Monday, January 26, 2009

Altus cuts staff by 75%, drops CF drug

By Mass High Tech staff

Picking which horse to bet on, Altus Pharmaceuticals Inc. will focus on its recombinant human growth hormone candidate and will discontinue its Trizytek program activities, eliminating about 75 percent of its staff positions.

Discontinuing the development of Trizytek will result in the transfer of certain Trizytek intellectual property rights to Cystic Fibrosis Foundation Therapeutics Inc. (CFFT), the nonprofit affiliate of the Cystic Fibrosis Foundation, according to Altus’ 2001 agreement with CFFT.  The Waltham-based company will continue developing its ALTU-238 compound as a once-per-week treatment for adult and pediatric patients with growth hormone deficiency, it said.

Most of the job cuts will be in functions related to the Trizytek program, according to Altus (Nasdaq: ALTU) officials, as well as certain general and administrative positions. Those include chief medical officer Burkhard Blank; chief financial officer Jonathan Lieber; and vice president, business development, John M. Sorvillo, all of whom will be leaving Altus. After the cuts, Altus will have approximately 35 employees.

Altus said that the personnel cuts and program reduction should reduce operating expenses by approximately 65 percent and should give it enough cash to last until about the end of 2009. Altus will record a restructuring hit of approximately $4 million in the first quarter of 2009, mostly from cash payments for severance expenses, the majority of which will be paid out over the course of 2009.

CFFT has told Altus that its decision to discontinue the clinical development and planned regulatory filings for Trizytek puts Altus in breach of the 2001 agreement, and Altus expects that will terminate its exclusive sublicense to Trizytek in North America and that CFFT will get exclusive control of the Trizytek program and related IP rights in North America. Altus and CFFT are also in discussions over an agreement under which CFFT would obtain worldwide rights to Trizytek and assume funding responsibility for the ongoing Phase 3 long-term safety study for Trizytek.