Avalon Pharmaceuticals is axing about a third of its staff as it scrambles to find new funds. The Germantown, MD-based biotech, which will be left with about 35 employees, told investors it can't operate past the end of the year without a fresh infusion of cash. To reduce its burn rate, Avalon is halting work on the cancer therapy AVN994, a move that took analysts by surprise. Instead, it will focus on AVN316, which CEO Kenneth Carter says is better understood by big pharma companies.
George B. Zavoico, an analyst with Cantor Fitzgerald in New York, told the Washington Post that the biotech's slow development cycle-nothing new in the biotech field--coupled with poor market conditions had made fundraising for Avalon much more difficult. Now the biotech has to forge a partnership deal, execute debt financing or sell itself to gain new capital. Avalon signed a $200 million pact with Merck last year.
- reaad the report in the Washington Post