Overview
We are a biopharmaceutical company focused on the development and commercialization of oral and injectable protein therapeutics using our proprietary protein crystallization technology, which we believe will have significant advantages over existing products and will address unmet medical needs. Our lead product candidate is ALTU-238, a long-acting, crystallized formulation of recombinant human growth hormone, for which we have completed a Phase II clinical trial in adults for growth hormone deficiency and have begun a Phase II clinical trial for growth hormone deficiency in pediatric patients. Our next most advanced product candidate is ALTU-237, for which we have completed a Phase I clinical trial for the treatment of hyperoxalurias. We also have a pipeline of other product candidates in preclinical research and development. On January 26, 2009, we announced a strategic realignment to focus on the advancement ALTU-238. To conserve capital resources, we have discontinued our activities in support of TrizytekTM [liprotamase], an enzyme replacement therapy for patients suffering from malabsorption due to exocrine pancreatic insufficiency. In connection with the realignment, we implemented a workforce reduction of approximately 70% of our workforce, primarily in functions related to the Trizytek program as well as certain general and administrative positions. As a result of these activities, we recognized a charge of $3.6 million in the first quarter of 2009, primarily for severance and related expenses. We anticipate a further restructuring charge of between $4.0 and $6.0 million in the second quarter of 2009 primarily resulting from our plans to vacate an office facility in Waltham, Massachusetts. We expect the restructuring plan will be completed in the first half of 2009. On February 20, 2009, Cystic Fibrosis Foundation Therapeutics, Inc., or CFFTI, and we entered into a letter agreement, or the Letter Agreement, and a license agreement, or the License Agreement, terminating our strategic alliance agreement. Under the terms of the License Agreement, we assigned the Trizytek trademark and certain patent rights to CFFTI and granted CFFTI an exclusive, worldwide, royalty-bearing license to use certain other intellectual property owned or controlled by us to develop, manufacture and commercialize any product using, in any combination, the three active pharmaceutical ingredients, or APIs, which comprise Trizytek. In these agreements, we also agreed to assist CFFTI with a transition of our on-going development and regulatory activities and clinical trials through March 27, 2009, after which CFFTI is responsible for future development activities. In exchange, CFFTI agreed to release us from all obligations and liabilities resulting from the original strategic alliance agreement, and to pay us a percentage of any proceeds CFFTI realizes associated with respect to any rights licensed or assigned to CFFTI under the License Agreement. Our future operating results will largely depend on the progress of ALTU-238 in the clinical development process and our ability to raise sufficient capital to fund operations. The results of our operations will vary significantly from year to year and from quarter to quarter and depend on, among other factors: our level of investment in pre-clinical and clinical research and development; our success in manufacturing drug supplies and procuring the APIs for our products; and the outcome of the clinical trials we conduct. We have generated significant losses as we have advanced our product candidates into clinical development and expect to continue to generate losses as we continue development of ALTU-238 and finalize our realignment of operations. As of March 31, 2009, we had $25.0 million of cash, cash equivalents and short-term marketable securities and an accumulated deficit of $356.3 million. We believe we have sufficient cash to meet our funding requirements into the third quarter of 2009. We will require significant additional funding to remain a going concern and to fund operations through December 31, 2009 and until such time, if ever, we become profitable. However, there can be no assurance that adequate additional financing will be available to us on acceptable terms.
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