[Updated Feb. 26, 2009—Clarifies and corrects terms of Pacira’s financing. See details below.]
San Diego-based Pacira Pharmaceuticals, which got a final $10 million installment of a venture capital commitment just a few months ago, laid off about 40 employees last week. Pacira CEO David Stack, who also is a managing director in the Boston office of MPM Capital, told me today the layoffs became necessary after a setback in the company’s clinical trial of a new drug delivery product for treating post-surgical pain.
The staff reductions represent about 36 percent of Pacira’s workforce. The latest round of cuts followed 18 layoffs in December, which has enabled Pacira to reduce its burn rate and use the company’s available resources to conduct another, more-focused evaluation of their latest product, Stack says. He described results of the latest trial as confusing, saying, “We think we can redo them in relatively short order.”
Pacira said in January it had completed enrollment in two pivotal Phase 3 trials to evaluate the safety and effectiveness of its version of the painkiller bupivacaine that uses the company’s proprietary sustained-release technology, which is designed to make drugs last longer in the body. Pacira already has approved and commercialized products based on its injectable, sustained-release technologies, known as DepoFoam and Biosphere. By encapsulating bupivacaine, a commonly used analgesic, Pacira said it hopes to extend the effective dose of the pain-killer from 6-8 hours to several days.
The cutbacks leave Pacira with almost 70 employees. Stack told me the staff cutbacks were necessitated at least partly because capital markets are hamstrung and the market for IPOs has been basically closed for more than a year. “It’s tough stuff, but it’s the only way to extend our available resources,” he says. An update to Xconomy’s San Diego layoff tracker is here.
Pacira, which has operations in San Diego and New Jersey, is a drug-delivery company that specializes in injectable, controlled-release technology developed in San Diego more than a decade ago by DepoTech. UK-based SkyePharma acquired the startup in 1998 in a deal that was then valued up to $56.2 million. A syndicate of venture capital firms acquired the business from SkyePharma almost two years ago, and renamed the company Pacira. Backers include MPM Capital, HBM BioVentures, OrbiMed Advisors, and Sanderling Ventures.
[Note: Pacira CFO Jim Scibetta tells me that Pacira did not raise $85 million recently, as previously reported, nor was there a previous $30 million investment by the venture syndicate in the company. Rather, the venture investors committed $85 million when they bought the company from SkyePharma. “We’ve not disclosed how much of that went to Skye and specifically how it was tranched,” Scibetta says, “but it was all disbursed between the March 2007 acquisition date and October 2008.”]
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