Ark Therapeutics Group has announced "a strategic restructuring" and refocusing of its R&D resources.
It is concentrating on its VEGF-D programmes already in early clinical trials in refractory angina and peripheral vascular disease (developed with the AI Virtanen Institute in Finland) and neuropilin-1 and foetal growth restriction pre-clinical studies (in collaboration with University College London). Ark says both of these programmes have "already attracted interest from potential collaborative partners" and it expects to sign a deal for at least one of these projects in 2011.
The company is also looking for a partner or licensee for Trinam, a VEGF-D gene-based medicine to prevent haemodialysis access surgery complications. The firm has decided that "the cost of development, the internal resource requirement and the clinical risk/reward ratio...is no longer appropriate for a company of Ark’s size". In addition, it will continue efforts to out-license the brain cancer drug Cerepro, the gene-based therapy rejected by European regulators earlier this year.
As a result of the initiatives, Ark said it will further reduce its overall headcount "thereby significantly reducing the fixed cost base of the business and approximately halving the group’s ongoing net monthly cash burn". Taking into account the one-off costs of restructuring and "income-generating initiatives already underway, including the sale of the company’s woundcare business", Ark should have sufficient funds to take it into 2013, "by which time some significant value inflection points will have been established".
The company added that Andrew Christie has decided to step down as chairman and Iain Ross will take on the role of executive chairman. Chief executive Martyn Williams said the restructuring will "significantly reduce the risk profile of the business" and create "a leaner, more focused operation".
The announcement has gone down well with investors and Ark shares were up 30% to nearly six pence at 11.35 this morning.