Creative BioMolecules Inc. is following a path familiar to quite a fewbiotech companies these days: cutting staff to save money.The Hopkinton, Mass. company, which is developing protein-basedtherapeutics for regeneration of hard and soft human tissue, said Fridaythat it will reduce its staff by 20 percent. It laid off 34 of its 195employees, and will let another five go by the end of the year when itcompletes a transfer of technology from Hopkinton to itsmanufacturing facility in Lebanon, N.H."This is part of a financial strategy with several components to bringfunds into the company and ensure our viability," Stephanie Marrus,Creative BioMolecules' vice president, corporate development, toldBioWorld.Creative BioMolecules has about 19.5 million shares outstanding. Itsstock (NASDAQ:CBMI) closed unchanged Friday at $3.25 per share.The company, founded in 1981, reported cash and investments of $9.6million on June 30. It had revenues of $1.2 million for the quarter,mostly from research and development contracts, expenses of $6million and a net loss of $4.88 million. Marrus said she couldn'tdiscuss the company's financial position. But based on numbers fromthat quarter, Creative Molecules would run out of money at the end ofthe year. The company's unaudited net loss for the nine months thatended June 30 was $13.9 million."We're looking at a number of different options," Marrus said. "Someare related to leveraging our investment in this manufacturing facility;we have a new contract with Stryker Corp. [of Kalamazoo, Mich.] thatwill bring increased cash flow; there will be savings from this[restructuring] move," and the company will look at partneringinitiatives.In mid-July, three other biotech companies announced similarrestructuring plans. Glycomed Inc., of Alameda, Calif., said it wasreducing personnel 30 percent and narrowing its development focus.Synergen Inc., of Boulder, Colo., said it was laying off 50 percent of itsstaff and ending a Phase III trial of Antril for Sepsis. And RepligenCorp., of Cambridge, Mass., cut 65 employees and stopped an HIVvaccine program in what management termed a "proactive" move.Charles Cohen, chairman and CEO of Creative BioMolecules, said,"We have sharpened the focus of our organization consistent with ourtransition from basic research into development and with our currentrevenue projections. Our top priorities are support of our partner,Stryker Corp., in the pivotal clinical trial in orthopedic reconstruction,and confirmation of the positive results we have seen in our pilotclinical trial for the regeneration of dentin."Creative BioMolecules has a two-year contract worth up to $8.6million with Stryker, which has a research and supply component,Marrus said. The deal is related to development of OP-1, an osteogenicprotein, that Creative BioMolecules supplies to Stryker for theorthopedic reconstruction pivotal trial.The protein, Marrus said, causes stem cells to differentiate into bonecells. She said "Stryker is very close to the completion of the trial."OP-1 is classified as a device for the purposes of that trial, and anotherone Creative BioMolecules is running itself that involves regenerationof tooth dentin. Marrus said a pilot study has been completed in thatindication and the company is in discussions with the FDA regardingthe design of a second pilot trial.The company has a preclinical pipeline that includes OP-1 and platelet-derived growth factor for indications such as osteoporosis, periodontaltissue repair and gastrointestinal disorders.The restructuring, Marrus said, "is a prudent thing to do in these times.We think it will make the organization stronger and more efficient inthe end." n
-- Jim Shrine
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