Biotech Tribulations Roundup: Failed Trials, Missed Targets, Business Mishaps

Nov. 01, 2009 5:03 AM ETLZAGF, PRTK, ICGN, GETA, ARYX1 Comment
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Basel, Switzerland-based Lonza Group (OTCPK:LZAGF) said it would take steps to cut costs by as much as $79 million including the elimination of 450 jobs in response to unexpected events in the third quarter that included cancellation and delays in large-scale biopharmaceutical custom manufacturing that will hurt its operational earnings. Lonza warned of continued volatility in the company’s markets, which it said it expects to continue for the next few years. The news sent shares of Lonza down 18 percent.

Richmond, California-based Transcept Pharmaceutical (TSPT) tumbled nearly 50 percent on news that the U.S. Food and Drug Administration issued it a Complete Response Letter regarding its application for approval to market Intermezzo, a treatment for people suffering from a form of insomnia that involves difficulty falling asleep after waking up in the middle of the night. The company originally filed for approval to market Intermezzo in September 2008. The FDA requested additional data demonstrating that Intermezzo, when taken as directed in the middle of the night, would not present an unacceptable risk of residual effects, with particular reference to next day driving ability. The FDA also expressed two concerns regarding the possibility of patient dosing errors in the middle of the night that could lead to next day residual effects. The agency FDA has asked Transcept to address methods to avoid inadvertent dosing with less than four hours of bedtime remaining, and inadvertent re-dosing in a single night. The company says based on the content of the letter, it is possible that it will need to conduct one or more additional safety studies. Transcept will request a meeting with the FDA to discuss specific requirements for approval.

Icagen (ICGN) said it expects to halt development of its asthma drug senicapoc after it failed in a mid-stage proof-of-concept trial in patients with exercise-induced asthma. News of the trial’s results for senicapoc sent shares of Icagen down about 45 percent. The Research Triangle Park, North Carolina-based company says it will continue to evaluate data from the trial, but it does not expect to continue clinical development of the drug at this time. Icagen said it expects to focus its efforts on its lead program, an experimental drug for epilepsy and pain now in mid-stage proof of concept trials, as well as its collaboration with Pfizer (PFE) for novel treatments for pain for which it is currently identifying clinical candidates.

Investors gutted shares of Genta (OTC:GETA) after the Berkeley Heights, New Jersey company said top-line results from a late-stage clinical trail of lead compound Genasense in patients with advanced melanoma failed to meet its primary endpoint. In the trial, patients who had not previously received chemotherapy received dacarbazine administered with or without Genasense. The trial used a biomarker to define patients who might best benefit from treatment. But the company said the trial did not show a statistically significant benefit for its co-primary endpoint of progression-free survival. Secondary endpoints of overall response rate and disease control rate also did not show a statistically significant benefit. The company said it was too early to evaluate longer-term responses to the treatment. Shares of the company closed down 70 percent on the news. “At this time, we cannot predict whether more mature data will reveal a benefit in either overall survival or durable response,” says Raymond Warrell, Jr. Genta’s CEO. “However, the immediate failure to confirm a significant improvement in progression-free survival will preclude our submission of a regulatory application this year.” The company is assessing the impact of the results on its future direction and expects to provide updates in the near future.

ARYx Therapeutics (OTC:ARYX) is cutting about 25 percent of its staff as it expects to license its lead development programs and resume development of earlier stage products. The Fremont, California-based company said it will reduce its headcount to 56 from 73. ARYx expects to complete an out-licensing agreement in the near term for the clinical development and commercialization of its oral anti-arrythmic agent budiodarone, and plans to follow that with similar agreements for its two other late stage products – one a treatment for various gastrointestinal disorders and the other an oral anticoagulant agent. The company recently announced it secured a committed equity financing facility of up to $35 million to protect it from the uncertainties related to the exact timing of a licensing deal on budiodarone. “While we share the disappointment that a partnering deal on budiodarone has taken longer than projected, the momentum toward completion of a deal continues to grow,” says Paul Goddard, CEO of the company. “The recently secured equity line provides increased flexibility so we are able to get the right deal done with the right company, and we remain confident that a partnership will be completed in the near term.”

Advanced Research Technologies, a Montreal-based medical device company that makes optical molecular imaging products for the healthcare and pharmaceutical industries, said its board of directors has initiated a process to explore strategic options available to the company because of its ongoing financial needs. Concurrently with this strategic review, the Company has implemented a downsizing of its workforce that affects 35 employees. The board has retained KPMG as financial advisor to assist in examining strategic options, which may include a recapitalization of the company, a sale of some or all of its assets, or a restructuring the company's operations. As part of this strategic options review, the board has authorized the company to explore whether third parties would have interest in acquiring it.
Consumer genetics company 23andMe completed a round of layoffs, according to the TechCrunch blog. The company did not disclose how many jobs it cut, but told the blog that it reduced staffing in a restructuring of its workforce. It said the cuts were “a reflection of the current economic environment all companies are facing” and will allow it to “continue to invest in the growth of our Personal Genome Service and research endeavors.”

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