After the discontinuation of a Phase III wet age-related macular degeneration program in January, Genaera Corp. is restructuring again as it refocuses on its preclinical obesity program.

Genaera's shares (NASDAQ:GENR) slid 9.3 percent, or 5 cents, Wednesday to close at 51 cents after the company announced the additional reduction in headcount.

Plymouth Meeting, Pa.-based Genaera decided in January to discontinue development of lead drug Evizon (squalamine lactate) in wet AMD, citing Genentech Inc.'s success with Lucentis (ranibizumab) as the cause of slow Phase III enrollment and higher FDA standards for approval. Instead, the company said it would focus on obesity drug trodusquemine (MSI-1436) and review its strategic alternatives. (See BioWorld Today, Jan. 5, 2007.)

At the same time, Genaera said it would reduce its work force by 30 percent, resulting in an estimated $300,000 hit in the first quarter of 2007. The additional cutbacks announced Wednesday will bring the total reduction since January to 50 percent, said Jennifer Bilotti, Genaera's vice president of corporate communications. The company also said it expects restructuring costs of $500,000 in the second and third quarters of 2007.

Genaera's new strategic direction includes the divestiture of certain non-core assets, a move Michael Yee, analyst with RBC Capital Markets, anticipated in a research report last month. Bilotti said the divestiture may include a Phase II prostate cancer program with squalamine lactate; the topical microbial Locilex (pexiganan acetate); or the hCLCA1 inhibitor Lomucin (talniflumate), which is in a Phase II trial partially funded by the Cystic Fibrosis Foundation.

One program Genaera seems inclined to hold on to is the anti-interleukin-9 (IL9) antibody MEDI-528 for asthma. Partner MedImmune Inc. has initiated four Phase II trials with the drug, results from which are expected throughout the year. Milestone payments associated with the program eventually could bring Genaera $54 million in income, not to mention royalties if the asthma drug gains approval.

Gaithersburg, Md.-based MedImmune's management of MEDI-528 and the divestiture plans for the rest of the pipeline leave Genaera with trodusquemine as its new lead internal program. The drug is an internally developed analog of Evizon that selectively inhibits protein tyrosine phosphatase 1B (PTP1B) and may be applicable in both obesity and diabetes. Bilotti said a Phase Ia trial is slated to begin in the first half of this year, with results anticipated before the end of the year. A Phase Ib trial in obesity will follow late in the year, with data in early 2008, and a second Phase Ib in obese diabetics is "in the planning stages," Bilotti said.

In animal models, trodusquemine produced consistent, sustainable weight loss, and Genaera said the drug also has shown the ability to reverse comorbidities associated with obesity such as abnormal glucose metabolism and cholesterol elevation.

As of Dec. 31, Genaera reported cash and cash equivalents of approximately $33.8 million, which the company said is sufficient to fund operations through 2008. Yee estimated the company's burn rate at $15 million annually and has a "sector perform" rating and 50 cent price target on the stock.