Troubled biotech Ariad Pharmaceuticals Inc., posting a deeper third-quarter loss, on Tuesday unveiled a plan to save cash and narrow its drug development focus after halting sales of a leukemia treatment in the United States last month because of toxic side effects.
But in a conference call with securities analysts, executives at the Cambridge company couldn’t predict when they might be able to resume selling Iclusig, which treats chronic myeloid leukemia. That will depend on negotiations with the Food and Drug Administration to revise the drug’s label — almost certainly reducing the eligible patient population — and taking other steps to warn doctors and patients of the risk of blood clots and heart problems.
“We don’t know when Iclusig will be back on the market,” Ariad chief executive Harvey J. Berger said in an interview. “[But] we will come through this stronger and as a better company, and Iclusig will prevail in Europe and, hopefully, in the US as well.”
Ariad’s plan, including the previously disclosed 160 layoffs — about 40 percent of its workforce — seeks to pare spending on operations this year to $240 million to $245 million, compared with a $245 million to $255 million range earlier projected. The aim is to extend the company’s cash reserves through mid-2015, while designating a new clinical program by the second half of next year to produce another cancer-fighting medicine.
“Rather than work on several development programs in parallel, as we did before the reduction in force, we’re focusing the entire drug development staff on a single, very exciting target for solid tumors,” Berger said. But he declined to specify the compound Ariad scientists are investigating, or the specific type of cancer they will target.
Under its “strategic path forward,” Ariad is budgeting conservatively without assuming Iclusig will be back on the US market in the next 18 to 20 months, executives said. But the company is hoping American sales of the drug can restart much sooner.
Ariad, meanwhile, plans to move forward with selling Iclusig in 15 countries in Europe, where the drug has been approved and remains on the market. And despite an FDA hold on enrolling new patients in clinical trials due to the increased safety risks identified in recent weeks, the company plans eventual clinical development of the drug to treat other forms of leukemia, gastrointestinal stromal tumors, and other cancers.
Investors reacted warily to Ariad’s recovery plan, sending its already depressed shares down 20 cents to $2.37, a loss of 7.8 percent on the Nasdaq. The company’s financial loss for the three months ending Sept. 30 was $66.3 million, less than analysts had projected but wider than the $53.2 million loss the Cambridge biotech registered in the July-to-September quarter last year.
In the call with analysts, Ariad executives, while acknowledging the risks of side effects, said they believed “adverse event” rates for patients taking Iclusig in studies are less than those portrayed by the FDA in a drug-safety communication late last month.
When one analyst questioned the wisdom of publicly taking issue with US regulators, Ariad chief scientific officer Timothy P. Clackson said, “We felt obligated to, in a very careful way, explain our understanding” of the clinical data because of fears the FDA “created a lot of confusion and questions” among doctors and patients.
“The FDA cannot provide a comment, as these issues are under review,” an agency spokeswoman said Tuesday. “It’s important to note though that this action was not only based on event rates, but also the seriousness of these rates, where significant harm to patients was identified.”
Berger, in the separate interview, said Ariad officials were cooperating with regulators. “We’re working closely with the FDA to understand the differences and to find the best way of bringing Iclusig back to the market for the most appropriate patients,” he said.
He also reiterated that Ariad is reassessing — but hasn’t abandoned — plans to move into a headquarters and laboratory complex under construction in Kendall Square, where the company had previously committed to being the sole tenant.
Under an agreement with the developer, Alexandria Real Estate Equities Inc. of Pasadena, Calif., Ariad won’t have to spend money on the project in the near term, Berger said. He said company executives would be talking with representatives of the developer in the coming weeks about how to proceed.
“Nothing has changed in terms of our plans to move into the building,” Berger said. “We will probably need less space than we thought.”
Tom Andrews, executive vice president and Greater Boston regional market director for Alexandria, said there could be a negotiated restructuring of the Kendall Square lease. One option, he said, would be for Ariad to sublease space to other tenants.
“No decision has been made,” Andrews said. “The lease obligation remains in place. They have no termination or downsizing rights under the lease. We have an obligation to them also, which is to finish the building by the first quarter of 2015. And we’re going forward.”