Incara Pharmaceuticals is back on life support.

Over the past two years, Incara has sold off divisions and potential product lines to stave off closure. Its remaining focus is on catalytic antioxidants — described as “disease modifying anti-inflammatory small molecules” — that have reduced damage done to normal tissue by cancer radiation therapy, stroke, chronic bronchitis and asthma. Incara has been working on the molecules for six years.

The company announced Tuesday after the markets closed that it again was virtually out of money. In order to stretch what cash is left, Incara (OTC Bulletin Board: INCR) said that most of the remaining staff wouldn’t be taking any pay. Three of 18 remaining employees also were let go.

The “cost reduction plan” begins Feb. 1. According to the company, “all senior officers and 80 percent of all employees of Incara have agreed to defer all or part of their cash compensation. Staffing has been reduced by 16 percent.”

With the moves, Incara added, “Management believes Incara will be able to continue operations into the second calendar quarter of 2003.”

Incara sold off its liver cell and liver stem cell program to Vesta Therapeutics for $2.8 million in cash and $400,000 in debt reduction last September. Some seven employees left Incara at that time.

The company reported a loss of $12.2 million in fiscal 2002 and reported only $86,000 in revenue.

Incara announced it had $209,000 in cash and cash equivalents on hand as of Sept. 30, 2002. That figure was down from $5.45 million a year earlier. Incara listed assets of $2.2 million, down from $8.61 in 2001.

The company’s stock traded at 3 cents Tuesday.

In the statement, Incara said management is “currently seeking financing and/or corporate collaborations to fund its operations and plans to initiate clinical trials within nine months of receipt of a sufficient amount of funding.”

Incara stopped development of its ulcerative colitis drug in September after disappointing clinical trials. Drug giant Elan purchased $4 million in equity in Incara in January 2001 to help develop the drug.

Incara also raised $7 million in a stock offering in September of 2001.

And in December of 1999, Incara sold its anti-bacterial division for $11 million.

Incara: www.incara.com