The Immune Response Corp. said Monday it is reducing its staff in an effort to cut costs by $1.8 million per quarter while narrowing its focus to its most advanced product, the HIV therapeutic vaccine, Remune.
The Carlsbad, Calif.-based company also said that following a meeting Friday of its board, CEO and President Dennis Carlo resigned and the company appointed Ronald Moss as president. Carlo had been CEO since 1994, while Moss, who joined the company as medical director in 1994, had served in other positions before being named vice president, medical and scientific affairs in January 2000.
The company had $1.1 million in cash as of June 30, with a net loss of $8.1 million for the quarter. The plan to cut 28 of 42 employees - leaving a core of 14 focused solely on Remune - is expected to result in savings of $7.2 million over time and $600,000 monthly, the company said. Immune Response also is taking steps to improve its cash position.
"We're in the middle of an offering right now with Spencer Trask & Co.," Immune Response's Michael Jeub, vice president of finance and chief financial officer, told BioWorld Today.
That offering is a unit offering. With additional warrants, it could result in an additional $10.4 million if the 30 percent overallotment option is exercised. The offering could raise an additional $28 million upon the exercise of both A and B warrants, Jeub said. It also was announced Monday that Jeb Trosper, CEO of Spencer Trask, would be joining Immune Response's board.
At the time second-quarter results were announced in August, Jeub said in a prepared statement that if that offering goes as planned and the additional $28 million is raised, the company would have sufficient cash to fund operations, excluding capital improvements, through September 2003. The company also said it completed after the end of the second quarter a private placement of $2 million of convertible notes, warrants, and a short-term promissory note with The Kimberlin Family 1998 Irrevocable Trust.
Now, to further reduce costs, the company is taking other measures, including subleasing 50,000 square feet of its King of Prussia, Pa., location. The company, which also has two buildings in Carlsbad, will be subleasing the larger of those two and moving into the smaller one, Jeub said.
"Those actions are at least half the dollars we're trying to save," Jeub said.
Moss told BioWorld Today that he would like the company to meet with FDA regulators within two months to help determine the next steps for Remune. In July at the International AIDS Conference in Barcelona, Spain, the company presented Phase II data that showed the vaccine stimulated HIV-specific immune responses that correlated with the control of virus in a three-year, 243-subject, double-blind, adjuvant-controlled trial.
"We are in the process of requesting meetings with the regulatory authorities in both Europe and the U.S.," Moss said, noting that company officials had not yet discussed those Phase II results with regulators.
One of the topics of discussion will be whether the Phase II data are "robust enough" on their own, or whether regulators would require additional trials.
"They may well request another trial," Moss said. "I don't think we can predict, [but] we are prepared to do additional studies." He added that the moves reported Monday would allow them to do just that, if necessary, and it would be doing those studies under new leadership.
"Our CEO who has just stepped down was a major factor in getting us close to the finish line," Moss said, although he said the company "felt [it] needed someone with extensive regulatory experience with the ability to get drugs approved both here and in Europe."
Remune has been up and down. A Phase II trial completed in Spain was originally thought to be a failure, and in July 2001, Immune Response's Remune partner, Agouron Pharmaceuticals Inc., returned rights to the vaccine. But an analysis done by an independent Data Safety Monitoring Board found the company actually hit the primary endpoint and the Phase II trial was considered a success. The company is seeking to repartner the drug. (See BioWorld Today, April 24, 2001; July 9, 2001; and Aug. 31, 2001.)
Moss also emphasized that the company will continue seeking to partner its other product candidates, including vaccines for rheumatoid arthritis (Ravax) and multiple sclerosis (NeuroVax), both of which have completed Phase II trials.
"We also have some cancer vaccines that at least in preclinical models have shown promising [results]," he said.
Another focus now is to ramp up the company's manufacturing operation in King of Prussia, Moss said, and five professionals will be hired to orchestrate that initiative.
Immune Response's stock (NASDAQ:IMNR) fell 1 cent Monday to close at 56 cents.