By Mary Welch
With about $40 million cash on hand, ImmuLogic Pharmaceutical Corp. is ending its business activities and aiming to distribute its assets.
"We are now in the process of deciding what is the best way to carry that out," said Joseph Marr, president and CEO. "Until then, we're not prepared to give numbers or more details."
The company, which never recovered from its failed clinical trials of the allergy vaccines Allervax Ragweed and Allervax Cat, has five employees, down from an all-time high of 155 employees two and a half years ago.
In a Phase II trial reported in April 1996, Allervax Cat produced statistically significant benefit in only one of four dosing regimes. A month earlier, development partner Hoechst Marion Roussel, of Frankfurt, Germany, had pulled out of the collaboration. In January 1997, Phase II study results from the Allervax Ragweed trial demonstrated statistically significant benefit at one dose level, but failed to show as much in another. A second trial was delayed. (See BioWorld Today, June 30, 1997, p. 1.)
In late 1997, the company put both trials on hold, slashed staff and cut projected net cash spending from about $18 million to $3 million per year.
The Allervax products used allergy-causing proteins to teach the immune system not to respond to a specific invading allergen, such as ragweed pollen or cat dander.
"We just didn't see the efficacy we expected," Marr said of the trials. "We could have researched it and done more trials, but that would have been an expensive proposition, and it just didn't make sense."
However, the company retooled the allergy drugs and entered into agreements with Sankyo Co. Ltd., of Tokyo, for a treatment of allergies to Japanese cedar pollen; and with Heska Corp., of Fort Collins, Colo., to use ImmuLogic's recombinant allergen technology for diagnosis and treatment of allergies in humans and animals. (See BioWorld Today, May 28, 1998, p. 1, and June 22, 1998, p. 1.)
"We're considering the best method to deal with potential royalty streams in our collaborations with Sankyo and Heska," Marr said.
As the company's troubles piled up, ImmuLogic officials reviewed about 70 companies to merge with or acquire.
"We made the decision that it was better to save our cash than use it to acquire or merge with an early-stage biotech company," Marr said. "The important message is that we believe we have a good deal [with Cantab Pharmaceuticals plc, of Cambridge, U.K.], and we have been careful to conserve our cash and will maximize best return to our investors."
The deal with Cantab, in which Waltham, Mass.-based ImmuLogic sold two research-stage vaccine programs for the treatment of nicotine and cocaine addiction for $9 million in Cantab stock, is unaffected by the most recent development.
ImmuLogic gave $6 million in cash to help fund the vaccines' development through the end of 2000, by which time the vaccines should be in Phase II trials. Contingent upon their successful completion, ImmuLogic could reap as much as $11 million in milestone payments.
"We believe this is a very favorable deal for our shareholders, and I believe they will see a good upside on this," Marr said. Although Cantab is developing the vaccines, Marr said it is likely that ImmuLogic will have an operating role in the program.
ImmuLogic's stock (NASDAQ:IMUL) closed Monday at $1.718, up $0.218.