Manchester-based Intercytex Group, which specialises in regenerative medicine products to restore skin and hair, has announced plans to cut its workforce by 50% and postponed any new projects in a bid to reduce its cash burn.

The company said that “with the financial markets in their current state”, it is proposing a reduction in headcount at its facilities in Manchester and Boston, USA of around 50% from the current level of 76 employees. The cuts mean that Intercytex will have enough cash to last until the end of 2009.

Intercytex says that the recent completion of the Phase III trial of its lead product for the treatment of chronic wounds, Cyzact (formerly ICX-PRO), “has resulted in a requirement for significantly fewer employees” and the results are expected towards the end of the current quarter. In the meantime, the board added that it has “also taken the view that it is inappropriate for the company to be commencing new projects in the present climate”.

As for its present product portfolio, Intercytex says that the commercialisation of Vavelta, a skin repair and rejuvenation product in the UK “is generating significant excitement”, while a Phase II trial of ICX-TRC for hair regeneration should be completed at the end of this quarter. ICX-SKN for the treatment of burns is also progressing well, helped by funding from the US Armed Forces Institute of Regenerative Medicine.

Chief executive Nick Higgins said that “it has become all too evident that these restructuring actions now need to be undertaken”. The measures “will give us the time and flexibility to explore fully the optimal partnering options for our key products”.

News of the cuts sent Intercytex shares down 27.7% to 17 pence.