US biotechnology firm Maxygen, which has just seen a collaboration with Roche terminated, has announced a rejigging of its operations which means the closure of its subsidiary in Denmark.

The closure of the Danish site means that Maxygen is consolidating all operations at its headquarters in Redwood City, California and will actually add 25 employees to its workforce at the site. As a result of these actions, the company expects $10 million in annual cost savings beginning in 2008.

Maxygen primarily employs scientific staff engaged in pre-clinical research at the Danish unit, which will cease operations by the end of the second quarter of 2008. As a result of the closure, the company expects to incur some $6 million of restructuring costs, the bulk of which will be recognised in the fourth quarter of this year.

Chief executive Russell Howard said that as Maxygen “transitions into a company with multiple clinical programmes, we must increasingly focus our staffing and cash resources on the execution of clinical trials". He added that with the weakening dollar, the cost of operating the Denmark facility has increased significantly and “consolidation will eliminate this rising cost and boost overall operational efficiency".

Maxygen said it does not expect the timing of any drug development programmes to be materially impacted by the consolidation. As for the future of the hepatitis compound MAXY-alpha, the drug being investigated in the abandoned project with Roche, Maxygen said it is evaluating its plans.