SAN DIEGO COUNTY : Syntro Going to Kansas City; 15 Lose Jobs

Syntro Corp., a troubled San Diego-based biotechnology company that has lost more than $16 million since its founding in 1981, is moving its headquarters to Kansas City effective immediately and scaling back its San Diego operations, moves that resulted in layoffs of 15 employees Wednesday, the company said.

Syntro also announced the resignations of president Cam Garner and chief financial officer Jack Fitzpatrick. Garner was replaced Wednesday by J. Donald Todd and Fitzpatrick by Janice E. Katterhenry. Both Todd and Fitzpatrick will stay on at Syntro through June 30, Todd said. Garner was unavailable for comment.

In an interview, Todd said the company is moving to consolidate administrative functions with its Kansas City-based SyntroVet animal health subsidiary, which markets Syntro’s only product, a pseudo-rabies vaccine for swine.

‘Tighten Its Focus’

Todd, who formerly was SyntroVet president, said the move will also enable Syntro to “tighten its focus” on genetically designed veterinary vaccines. “We will be de-emphasizing basic research in favor of developing products from technology already in place,” Todd said.

Although Syntro has attempted over the years to develop a variety of bio-engineered human and animal health-care products, it has introduced just the pseudo-rabies vaccine, sales of which are running $1 million a year, Todd said. In previous years, Syntro had booked revenue by doing contract research, but those contracts largely dried up in 1987.

The shrinking revenue has caused Syntro to incur mounting losses. For fiscal 1988, Syntro’s loss totaled $6.6 million on revenue of $1.6 million. For the first two quarters ended March 31 of the current fiscal year, Syntro reported a loss of $2.4 million on revenue of $888,487.

The layoffs announced Wednesday will leave Syntro with 19 employees in San Diego, most of whom are involved in research, and about 19 in Kansas City, Todd said. At its peak two years ago, Syntro employed about 75 workers.

With stockholders’ equity as of March 31 of $10.2 million and working capital of $8 million, Syntro appears to be in no immediate danger of insolvency.

Nevertheless, the steady losses prompted Syntro in December to retain Shearson Lehman Hutton to explore “financing alternatives” for the company, including “an outright sale of Syntro to a corporate entity,” Todd said.

No Offers Forthcoming

The search failed to turn up any “attractive offers,” Todd said, probably because of a patent infringement suit filed in March against Syntro by Upjohn Co. in U. S. District Court in Delaware alleging that Syntro’s pseudo-rabies vaccine is based on Upjohn’s proprietary technology.

“Even though we are very confident we can defend ourselves, as long as (the suit) is pending, (potential buyers) are not interested in stepping up to the line and taking on that liability,” Todd said.

Last October, Syntro transferred rights to its proprietary synthetic silk technology to a new company called Protein Polymer Technologies headed by former Syntro President Thomas Parmeter. In exchange for initial financing assistance, technology rights and the use of Syntro laboratory space, Syntro received a 25% equity interest in Parmeter’s new company, Todd said.

Todd said Syntro’s move to Kansas City will have no effect on Protein Polymer, which has yet to produce a marketable product. “They are on their own,” he said of Protein Polymer, which has since succeeded in raising initial “seed capital.” Parmeter was out of town and unavailable for comment Wednesday.

In over-the-counter trading Wednesday, Syntro stock closed down $.06 a share at $.75. At Syntro’s initial public stock offering in July 1986, Syntro shares were sold at $8 each.