Immunicon Corp. is laying off a quarter of its work force to strengthen its balance sheet, while narrowing its research and development work to projects that will increase near-term revenue.
About 25 percent of the company's full-time or full-time contract positions were eliminated, though Immunicon did not release the exact number. The company had 139 employees at the end of 2004.
The reductions are expected to reduce expenses and to allow for a more concentrated focus on research and development efforts for its cell- and molecular-based diagnostic and research products. Clinical trial work also is continuing to expand the uses of its CellSearch CTC Kit that is partnered with Johnson & Johnson unit Veridex LLC, of Warren, N.J. The kit is designed to optimize the recovery of circulating tumor cells, which can be analyzed to predict whether a patient would respond to a certain therapy.
Immunicon's expected cash burn of $30 million to $32 million for the year hasn't changed, though the company anticipates the savings to affect its 2006 expenditures. Severance pay and other costs stemming from the job cuts are projected to total about $1 million, to be recorded in this quarter's earnings statement.
Company executives declined to comment Monday, expecting to provide details in a conference call set for this morning. Shares of Immunicon (NASDAQ:IMMC) lost 43 cents Monday to close at $3.78.
The Huntingdon Valley, Pa.-based company said the most significant reduction will come from platform development programs that are nearly completed, such as CellTracks Analyzer II, a next-generation cell analysis platform launched in late June. That product is part of Immunicon's portfolio aimed at capturing, counting and characterizing rare cells.
Its other technologies include the CellSave Preservative Tube for the collection and preservation of whole blood, and the CellTracks AutoPrep System, designed to work in conjunction with reagent kits to isolate circulating tumor cells (CTCs) or circulating endothelial cells (CECs).
The CellSearch technology, approved last year in metastatic breast cancer, is sold by Veridex, which gained exclusive, worldwide rights to commercialize products using Immunicon's technology for cancer indications in exchange for a 30-percent share of the royalties. Veridex recently submitted additional data to the FDA linking the presence of CTCs to patient survival in metastatic breast cancer to seek an expanded indication. Trial results, reported earlier this year at the American Society of Clinical Oncology meeting in Orlando, Fla., showed the ability of CTC levels in predicting progression-free survival and overall survival, and suggested a means of measuring disease progression superior to existing serum tumor markers. According to the trial data, a CTC count of five or more per 7.5 mL of blood appeared to be predictive of shorter survival.
In addition to breast cancer, the CellSearch kit is being tested in patients with metastatic colorectal and prostate cancers.
The company, which recorded a net loss of $7.1 million for the quarter ended June 30, went public in April of last year with a $48 million initial public offering, selling shares at $8. It raised an additional $18 million through the sale of common stock in June. As of July 31, Immunicon had about $54.7 million in cash, cash equivalents and short-term investments.