It’s a rare management team that’s willing to admit it’s time to throw in the towel before all investors’ money is lost. But executives at AutoImmune Inc. have done just that.
The Pasadena company has been trying to commercialize treatments for autoimmune and inflammatory diseases for 21 years. The board announced last week that it had finally pulled the plug.
“We’ve reached the point where it’s appropriate to send the money back to the shareholders,” said Chief Executive Bob Bishop, who joined AutoImmune in 1992. “Biotechnology is a high-risk game. I knew that going in, and we gave it our best effort.”
The company, which went public in 1993, once had promise, but has been trading for pennies on the Pink Sheets.
Its experimental products are based on intellectual property from Harvard University researchers, but about a decade ago some therapies failed to live up to expectations in midstage clinical trials, prompting Bishop to cut much of the company’s staff.
Since 2000, the company has been more or less “virtual,” with Bishop and his finance director working part time from their homes. The death knell came when late-stage clinical trials on dirucotide, a drug to treat multiple sclerosis, failed to show results in summer 2009. The drug was licensed to BioMS
Medical Corp., an Edmonton, Alberta,
Bishop said AutoImmune already sold some of its technology and will continue to look for buyers for the rest.
“In the end I feel good that we consistently tried to do what’s best for shareholders,” he said.
Date to Boost Care
Pending federal regulations that will encourage doctors and hospitals to invest in electronic medical records could boost the business of an L.A. information technology company.
Zynx Health sells databases that doctors can use with their electronic records to help determine the best care for patients. The databases give quicker access to the latest scientific literature and best practice guidelines.
“(Record) systems by themselves don’t improve care,” said Greg Dorn, chief operating officer of Zynx, a subsidiary of Hearst Corp.
The ability to show that an electronic record system is improving care will be important when the U.S. Centers for Medicare & Medicare Services dole out rewards from the federal stimulus package to providers.
The American Recovery and Reinvestment Act of 2009 includes incentives for health care providers to install electronic record systems. But recipients have to meet what are called “meaningful use” guidelines. That means the record systems need to clearly help doctors take better care of patients.
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