>> TORONTO, June 14 (Reuters) - AnorMED Inc. <AOM.TO> shares slipped more than 10 percent on Wednesday one day after the drug company outlined an aggressive shift in corporate strategy based on a sole product and said it would have to borrow money to develop the treatment. Shares of Vancouver, British Columbia-based AnorMED were down 70 Canadian cents, or 9 percent, at C$7.10 by early afternoon, after dropping to as low as C$7.00 earlier in the day.
The company, which is attempting to complete phase 3 trials of Mozobil, its stem-cell transplant drug for cancer patients, said on Tuesday it was transforming from a research focused firm to a fully integrated biopharma company.[Every company that’s restructuring seems to be saying the same thing.]
But to do this, the company said it would have to explore funding options to help it meet its advanced timetable for regulatory approvals.
Brian Bapty, an analyst at Raymond James in Vancouver, said the market flinched at the prospect that the company might have to borrow money to proceed with its plans. "If there is a question on the quarter, it is that if they carry this drug through to end of phase 3, the company will likely be facing some kind of financing requirement," Bapty said.
…AnorMED, whose shareholders voted in favor of dumping its entire board two months ago, said the shift in corporate strategy would center on Mozobil, which is expected to report top line data from phase 3 studies by the second quarter of 2007.
If the studies are successful, the company has said it hopes to file for approval to market the drug in the United States by the end of 2007. Marketing approval of the treatment is not expected in Canada and Europe until at least 2008.
But Kenneth Galbraith, chairman and acting CEO, downplayed the significant drop in shares on Wednesday, noting that turmoil of the past few months gave disgruntled shareholders an opportunity to exit. "One day doesn't make a strategy bad, nor does 10 percent not make a strategy good. What we need to focus on is making progress over time, communicating it and that share value will catch up," he said in an interview.
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