Advancis Pharmaceutical Corp. may soon lay off some of its 80 employees as the firm struggles to deal with back-to-back testing failures of its lead product, a once-a-day, slow-release version of the antibiotic amoxicillin.
Edward M. Rudnic, the Germantown firm's chief executive, told analysts during a conference call yesterday that the firm would need to "identify and eliminate expenses" to continue operating.
Later in the day, an Advancis executive said one option under consideration was layoffs.
The firm halted development on several other projects and laid off 19 employees, or 18 percent of its staff, in November, a month after drug giant GlaxoSmithKline ended a partnership to develop a different slow-release antibiotic.
Rudnic told analysts that the new round of cost-cutting measures could be put in place as early as two weeks from now. The belt-tightening comes after Advancis released results from testing on children that showed its new formulation of amoxicillin was only 65.3 percent successful at curing strep throat, far less than the 85 percent needed to qualify as a primary treatment. Penicillin also worked better.
The firm reported similar results last month for testing on adults.
Advancis officials said they would take the next few weeks to examine whether they could salvage the proposed product. One option would be to change the dose, including having patients take the drug for 10 days instead of 7, and undertake another round of testing.
At the same time, the company is also facing the possibility of losing the corporate partner helping develop the drug.
Stephen J. Mock, a spokesman for Par Pharmaceutical Inc., yesterday reiterated earlier statements that the company may pull out of a partnership deal with Advancis because of the testing failures. However, he said, executives will await further analysis of the results during the next few weeks before making a decision.
Par has already poured $23.5 million into the development of the product and would likely have to invest a similar amount should testing continue with the company onboard, Mock said.
The situation clearly has investors concerned. Advancis shares fell 17 percent, or 30 cents, to close at $1.45. At one point, shares fell to $1.26.
The stock was trading at nearly $8 a year ago.