Two weeks after reporting that its pancreatic cancer drug, Virulizin, missed the primary endpoint in a Phase III trial, Lorus Therapeutics Inc. is cutting its work force by 35 percent and reducing costs to increase its cash position.

The Toronto-based company said the move would ensure funding for its operations through 2006 and beyond and support its clinical and preclinical programs. During the next year or so, Lorus intends to focus on finding partnership opportunities for Virulizin, as well as for GTI-2040, which is in Phase II studies in multiple cancer types.

Lorus also has a third product in clinical development, GTI-2501, in a Phase II trial in patients with prostate cancer. In addition, the company has a preclinical pipeline that includes potential small-molecule and antisense drug candidates, and its recent cost-cutting measures should allow the company to advance an additional drug candidate from its preclinical small-molecule program.

Last month, Lorus reported top-line data from its Phase III trial of Virulizin, which missed its primary endpoint of improving, with statistical significance, overall median survival when combined with gemcitabine. The trial compared Virulizin, a macrophage stimulator, plus gemcitabine to placebo plus gemcitabine in chemotherapy-na ve patients with pancreatic cancer. Data from the intent-to-treat population showed that the median overall survival time was 6.3 months for the combination treatment, with a one-year survival rate of 25.9 percent, compared to six months median survival and a one-year survival rate of 17.6 percent for the placebo-plus-gemcitabine-treated group. Shares of Lorus lost more than half their value that day, closing at 36 cents, down 40 cents. (See BioWorld Today, Oct. 19, 2005.)

Though the survival times failed to meet statistical significance, the company has said it is encouraged by improvement trends among patient subsets. Lorus continues to analyze the data and plans to present further details at a later date.

The company reported a net loss of C$5.7 million (US$4.8 million) for its first quarter of 2006 ending Aug. 31, 2005. As of that date, Lorus has cash, cash equivalents and short-term investments totaling C$16.6 million.

Its stock (AMEX:LRP) closed Wednesday at 26 cents, unchanged.