In light of its failed Phase III trial of Neotrofin in Alzheimer’s disease reported last week, NeoTherapeutics Inc. said Tuesday it is changing course and focusing on the out-licensing of its drug candidates in neurology.
Secondly, it said that it will focus on the internal development of its in-licensed cancer compounds.
NeoTherapeutics, of Irvine, Calif., reported last week that its lead drug, Neotrofin, failed to meet its primary 12-week endpoints in a pivotal Phase III trial. The company’s stock fell 63.6 percent, or $1.40, to close at 80 cents when the results were reported. (See BioWorld Today, April 30, 2002.)
NeoTherapeutics’ stock (NASDAQ:NEOT) fell 29.3 percent Tuesday, or 17 cents, to close at 41 cents.
Company officials could not be reached for comment Tuesday.
The company said it expects to decrease its burn rate from $7 million per quarter to about $3.5 million per quarter, in part due to the fact that the Phase III trial in Alzheimer’s disease is complete. Other cuts will come in clinical and research staff working on Neotrofin and a reduction in administrative staff. Still more cost savings will be achieved by the elimination of manufacturing expenses for Neotrofin.
NeoTherapeutics said it is in discussions with pharmaceutical companies regarding potential licensing agreements to develop AIT-034 for dementia; NEO-339, which the company said has demonstrated activity against cognitive impairment; and its anti-psychotic platform.
Phase II studies of Neotrofin continue in Parkinson’s disease, spinal cord injury and chemotherapy-induced neuropathy.
Last week, NeoTherapeutics said it would direct its clinical work toward its anticancer drug satraplatin, which it licensed from Johnson Mathey plc, of London, in September. The company said its oncology subsidiary, NeoOncoRx Inc., plans to launch a Phase III trial of satraplatin in prostate cancer during the third quarter.