Cantab Pharmaceuticals plc, reeling from the failure of its leadproduct to prevent rejection in transplant patients, said Thursday thatit has been forced to cut costs and lay off one-fourth of its workforce.

Paul Haycock, president and CEO of the Cambridge, England firm,told BioWorld Today that the financially strapped company had nochoice but to ensure that it could survive without new capital for thetwo years it will take to bring other products to market.

Haycock said the failure of the anti-rejection drug LM-CD45 tograduate from Phase II trials will almost certainly "affect thecompany's ability to raise financing."

The cutbacks will cost approximately 12 workers their jobs. Thecompany said in a statement that it will help them in their efforts tofind other employment.

Cantab plans, Haycock said, to focus even more intensively on thecompany's primary products, TA-IIPV, a potential treatment forcervical cancer, and TA-GW, designed to treat genital warts.

Although it is in an earlier phase of development than the cervicalcancer product, TA-GW is likely to progress faster because it is lesscomplex, Haycock said.

The company, founded in 1989, aims to develop a range of productsthat exploit the immune system's ability to combat disease. Its currentdifficulties began a month ago, when the anti-rejection drug, LM-CD45, failed to live up to early expectations.

Baxter International Inc., of Deerfield, Ill. _ which had obtainedexclusive worldwide manufacturing rights and exclusive marketingrights in Japan, the Pacific Rim, North America and Europe _abruptly halted phase II trials of the drug when a one-month reviewof the drug's performance showed that treated patients fared no betterthan those on placebo.

Haycock called the early, unexpected demise of what he termed thecompany's lead product, a "disappointment."

Cantab, which was financed in the U.S. through a $10 million publicstock offering, predicts that the painful round of cutbacks will ensureits "financial position at its planned level of operations" without aninfusion of new funds until mid-1997, the company said in astatement.

Baxter, a pharmaceutical giant with total assets of more than $10billion, has a wide range of biotechnology interests. The company hasentered into agreements with more than a dozen biotech firms todevelop, manufacture or market a wide range of promising newproducts, ranging from clotting factors for hemophiliacs to diagnostictests for cancer, AIDS, hepatitis and sexually transmitted diseases.

In March, Cantab said it had 15.3 million in cash and short-terminvestments as of Dec. 31, 1994. The company reported a net loss of4.1 million in 1994. n

-- Steve Sternberg Special To BioWorld Today

(c) 1997 American Health Consultants. All rights reserved.