TORONTO (Reuters) - Stem Cell Therapeutics, a Canadian biotechnology company, said on Friday it would remove its senior executives to save money after the lead study of a stroke treatment failed to meet targets.
Shares of the Calgary-based company tumbled after it said it would terminate its chief executive, chief financial officer and two other vice-president positions, effective June 30.
CEO Alan Moore and CFO Barry Herring agreed to stay on a consulting basis for the next six months.
The company said in a statement its ability to pursue further stroke studies was uncertain because of limited capital and the failure of the lead study to meet targets.
Stem Cell Therapeutics, which focuses on developing drugs that can stimulate a patient’s own stem cells to repair neurological function, said it was also seeking approval with the U.S. Food and Drug Administration to pursue phase III of its lead study for NTx-265.
The results of the phase IIb stroke trial, released last month, showed significant improvements in both placebo and drug-treated patients. The company said it has been unable to explain the unexpectedly large placebo effect.
The cuts, along with other staff reductions and cost cuts, will save a total of C$540,000 and leave it with about C$1.4 million by the end of the year.
Board director Bob Rieder also resigned on Thursday while the remaining members said they planned to stay on until the end of 2010.
Going forward, the company said it will focus on their lead drug study and review how to finance opportunities in traumatic brain injury and multiple sclerosis, and consider other strategic alternatives.
Stem Cell Therapeutic shares were down 50 percent at 4.5 Canadian cents on the TSX Venture Exchange on heavy volume.
Reporting by Solarina Ho; Editing by Frank McGurty
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