BioCentury
The current issue of BioCentury covers as main theme restructuring efforts in the biotech industry. Somehow, they have picked up BioTransplant (and Don Hawthorne) as one example of what goes on in the industry. As we have had such an awful day today, I will quote a small part of the article. There are some pieces that should be of interest to a BioTransplant investor.
Going into its restructuring, BTRN had $13.2 million in the bank as of June 30, and had posted an operating loss of $12.7 million in the first six months. The company now hopes to stretch its funds into the third quarter of 2003.
BTRN has not had a late-stage product blow up; instead, sales of its Eligix cell separation systems have disappointed, while its pipeline has suffered from a lack of visibility.
BTRN’s lead compound – MEDI-507 (siplizumab) for psoriasis – is partnered with MedImmune Inc. (MEDI, Gaithersburg, Md.), which has been focused on getting its FluMist vaccine registered by no later than mid-November to catch this year’s flu season (see BioCentury, July 15).
Siplizumab, a humanized monoclonal antibody against CD2 receptors on T cells and natural killer (NK) cells, is in Phase II testing. Data are expected next spring. The company has received European CE mark approval for its Eligix BCell-SC, CD8-DLI and CD8-SC Cell Separation Systems, which are used in treating B cell malignancies. But they’re small products and not ones that a CEO can hang a big financing on. Moreover, according to Hawthorne, sales didn’t materialize as rapidly as expected. “Therefore,” he said. “there was a cost structure in place that had assumed the higher revenue would happen.”
In BTRN’s July restructuring, the company reduced its headcount to 62 from 82 to reduce its burn by about 25%. As part of the makeover, Hawthorne said, BTRN sent five employees to Europe to work with partner Gambro AB (SSE:GAMB, Stockholm, Sweden) to “galvanize sales of Eligix.”
The company also put in tighter management control over spending. “We elevated spending decisions to the director level from the manager level,” Hawthorne said. In the process, he noted, BTRN “eliminated all discretionary spending.’
Comments: It seems that BioTransplant has picked someone to lead the company who knows this part of the game from previous experiences. I take that as a positive. |
