Cytos hits the self-destruct button as PhIIb asthma study bombs

Cytos Biotechnology CEO Christian Itin

After 19 years of fruitless drug development work capped by the failure of a Phase IIb study of its experimental asthma therapy, Cytos Biotechnology is ready to call it quits.

The Swiss biotech said that its asthma drug CYT003 flunked its primary as well as secondary endpoints in the critically important study, making it all but impossible to raise more funds for the company. As a result, CEO Christian Itin has hit the self-destruct button, starting a liquidation review process that includes the necessary talks that will precede the termination of all 36 staffers on the payroll in Schlieren.

Cytos was living on borrowed time after Novartis ($NVS) bowed out of a $500 million deal to develop a smoking cessation vaccine in early 2013--a full four years after it failed a mid-stage study. By that point the biotech had already restructured the company and circled its wagons around the lead therapy for asthma.

In its release today the company bluntly assessed the need to call it quits.

"When developing the plans for winding down operations, we will seek to minimize adverse consequences for our employees and other stakeholders," Itin said in a statement.

Cytos has $35 million on hand to close the doors and liquidate operations. Novartis and Cytos had also been working earlier on a vaccine program for Alzheimer's, one of many approaches aimed at eliminating amyloid β. The company spun out of the Swiss Federal Institute of Technology in Zurich back in 1995.

- here's the press release