Telios Pharmaceuticals Inc. said Tuesday that it is laying off morethan half of its remaining staff, leaving 35 employees.
The cutbacks stem from results of a trial of the company's leadproduct, Argidene Gel, which failed to show statistical significancevs. placebo in the complete healing of diabetic foot ulcers. (SeeBioWorld Today, Oct. 7, 1994, p. 1.) On Nov. 1, Telios cut its workforce from 138 to 80 employees. This cut reduced the staff from 77to 35, for an overall reduction of about 75 percent from Nov. 1.
Nancy McRae, the company's investor relations manager, toldBioWorld the cuts were across the board, but primarily involvedthose in the manufacturing sector. One result is that Telios no longerwill try to secure contract manufacturing.
Telios has a 67,000-square-foot facility containing manufacturing,laboratory and administrative space. McRae said Telios is looking tosublet all or most of the building, and continues to seek a mergerpartner or other alliance or transaction that would help the company.
"That's what we're focused on over the short term," Todd Simpson,the company's chief financial officer, told BioWorld. In addition, hesaid Telios has two financing possibilities to help keep the companygoing.
One strategy, revealed Tuesday, involves a change in the terms ofTelios' offer to buy back $13.4 million in securities it sold inconnection with a public offering that closed Sept. 29, shortly beforethe failed trial. The amended offer gives investors a chance to ownshares at the price they've been trading since disclosure of trialresults, making it more likely they won't sell their shares back to thecompany. Also, Simpson said, Telios signed a placement-agentagreement with an investment banker who will do an off-shoreoffering for Telios, sometime after the tender offer deadline, whichwas extended to Dec. 16.
Telios, which has about 25 million shares outstanding, reported a netloss of about $5.6 million for the quarter that ended Sept. 30.Simpson said the cutbacks may reduce the company's burn rate byabout $1 million per month, to some $900,000 per month.
Telios reported about $22.2 million in cash and investment as ofSept. 30. But that includes the $13.4 million from the offering, someor all of which might be returned to investors. The company also hasabout $3 million in trade debt, Simpson said.
The bottom line, Simpson said, is "if we can retain a majority of theproceeds [from the offering], we have about nine months of cash."
Telios' stock (NASDAQ:TLIO) closed Tuesday unchanged at 56cents per share. n
-- Jim Shrine
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