The biopharmaceutical company focused on oncology made the move, effective as of July 27, following previously announced reductions in early-stage and preclinical drug discovery and decreased emphasis on internal manufacturing capabilities.
The 29,000 sq ft. pilot facility, known as Biopharmaceutical Sciences Process (BPS) facility, was leased to CuraGen in June 2005 to use for pilot scale production of proteins and antibodies. The BPS facility primarily supported early-stage pipeline development and non-Good Manufacturing Practices (GMP) manufacturing.
CuraGen president and chief executive Frank Armstrong said in a statement: "This strategic decision was difficult but necessary to ensure that CuraGen focuses its resources and invests appropriately into velafermin, belinostat (PXD101) and CR011-vcMMAE which represent the most significant value to CuraGen, its employees and its shareholders."
A CuraGen spokesman told US-PharmaTechnologist.com the positives from the closure was "the ability to focus resources as appropriate into clinical development to help ensure adequate funding to potentially advance one or more of our oncology products through Phase III development."
As a result of the closure, approximately 40 employees will loose their jobs, expected to be mainly preclinical and manufacturing researchers and additional support staff from within the organization. Those employees affected would be eligible for a severance package that would include severance pay, continuation of benefits and outplacement services.
Changes relating to the corporate restructuring were estimated by the company to be approximately $8m, including non-cash charges of approximately $6m relating primarily to assets to be written off or disposed of in connection with the closure of the BPS facility and cash payments of approximately $2m for severance and other related obligations.
By the end of 2007, CuraGen expected to have approximately 50 employees compared to 89 currently.
The closure would not affect any contracts with other companies and details of what would happen to the facility after closure in July were not disclosed.
This latest move follows the May acquisition by Roche of 454 Life Sciences, a majority-owned subsidiary of CuraGen established in 2000 with the mission of developing and commercializing next-generation sequencing technology.
The firm, which noted a $59.8m consolidated net loss for 2006 and $39.6m in revenue, has executed a number of "strategic initiatives" recently to focus the company's resources on its three oncology products, velafermin, belinostat and CR011-vcMMAE.
Early in February this year, the company repaid its outstanding 2007 convertible debt with cash and thereby reducing the amount of debt on the balance sheet by $66.2m.
Further cost saving measures and strategies to strengthen the balance sheet are anticipated in the coming year.
Velafermin, also known as Fibroblast Growth Factor-20, is a protein therapeutic being investigated for the prevention of severe oral mucositis, a severe irritation and ulceration of the mouth following cancer treatments that break down the cell wall. It is currently in Phase II trials.
Belinostat (PXD101) is a histone deacetylase (HDAC) inhibitor being investigated for the treatment of solid and hematologic cancers. Intravenous and oral formulations are being trialed.
CR011 is a monoclonal antibody which is linked to the potent chemotherapeutic vcMMAE to form the antibody-drug conjugate CR011-vcMMAE. Phase I and II clinical trials are continuing.
At least one of the drugs will enter Phase III next year.
