Nexell Therapeutics Inc. reported Wednesday that its board authorized management to begin an "orderly wind-down" of company operations, thus endings its focus on modifying or enhancing human immune function and blood cell formation.

The company's stock (NASDAQ:NEXL) fell 23 cents Wednesday, or 65.7 percent, to close at 12 cents.

Nexell, of Irvine, Calif., said in a prepared release that it is reducing its work force from 23 full-time employees to three.

Nexell first revealed its financial woes in March, when it said that the sale of its Toolbox business to Baxter Healthcare Corp., of Deerfield, Ill., had eliminated substantially all of the company's product revenue. (See BioWorld Today, March 29, 2002.)

Wednesday the company said it is considering alternate methods of completing the wind-down, including liquidation or reorganization under the federal bankruptcy code, or dissolution under Delaware law, among other options.

"In light of the liquidation preference of the company's outstanding Series A and Series B preferred stock in the aggregate amount of about $149 million, it is very unlikely there will be any remaining value available for distribution to the holders of common stock," Nexell said.

Nexell said it had cash and cash equivalents of $6.2 million as of March 31. This amount would not have been sufficient to fund normal operations beyond June, it said.

For the first quarter, total revenues decreased $1.8 million, or 37 percent, to $3 million, compared to $4.8 million in 2001. The company recognized revenue of $1.5 million in February as a result of a one-time sale to Baxter of inventory excluded from a previously announced sale of Nexell's Toolbox business to Baxter, completed Aug. 31. Nexell and Baxter agreed on a final settlement releasing both parties from further obligations related to the sale of the Toolbox business, resulting in total cash proceeds of $3 million to Nexell in the first quarter, Nexell said.

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