As part of a restructuring plan prompted by the failure of its lead product, Synsorb Biotech Inc. is selling its manufacturing facility and intellectual property related to the failed product.
Synsorb, of Calgary, Alberta, took a major hit in December on the U.S. stock market, falling 52 percent on news that it would stop development of Synsorb-Cd for recurrent Clostridium difficile-associated diarrhea because of high Phase III dropout rates and inadequate enrollment. After about 19 months, the company had enrolled only 205 patients out of the targeted 680. (See BioWorld Today, Dec. 12, 2001.)
On Tuesday, the company’s stock (NASDAQ:SYBB) closed unchanged at 22 cents.
Termination of the Synsorb-Cd trial forced the company to reduce its work force from 42 to 24 and look for other ways to cut its burn rate. There have been no additional layoffs, but others are expected later this year.
Cindy Gray, manager of Synsorb’s investor relations, told BioWorld Today that the company is now looking for a buyer for its 30,000-square-foot pharmaceutical manufacturing facility in Calgary. “We are indeed seeking a buyer or buyers and the facility is not being handled by a real estate agent at this point,” she said. “We also are selling the intellectual property related to the Synsorb technology.”
Furthermore, Gray said the company negotiated a repayment schedule for the C$5 million (US$3.1 million) borrowed for construction of the facility.
Gray said decisions are pending regarding the future of the company.
“The principal message we want to convey today is that the debt repayment has been restructured so that instead of a longer-term debt repayment, we will repay it by June 30 [payments will begin Jan. 31],” Gray said. “And we want to signify to the market that the manufacturing facility is up for sale.”
Although research and development work, as well as nonessential operations at the manufacturing facility have been terminated, the company released a statement saying sufficient staff is in place to maintain compliance with good manufacturing practices pending a sale.
As of Dec. 31, Synsorb had cash balances of C$5.8 million and owned 6,255,800 shares of Oncolytics Biotech Inc., the Calgary-based developer of Reolysin, a potential cancer therapeutic. The shares were worth C$20.5 million at market close Monday. The total debt of Synsorb Dec. 31 was C$5.9 million. Synsorb also owns a stake in BCY LifeSciences Inc., of Toronto, and has an equity-line agreement with Roseworth Group LLC, of the British Virgin Islands, under which Synsorb could sell up to 1 million shares of Oncolytics Biotech over 12 months.