Article preview from IN VIVO - July, 2012
Five years ago, QLT Inc. charged in hard and snapped up an experimental drug-eluting punctal plug technology created by incubator ForSight Labs LLC. At the time, we reported in START-UP that the punctal plug – designed to deliver drugs directly into the eye – might make or break the company. Looks like it was the latter. Last month, QLT’s newly elected board of directors instituted a broad reshuffling of the company. The board cut the work force by 68% and it intends to divest the still-experimental punctal plug technology, hoping to sell the line outright or spin it out into another entity.
Article preview from IN VIVO - July, 2012
Five years ago, publicly traded QLT Inc.charged in hard and snapped up an experimental drug-eluting punctal plug technology created by incubator ForSight Labs LLC. The technology had only existed a year, but QLT’s CEO Bob Butchofsky was a believer, agreeing to pay $42 million up front for the untested technology, a nice return for investors who had committed less than $5 million to the project. At the time, we reported in START-UP that the punctal plug – designed to deliver drugs directly into the eye – might make or break the company.
Looks like it was the latter. Last month, QLT’s newly elected board of directors instituted a broad reshuffling of the company. The board cut the work force by 68%, including Butchofsky and several senior managers. The board also intends to divest the still-experimental punctal plug technology, hoping to sell the line outright or spin it out into another entity. The company also may shed once vital Visudyne (verteporfin) franchise, a treatment for macular degeneration that got upended by several changes in the market including Roche’s Genentech Inc.’s release of Lucentis (ranibizumab).
Roth Capital Partners Analyst Scott Henry says QLT’s ill-fated acquisition of the punctal plug program played a “huge role” in the reorganization. The clinical trials required for the drug-delivery punctal plugs – which fit into the tear ducts of an eye – drained the company’s capital reserves, causing the company to slip into negative EBITDA, he says.
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