Avanir Pharmaceuticals, a biotechnology company based in Orange County, said yesterday that it may close its San Diego research and development operations after ending two collaborations.
Company executives would not say how many jobs would be affected if the local operations are shuttered. If the closure occurs, executives said, they anticipate moving some jobs to Orange County.
“It's quite unfortunate from our vantage point, and we are disappointed we have to go down this path,” Chief Executive Keith Katkin said.
The San Diego facility is the company's primary research location, containing all of its lab space, biologists and chemists. Katkin said that fewer than 50 people work there.
The company said yesterday that it had mutually agreed with AstraZeneca to end their collaboration and licensing deal on a cholesterol drug, after reviewing efficacy studies. Avanir, which retains development rights to the drug, has not decided what it will do with the compound, Katkin said.
Avanir is also winding down its two-year collaboration with Novartis on a therapy for inflammatory disease. Novartis will move forward with further development of that therapy, Avanir said.
Avanir said that as those collaborations come to an end, it plans a restructuring to conserve cash as it pursues regulatory approval for Zenvia, its treatment for uncontrolled emotional outbursts.
The company is targeting a $20 million reduction in annual operating expenses. As of Dec. 31, Avanir reported having cash and investments in securities of $17.6 million.
Avanir said it has received some inquiries from companies interested in buying some of its assets, including several investigational compounds. One of those compounds is FazaClo, an anti-psychotic drug.
The company received an “approvable” letter from the U.S. Food and Drug Administration in January, seeking more information before it considers the drug.
It also has received an approvable letter on Zenvia. In February, the company said it needed to conduct a two-year study to satisfy regulators' questions on the drug.
Katkin said the company plans an investor conference call in May, when he anticipates a more detailed restructuring plan will be announced.
Katkin became chief executive March 16, after Eric Brandt resigned. Katkin has been with the company since July 2005, previously as senior vice president of sales and marketing.
Avanir moved its administrative offices from San Diego last year in an effort to cut costs. Administrative space in southern Orange County is about half the cost of lab space in San Diego. The company projected that it would save about $1 million over three years.
Avanir shares fell 22 cents yesterday to close at $1.20.
Terri Somers: (619) 293-2028; terri.somers@uniontrib.com
