Altus Pharmaceuticals, a 17-year-old Boston-area biotech whose struggle for survival we profiled last month, will join the boneyard of companies that have not made it through the current economic crisis.

Yellow stickers in the company's lab mark equipment to be sold

"Very simply, we have not been able to secure financing," Georges Gemayel, Altus's CEO, told The Scientist this morning.

The company announced in a Securities and Exchange Commission filing on Monday (September 14) that it would be winding down its operations. Altus needed to secure $10 million -- not a lot of money by industry standards -- by this month to stay in business.

In January of this year, in an attempt to balance its books, Altus shelved its main project, an enzyme replacement therapy for cystic fibrosis, when Phase III trial results proved ambiguous. Instead, it turned its focus to a human growth hormone therapy, ALTU-238, currently in Phase II trials. $10 million dollars in funding, Gemayel hoped, would pay for the completion of a key trial, the results of which -- if all went well -- would allow the company to find investors or partners to move the therapy forward. At the same time, the company also laid off about 75% of its staff and began feverishly working to get rid of its liabilities, from an expensive 10-year lease for its office and laboratory space to a manufacturing contract with a company that was to produce its cystic fibrosis drug.

"We have cleaned the balance sheet quite well," said Gemayel. "But [while we're] doing that we are running out of cash."

According to the Biotechnology Industry Organization, 20 publically traded biotech companies have suspended operations since January, 2009. Another 26 have declared bankruptcy in 2008 and 2009.

Gemayel said there is no date set for when Altus will close its doors. The plan now is to sell as many assets as possible, including ALTU-238. "As long as there is light there is hope," Gemayel said.


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