By Mary Welch
Techniclone Corp. will cut its work force in half over the next several weeks and, unless it has access to new funds, will be unable to fund operations after November.
The Tustin, Calif.-based company said it would substantially reduce all operations, other than clinical trials and related support functions. Techniclone also is in various stages of negotiations with potential corporate partners for its Vascular Targeting Agent (VTA) technology as well as in preliminary discussions to secure additional funding. The investment banking firm of US Bancorp Piper Jaffray, of Minneapolis, was hired to pursue strategic alternatives.
The news resulted in a 32 percent drop in Techniclone's stock (NASDAQ:TCLN) as it closed Tuesday at 40.63 cents, down 18.75 cents. Company executives said they would have no comment.
Techniclone reported cash and cash equivalents of about $2.4 million as of April 30, 1999, in its year-end statement for 1999. The company posted year-end revenues of $380,000, down from $534,000 in 1998. Techniclone posted a net loss of $19.5 million, up from a net loss of $11.8 million in 1998. As of Aug. 31, the company had 78 million shares outstanding.
Despite its bleak financial situation, the company has several programs in clinical trials.
Currently in Phase II/III trials is Oncolym, a therapy for the treatment of advanced non-Hodgkin's B-cell lymphoma. Oncolym is a murine monoclonal antibody radiolabeled with iodine-131 and is highly specific for the HLA-Dr antigens on the surface of B cells.
Earlier this year, the company entered into a $20 million licensing deal for Oncolym with Berlin-based Schering AG. The deal included a $3 million up-front payment and Schering assumed 80 percent of the existing clinical trial costs. At the time the deal was announced, the two were also negotiating terms of a possible licensing of Techniclone's VTA technology. VTA includes agents that block the flow of oxygen and nutrients to a solid tumor's vascular network, causing clotting and necrosis. (See BioWorld Today, March 23, 1999, p. 1.)
When the deal was consummated, Techniclone's president, Larry Bymaster, said he thought Oncolym sales could translate into annual revenues of $150 million.
Its tumor necrosis therapy program is in Phase II and is designed to deliver high doses of radiation directly to the core of the tumor while causing minimal damage to surrounding tissue.
Techniclone also has an ongoing Phase II trial of Cotara for the treatment of malignant glioma or solid tumor brain cancer. Cotara, which is radiolabeled with Iodine 1-31, is able to expose neighboring living tumor cells to beta radiation. Cotara is also in Phase I/II trials for the treatment of pancreatic, prostate and liver cancers.
Its third technology, in preclinical development, is Vasopermeation Enhancement Agents. VEAs are monoclonal antibodies that increase tumor blood vessel permeation for enhanced uptake of chemotherapeutic agents versus normal tissues.