Celtrix Pharmaceuticals Wednesday dramatically reduced its workforce, laying off 50 of its 150 employees, to trim $8 million inexpenses following last month's disappointing interim results from aPhase III BetaKine trial for repairing macular holes in the retina.
Dale Stringfellow, Celtrix's president and CEO, said staff cuts andother cost reductions were related to a delay in filing for FDAapproval of recombinant BetaKine. Among those leaving thecompany are three top executives: Sandra McNamara, chief financialofficer; Larry Ellingsworth, vice president of operations; and BruceRiddell, vice president of marketing and sales.
Celtrix expected to file a product license application in January forBetaKine and anticipated market approval by the end of 1995 beforegetting the discouraging trial data last month.
In late October, the Santa Clara, Calif., company reported thatfindings from a three-month follow-up study of 120 patients in theplacebo-controlled trial were inconclusive. (See BioWorld Today,Nov. 1, 1994, p. 1.)
The Phase III trial was designed to test BetaKine's effect onimproving tissue repair and vision in connection with vitrectomy forpatients with macular holes. The clinical study called for post-surgical patient analyses for a year at three-month intervals to judgeBetaKine's performance.
Stringfellow said investigators will continue to evaluate patients andmake a decision in nine months on whether to file for marketapproval.
"It didn't make sense to assume we will have fileable data after 12months," said Stringfellow, explaining why the company decided notto wait to make reductions.
With $29 million in cash at the end of the third quarter, Sept. 30, thecost-cutting measures will reduce the burn rate to a projected $13.5million a year, he said, giving Celtrix enough money to keepoperating another two years.
In addition to the layoffs, the company terminated contracts andtemporary workers associated with the FDA regulatory filings andcanceled contracts for marketing and sales. All staff cuts wereeffective Wednesday.
The three-month follow-up data of the macular hole study sentCeltrix's stock (NASDAQ:CTRX) plummeting 63 percent Oct. 31.Wednesday the stock closed at $2.12, down 12 cents.
Stringfellow said the restructuring will enable the company tocontinue its other programs, including Phase II clinical studies ofBetaKine for macular degeneration.
He also said Celtrix will continue talks with potential corporatepartners. "We're looking for a partner for our ophthalmologyproducts in Europe and our partner for the macular hole project inJapan is going ahead with development," he said.
In June, Celtrix licensed BetaKine to Cambridge, Mass.-basedGenzyme Corp. for development of the drug for diseases other thanophthalmic disorders. Genzyme has clinical trials of BetaKine underway for multiple sclerosis and wound healing.
Stringfellow said Celtrix has an option for additional funding fromGenzyme in December 1995. Genzyme owns about 10 percent ofCeltrix and the new funding would come in the form of an additionalequity investment of between $5 million and $10 million. n
-- Charles Craig
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