Wednesday, November 5, 2008

CombinatoRx to slash staff levels nearly in half

By Mass High Tech Staff

One month after it reported disappointing trial results for a drug intended to treat knee osteoarthritis, CombinatoRx Inc. has decided to cut its staff levels nearly in half. In a filing with the U.S. Securities and Exchange Commission yesterday, the Cambridge-based biotech said that the affected employees have been notified and it expects all cuts to be completed by December.

In its Phase 2b clinical trial of the drug Synavive, CombinatoRx (Nasdaq: CRXX) found a placebo and Synavive turned up statistically insignificant results in a knee pain measurement test for patients walking on a flat surface. As a result of the clinical trials results, CombinatoRx stock dropped 73 percent at about 11 a.m. on Oct. 4, the day it announced the failed test, from $3 per share to 80 cents per share. The company’s stock closed yesterday at 59 cents per share.

In total, the company will cut 45 percent of its workforce, last reported at 144 employees.

Last October, CombinatoRx reported it had signed definitive agreements with unnamed institutional investors to sell up to 5.6 million shares of its common stock, raising a combined $35 million in a registered direct offering.

CombinatoRx reported a net loss of $53.3 million on total revenue of $15 million in 2007.