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SYNERGEN MANAGEMENT TEAM "EVALUATING" OPERATIONAL/R&D "PRIORITIES"

Executive Summary

SYNERGEN MANAGEMENT TEAM "EVALUATING" OPERATIONAL/R&D "PRIORITIES" following the resignation of President and CEO Jon Saxe on the heels of disappointing results of Synergen's Phase III trial of Antril (anakinra) for treatment of septic shock. The new management team of chairman and CEO Larry Soll and four exec VPs "intends to sharpen the focus of the company's priorities in clinical and preclinical research and in discovery science," Synergen said April 8. "It is currently evaluating its operations to assess which of Synergen's clinical and other programs should command highest priority and is reviewing which of its programs should be deferred or canceled in order to conserve cash." "The company plans to implement measures to further reduce expenses including selectively reducing staffing and eliminating several planned capital expenditures," Synergen noted. The firm plans to reduce its payroll by about 10% from the current level of 675 employees. Synergen said it has $220 mil. in cash on hand and expects to end the year with "well in excess" of $150 mil. Saxe "resigned as a result of differences of opinion with the company over management philosophy," Synergen said. A former Roche VP, Saxe joined Synergen in 1989. Synergen VP-Clinical Research Michael Catalano also has resigned. Exec VP Robert Thompson takes over clinical research responsibility. Catalano "will continue as a technical consultant to the company," Synergen said. Soll is a founder of Synergen and Saxe's predecessor as president and CEO. He has been chairman of Synergen since 1987. The four exec VPs comprise a new office of the president. They are Gregory Abbott (business development), Robert Thompson (preclinical and clinical research), Kenneth Collins (finance and administration) and Mark Young (manufacturing). Collins and Young both have been promoted from VP positions to exec VP. Synergen said its current top priorities are to complete a second Antril sepsis trial, file for registration in Europe in the second half of 1993, continue development of Antril for rheumatoid arthritis and complete a pivotal Phase II/III trial of ciliary neurotrophic factor started this month (see preceding T&G). Other research projects for the firm include: Antril for inflammatory bowel disease, chronic myelogenous leukemia, graft- versus-host-disease, and asthma; CNTF for other neural disorders; biosynthetic fibroblast growth factor; insulin-like growth factor; nerve growth factor; tumor necrosis factor; and secretory leukocyte protease inhibitor (SLPI). On Feb. 22, Synergen announced that Antril did not show a significant benefit in sepsis patients ("The Pink Sheet" March 1, T&G-7). The company plans to conduct a second Phase III trial to examine prospectively Antril's efficacy in a subset of seriously ill patients. When Synergen first publicized its analysis of the Phase III data, Saxe said that the company still planned to file a PLA for the interleukin-1 receptor antagonist by the third quarter. However, on March 23, the company announced that it would delay the PLA filing until after the second Phase III trial was completed ("The Pink Sheet" March 29, T&G-12). The setback for Antril followed Synergen's decision to scrap a Phase III trial of Trofak (fibroblast growth factor) for treatment of leg ulcers in November 1991 ("The Pink Sheet" Nov. 18, 1991, T&G-6).
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