michael Kranda, who resigned for personal reasons. In announcing the restructuring plan during a conference call with investors and analysts Thursday morning, Ebsworth said splitting the company into three divisions "will improve the transparency to you as analysts and investors so you can clearly see what is going into each of those businesses and what is being generated by those businesses, and to reinforce management's accountability."
As of June 30, he said OGS's cash balance was £153.4 million (US$238.8 million), and revenue for the six months leading to June 30 was £5.8 million. The loss for the period was £19.5 million, reflecting the expansion of OGS's drug discovery programs with NeoGenesis Pharmaceuticals Inc., of Cambridge, Mass., and BioInvent International AB, of Lund, Sweden, and manufacturing costs associated with the Zavesca launch.
Aside from the new business approach focusing on three separate areas, Ebsworth said in the past 90 days he and other members of management have taken other steps to control costs, including two rounds of layoffs over the summer affecting 50 full- and part-time workers. The first job cuts occurred in the U.S. by way of closing the Bridgewater, N.J., facility, and the second round took place in late August in the UK.
Meanwhile, the company has been working against at least one roadblock to bring its lead product, Zavesca (formerly Vevesca), to market. The FDA in June issued a "not approvable" letter in the case of Zavesca for Gaucher's disease in patients for whom enzyme replacement therapy is unsuitable. (See BioWorld Today, 25, 2002.)
Ebsworth told conference call listeners that he was "fresh off the plane" from an FDA meeting to discuss Zavesca. He expects notification from the agency within 30 days referencing steps to increase the drug's chance of winning approval. European approval is pending, he said, and subsequently, the company will begin working in Israel for regulatory clearance.
OGS signed a deal in July with Allschwil, Switzerland-based Actelion Ltd. to market and distribute Zavesca in Europe. Ebsworth said a partner has not been named in the U.S.
Just behind Zavesca in the inherited storage disorders pipeline, OGS is working on OGT 923, an analogue of Zavesca expected to be dosed in humans by the end of the year. And after OGT 923, OGS has a few other oncology projects, Ebsworth said.
Namely, the lead product is MDX-OGS 001, a heparanase 1 antibody being developed in conjunction with Medarex Inc., of Princeton, N.J. The companies expect to file an investigational new drug application in the second quarter of 2003.
"There clearly is a gap between Zavesca as the lead and the clinical portfolios coming forward," he said. "Restructuring will provide clear focus in the various areas, and I believe focused responsibility in our organization is one way to deliver results. It won't close the gap between the products. What we're going to have to do there is buy products or a company.
"Our prime goal is to buy other companies, but if somebody makes an offer to buy us, and it is the right financial offer, then we would offer that to the shareholders," Ebsworth told BioWorld Today.
Going forward in the proteomics division, he said, the strategy is to "further extend commercial relationships, commercialize existing intellectual property and create new product offerings." OGS is involved in a collaboration with New York-based Pfizer Inc. to identify biomarkers for Alzheimer's disease and arteriosclerosis and with Bayer to identify therapeutic targets for asthma and chronic obstructive pulmonary disease.
Recently, he said, the company signed an initiative with the Cystic Fibrosis Foundation Therapeutics Inc., of Bethesda, Md., to discover and validate serum biomarkers of cystic fibrosis and associated pulmonary complications. And OGS has recently entered an agreement with the FDA's Center for Drug Evaluation and Research to identify serum protein biomarkers that could be used during drug development for early prediction and evaluation of drug-induced toxicities.
Beginning in January, each of the three business units will report separately, Ebsworth said. Financially, the proteomics division will aim to achieve profitability in 2003 and the inherited storage disorders division should be profitable in 2005. Oncology will be the company's primary area of investment, Ebsworth said.
OGS's stock (NASDAQ:OGSI) closed Thursday at $2.41, down 10 cents.