Ribozyme Pharmaceuticals Inc. is restructuring to increase its focus on diagnostic and manufacturing activities and its ribonucleic acid interference program; however, the restructuring will necessitate a decrease in staff from 120 to 90.

The company announced the changes Wednesday, which it said would reduce operating expenses by about 35 percent in 2003, dropping a burn rate that had been at about $8 million per quarter to about $3 million.

In the first six months of 2002, Boulder, Colo.-based Ribozyme had a net loss of $18.1 million. As of June 30, the company had cash, cash equivalents and securities of $21.9 million.

Ribozyme President and CEO Howard Robin told BioWorld Today, "We're sitting with enough cash easily to take us through the end of this year and into next year, but obviously, I don't believe that's sufficient."

Robin said he would like to have enough cash on hand to fund the company between one and two years, and that it's in the process of raising money now in a transaction most likely to be a private placement completed before year's end.

"I believe that we can do that, given the very clear direction we have now," he said. The job cuts are coming from across the board, Robin said, including research, development and administration.

The CEO, who has been at the helm for about a year, said the company has no intention of leaving the therapeutic side of its business behind while it expands its focus.

"I don't see ourselves as a contract manufacturer at all," he said, noting that there are "a number of companies" talking to Ribozyme about their nucleic chemistry needs.

"What we envision is getting certain fees for services and some type of royalty so there is a longer-term" relationship between Ribozyme and its partners, he said.

The company expects to announce one more deal in diagnostics and another in manufacturing before year's end.

In late July, Ribozyme reported that it formed an agreement with Geron Corp., of Menlo Park, Calif., allowing Ribozyme to manufacture GRN 163, Geron's lead anticancer drug. Ribozyme has not disclosed the fees it will receive under that agreement, or any revenues it expects to get from its newly formed manufacturing and diagnostic businesses.

In March, the company entered an agreement with Fujirebio Inc., of Tokyo, to develop and commercialize ribozyme-based clinical diagnostic products. Ribozyme has milestones to meet within that agreement this year, and Robin said that some companies were waiting to see those achieved before making decisions about potential agreements with the company.

In another area of intensified focus, Ribozyme said it is increasing its investment in its ribonucleic acid interference program by applying its nucleic acid technology toward the development of therapeutics. Robin told BioWorld Today that his company has been involved in such research for more than a year, with 20 patents already filed.

"We made this decision some time ago," he said. "We already have efficacy data in an animal model. You don't have all your patents filed if this is a short-term, opportunistic approach."

Up to now, the company had been focusing on the development of drugs to treat cancer and hepatitis.

On Thursday, Robin said, "I don't think ribozymes are the only place we want to be."

In April, Ribozyme reported that its Phase II trial of Angiozyme in metastatic breast cancer failed to achieve a clinically significant response rate. Ribozyme is partnered with Chiron Corp., of Emeryville, Calif., for the development of Angiozyme. The companies share costs 50-50 in the co-development agreement entered in August 1994. (See BioWorld Today, Aug. 5, 1994.)

In addition, the company said the same day that it stopped dosing in a Phase II trial of Heptazyme, another ribozyme-based drug, after an animal from a preclinical study lost its vision. The Heptazyme Phase II trial began in October and involved about 40 patients with chronic hepatitis C. Ribozyme's stock dropped 32.4 percent, or 67 cents, to close at $1.40 on the news. (See BioWorld Today, May 1, 2002.)

In a conference call Wednesday afternoon, Robin said the company is replacing its original formulation of Heptazyme with a second-generation version that should enter clinical trials in 2004. Angiozyme, its angiogenesis inhibitor, will continue in Phase II studies for metastastic colorectal cancer, with 12-week results expected at year's end and 24-week results expected in the first quarter of 2003.

Ribozyme also is ending its HepBzyme program, a ribozyme for the treatment of hepatitis B. Robin said the market for hepatitis B was just too small for a company of Ribozyme's size to continue investing in the program.

Ribozyme also is conducting a Phase I dose-escalation trial of another candidate, Herzyme, in patients with HER2-overexpressing cancers. Ribozyme is collaborating with Elan Corp. plc, of Dublin, Ireland, in a venture named Medizyme Pharmaceuticals. The trial is employing Elan's Medipad device to deliver Herzyme subcutaneously.

With Elan's restructuring eliminating oncology from its focus, Robin said he is well aware that the program may be dropped by Elan, although the companies have had no discussions on that. (See BioWorld Today, Aug. 12, 2002.)

"It is certainly likely that at some point they will bow out of the program," Robin said.

Ribozyme's stock (NASDAQ:RZYM) fell 12 cents Thursday to close at 85 cents.