Washington Editor

In a restructuring effort aimed at focusing on its three lead products, EntreMed Inc. opted to eliminate a quarter of its Rockville, Md.-based workforce.

John Holaday, company chairman and CEO, said the staff cuts are across the board and involve about 30 of the company's 115 employees. Aside from the reduction, the company has deferred a portion of the salaries of all senior management.

On the bright side, all remaining employees will turn their focus to development activities surrounding two protein drug candidates, Endostatin and Angiostatin, and an orally available small-molecule drug candidate called Panzem. All products are in Phase II trials.

"Our products are doing well, and we've got a rich pipeline," Holaday told BioWorld Today. "We're not dropping programs, but in some cases we are suspending very early preclinical research that will be picked up later on. By and large, what we are doing is refocusing our energies toward a lower burn rate to accommodate the present environmental circumstances for those of us in this industry."

Holaday wouldn't discuss the company's second-quarter financial results, saying the figures would be made public in a conference call Aug. 14. However, he said the company had $26 million in available cash at the end of the first quarter.

Staff cuts and manufacturing cost reductions are expected to lower operating expenses between 30 percent and 40 percent, beginning in the fourth quarter, Holaday said.

Expenses likely were higher in the past because EntreMed was heavily manufacturing, stockpiling products to support its clinical trials through the year 2003. EntreMed's three drugs are being studied in 17 trials.

"In biotech, often companies transition from academic and [research and development] into more commercially oriented companies - and that is exactly what we are in the process of doing," Holaday said.

In May, EntreMed filed a $50 million shelf registration, and last December, the company closed a $22.6 million private placement earmarked to drive its three main products. (See BioWorld Today, Dec. 20, 2001.)

Angiostatin in combination with chemotherapeutics is being studied in non-small-cell lung cancer. Panzem, an orphan drug, is begin studied in various cancers including breast cancer, and Endostatin, also an orphan drug, is being studied in Stage IV metastatic melanoma.

EntreMed's stock (NASDAQ:ENMD) rose 1 cent Wednesday to close at $2.69.