Vatican-owned Nerviano risks closure

Italy's Nerviano Medical Sciences (NMS) has run out of cash and may start laying off staff this month if a rescue plan is not forthcoming.

The biotech firm is 100% owned by the Vatican through the Catholic institute Congregazione dei Figli dell'Immacolata Concezione (CFIC).

NMS owns one of Italy's most important medicine research facilities just outside Milan and is one of Europe's largest oncology drug discovery and development centres.

The company has formed several partnerships in recent years including one with Genentech aimed at finding new small molecule inhibitors of certain anticancer agents.

Luigi Rossi Bernardi, a Milan local government official responsible for research, innovation and human resources, said he was "very concerned" about the future of NMS.

"The company has had several cash injections, but this has not been enough to cover the costs of the drugs research and development. Now the money has run out," he said.

The Vatican institute acquired the Milan research centre from Pfizer in 2004. The terms of the deal were said to include around Euro 200m of r&d funding. However this has not been officially confirmed.

In July 2007, NMS was granted a €132m loan facility from Italy's largest bank Unicredit. The company said at the time that it had enough resources to finance its r&d for a further 18 months. It also expressed hopes that NMS could be floated on the stock market.

Last year, NMS said CFIC had approved moves to raise a further €70m. However, it is unclear whether this money was ever raised.

NMS restructured its organisation and changed its company status so that it would be able to "open the door to new industrial partners".

It said that it had 18 research projects in the pipeline, was spending €65m a year on r&d and had made €30m from the sale of scientific and manufacturing services.

The company added that it was due to receive €50m of public funding in 2009.

NMS says that it has partnerships with Pfizer, Bristol-Myers Squibb and several biotechnology companies and academic institutions.

Its most advanced drug is an aurora kinase inhibitor known as danusertib, which is in Phase II trials.