Citing a lack of operating capital as the cause, Receptagen Ltd. haslaid off 27 employees at both the company's drug distributionoperation in Burnaby, British Columbia and its biotech operation inEdmonds, Wash.
The layoffs would be temporary, Joseph Baba, director of investorrelations, told BioWorld Today, until "certain financing comesthrough."
"We intend to call back these employees," he said, "when thefinancing comes through. He added, however, that if the financingdidn't close, there could be some structural changes to the company.
Baba said an investor, Dennis Fowler, who owns a company entitledPharmaceutical Consultants and Investments Inc., in the CaymanIslands, had signed in July for a convertible debenture and an equityplacement for $20million. The investment, Baba said, would give Fowler 64 percentownership in the company.
"We were initially expecting approximately $3.7 million to come inAugust," Baba said," then it was pushed to Oct. 17 and now it's anyday."
Receptagen, which has 10 remaining employees, is composed of twobusiness ventures: two biotechnology subsidiaries, Receptagen Corp.and Ryan Pharmaceuticals Inc., and Vancouver Wholesale DrugDistributors.
Receptagen, in Edmonds, has been pursing worldwide developmentof proprietary "growth blocker" drugs to induce apoptosis in cancercells. Initial targets for "growth blockers," the company said, areAIDS patients who develop lymphomas.
Ryan Pharmaceuticals, also in Edmonds, owns the exclusive rights toU.S. commercialization of a company product, Coenzyme Q10, foruse in treating AIDS symptoms. Coenzyme Q10, the company said,has been shown in an animal model to prevent neuronal tissuedamage that occurs with stroke, stimulates the immune system byincreasing the numbers of circulating T cells and has anti-oxidantproperties.
CoQ10 has demonstrated potential clinical benefit in a Phase I pilottrial in AIDS patients. The company, through its acquisition of RyanPharmaceuticals, has acquired a U.S. patent for the use of CoQ10 inthe treatment of AIDS symptoms and is pursuing marketing CoQ10as a nutritional supplement for use in conjunction with other AIDStherapeutic products.
In January, Receptagen raised $1 million through a convertibledebenture private placement with Great Fund Development HoldingsLtd., of Hong Kong. Great Fund also agreed to make an equityinvestment of up to $8 million later in the year and it received anoption to purchase up to 80 percent of Ryan Pharmaceuticals Inc., for$7 million. n
-- Frances Bishopp
(c) 1997 American Health Consultants. All rights reserved.