Biotech firm Viropharma ( VPHM) is putting its failed drug to treat the common cold on ice as it restructures operations to preserve cash.

The Exton, Pa.-based company said Thursday that it has terminated its partnership with drug giant Aventis ( AVE) regarding Picovir, the experimental cold treatment that was rejected by the Food and Drug Administration earlier this year. Viropharma said it would not restart work on Picovir unless a new partner is found.

Viropharma will return to Aventis about $20 million in milestone payments related to the partnership.

Viropharma also announced a major corporate restructuring. The company is cutting its workforce by 63%, which includes the transfer of its 200-person sales force to Aventis in exchange for a cash payment of $15.4 million. Viropharma is firing additional personnel in other parts of the company.

As of June 30, Viropharma had $201 million in cash. With the restructuring, the company believes it will have enough cash to fund operations and debt service requirements for three years. Viropharma said it plans to spend about $20 million to purchase a portion of its $180 million in convertible debt.

ViroPharma's drug pipeline, outside of Picovir, is still in the beginning stages of development. The company is conducting early-stage human testing on an experimental drug to treat respiratory syncytial virus, a serious respiratory tract disease that afflicts infants and young children. The company also has a very early drug candidate to treat hepatitis C, still in the laboratory.

Shares of Viropharma were trading up 3 cents to $1.58.