Cytos confirms drastic cuts in workforce and management
Schlieren - Swiss biotechnology company Cytos has devised a plan to get its lead candidate into Phase II. To achieve this, the cash strapped company will slash its workforce, as previously announced, by 85%. To ensure the development of candidate CYT003-QbG10 against hay fever and asthma, the cutback will happen in two steps, as the company stated on Monday. The staff of now 80 will be reduced to 30 until December 2011, then down to 10 in May 2012. The management board will be bleeding too, with Mark Richmond and Jean-Yves le Cotonnec leaving the Board of Directors, with just three members remaining. The shrunken executive board will consist of Harry Welten, Philipp Müller and Frank Hennecke. Both panels will be led by Thomas Hecht. The cutbacks have become necessary because of persisting money shortfalls. Cytos has an outstanding convertible bond of nominal CHF 41.1 million, which is due on February 20, 2012, and the firm projects its financing gap could still be as high as CHF 17 million by then. CYT003-QbG10 is an allergen-independent immunotherapy that has completed Phase II trials for the treatment of allergic asthma and allergic rhinitis. The drug comprises the virus-like particle Qb, containing the immunostimulatory sequence G10. Cytos claims G10 acts to stimulate TLR9 in dendritic cells and induce the production of immune mediators that balance allergic immune responses and also activates TLR9 on mast cells, which further down-regulates the allergic response.