I told you I wouldn’t shy away from throwing in the biotechnology news here when newsworthy things happen in that world. And in Bothell, the center of the biotech universe for Snohomish County, things are happening.
Unfortunately, many of those things lately are not good. In the past month or so, both Sonus Pharmaceuticals and Nastech have hit rough seas, resulting in huge stock drops for both.
Sonus earlier this week outlined how it plans to move forward with 25 percent fewer employees and other changes. It has time on its side, as its amassed cash can take it through the second half of 2009.
In an early morning (5 a.m. PST!) call today, Nastech CEO Steven Quay elaborated on Nastech’s way forward. This is in the wake of Procter &Gamble Pharmaceuticals’ decision to drop its potentially lucrative partnership with Nastech on an osteoporosis drug candidate.
An overview of what the company plans was in today’s story in The Herald. If you have the time and inclination, go ahead and listen to the archived Web cast.
“Since the news from Procter &Gamble on Nov. 6, we have focused on reducing Nastech expenses as quickly as possible, while maintaining activities that add value,” Quay said during the call. “We are willing to place all of our resources to support these efforts that have the best possible opportunity for success.”
Here are some of the highlights:
* Quay confirmed the company plans to lay off employees, but a specific number wasn’t announced.
* Nastech also will focus its research and development money almost solely on its most advanced drug candidates, those in phase 2 trials or later. That includes the PYY3-36 nasal spray, which is aimed at treating obesity, the osteoporosis spray program that Procter &Gamble withdrew from and a nasal spray form of insulin. Nastech also has another osteoporosis spray, calcitonin, that’s being reviewed by the Food and Drug Administration for potential approval.
* Nastech will spin off MDRNA Inc., which is focused on developing further uses for RNA interference technology, as an independent, separately financed company. RNA interference is a cellular mechanism that turns off the production of proteins critical to the expansion of viruses in the body. As its own firm, MDRNA can attract more investment. By the end of 2008, Nastech hopes to have it operating as a separate, publicly traded company that pays dividends to Nastech shareholders.
Spinning off MDRNA alone should save Nastech $20 million in operating costs next year, Quay said. He added that action was thought of before Nastech’s latest crisis. “MDRNA is not a recent idea and is not a reaction to recent events,” he said. The committee that studied options for unlocking the maximum value of Nastech’s technology was set up this summer.
As for Nastech itself, Quay said it will consider all of its alternatives for generating more investment or financing. Philip Ranker, Nastech’s chief financial officer, said: “Our target is to enter 2008 with a balance sheet that includes approximately one years of operating cash” for the nasal spray business, which is Nastech’s core business.
Only time will tell whether this plan is Nastech’s key to rebounding. But investors today sure seemed to like what Quay had to say.
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