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Unigene Gets $750K from Victory Park

Stocks in this article: UGNE

Unigene cut its workforce by 40% on April 1 as part of its strategic reorganization. The majority of the company's workforce that was laid off worked on the company's Fortical manufacturing and recombinant calcitonin production operations. Unigene had 53 full-time employees as of Feb. 28, SEC filings said.

Unigene's only product to reach the market to date, Fortical, a nasal spray that received approval from the Food and Drug Administration in 2005 and is marketed by Upsher-Smith Laboratories Inc. for the treatment of postmenopausal osteoporosis, has run into trouble lately. Unigene has licensed to Upsher-Smith its patented nasal formulation of calcitonin.

The European Medicines Agency, the European Union's regulatory body on pharmaceuticals, on July 20 concluded that there was evidence of a small increased risk of cancer with long-term use of current calcitonin medications such as Fortical. In August, another regulator, Health Canada, announced that it was reviewing whether to follow the European medical authorities and restrict use of the nasal spray because of the increased risk of cancer.

Then, on March 5, an FDA advisory committee concluded, in a 12-9 vote, that the benefits of calcitonin salmon for the treatment of postmenopausal osteoporosis don't outweigh a potential risk of cancer. The advisory committee found that calcitonin products, including Fortical, should not be marketed broadly. The committee also voted 20-1 that fracture prevention data should be required for the approval of new oral calcitonin products in development for osteoporosis prevention and treatment.

"We view the reduction in workforce as an unfortunate, but necessary part of our path forward in continuing to explore and develop strategic options to protect and enhance shareholder value," Palmer said in the statement.

Unigene has been working with financial adviser Canaccord Genuity Inc. to explore and evaluate a range of strategic options, including partnering its technology, licensing its intellectual property, divesting certain assets and selling the company.

Eugene Rozelman, a managing director at Canaccord Genuity who is working with Unigene, refused to comment.

Unigene hasn't given much clarity on its strategy going forward, Drumm said. Unigene has always operated at a loss and has a $216.63 million accumulated deficit. The company reported a $34.3 million net loss for the year ended Dec. 31.

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