West Coast Editor

Large Scale Biology Corp. said it's cutting weight to preserve cash, letting go a third of its staff and trimming the paychecks of higher-paid employees, thereby saving at least $10 million by July 1.

At the same time, Vacaville, Calif.-based LSB said it is sharpening its focus to "speed [the company's] transition from the development of technology platforms to a market-driven commercial business."

Wall Street took the news amicably. The company's stock (NASDAQ:LSBC) closed Wednesday at $1.22, up 6 cents.

Daniel Moriarty, vice president of corporate affairs, said the firm has "too many things going on at once," and the economic times are hardly right for widely spaced efforts, he added.

"Internally, we have for a couple of months been looking at comparisons of other companies and other stocks," he told BioWorld Today. "The entire sector is absolutely battered, and the market valuations are just absurd."

The company is making moves at its corporate locations in Vacaville; Germantown, Md.; and Owensboro, Ky., reducing employees to 127 - a loss of 58 people since January.

About 28 of the more highly paid workers - that is, about 20 percent of the remaining staff after cuts - are taking a 10 percent cash compensation hit, and LSB's three highest-paid executives are sacrificing 20 percent.

Leigh Anderson, chief scientific officer, resigned from the company along with his father, Chief Scientist Norman Anderson, but both will serve as consultants. Larry Grill, co-founder of LSB, was appointed the new chief scientific officer. All business units will report to John Fowler, president.

LSB went public with an $85 million initial public offering two years ago, partly underwritten by William Blair & Co. LLC, of Chicago, which estimated LSB's cash would be about $33 million at the end of June. (See BioWorld Today, Aug. 11, 2000.)

An important area of effort among others, Moriarty said, will be the firm's automated Geneware technology, designed to insert genes into host organisms with the intention of finding both genes and gene function.

"We're doing the non-Hodgkin's lymphoma vaccine that we're completing Phase I on, and we're going into Phase II," he said. "Because this is new technology, we're really just validating for humans what we've already done in animals, and what we know we can do in huge quantities."

For the NHL vaccine, Moriarty said, the leaves of tobacco plants are being used at the Owensboro facility.

"We have things going on there that will be in other plants, but I'm not able to announce that yet," he said, noting that more news is expected in the next few weeks.

The company also will be moving ahead with Plurigen CM, the hematopoietic stem and progenitor cell growth factor.

"We're currently working with several companies and academic institutions on developing uses for the product that we'll share in," Moriarty said.

The proteomics lab in Germantown will see particular changes, he said.

"That's a facility where the total focus of the lab is on proteomics, rather than multiple activities," he said. "Proteomics, the entire industry knows, has not been able to be commercialized as quickly as the industry believed it would. We have numerous contracts and alliances for work that will be going on, but we're going to be doing less academic' work, if you will, and trying to concentrate on whatever we have in-house that makes it commercially viable."