Corvas International Inc. cut its work force by 40 percent as part of a reorganization plan aimed at focusing on its later-stage products, while dropping the earlier drug programs.
By eliminating about 40 employees who hold research and administrative positions, San Diego-based Corvas believes it will save at least $8 million this year, Randall Woods, the company's president and CEO, told BioWorld Today.
"Reducing the work force is not a fun part of my job - a lot of really good people have been laid off here," Woods said. "But I also think that what we are charged with doing is making sure that we maintain adequate cash reserves, and then deploying the resources in a strategic manner that maximizes the value of the company. This was a difficult decision, but we felt that we needed to do it now and not wait until our cash reserves were depleted."
Corvas' stock (NASDAQ:CVAS) closed Tuesday at $1.72, down 3 cents.
After the market closed Tuesday Corvas released its second-quarter numbers. It reported cash and investments of $101.4 million. As a results of the restructuring, the company said it expected its cash burn to decrease to the mid-$20 million range. It reported about 27.5 million shares outstanding.
Under the reorganization plan, Corvas will place its focus on its lead product, rNAPc2, a cardiovascular drug candidate in Phase II trials. It is an injectable anticoagulant intended for the treatment of acute coronary syndromes, specifically unstable angina (UA) and non-ST-segment elevation myocardial infarction (NSTEMI).
Corvas in December reported that a Phase IIa study of rNAPc2 indicated that it appeared to be safe and well tolerated when administered before elective percutaneous transluminal coronary angioplasty. And Woods said the company has positive data from a Phase IIb trial of rNAPc2 in deep-vein thrombosis in total knee replacements.
Corvas hopes to initiate a Phase II trial of rNAPc2 by the end of the year for UA and NSTEMI patients, Woods said.
Corvas also will maintain its cancer projects, including its Protease Activate Cancer Therapy (PACT) program, as well as its corporate collaborations with Abgenix Inc., of Fremont, Calif., and Dyax Corp., of Cambridge, Mass., to develop therapeutic antibodies against cancer. (See BioWorld Today, May 15, 2002.)
"We are basically making sure that we focus money and resources on our later-stage projects that have the greatest chance for clinical success," Woods said. "The earlier-stage projects would take too much money and too much time before we would see success from them. They were great programs, very promising, and any other time we probably wouldn't do this, but given the way the markets are these days, you can't be certain what's going to happen over the next few years so we want to make sure we hang on to our money."
Staff reductions and the reorganization of priorities have nothing to do with the recent developments related to a deal with New York-based Pfizer Inc. Pfizer last month returned Corvas' neutrophil inhibitory factor (rNIF) after the product, also referred to as UK-279,276, failed to show activity in acute ischemic stroke patients in a Phase IIb trial, results of which were disclosed in April. (See BioWorld Today, June 18, 2002, and April 25, 2002.)
"We are still analyzing and getting information from Pfizer," Woods said. "We will see if there is value in pursuing any other indications for rNIF. But in terms of stroke, we know it doesn't work there, but there could be utility in other areas. But that is not our priority."