CytoTherapeutics, a Lincoln based bio-technology company that is in the throes of winding down its Rhode Island operation after an unsuccessful trial of its chronic pain application, has apparently not given up all hope on the process, while actively negotiating with a potential financial partner for another line of research. Even so, unless there is a “miracle,” the Rhode Island plant will be phased out by the end of the year, maybe by the end of October, said Elizabeth Razee, a CytoTherapeutics vice president. Of the 60 employees in Lincoln, she said, only about 20 remain, the rest having accepted a financial package from the company. She would not disclose the contents of the package.
While there has been no specific announcement, Razee said it is likely the company’s administrative offices would also move to Sunnyvale, California, where the company is engaged in its stem cell research.
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That research has received some positive publicity within the last month, following a study that the company said showed its technology could create supplies of human cells that could aid in the development of treatments for severe neurological disorders, such as Parkinson’s and Alzheimer’s diseases, spinal cord injuries, and multiple sclerosis.
The company stock, which had drifted to close to 50 cents a share, rebounded on the stem cell news to close to $2, settling back to about $1.25. The company’s low share price, Razee said, is a problem as it tries to find a money partner for its stem cell research.
Razee said the company is in serious discussion with one potential source, and said that “of necessity” the parties were “close,” in what she called “very serious, ongoing negotiations.” She wouldn’t comment on the amount of the potential funding, saying it ranged from large to small areas, but would be “revenue enhancing.” It all involves the stem cell research, she said.
“When the share price is low it has been hard to realize the value,” Razee said. “The value technology wise is very high.”
CytoTherapeutics, which opened in Rhode Island 11 years ago, had for some time held out considerable hope that its encapsulated cell technology would go to market. AstraAB had provided funds for the chronic pain application, although Razee said there are other uses for the technology. Astra, she said, is not the potential source of funds for the stem cell research.
When the second trial failed at the end of June, Razee said, it had little to do with the technology, but rather whether it was successful in reducing the level of pain among the trial’s participants, possibly a matter of dosage. But since the trial is a matter of “black and white,” there was little chance for the company to make any adjustments to such items as dosage.
Dr. Moses Goddard, a company vice president and chief technical officer for its cell encapsulation program, has yet to give up hope on the process. Razee said he has been actively looking for a partner for the possible ophthalmic uses of the technology, which could be used to treat blindness. Razee said the company is now awaiting the results of data from a study of the technology involving large animals.
She said there was some interest in the encapsulated cell technology, but indicated the company was just clinging to any hope that Dr. Goddard’s efforts would be successful, with most of its efforts pointed west.
If, however, Dr. Goddard does find a partner, Razee said it is likely that the process would continue under the CytoTherapeutics umbrella as a subsidiary.
Still unresolved, as the company continues its Rhode Island “wind down,” Razee said, is the state’s effort to collect $2.6 million it claims the company defaulted under an agreement entered into with the Rhode Island Partnership for Science and Training in 1989. The state moved to collect the funds because the company is downsizing. The company maintains it is not in default of the agreement.
