La Jolla forced to restructure

San-Diego-based La Jolla Pharmaceutical is to implement a restructuring plan to reduce its costs.

The plan, which will be initiated immediately but not completed until the second quarter of 2005, includes a workforce reduction of approximately 60 staff members, leaving a post-restructuring workforce of approximately 95 staff members. Under the plan, the company expects to continue its ongoing clinical benefit trial of Riquent without any significant additional patient enrollment or site expansion and continue its small molecule inflammation programme.

The company also plans to continue its activities that would allow a filing of a Marketing Authorisation Application in Europe.

This action follows the outcome of a meeting with the FDA, in which the FDA stated that La Jolla's Riquent was unlikely to receive an accelerated approval under the FDA's Subpart H regulation. In October 2004, the company received an approvable letter from the FDA for Riquent. The letter indicated that an additional trial demonstrating clinical benefit would be required prior to approval of Riquent and that the company's ongoing trial would appear to satisfy this requirement.

The company had previously announced that if the FDA did not approve Riquent under Subpart H and if it did not raise additional funds in the near future, either through the sale of additional securities or a collaborative agreement with a corporate partner, it would need to take significant cost-cutting measures to continue its operations into the first quarter of 2006. The current restructuring plan is part of these cost-cutting measures. LA Jolla is continuing to review other areas where additional expenses can be reduced and is actively seeking collaborative agreements to support the development of Riquent and its small molecule inflammation program.

'We are grateful for the determination and diligence of our talented colleagues over the past several years,' said Steven Engle, La Jolla Pharmaceutical's chairman and chief executive officer. 'When you have a great team, it is always difficult to make these types of decisions. However, we felt it was necessary to conserve our financial resources to focus on Riquent.'

'No drugs have been approved for lupus patients in 40 years, and there is a great need for safer treatments,' added Engle. 'We have shown that Riquent has been well tolerated and that it reduces antibodies to double-stranded DNA, and that reductions in these antibodies result in fewer renal flares and improved health-related quality of life. Even with the support of the medical community and our best efforts, an additional clinical trial is still required.'