By Mary Welch

Creative BioMolecules Inc. cut its staff from 70 to 43 and will devote its attention to its morphogenic protein-based clinical candidates for stroke and renal disease.

The layoffs and redirected efforts will loosen up several million dollars that were originally budgeted in 2000 to support discovery research programs.

"This is not a cutback and our burn rate won't be affected," said Karla MacDonald, the company's manager of corporate communications. "It is a refocusing of resources - a channeling of financial and human resources from earlier-stage discovery programs and using them to support the clinical development of our stoke and renal disease programs.

"We evaluated our research and development efforts and decided to put our attention to the programs where we have received some notably encouraging new data - namely stroke and renal disease."

The company will not apply any more resources to its early-stage programs. "We had been looking at bone morphogenic proteins for a variety of indications," MacDonald said. "However, we won't be going forward with those programs."

Creative BioMolecules, of Hopkinton, Mass, expects to file investigational new drug applications for candidates for stroke in the third quarter of next year and renal disease in the fourth quarter of 2000.

The company had been partnered for the renal indication with Cambridge, Mass.-based Biogen Inc. in a deal that could have been worth $122.5 million. Biogen paid $28 million up front, including an $18 million equity investment that represented 4.7 percent of the company. (See BioWorld Today, Nov. 11, 1996, p. 1.)

However, that deal was restructured last year, with Biogen returning the primary responsibility to Creative BioMolecules. Biogen provided $4.7 million in research support and has until the end of the year to exercise an option to take back control of the program.

Both trials will involve OP-1 (recombinant osteogenic protein-1), a morphogenic protein that is part of the transforming growth factor-beta superfamily. OP-1 assists embryonic cells in their differentiation into more specific cells that make up tissues and organs of the body. For renal failure, OP-1, which is produced in the kidneys, seems to slow the degeneration of the kidneys by halting cell death, the company said.

The company's lead product, OP-1 Implant, is currently being reviewed by regulatory agencies in the U.S. and Europe. The bone graft device is partnered with Stryker Corp., of Kalamazoo, Mich. The device, a combination of OP-1 and a resorbable collagen scaffold, is a paste-like material that is surgically implanted in bone fractures that have not healed. The protein activates a highly specialized bone cell reaction that starts normal bone regeneration.

"We hope that Stryker will be able to launch next year," MacDonald said.

Creative BioMolecules reported a net loss of $5.6 million for the first six months of the year on revenues of $2.8 million. As of June 30, the company had about $26.6 million in cash.

Creative BioMolecules' stock (NASDAQ:CBMI) closed Tuesday at $3, up 6.25 cents.