Capstone Therapeutics axing 78% of jobs in 'hibernation' move

"Hibernation mode." Those are the words Capstone Therapeutics ($CAPS) Executive Chairman Jock Holliman used in a press release announcing 14 of the struggling biotech's 18 employees are getting pink slips as the company aims to preserve cash. After a mid-stage study of its lead drug AZX100 against skin scarring failed to meet its primary goal in April, the company now plans to operate virtually with a lean four-person crew as it pursues a partner for the program.

The Tempe, AZ-based developer, previously called OrthoLogic, has burned through more than $130 million developing its treatments and has no products on the market. Focused on developing therapeutic peptides, the firm now has two main programs that include AZX100 and Chrysalin. In a Phase IIa study, the former of the two drugs fell short on the primary efficacy endpoint of improving a measurement of scarring at 12 months after surgeries.

"Capstone is observing its commitment to stockholders to preserve cash by moving into a 'hibernation' mode," Holliman said in the release this morning. "We promised we would pursue--for a reasonable period of time--a joint development alliance for AZX100. The AZX100 program in dermal scarring has, in fact, generated genuine interest in the marketplace. However, there remains uncertainty regarding the timing of such an alliance, and there are no guarantees that a partnering deal can be consummated in what we consider to be a timely manner."

The biotech's shares have fallen 62% this year and closed Thursday at 22 cents per share, Dow Jones Newswires reports.

- here's the Capstone release
- see the Dow Jones report (sub. req.)