Financial woes have led Incara Pharmaceuticals to cease further enrollment of patients into one of its ongoing clinical trials.

The decision, announced Monday, came as a result of financial concerns and also worries about continued support from its partner for the drug, Elan Corp.

The trial on a drug to treat inflammatory bowell disease began in January 2001 and as of August 23, 2002, 138 patients had been enrolled at 33 academic and private medical centers nationwide. All patients currently enrolled are expected to continue for the duration of their six-week course of study participation and data from these patients will be included in the analysis.

Bennett Love, vice president of corporate planning and communications for Incara, says that the existing number of patients should provide a sufficient amount of data. He also says the company is running low on cash as Elan, which has provided a $3 million equity investment, rethinks its strategy.

“Several things led to it,” Love says of Incara’s decision to cease further enrollment of patients. “Number one, we are in position where we are running low on cash. Also, it’s been well documented that Elan is cutting back on funding of joint venture partners.”

Love says Elan originally had 55 partners. And while the company is still doing some funding deals, including Incara for the time being, he says the partnership is “under review.”

Deligoparin is being developed for the treatment of inflammatory bowel disease, specifically ulcerative colitis, by Incara Development, which is jointly owned by Incara Pharmaceuticals and Elan. Incara licensed deligoparin from Opocrin of Modena, Italy in 1998.

“After agreeing to stop enrollment in the trial, Elan has indicated that it intends to fund the remainder of the trial and the necessary follow-up,” Clayton I. Duncan, president and chief executive officer of Incara, said in a statement. “If the results are positive, we believe the data will increase the value of this program and enhance our efforts to secure a corporate partner from the pharmaceutical industry for further development and commercialization of deligoparin.”

The preliminary analysis of efficacy should be completed in September. At that time, Love says Incara will better be able to determine its financial future based on what it hopes and thinks will be positive results.

“What’s in the data will dictate a lot of that,” says Love. “The data from trial results will give us insight to where we go from a financial perspective.”

Incara has said it is considering various financial alternatives regarding its need for additional capital to prevent running out of money by the end of September. These alternatives could include additional sales of stock, the sale of one or more of the company’s programs or the sale of the entire company, Incara said. But the company has no plans to layoff any of its 25 or so employees, according to Love.

During its fiscal third quarter, ended June 30, Incara lost $3.4 million, or 26 cents per share. That compares with a loss of $3.2 million, or 40 cents per share, during the same period a year ago. For the nine-month period, the company lost $9.4 million, or 74 cents per share, compared with a loss of $19.5 million, or $2.59 per share, in the first three quarters of fiscal 2001.

In addition to developing deligoparin for treatment of ulcerative colitis with Elan, Incara is developing therapies focused on tissue protection, repair and regeneration. The company is developing a series of catalytic antioxidants as treatments for damage occurring in cancer radiation therapy and stroke and for protection of cells in transplantation. Incara is also developing liver cell therapy for treatment of liver failure.

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