With no hope of completing negotiations for a corporatecollaboration by the end of this year, ImmunoGen Inc. said Mondayit was laying off 60 percent of its work force, suspending newproduct development programs and cutting senior managementsalaries by 20 percent.
Mark Ratner, ImmunoGen's director of external communications,said the Cambridge, Mass.-based company will reduce its 180-person staff by more than 100 employees from all departments andshut down its manufacturing facility.
The 20 percent salary cuts, he added, will affect the company's topfive or six executives, including the chairman and CEO, MitchelSayre.
ImmunoGen's stock (NASDAQ:IMGN) closed Monday at $2.62,down 87 cents.
Ratner said the spending reduction plan will not affect developmentof ImmunoGen's lead product, Oncolysin B, which is in clinicalstudies for several indications, including Phase III trials forpreventing relapses in lymphoma patients after autologous bonemarrow transplants.
The company's research subsidiary, Apoptosis Technology Inc., ofCambridge, Mass., also will be spared any cuts.
"The spending reductions," Ratner observed, "are not the result ofany product blow-up. We're cutting costs to extend survival of thecompany."
For the quarter ending Sept. 30, ImmunoGen reported cash totalingabout $16 million and a burn rate of more than $5 million quarterly,meaning the company could continue operating through next springwithout additional resources or expense reductions.
The company estimated the cost-savings plan will reduce the burnrate to less than $1 million per month.
Ratner said ImmunoGen was discussing corporate collaborations, butcould not reach any agreements. None of the potential collaboratorswas identified, but he added that the company will continuesearching for partners.
ImmunoGen, which has about 12.6 million shares outstanding, alsois considering other forms of financing, Ratner said.
In a prepared statement, Sayre said, "Given our current financialresources, we must substantially reduce our expendituresimmediately to protect the continued development of Oncolysin B."
In addition to the Phase III studies of Oncolysin B, the drug is inPhase II trials for preventing relapses of lymphoma and leukemiaafter chemotherapy and Phase I/II trials for pediatric lymphoma andleukemia.
In addition, Phase I/II studies of the drug for AIDS-relatedlymphoma were completed recently with encouraging results and asecond clinical trial was started in September.
Oncolysin B is comprised of the anti-B4 monoclonal antibody andthe modified plant toxin "blocked ricin." The immunotoxin isdirected to CD19+ cells and delivers the toxic portion of blockedricin to the cytoplasm, where it inhibits protein synthesis.
Ratner said ImmunoGen has enough Oncolysin in inventory tocomplete the ongoing clinical trials.
Among the programs being suspended are other Oncolysin productsand the company's small drug immunoconjugates. Sayre saidImmunoGen will retain "the nucleus of talent necessary to reopenthese programs quickly when funding becomes available."
Ratner said ImmunoGen's shortage of capital is not uncommonamong smaller companies in the current cash-starved biotechnologyindustry.
"It's indicative of many biotech companies that have more on theirplates than they can digest," he said. "It also reflects the high cost ofclinical drug development." n
-- Charles Craig
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