Cytos Biotechnology to wind down key operational activities
Will make 24 members of staff redundant at the end of July
Cytos, a biopharmaceutical company based in Switzerland, has entered into agreements with major creditors resulting in a reduction of liabilities and provisions of the company of approximately CHF5m (US$5.7m).
In addition, the four convertible loan note holders Abingworth, Amgen, venBio and Aisling have agreed to subordinate part of their loan notes to ordinary creditors. The loan notes will remain senior to the convertible bonds. Together, these measures allow for a continued operation of the company.
To reduce future expenses, Cytos is winding down key operational activities related to the development and manufacturing of CYT003 for the treatment of moderate to severe allergic asthma. A Phase IIb study of CYT003 showed that the immune modulator failed to hit its primary or secondary endpoints compared with placebo, which meant that the condition for the conversion of convertible loan notes could not be achieved.
The company has notified 24 members of staff that their employment agreement will be terminated on 31 July. As a further cost saving measure, the size of the company’s board of directors will be reduced from seven to four at the end of this month.
The company is also seeking to engage in discussions with interested parties regarding its VLP B-cell vaccines platform and ongoing preclinical development programmes based on it.
The company had CHF31m in cash on 31 March and does not expect to be able to repay any convertible bonds, which are subordinated to other creditors. Likewise, it does not expect to make any payments to shareholders.