Restoragen Inc. said it is restructuring and as a result will cut half its work force, slashing jobs from 121 to 60.
The Lincoln, Neb., company, in a prepared release, said it would announce a realigned business strategy “in the coming weeks.” The statement indicated that the revised strategy likely will focus on Restoragen’s “core competence in developing commercially viable recombinant peptide product methods, as well as strategic partnering to develop and commercialize peptide-based therapeutics for clinically and economically important metabolic diseases.”
“Regrettably, this downsizing is necessary to restructure the company in a focused and strategic manner,” CEO Ashleigh Palmer said in the statement.
Palmer joined the company as CEO in January.
As part of the restructuring, Restoragen said it modified its clinical development program in Type II diabetes for rGLP-1 (recombinant glucagon-like peptide), which the company calls Betatropin. The product is in a Phase IIb trial in the United States.
The company said it focuses on regulatory protein hormone therapy and peptide hormone therapy, particularly middle-range peptides consisting of 20 to 50 amino acids. These include GLP-1 and growth-releasing factor (GRF). It said the deficiency or inability of those types of regulatory peptides to regulate major body systems can lead to obesity, osteoporosis and muscle frailty.
The company said it also is developing Betatropin for appetite control and weight reduction in obese patients and evaluating it for treatment of heart failure.
Restoragen said it has a proprietary peptide production technology for high-yield recombinant production, terminal amidation and purification of peptides at a relatively low cost.
Restoragen owns or has licenses to 34 U.S. patents.
According to its 10-Q quarterly report filed Nov. 13, Restoragen had cash and cash equivalents of $2.7 million on Sept. 30, and $1.1 million Oct. 31. The company said that based on its plan at the time and spending levels, it expected its cash would be exhausted by the end of November 2001. However, it said in the report that it was attempting to obtain interim financing in the form of both debt and equity. Restoragen said from May to September 2001, it had attempted a private placement of preferred stock to raise $30 million in operating funds, but was unsuccessful.
The company said since its inception in 1989, it had experienced operating losses and expected those to continue until a product received regulatory approval.
Company officials did not return phone calls seeking comment.