Sweden's Karo Bio is laying off 25 of its 70 staff as it prepares to spin off its preclinical activities.

The latter decision was unveiled last week and the company noted that many operations currently conducted at the Huddinge campus are pre-clinical R&D projects. Before these operations are transferred into a separate subsidiary, "a cost efficiency programme will be implemented", hence the redundancy notices.

There may be more cuts as Karo Bio noted that the final reduction "will be determined by ongoing business discussions regarding the company’s development projects". The firm says it is now concentrating on eprotirome, a thyroid hormone analogue which could significantly lower ‘bad’ cholesterol levels in patients already taking statins. Karo Bio’s financing is enough to implement eprotirome’s Phase III programme.

Chief executive Per Bengtsson said "we want to create two attractive companies with clear objectives and the right resources". He added that "in the stock market, Karo Bio is today synonymous with eprotirome which overshadows our other operations".

He concluded by saying that “the name Karo Bio is a strong brand name in the field of nuclear receptors, both in academic and industrial circles. It makes sense from a business perspective that this name follows the pre-clinical activities.” In the next six months, a detailed plan for the spin-off and a proposed name-change for the existing business will be announced.