Patheon announced that it plans to sell its facility in Carolina, PR, while retaining two other sites in Caguas and Manati. The announcement came during the company's 4Q07 financial statement. The quarter ended October 31.

The Carolina site is a 230,000-square-foot facility with 200 employees, and specializes in the manufacture of oral cephalosporin solid dosage forms, including tablets, capsules and powders for suspension. The facility currently manufactures four products for six clients. Said outgoing chief executive officer Riccardo Trecroce, "We have concluded that Carolina -- a high-quality site with specialized capabilities and expertise - would be of greater strategic value to another company with a focus on manufacturing oral cephalosporins. This divestiture will allow us to focus on improving operating performance and growing our business at the Caguas and Manati facilities." During the quarter, the company announced the sale of its Niagara-Burlington OTC facility to Pharmetics.

For the quarter, revenues from continuing operations grew 1% to $167 million. The company posted a net loss (including discontinued units) of $9.1 million in the quarter, down from a loss of $22.2 million in 4Q06. For FY07, revenues from continuing operations was up 1% to $677 million, with a net loss of $94.6 million, compared to a loss of $288.2 million in FY06. Patheon took a goodwill writeoff of $255 million in FY06, which accounts for much of that year's net loss.

Strong revenue growth in its European operations was offset by deteriorating revenues in PR (attributed to generic competition for Omnicef and Zocor) and a decline in Canadian sales (attributed to API delivery delays for a major prodct).

Neurocrine Biosciences announced that it will lay off approximately 130 employees at its San Diego campus, as a part of its restructuring program to prioritize its R&D programs and associated costs and expenses after an FDA delay on insomnia treatment indiplon. Following the firings, Neurocrine will have approximately 120 employees.

One Dec. 13, the FDA issued Neurocrine an "approvable letter" for indiplon, requesting additional clinical and preclinical data on the drug before it will consider approval. The company's NDA covered 5mg and 10mg doses of the drug. In May 2006, Neurocrine submitted a filing for a 15mg dose of the drug, but the FDA asked for reanalysis of safety and efficacy data; development partner Pfizer pulled out of the project after that. The company is preparing a formal meeting request to the FDA to discuss the most recent approvable Letter.

Gary Lyons, president and chief executive officer of Neurocrine, remarked, "It is with great disappointment that we have to make this difficult decision that will have such an effect on so many of our employees and their families. We are greatly saddened to move in this direction after our employees have continually demonstrated only the highest level of dedication and commitment. However, in order to meet our goals on other high priority programs, we have to refocus our resources as quickly as possible. I want to sincerely thank the departing employees for their tremendous efforts and wish them great success in the future."

GlaxoSmithKline has exercised its option to exclusively license XL880 from Exelixis for further development and commercialization. XL880 is a small molecule compound currently being evaluated in Phase II trials in patients with papillary renal cell carcinoma (PRC), gastric cancer and head and neck cancer. Under the terms of the collaboration between Exelixis and GSK initiated in October 2002 and amended in January 2005, GSK's selection of XL880 entitles Exelixis to a selection milestone of $35 million and additional payments upon the attainment of specific development and commercialization milestones. The $35 million milestone will be applied to repayment of an advance that GSK paid to Exelixis in 2005. Exelixis is also entitled to receive double-digit royalties on product sales if the compound is approved for marketing and commercialized. Exelixis will have certain co-promotion rights to XL880 in North America.

George A. Scangos, Ph.D., president and chief executive officer of Exelixis, remarked, "We believe that XL880 has substantial potential as a first- and best-in-class therapy, and GSK and Exelixis look forward to the completion of the ongoing XL880 Phase II trials and evaluation of pivotal trial options. We believe that GSK's selection of XL880 validates our strategy of building a franchise in the area of MET inhibition to exploit the potential of this promising target."

The collaboration between Exelixis and GSK, which is managed by GSK's Center of Excellence for External Drug Discovery (CEEDD), covers seven compounds and their back-up and follow-up compounds currently in the Exelixis development pipeline. Under the terms of the collaboration, Exelixis submits the covered compounds to GSK as they achieve clinical proof-of-concept, which is a pre-determined measure of efficacy, generally based on Phase II trial data, and GSK has the option to select two compounds, and potentially a third compound, for further clinical development and commercialization. However, in the case of XL880, GSK requested in August 2007 to review the compound's data prior to achievement of proof-of-concept. Exelixis agreed to the request and submitted the XL880 data package to GSK in September 2007.

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