A Calgary-based pharmaceutical company is closing its manufacturing plant, laying off half its staff and terminating trials on its only drug after less than promising test results.

SYNSORB Biotech CEO David Cox told a shareholders’ meeting last week that a review of the trial showed inadequate enrolment rates and an “unacceptably high” dropout rate of participants in Phase 3 clinical trials for the company’s showcase anti-diarrhea drug SYNSORB-Cd.

“The decision to terminate the trials came after a thorough review of all available data and an assessment of the overall prospects of obtaining market approval for the product in a commercially feasible manner and time frame,” Cox said.

David Lazarowych, Business Edge
CEO David Cox says firm searching for 'strategic alternatives.'

The news sent SYNSORB stock tumbling 55 per cent, down 65 cents to 53 cents on volume of 3.1 million shares.

Cox said 205 mostly elderly patients were enrolled in the testing, but 30 per cent dropped out before the trials were completed.

Recurrent Clostridium difficile associated diarrhea (CDAD) is a highly infectious disease that is sometimes referred to as “Antibiotic Associated Diarrhea, because it usually arises as a result of antibiotic use. It is prevalent in health-care institutions such as hospitals and nursing homes.

“With these significant reductions in staff, and the elimination of costs associated with our Phase 3 trials, we will successfully reduce our burn rate to minimal levels,” said Cox.

The trials will now be wound down in compliance with proper clinical practice and regulatory requirements. While the company will retain a core management team to search for “strategic alternatives,” it will lay off about 18 staff with more cuts planned in the future.

A 30,000-sq.-ft. manufacturing facility in Calgary will also be closed.

“While I am of course deeply disappointed in the outcome of these trials, I believe that it is the most prudent course of action and one that preserves the most value for our shareholders,” Cox said, adding he still believes the company is well-positioned to pursue new alternatives in the current biotech market.

As of Nov. 30, SYNSORB’s assets included $7 million in cash and 6.3 million common shares of Oncolytics Biotech Inc., which at the close of trading on Dec. 10 had a market value of about $53 million.