Keryx Biopharmaceuticals is the latest US company to have been forced into a major restructuring, following the failure of its lead drug candidate Sulonex.

The New York-based firm’s stock slumped 88% to an all-time low of $0.64 per share a month ago when the firm announced the negative outcome of a Phase III trial of Sulonex (sulodexide) for the treatment of diabetic nephropathy. As a result, Keryx is reducing its workforce by 50% to 25 full- and part-time employees, a move which will reduce its cash burn rate to approximately $10-$15 million for the remainder of the year.

The company expects to end the first quarter of 2008 with $50 million in cash and equivalents, and of that $12 million is invested in note securities which have failed auctions this year. Expenses for the quarter are expected to total $17 million, primarily due to the completion and shut-down of the Sulonex clinical programme.

Aside from the job losses, key elements of the restructuring will see Keryx terminate 12 of 20 early-stage clinical studies of the anti-cancer drug KRX-0401 (perifosine) and has delayed starting a Phase III trial of the compound until analyses are completed from ongoing exploratory studies of perifosine as a treatment for a variety of tumour types. However it will continue development of Zerenex (ferric citrate), which is in Phase II for the treatment of hyperphosphatemia in patients with end-stage renal disease.

Chief executive Michael Weiss said that this “has been a challenging process, but through these measures we believe that we have designed a strategy by which we will conserve our financial resources and strengthen our ability to execute on our goals to move our drug candidates forward”.