Following the failure of its experimental lung cancer drug in a late-stage trial, Germany's Agennix is cutting its workforce by 55%.
The restructuring plan will see 37 jobs go and the firm's Houston, USA site will be shut down. Some 30 staff will remain as Agennix decides its "next strategic steps".
Agennix' problems stem from Phase III data presented earlier this month which revealed that its lead drug talactoferrin did not meet its primary endpoint in demonstrating an overall survival benefit in patients with non-small cell lung cancer. A number of analysts have predicted that the firm, which is publicly quoted but majority-owned by well-known entrepreneur Dietmar Hopp, could soon fold.
Agennix expects to have sufficient cash to fund operations into the first quarter of 2013 and as of June 30, it had cash and equivalents of 22.7 million euros. The company added that the costs of this restructuring will in the near term offset anticipated longer-term savings from these cuts.
Chief financial officer Torsten Hombeck said that "our immediate objective of conserving cash has sadly necessitated significant staff reductions in both Germany and the USA". He added that talks are ongoing with the company's supervisory board to determine its direction "and will provide an update in the near future".