Troubled Danish biotechnology company Pharmexa has announced cost-cutting measures which will result in job losses and a possible sale of the firm.
The company said that it has undertaken a number of “project prioritisations” aimed at reducing its R&D and administration costs. Specifically it will continue development of GV1001, a peptide vaccine that has entered Phase III trials in pancreatic cancer and is in Phase II for liver cancer, and its “universal influenza vaccine project” will also proceed.
Externally-funded agreements, including a breast cancer vaccine plus a HIV programme (with Bavarian Nordic) and an Alzheimer’s disease project with fellow Danish firm Lundbeck will also continue. However an osteoporosis and an early-stage cancer programme will be put on hold, while a number of smaller technology projects will be stopped.
These moves will lead to the loss of 20 jobs, or 20% of Pharmexa’s employees and the lay-offs will take place both in San Diego, USA and in Horsholm, Denmark. The firm has also advanced plans to move to a smaller facility in Horshiolm, which will result in a 40% reduction in the company’s building costs.
As a result of these initiatives, its R&D costs for 2008 will total 165 million kroner, or around $32.4 million, compared with an earlier forecast of 185 million kroner. Net loss should be in the region of 150 million kroner, 30 million kroner less than previously expected.
Whether these measures will be enough remains to be seen and Pharmexa also noted that it has retained HSBC Bank as a financial advisor in order to explore its strategic alternatives. The cost-cutting comes a fortnight after the firm completed a share issue that has raised three times less than expected.
