Small Drug Firms Face Operating Setbacks

La Jolla Pharmaceutical has eliminated most of its workforce, about 90 jobs, and is exploring "winding down the business" or selling the company. Last month, it reported that a Phase III trial of its lead product, the lupus treatment Riquent, had failed to show any efficacy. Panacos Pharmaceuticals is considering selling itself or its HIV drug development programs. The firm has closed its Gaithersburg, Md., facility and cut staff from 11 to four employees. In January, Panacos sold Myriad Pharmaceutical the rights to bevirimat, the first in a new class of HIV maturation inhibitors, now in Phase II clinical trials. Meanwhile, Vanda Pharmaceuticals' management is fighting attempts by some investors to take control of the company and liquidate it. Vanda has already cut spending and staff as it awaits FDA's reconsideration of its antipsychotic drug, iloperidone.