Introgen Therapeutics Inc. is looking to conserve cash to more efficiently develop its lead cancer product.

The Austin, Texas-based company plans to reduce its quarterly operating expenses by about $2 million - cost savings to be brought about by a realignment of research and development operations that includes layoffs of a third of the work force.

Specifically, Introgen is working to reduce its current quarterly spending of more than $6 million to about $4 million. The company said tighter controls on its burn rate would leave it with about five quarters of cash, reported for the year ended Dec. 31 at about $23.5 million. Introgen lost about $26.1 million last year, up from a reported net loss of about $24.4 million for the year-earlier 12-month period.

"We assess events and information to prioritize programs and resource allocations," David Nance, Introgen's president and CEO, said during a conference call. "We have very recently made decisions to implement a restructuring program, effective immediately, that will have a significant impact on reducing cash consumption as soon as the second quarter of 2003."

The cost-saving measures are designed to provide funding for further development of its Advexin gene drug to treat non-small-cell lung cancer. Already in Phase III trials for head and neck cancer at about 80 sites, Introgen said it would streamline such studies to focus on fewer sites with larger numbers of potential subjects.

"We have implemented a program to concentrate our resources at those sites that are most productive for the company, and to reduce expenses associated with less productive sites," Max Talbott, Introgen's senior vice president of worldwide commercial development, added during the conference call. "We do not expect this plan will affect previously projected timelines, and it is still our goal to submit a biologics license application in 2004 and to receive regulatory approval in 2005."

Philip Nadeau, an analyst with SG Cowen in New York, said Introgen's available cash should be sufficient to complete Advexin's ongoing registration trial. The more concentrated monitoring and patient recruitment efforts would save money, resources to be allocated to the lung cancer program. Phase II studies in that indication showed Advexin to be safe and well tolerated.

Introgen still has all worldwide rights to the product, which delivers the p53 gene to tumors via an adenoviral vector, though the company said it plans to further Advexin's development in lung cancer with a still undetermined partner. Nadeau indicated that the company would likely begin Phase III trials in lung cancer after finding a partner.

"Although Introgen would not initiate a Phase III non-small-cell lung cancer trial until a partner is signed, the company would like to complete as much work with the FDA as possible beforehand so that a registration trial could be initiated quickly after one is found," he wrote in his research notes.

Advexin p53 therapy also is being studied in a Phase II trial in breast cancer and Phase I trials in prostate, ovarian, bladder and brain cancers.

The company said its first small-molecule candidate, INGN 601 (mebendozole), also is the subject of partnering discussions. Another candidate is INGN-241, an adenovirally delivered mda-7 gene in Phase I trials for various solid tumors.

Introgen's stock (NASDAQ:INGN) fell 15 cents Tuesday to close at $2.30.