Procept Inc. is restructuring its research and development focus andreducing staff to save money while it finds partners to help fund itsprograms.
Procept ran into trouble last October when it was forced toreconfigure the dosing regimen in a Phase I/II trial of its lead drug,PRO 2000, just as company executives were preparing to go on theroad to generate interest in a stock offering. The financing was pulledand the company's stock dropped from the $6 to $7 range and settledat about $2.
Procept, of Cambridge, Mass., said Monday it plans to cut costs bynarrowing earlier research efforts and reducing staff about one-third_ from 60 to 40 people. The company plans to increase efforts toattract corporate partners.
The focus will be on HIV drugs, such as PRO 2000; a drugdevelopment program for infectious diseases with VacTex Inc., aCambridge company Procept helped found last January; and twoprograms for immunosuppression.
On Tuesday Procept detailed plans to develop a gel based on PRO2000 for use as a topical microbicide women could use vaginally tohelp prevent sexually transmitted diseases. Laboratory studiesshowed the drug is active against a range of HIV strains as well othersexually transmitted diseases.
Stanley Erck, Procept's president and CEO, said the plan is to get thePRO 2000 topical formulation into two Phase I trials this year,hopefully in collaboration with government agencies. The work doneto date on PRO 2000 should speed development. Erck said the gelcould be the leading topical microbicide candidate in development.(Other products such as spermicides are on the market but weren'tdeveloped as antiviral agents.)
Procept on June 30, 1996, had about $11 million in cash and 13million shares outstanding. The company, which has been spendingabout $3 million per quarter, expects to reduce the burn rate to about$1.8 million per quarter. "That will stretch our cash at least throughthe fourth quarter of next year," Erck said, "and give us ample time tofind partners for two or three programs."
Procept intends to continue developing PRO 2000 itself until theantiviral effects can be demonstrated in humans, Erck said.Demonstration of that benefit will increase the value to partners.
PRO 2000 is designed to prevent HIV from infecting T cells bystopping gp120 from binding to the CD4 protein. In a Phase I/II trialin Amsterdam last October patients developed side effects associatedwith the continuous infusion protocol. Procept later began a PhaseI/II trial of the drug in Brussels, Belgium, with a daily bolusinjection.
Procept has a collaboration with Sandoz Ltd., of Basel, Switzerland,to discover compounds that block the CD4-MHC interaction fortransplantation and autoimmune applications. The companies alsowere working on drugs to inhibit the CD2 receptor, but that part ofthe alliance was stopped last year
The CD2 program now is one for which Procept is seeking partners.Erck said Procept has all the tools for high-throughput screening andoptimization of candidates.
Another partnership candidate is in the area of small-moleculeimmunosuppressives.
A financing group called Boston Medical Investors Inc. provided $1million to help fund VacTex, a collaboration between Procept andscientists at Brigham and Women's Hospital in Boston. Another $1million of financing came in later from New Enterprises Associates inBaltimore.
VacTex's founding was based on discovery of the CD-1 system oflipid antigen presentation. The goal is to develop vaccines fortuberculosis and other infectious diseases. Procept gained anownership position in the company through its research contributionsand has an option to purchase the entire company.
In May 1996 Procept raised $11 million through the sale of fivemillion units, each consisting of one share and one warrant. Thewarrants can be converted into common stock at $2.50 per share forfive years.
Procept's stock (NASDAQ:PRCT) was unchanged on Monday'srestructuring news. It gained 6 cents Tuesday on the microbicidedevelopment to close at $1.56. n
-- Jim Shrine
(c) 1997 American Health Consultants. All rights reserved.