BOTHELL — MDRNA Inc. is laying off 23 more employees, including its president, as the biotechnology firm formerly known as Nastech Pharmaceuticals tries to reinvent itself.
After the job cuts, which are effective immediately, Bothell-based MDRNA will employ 55 people full time by the end of this month. Since last fall, MDRNA has slashed nearly 150 positions.
In the second quarter, the company lost more than $14 million, or 48 cents a share, up from a loss of $12 million in the year-ago period. The company’s revenue totaled $700,000, down sharply from nearly $5 million in the same quarter of 2007.
MDRNA, which ended the second quarter with just less than $20 million in cash and short-term investments, will take a nearly $2 million charge to cover severance and other costs related to the layoffs.
Once focused on nasally inhaled medications, MDRNA shifted its name and focus after a series of setbacks in its drug development programs. The biggest blow was Procter &Gamble Pharmaceuticals’ termination of an agreement to help the company develop a nasal spray to treat osteoporosis. The drug development agreement potentially was worth more than $500 million.
In the months since losing that agreement, MDRNA’s shares have lost more than 90 percent of their value.
That tailspin resulted in the company’s decision to turn its research focus from nasally inhaled drugs to RNA interference, a cellular mechanism that can halt proteins vital to expanding viruses in the body. The company hopes it can use RNA interference to develop treatments for a variety of cancers and other conditions.
That new focus, the company’s new name and other changes were announced in early June. Michael French, who took over as chief executive officer at that time, said the transition continues. With that in mind, most of the 23 people being laid off are from the company’s nasal development programs. Also included are the company’s president, Gordon Brandt; its chief business officer; and the chief scientific officer in charge of nasal delivery programs.
French said MDRNA will not start any new research on nasally inhaled medications. Instead, 60 percent of the remaining work force will be focused on research and development related to RNA interference, he said. By 2010, the company may be ready to begin clinical trials on such new drugs.
The company still hopes, however, to recoup some of its years of work and investment into nasally delivered drugs, Brandt said.
“We believe that our intranasal assets have significant value,” Brandt said, adding that MDRNA has received several inquiries from firms interested in acquiring those drug development programs. “We hope to be able to announce one or more such transactions soon.”
Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.
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