GeneFormatics Enters Marketing Deal With
Japan-Based Firm
Alliance Pharmaceutical Inc. said it will lay off 20 percent of its work force because of a suspension of the clinical trials of its flagship product Oxygent, a blood substitute used during surgery.
On Jan. 8, Alliance said it stopped a heart-surgery study, because of unexpected rates of strokes.
A company spokeswoman said Alliance will collect data from 400 coronary artery-bypass surgery patients tested at 40 medical centers and analyze it. She couldn’t say how long the evaluation process will take.
The firm hopes to achieve $14 million in annual savings by eliminating some 50 positions, including scientists, production and administrative workers, as well as cutting lower-priority projects, Alliance officials said Jan. 23.
That leaves the company with a staff of 200 people, including key clinical, scientific, medical and other personnel.
In April 1999, Alliance laid off about 30 workers to curb costs in moving its research projects forward.
Alliance’s partner, Deerfield, Ill.-based health care giant Baxter Healthcare Corp., will continue to co-develop Oxygent, said Alliance spokeswoman Gwen Rosenberg.
“Alliance’s immediate priorities are to identify the issues that led to the Oxygent study suspension and resume development of the product,” said Duane J. Roth, chairman and CEO of Alliance.
Analysts said the setback will cost the firm precious time.
The firm was already in the last phase of three required stages of testing to file for regulatory approval of the experimental blood substitute.
Oxygent, which imitates the ability of red blood cells to carry oxygen to the body’s tissues, is given to patients mainly to avoid the use of donor blood during surgery.
Oxygent has shown promise in a Phase III trial of 492 general-surgery patients.
The coronary artery-bypass surgery study was already well on its way with 400 participants out of 600 projected patients.
Alliance decided to halt the trial because it couldn’t explain why the number of patients suffering strokes was lower than projected in the control group, which caused an imbalance in the overall figures, Rosenberg said.
Rosenberg said in the Oxygent-treated group, the number of patients who had a stroke were within the expected percentage range.
She couldn’t give exact figures for the range.
Alliance will decide whether to proceed with the trial following minor changes or start a new trial after looking at all the data.
The halt of the trial frustrates Alliance’s hopes to file for regulatory approval for Oxygent in the second half of this year.
The firm said last week it expects to report more than $25 million in cash as of Dec. 31.
Last year, Alliance had a burn rate of $50 million, twice the money the firm has in the bank now.
Rosenberg hopes the $14 million in anticipated yearly savings, in addition to a $30 million payment due this year from its Baxter partnership, will keep Alliance afloat for some time.
Alliance shares fell $5.13 to close at $2.38 in trading of 8 million shares Jan. 9, the day the biotech firm stopped the trial.
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GeneFormatics Enters Collaboration:
GeneFormatics Inc., a San Diego-based proteomics firm, said Jan. 21 it signed collaborative agreement with Japan-based Takara Shuzo Co. Ltd. to sell its protein structures.
Under the agreement, Takara has the exclusive rights to market GeneFormatics’ products and services in Asia.
Details of the financial agreement were not disclosed.
Send biotech news to Webb at mwebb @sdbj.com.
