Capstone Therapeutics plans to preserve cash during ongoing discussions with potential partners regarding AZX100 in dermal scarring. The company will reduce staff from its current 18 full-time employees to a core of four individuals covering required regulatory and financial functions at substantially reduced compensation.

"Capstone is observing its commitment to stockholders to preserve cash by moving into a 'hibernation' mode," said Jock Holliman, executive chairman.

"We promised we would pursue - for a reasonable period of time - a joint development alliance for AZX100. The AZX100 program in dermal scarring has, in fact, generated genuine interest in the marketplace. However, there remains uncertainty regarding the timing of such an alliance, and there are no guarantees that a partnering deal can be consummated in what we consider to be a timely manner. This cash-preservation plan will allow the company to reduce costs, operate 'virtually' and continue partnering discussions and negotiations in an efficient fashion. Should an alliance be secured, we will reexamine our structure accordingly," said Holliman.