With just more than $200,000 in cash at the end of September and a net loss for the quarter ended that month of $2.7 million, Incara Pharmaceuticals Corp. looks to be dangling from the end of its financial lifeline. But its tight-knit group is banding together, putting aside personal monetary needs and betting on the science.

The Research Triangle Park, N.C.-based company said Wednesday it and an affiliate of Elan Corp. plc terminated an option for the affiliate to license Incara's catalytic antioxidant compounds for use in combination with cancer radiation treatment. With full rights in hand, Incara can use the compounds as bait for partnering deals that could bring financial relief. But it also said late Tuesday it was reducing its work force by 16 percent and - in a show of dedication - most of those remaining agreed to defer all or part of individual cash compensation, awaiting more liquid days.

They would recoup those deferred payments when money comes into the company.

"It didn't surprise me as much as it did everyone else," said Bennett Love, vice president of corporate planning and communication at Incara. "The top management has been together for a long time - we've been together for about 10 years. We have confidence in the scientific program we are working on. Given enough time, we will put something together that will work out."

Beginning Feb. 1, with senior management leading the way, 80 percent of Incara's 15 employees will "defer compensation while we are looking for a collaboration or funding," Love told BioWorld Today. With that sacrifice, Incara said it should be able to continue operations into 2003's second calendar quarter.

The restructuring leaves Incara zeroed in on its catalytic antioxidants program. Incara and Elan, of Dublin, Ireland, formed a joint venture in 2000 to develop an ultra-low-molecular-weight heparin called OP2000. That product eventually became deligoparin, but in August, Incara stopped the trial amid doubts over its own finances and the support of its partner. Elan at the time was itself refocusing, dropping programs and assets that fell outside its core areas of neurology, pain and autoimmune disease. However, in September Incara reported results from the trial that "did not support continuing [development]," Bennett said, and the program was terminated. (See BioWorld Today, Aug. 27, 2002.)

But Elan and Incara were still linked. In May, Elan had made a $3 million equity investment in Incara for the option to license the catalytic antioxidant compounds for use in combination with cancer radiation. But Elan declined the option and the next moves for the program will be decided by Incara.

"The thing that Elan specifically was involved with was one of the compounds to protect against normal tissue damage in radiation therapy," Richard Gammans, senior vice president of antioxidant therapies, told BioWorld Today. "We have identified a compound and are doing the work to open [an investigational new drug application] and initiate clinical trials."

The company would like to develop the compounds internally for treatment in conjunction with cancer, Love said. Externally, the company is seeking partners for asthma, chronic bronchitis or emphysema indications. But first the company must address its most pressing concern: money.

Incara ended its fiscal year Sept. 30 and reported $209,000 in cash and cash equivalents. For the year, it posted revenues of $86,000 and a net loss of $12.2 million. The company is publicly traded on the Over-the-Counter Bulletin Board, and its stock has languished at less than a dime since the Thanksgiving holiday. However, its stock (OTCBB:INCR) jumped 166 percent Wednesday, or 5 cents.

The catalytic antioxidant molecules are designed to inactivate oxygen-derived molecules similar to the way the body's naturally occurring enzymes do. The difference is "the one in the body is a large protein - we have a small molecule," Gammans said. The small molecule can be given when "the body produces an excessive amount of free radicals [such as during radiation treatment], which can overwhelm the body's ability to eliminate them."

If funding appears, Gammans said the radiation therapy indication "has the dimensions that lend itself to a company of our size," and thus could be developed alone. Following a successful financing, Incara would plan the initiation of clinical trials within nine months. But for the other indications, Incara would "certainly enter collaborations for all of [them]," if able, he said.