IntraBiotics Pharmaceuticals Inc. said Monday it will implement a restructuring plan to slash operating expenses and cut staff by 70 percent in the wake of its failed Phase III trial of iseganan in oral mucositis, reported in late September.
The Mountain View, Calif.-based company's plan involves reducing its cash operation expenses from $7.5 million per quarter to about $1.5 million per quarter in 2003. Twenty-seven positions will be cut.
"The reasons for reducing our current cash burn rate include a recognition of current very difficult market conditions, reducing our ability to raise additional funds in the near future, and the need for sufficient time to thoroughly evaluate our options going forward," IntraBiotics Chairman and CEO Ernest Mario said in a prepared statement. "I am personally grateful to all of our employees for their hard work in the pursuit of an oral mucositis indication for iseganan. Unfortunately, our Phase III clinical trials to prove efficacy . . . did not meet their primary endpoints, necessitating this action."
On news of the Phase III failure, the company's stock (NASDAQ:IBPI) dropped $1.11, or 70 percent, to close at 46 cents on Sept. 30. It closed unchanged Monday at 31 cents. (See BioWorld Today, Oct. 1, 2002.)
The company said at the time that preliminary results of the 509-patient trial of iseganan hydrochloride oral solution for reducing the incidence and severity of oral mucositis in patients undergoing high-dose chemotherapy showed the trial did not meet its primary endpoint.
The study measured the proportion of patients given iseganan who did not develop severe oral mucositis during chemotherapy vs. the placebo arm. Preliminary results showed 43 percent of patients in the iseganan arm did not develop mucositis, while 37 percent of placebo patients also were free of severe oral mucositis (p=0.18).