Shaman Pharmaceuticals Inc., which reported a net third quarter lossof nearly $5 million or 38 cents per share, said it is refocusing itsefforts to put more emphasis on applying its ethnobotanical approachto develop treatments for diabetes and other metabolic diseases.Lisa Conte, president and CEO of the San Carlos, Calif.-basedcompany, said Shaman also is actively seeking corporatepartnerships to help fund development of therapies for diabetes. Shewould not comment on any potential agreements.Shaman's drug discovery programs, which primarily are aimed atinfectious diseases, are based on screening tropical plants that have ahistory of medicinal use.Last month, Eli Lilly and Co., of Indianapolis, opted to end acollaboration aimed at identifying anti-fungal drug candidates fromplant extracts. The agreement, which began in 1992, paid Shamanabout $1.7 million a year and was expected to run through 1996.Conte said reshaping the company's focus will reduce the burn ratenext year by $4.4 million, lowering it to a projected $16 million for1995. At the end of the third quarter, Sept. 30, the company had$45.2 million in cash.Conte observed that by emphasizing development of drugs to targetdiabetes and other metabolic diseases, the company will eliminateprograms which could result in some layoffs among Shaman's morethan 100 employees.Shaman has identified a class of compounds for potential treatmentof diabetes and has filed a patent application related to them. Thecompounds were derived from screening plants in 30 countries inAsia, Africa and South America.In addition, the company has two drugs in clinical development:Provir, an oral product for treatment of respiratory viral infections;and Virend, a topical treatment for herpes.Conte said the company expects to give itsethnobotanical approach to drug discovery an added boost incredibility by including metabolic disease targets with its efforts todevelop antiviral treatments.In its third quarter report, Shaman said a net loss of $4.9 millionbrought the company's losses for the last nine months to a total of$13.5 million or $1.04 per share; that compares with a third quarterloss of $4.12 million, or 39 cents per share, a year ago and a loss forthe first nine months of 1993 of $8.9 million, or 92 cents a share.Revenues for the third quarter of this year were $420,000 comparedwith $510,00 for the same period a year ago.With the expiration of the Lilly collaboration, Shaman said it expectsno contract revenues in the last quarter of this year. The companysaid it also plans to take a fourth quarter charge of $500,000 relatedto restructuring expenses. n
-- Charles Craig
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