Alkermes Inc. said it decided not to wait until it was low on cash tostart saving.The Cambridge, Mass. company is cutting its development efforts tofocus on its nearest-term programs, and cutting staff 24 percent in anattempt to reduce net losses by $1 million per quarter.The cuts will involve about 30 of the company's 127 employees,mostly in research, laboratory support and administrative positions,Michael Landine, Alkermes' chief financial officer, told BioWorld.The company will focus on the RMP-7 (receptor-mediatedpermeabilizer) program, an agent for delivering drugs to the brainwhich is in Phase I/II trials; and ProLease, an injectable, sustainedreleased delivery system undergoing feasibility studies on its ability toallow less-frequent administration of drugs.Projects put on hold include the carrier program, which uses anantibody to deliver large molecules to the brain (See BioWorld Today,Sept. 15, 1994, p. 1), and the calpain-inhibitor program, which dealswith neurodegeneration in the brain. Preclinical data from the latterprogram will be presented in November at the Society of Neurosciencemeeting in Miami, Landine said.Mark Simon, an analyst with Robertson, Stephens & Co., of SanFrancisco, said the move made by Alkermes is one some othercompanies should consider."The management team is being proactive, and not reactive," Simontold BioWorld. "If they had continued to fund everything, it's quiteconceivable the lead programs could be underfunded. They shouldn'tbe, since they have the greatest potential to add shareholder value.Alkermes, which had cash and investments of $28.2 million on June30, in addition to $23.3 million available from funding vehicleAlkermes Clinical Partners L.P., joins a string of biotechnologycompanies that recently have announced scale-back plans. Most did itafter clinical trial failures, or without the financial resources that areavailable to Alkermes."One of the major management failures in the biotech industry hasbeen the inability to cut off funding for projects that have a very lowlikelihood of success," Simon said. "Companies should slim downwhile they have plenty of cash and operating flexibility, and not waituntil their backs are up against the wall."Alkermes (NASDAQ:ALKS) showed a net loss of $3.7 million in thefirst quarter. It has about 13.5 million shares outstanding. Thecompany's stock was up 13 cents Tuesday to close at $3.88 per share.The ongoing clinical Phase I/II trials involve RMP-7 in combinationwith carboplatin, a chemotherapeutic agent, for treatment of braintumors. Two of the trials, including one in the U.K., are administeringthe agent intravenously. In the other, it is being administered intra-arterially. Preclinical studies reported on in April demonstrated thatRMP-7 selectively increased permeability of the blood-brain barrier inanimals with brain tumors or radiation injury in the brain.Landine said interim data on the Phase I/II trials might be released at ascientific meeting in the spring, and that Alkermes plans expandedPhase II trials early in 1995 for RMP-7 for brain tumors.The ProLease program, Landine said, is undergoing scientificfeasibility studies with undisclosed partners. The idea is to convertthose studies into longer-term relationships with companies interestedin the sustained-release system.The carrier program put on hold is, in some respects, ahead of theneurotrophic factor field, Landine said. The company always said itwould partner the delivery vehicle with a company that has aproprietary neurotrophic factor, he added."There's excellent science in that [carrier program]," Landine said,"but the use of trophic factors in the brain has not been conclusivelydetermined to be useful in a disease state, such as Alzheimer's." n
-- Jim Shrine
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