Click to Enlarge

ImaSight CEO John Brooks. (Darren Brown, OBJ)

Operations halted while company works on partnership deals

ImaSight Corp. is temporarily halting operations at its recently acquired Liponex division to conserve capital, but CEO John Brooks said things should be back up and running in the next few weeks once it devises a deal to decide the fate of its beleaguered drug subsidiary.

"It's just until we have some clarity in terms of ... having a pharmaceutical partner (for Liponex)," said Mr. Brooks in an interview with OBJ. "(Future actions) will be based on what the pharmaceutical partner wants in term of how we move things forward."

The Gatineau-based digital X-ray maker, which merged with 'good cholesterol' drug developer Liponex in June in a $10-million reverse takeover deal, said the current economic turmoil is forcing its hand.

The company added chief financial officer Brian Radburn will step down as part of the cost-cutting measures, with Mr. Brooks assuming interim CFO duties. Jean Caseault, ImaSight's president, will be promoted to co-CEO.

ImaSight earlier said it had developed a business and financial plan "to focus efforts on the revenue-generating elements of the company's business model," and had added it was "actively seeking" short-term financing that would help tide its operations over for the next few months.

But the troubles in the financial markets have made it next to impossible for ImaSight to secure that funding, Mr. Brooks said.

"Nobody's lending or investing today," he said.

However, the firm stressed it's still trying to license Liponex technology.

"We're in very serious discussions with two companies (regarding a deal for Liponex) ... We expect to have two term sheets within the next few weeks, and we'll figure it out from there," said Mr. Brooks.

Liponex currently has three full-time staff, with founder Dr. Daniel Sparks serving as a consultant and dividing his time between the company and the University of Ottawa Health Institute, where he still does "some related research" in Liponex's field area.

Mr. Brooks said both of the potential pharmaceutical partners have indicated "strong interest in continuing to work with Dr. Sparks," with the expectation that there would be a "continued research presence" in Ottawa.

However, the company had also said in August that it was considering a complete sale of Liponex's CRD5 drug, which treats heart disease by increasing 'good cholesterol' or high-density lipoprotein (HDL) levels in the body.

Liponex has had a run of bad fortune since March 2007, when its stock plunged by almost 80 per cent after it announced it had failed to produce "statistically significant" test results with CRD5. The company was then forced in December of that year to cancel its animal trials in mini-pigs after the model did not produce satisfactory results, and since then the fate of the drug has been in limbo.

Despite the shutdown and dicey capital situation, Mr. Brooks was positive on the company's main X-ray business, which he previously said was garnering a good reception in its target market.

"While reducing costs is the prudent thing to do in this uncertain economic environment, we are encouraged that booked installations of our digital X-ray sensor indicate that November will be our best-ever month," noted Mr. Brooks in a statement last week. "This growth comes primarily from Canadian sales. We are now well-positioned once the economic conditions in the U.S. stabilize."