Amira Cuts Half of Staff, Scientific Founders Exit as Company Seeks to Conserve Cash
San Diego-based Amira Pharmaceuticals has cut half of its workforce and its trio of scientific founders have left the company as it seeks to conserve cash over the next two years, Xconomy has learned.
The company is shrinking down to 25 employees, and the cuts are being concentrated primarily in discovery research and administration, as Amira seeks to transform itself into more of an early-to-mid-stage drug development organization, CEO Bob Baltera says. Amira’s scientific founders Peppi Prasit, Jilly Evans, and John Hutchinson—who worked together for years at Merck before the pharma giant closed its San Diego operation—are all leaving the company, although Prasit will remain as chair of the company’s scientific advisory board, Baltera says. The cuts were first announced internally at Amira last week.
Amira, founded in 2005, has raised more than $28 million in venture capital all told and has received an undisclosed amount of financial support from a partnership with London-based pharmaceutical giant GlaxoSmithKline. But Amira’s last venture round, worth $25 million, came from Novo A/S, Avalon Ventures, Prospect Venture Partners, and Versant Ventures back in March 2007. The company’s lead drug candidate for lung fibrosis just entered its first clinical trial last month, meaning it has several hurdles left to clear before it can generate the kind of value that will prompt venture investors or prospective partners to shell out more cash. So Amira is making the cutbacks now in order to preserve resources long enough so it can see the clinical trial results it needs to see, Baltera says.
“These decisions will enable us to extend our runway at least two years, without going out and relying on additional dilutive funding,” Baltera says. He added that Amira’s discovery group has generated more product candidates than the company has money to pursue now.
Amira hasn’t completely scrapped its discovery research program, although it will be shifting emphasis to early and mid-stage development, Baltera says. The company is looking for a new executive vice president of R&D to help move those programs ahead, he says.
Glaxo is still actively working on the program it licensed from Amira, AM 103/803 to inhibit a protein called FLAP that’s implicated in respiratory diseases. Amira is also still seeking a large partner to help with large-scale development and commercialization of a DP2 blocker for asthma and chronic obstructive pulmonary disease. “It’s been a challenging environment to find a partner for this. We do still have interest,” Baltera says.
That means Amira is placing most of its resources on AM152, an oral pill designed to block a target called LPA1, thought to be involved in idiopathic pulmonary fibrosis. I described some of the rationale behind this therapy in a feature back in March 2009. The company also has another LPA-blocking drug that could be ready to go into clinical trials in 12-18 months, Baltera says.
The cutbacks, Baltera says, are necessary because of the difficult financing climate for companies with early-stage research.
“In a different time and place, we’d be in a different place than we are. These are hard decisions,” Baltera says.