Repligen Corp. on Tuesday responded to its precarious cash positionby implementing a restructuring plan that cuts employees and thecompany's clinical development programs.Repligen, of Cambridge, Mass., will cut 65 employees, including twoin senior management, and will discontinue development of its HIVvaccine, RP400c, which was in Phase I trials. Repligen now has twoproducts in the clinic and one in preclinical development, as well as aproduct being developed in collaboration with Eli Lilly & Co.As of June 30, the end of the company's first quarter, Repligen hadabout $30 million in cash. That's enough to take us 18 to 24 monthswithout additional financing, Ramesh Ratan, Repligen's senior vicepresident and chief financial officer, told BioWorld. Our objective isto seek corporate partners who would provide us with research fundingand certain equity investments.Investors liked the move as Repligen's stock (NASDAQ:RGEN) closedup 13 cents Tuesday at $3.38 per share. The company has about 13.3million shares outstanding.Brandon Fradd, an analyst with Montgomery Securities in SanFrancisco, told BioWorld he had suggested that Repligen drop the HIVvaccine program.'It was the area of least focus for them, they had put a relatively smallamount of money in it, and other companies were further along,' Fraddsaid. It gives them enough breathing room to get through some of thePhase II trials.'I'm sure this isn't the only one you're going to see do this[restructure] over the next few weeks or months,' Fradd said. 'Thereare a lot of companies running out of money.'Ratan said Repligen made a proactive move in scaling back instead ofdoing it after announcing some bad news about one of its programs,which he said differentiates Repligen from a number of companies thatrecently have announced cutbacks.'It was just part of management trying to make sure the company wasrun in an efficient manner and not having to be forced at the lastminute,' Ratan said. 'As part of our normal, ongoing evaluation of ourprograms, we felt that under the current market conditions we had tofocus on our existing products which are in the clinic or close to beingin the clinic.'He said the HIV program was one that would involve a great deal oftime, risk and money, and Repligen decided it couldn't afford thatinvestment. Ratan said Repligen would look to make RP400c, whichMerck & Co. holds certain rights to, available to other companiesinterested in developing it. RP400c is a subunit immunogenspecifically directed at generating neutralizing antibodies to the V3loop segment of HIV's envelope protein gp120.Repligen's lead product candidate is recombinant platelet factor 4(rPF4), a protein being evaluated to stop tumor growth by inhibitingangiogenesis, and its potential to reverse the anticoagulant effects ofheparin. On the cancer side, rPF4 is in Phase II trials for Kaposi'ssarcoma, and in Phase I/II trials for colon cancer and separately, renalcell cancer and malignant melanoma. On the cardiovascular side, it's ina Phase II study in cardiac catheterization and Phase I/II trials incoronary artery bypass graft surgery.A second Repligen product is AM285, a small molecule that works byregulating a backup energy system within cells. It is being tested in aPhase I study in late-stage solid tumors, and the company said it maybe effective against serious viral infections.Repligen also has a preclinical program in the immune modulationarea.Ratan said Repligen would like to work with collaborators on one ortwo of the programs and work on the other one or two by itself.Repligen had 301 employees as of March 31, and reduced it to about255 through natural attrition over the past few months, Ratan said.About 65 of the remaining 255 employees will be laid off, leavingRepligen with 190 employees. The company will be taking a one-timecharge of $975,000 in the quarter that ends Sept. 30 related to assistingthose laid off, the company said.Eliminated positions include that of vice president, regulatory andquality affairs, held by Bernadette Alford, and vice president,manufacturing operations, held by Howard Levine. n
-- Jim Shrine
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