CombinatoRx said today is cutting 45 percent of its staff after its lead drug candidate failed in a clinical trial for arthritis patients, according to a regulatory filing. The company said it had about 160 employees when I profiled it in late September, so that means about 70 workers are likely getting pink slips between now and the end of the year. Employees will get severance payments and outplacement service, the company said.
The Cambridge, MA-based biotech company (NASDAQ: CRXX), founded in 2000, has no marketed products and has spent more than $220 million building a pipeline of contenders. Its lead candidate, Synavive, failed to show a statistically significant benefit over placebo, when compared in a study of 279 patients with osteoarthritis last month. The stock crashed almost 80 percent in the first day, and closed at 59 cents today, before the job cuts were announced.
CombinatoRx plans to release its third quarter financial report tomorrow morning, so we’ll get a briefing about how much cash it has, how fast it is burning through those funds, and what else it has in the cupboard that might turn things around. The company currently has drugs in clinical trials for dermatology conditions and diabetes. The question is whether investors want to hear any of it, or just run for the exits.