The cancer company NeoPharm Inc. is cutting about a fourth of its work force as part of a money-saving measure.
Called a "cost rationalization program" by the company, it is expected to reduce total expenses by about $7 million on an annualized basis, nearly half of which is likely to be realized this year. The layoffs, which are affecting 23 percent of the biopharmaceutical firm's staff, are projected to contribute about $3 million in payroll savings to the estimated $7 million in total savings. The employee cuts are aimed at eliminating redundant or unnecessary positions.
Company officials declined to provide further comments or details.
But the company indicated that additional cost savings are expected to come from a "reprioritization" of NeoPharm's NeoLipid liposomal drug delivery program to reflect a "changing market landscape" and regulatory requirements, in addition to a consolidation of all operations into its headquarters in Waukegan, Ill.
Among products developed from the NeoLipid platform are LEP-ETU, a liposomal formulation of paclitaxel, and LE-SN38, a liposomal formulation of the active metabolite of irinotecan. Both products are on the cusp of Phase II.
The company had $30.3 million in cash and short-term investments as of Dec. 31, and soon after raised an additional $35.7 million in a public offering. NeoPharm, which posted a $9.7 million net loss in its last quarterly report, is due to report earnings Friday. (See BioWorld Today, Jan. 6, 2006.)
The company, which recently completed enrollment in a pivotal trial of cintredekin besudotox in brain tumor patients, its lead product candidate, is focused on preparing for a possible regulatory submission.
The Phase III trial is called PRECISE, and company executives have in the past said the biologics license application could come in the second half of this year. In addition, NeoPharm is working to complete a manufacturing program for the tumor-targeting agent, a recombinant protein composed of two parts, a tumor-targeting molecule (IL13) and a cytotoxic agent (PE38).
Last year, the company licensed cintredekin besudotox's exclusive Japanese development rights to Nippon Kayaku Co. Ltd., of Tokyo, in return for an up-front licensing fee and $14 million in future milestone payments. (See BioWorld Today, Jan. 6, 2005.)
On Monday, its stock (NASDAQ:NEOL) fell 49 cents to $7.50.