By Lisa Seachrist
WASHINGTON — Cytogen Corp. will close its Cellcor Inc. subsidiary in 45 days if a buyer cannot be found.
The announcement comes four months after the company disclosed its intentions to sell Cellcor and two days after negotiations with an unnamed buyer fell through.
"We narrowed it down to one company several weeks to a couple of months ago," said James Grigsby, chairman of the board for the Princeton, N.J., firm. "We honestly thought it was a done deal. It was a complete shock to see it fall apart."
Cytogen acquired Cellcor, of Newton, Mass., and its autologous lymphocyte therapy (ALT) technology in 1995 for stock valued at $19.5 million. ALT involves an ex vivo procedure designed to activate a cancer patient's immune system. White blood cells are removed, and both killer and helper T cells are activated and infused back into the patient, where they find and attack tumors and viruses. The procedure has been tested in Phase III trials with metastatic kidney cancer.
Cytogen decided in March to halt the program and try to find a buyer to advance the therapy in order to focus on marketing its already approved products: Quadramet, a radiopharmaceutical drug for pain from bone cancer; ProstaScint, a diagnostic imaging agent for prostate cancer; and OncoScint CR/OV, a monoclonal antibody for detecting colorectal and ovarian cancers. (See BioWorld Today, March 27, 1998, p. 1.)
Grigsby noted Cytogen needs to focus its management resources and scant financial reserves on the marketable products. As of March 31, Cytogen had $2.5 million in cash and a burn rate of $1.1 million per month.
In December, Cytogen raised the first $7.5 million of a financing commitment that totals a potential $20 million from a small group of private investors buying 6 percent convertible preferred stock. The company has access to $12.5 million from the same source; however, drawing on that commitment is considered a last resort.
In addition to selling Cellcor, Cytogen is looking into other financing mechanisms.
"We made what is truly an agonizing decision on selling Cellcor," Grigsby said. "We do believe in it. We feel that we owe it to the management and the employees to try to find another buyer; and we are sensitive to the fact that we have patients enrolled in the clinical trials. The 45 days is really the compromise time."
Grigsby said that a sale doesn't need to be complete in 45 days, but that Cytogen has "to see pretty clearly" that a deal is in the works.
Cytogen's stock (NASDAQ:CYTO) closed Tuesday at $1.125, down $0.188. *