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Santaris Bets on New Subsidiary to Bolster US Presence; Posts Higher Losses in '08

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Danish RNA drugs developer Santaris Pharma has begun setting up a San Diego, Calif.-based subsidiary in an effort to strengthen its position in the US, a company spokeswoman confirmed this week.

Although specific details about the unit were not available by press time, the spokeswoman said that it would be led by Chief Development Officer Arthur Levin, who was formerly senior vice president of drug development at antisense shop Isis Pharmaceuticals.

She added that Santaris expects to formally announce the subsidiary in the coming months.

The news comes a little more than a month after Santaris reported its financial results for 2008, which included a 76 percent jump in revenues amid a sharp rise in losses.

For the year, Santaris' revenues, which were derived entirely through partnerships, including one with GlaxoSmithKline (see RNAi News, 12/20/2007), climbed to DKK66.7 million ($11.8 million) from DKK37.8 million the year before.

The company noted that its 2008 revenues did not include payments related to its roughly 3-month-old alliance with Wyeth (see RNAi News, 1/15/2009). The $7 million in upfront payments Santaris stands to receive under that arrangement will be recognized as revenue based on deliveries and the company's fulfillment of contractual obligations, Santaris noted.

Santaris' net loss for 2008 jumped to DKK171.9 million, or DKK2 per share, from DKK102.5 million, or DKK1.49 per share, the previous year.

Contributing to the higher losses was an increase in research and development spending to DKK220.4 million from DKK128.9 million, and a rise in administrative expenses to DKK23.2 million from DKK17 million a year earlier.

Santaris attributed the higher costs to an increase in its research activities, which include the initiation of a phase I study of the microRNA-targeting hepatitis C therapy SPC3649 (see RNAi News, 5/29/2008), as well as an increase in the number of full-time employees from 67 in 2007 to 100 in 2008.

Since then, 35 employees have been let go as part of a corporate reorganization that included narrowing the company's therapeutic focus to metabolic disorders and infectious disease, Santaris noted in its annual report. Currently, it has approximately 65 staffers.

As of Dec. 31, 2008, Santaris had DKK195 million in cash. The firm expects to have DKK150 million at the end of 2009, which, in combination with expected payments from partners, would be sufficient to fund its operations for two years.

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