Cambridge Biotech Corp., which had a series of recent setbacks, saidThursday that it filed for protection under Chapter 11 of the U.S.Bankruptcy Code.As part of the restructuring, the company is eliminating 32 positions atits Worcester, Mass., base, leaving a total of 185 employees there andat its Rockville, Md., manufacturing facility. Karen Meenan, thecompany's associate general counsel, said Cambridge Biotech wouldnot disclose any information related to its cash position.Last November, the company was hit with shareholder lawsuits arisingout of the restatement of Cambridge Biotech's 1992 financials. InMarch, auditors from Deloitte & Touche suspended their fiscal year1993 audit because of their concern about certain transactions and thepossible impact on financial results. In May, president and CEO PatrickLeonard, left the company, along with other officials. And in June,Cambridge Biotech's stock was delisted because of its inability toprovide audited financial statements."This allows us time to address some of the issues that have beenfacing the company, in a logical, planned manner, so we can goforward," Meenan told BioWorld. "This to going to let us focus on ourkey pharmaceutical business without the distractions."She said the delisting of the stock hindered the company's ability toaccess capital, and its ability to work on plans with potential businesspartners.Cambridge Biotech's lead technology is the adjuvant QS-21,trademarked Stimulon, which it licenses to at least five companies foruse in the infectious disease and cancer areas. Robert Kammer, thecompany's vice president of medical affairs, told BioWorld that allthose licensing Stimulon have, or will have, candidates in the clinic bythe end of the year.Cambridge Biotech also is developing a drug delivery technologybased on the patented membrane permeabilizing characteristics ofsemisynthetic saponin derivatives, Kammer said. And, he said, thecompany is awaiting Department of Agriculture approval on itssubmission for a novel canine lyme vaccine.Accounting firm Coopers & Lybrand was retained to audit CambridgeBiotech's financial statements for fiscal years 1991 through 1993. Oneof the concerns expressed by Deloitte & Touche centered around fourtransactions totaling about $1.57 million in 1992 that the auditors saidmay have been made instead in 1993. There also were other questionsraised about revenue recording.Meenan said there is no time frame on completion of the audit, or onwhen the company will come out of reorganization.CEO Jeffrey Beaver said, "The strength of our technology is unaffectedby today's actions. We plan to build on this strong technological baseand to move the company forward during the reorganization period.We appreciate the confidence and support of our shareholders,employees, customers and strategic alliance partners." n
-- Jim Shrine
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