Altus Pharma (ALTU) to Realign Product Development Priorities; to Discountinue Trizytek Program; Cutting 75% of Workforce, Including CFO

January 26, 2009 8:41 AM EST

Altus Pharmaceuticals Inc. (NASDAQ: ALTU) announced a strategic realignment of product development priorities to focus on the advancement of the Company's breakthrough, long-acting, recombinant human growth hormone candidate, ALTU-238, as a once-per-week treatment for adult and pediatric patients with growth hormone deficiency. To conserve capital resources, Altus will discontinue its Trizytek program activities. This discontinuation will result in the transfer of certain Trizytek intellectual property rights and regulatory filings to Cystic Fibrosis Foundation Therapeutics, Inc., the nonprofit affiliate of the Cystic Fibrosis Foundation, in accordance with Altus' 2001 agreement with CFFT. In addition, Altus is evaluating the feasibility of moving forward its early-stage clinical and pre-clinical programs and will make future decisions on these programs depending upon the availability of resources.

As a result of this realignment, Altus will implement a workforce reduction of approximately 75%, primarily in functions related to the Trizytek program as well as certain general and administrative positions. In connection with the restructuring, Chief Medical Officer, Burkhard Blank, M.D.; CFO, Jonathan Lieber; and, Vice President, Business Development, John M. Sorvillo, Ph.D., will be leaving the Company. Employees affected by the reduction will be offered severance benefits. Following the staff reductions, Altus will have approximately 35 employees at its headquarters in Waltham, MA.

Altus expects that these personnel and operating decisions will reduce current annualized operating expenses by approximately 65% and should extend the Company's cash runway to approximately the end of 2009. The Company expects to record a restructuring charge of approximately $4.0 million in the first quarter of 2009, primarily representing cash payments for severance expenses, the majority of which will be paid out over the course of 2009. The Company may incur further charges, which may be significant, due to events related to the discontinuation of the Trizytek program, including the settlement of various contractual obligations and facilities-related costs. Additional financial guidance will be provided when full 2008 financial results are announced in March 2009. Altus expects the majority of the realignment plan to be completed by the end of the first quarter 2009.

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